The WAEMU public securities market recorded robust demand within the week of Could 12 to Could 15, with 3 member states elevating CFA92 billion towards an preliminary goal of CFA85 billion.
Buyers submitted CFA196.67 billion in bids, giving the week a protection price of 231%. The estimated absorption price was 47%, displaying that treasuries acquired greater than twice what they wanted however accepted lower than half of the bids. Togo’s Could 15 public sale, which focused CFA35 billion, had not but revealed outcomes.
The week additionally confirmed a uncommon stability between short- and long-term devices. Treasury payments accounted for 50.17% of accepted quantity, or CFA46.16 billion, whereas Treasury bonds represented 49.83%, or CFA45.84 billion. The stability was pushed by Benin, which issued solely short-term payments.
Guinea-Bissau opened the week by elevating CFA15 billion from CFA32.83 billion in bids, an oversubscription price of 219%. Mali adopted with CFA55 billion accepted from CFA68.17 billion in bids, above its CFA50 billion goal. Benin closed the week with the strongest demand, drawing CFA95.67 billion in bids towards a CFA20 billion goal, however accepting solely CFA22 billion.
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Subsequent week will take a look at the depth of regional liquidity. Mali, Côte d’Ivoire, Burkina Faso, Niger and Senegal are anticipated to hunt CFA384.90 billion between Could 18 and Could 22, one of many highest weekly volumes of the yr. The consequence will present whether or not investor demand can take up a number of massive issuers on the similar time.
Key Takeaways
The week’s auctions present that liquidity remains to be accessible within the WAEMU debt market, however buyers stay selective. Benin attracted massive demand as a result of it supplied quick maturities of 91 days and 182 days, with yields of three.20% and three.56%. Mali raised greater than its goal, however its 7-year bond acquired no bids, displaying that buyers nonetheless keep away from lengthy publicity to higher-risk sovereigns. Guinea-Bissau additionally confronted combined demand, with its 356-day invoice absolutely accepted however its 3-year bond going through extra competitors.
The message for treasuries is obvious: markets are able to lend, however they like quick length, clearer compensation visibility and stronger threat compensation. The stability between payments and bonds this week doesn’t but mark a structural shift. It was primarily attributable to Benin’s short-term challenge. The true take a look at will come subsequent week, when 5 issuers search virtually CFA385 billion. If demand stays excessive, it’s going to verify that regional banks and buyers nonetheless have money to deploy. If protection weakens, governments may have to regulate maturities, yields or accepted volumes.
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