Review of Bond market in 2025

Historical macro indicators dictate rates amidst global shocks; Cyclone Ditwah impact leads to uncertainties

- BY WEALTH TRUST SECURITIES

THE Government Securities market commenced 2025 on a positive note, extending the momentum from late 2024, during which yields trended downward amid improving macroeconomic conditions.

This was further supported by policy continuity and clarity following the completion of the 2024 electoral cycle, which helped alleviate uncertainty-related risk premiums and strengthen investor confidence. The T-Bill and T-Bond markets continued to mostly rally throughout Q1 of 2025 with yields overall trending lower at auctions and dropping in the secondary market as well. This was supported by CCPI inflation starting off the year in deflation at -4% YOY as at January and continuing to be in deflation throughout the quarter, reinforcing an attractive real rate environment. In addition, a robust fiscal consolidation contributed towards reduced Budget deficits and healthy Treasury cash buffers which further supported the rally. The Q1 table, gives the quarter opening and closing yields for the most liquid/benchmark durations.