Money Markets
Bond market exerts pressure on interest rates
An investor monitors the digital board at the NSE. The number of Treasury bonds experiencing a rise in yields rose to 42. Photo/REUTERS
Posted Thursday, September 9 2010 at 00:00
“People are selective. They look at which bonds offer good returns and avoid those that don’t offer as much,” said Mr Muchiri, adding that the yield curve is beginning to stabilise with the correction.
Two years ago, when equities were still popular, only about half of the listed Treasury bonds were trading at a premium.
This has since changed and almost all bonds are currently trading at a premium.
In 2008, it was easier to get a bargain from the short tenor than long tenor bonds.
Even earlier, most of the longer-term bonds between nine and 15 years and the shorter-term ones, mainly two and three years, were trading at a premium.
To indicate that the lower prices for bonds were an attraction, investors were going for the bond in large numbers in the past week.
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