Chamwe Kaira
The Bank of Namibia’s government bond auction on Wednesday recorded bids over N$3 billion against an initial offer of N$2 billion.
The GC35 recorded the highest demand, with tenders of N$585 million, or 24% of the total. Allocations reached N$312 million, double the initial offer of N$160 million.
The GC40 also drew interest of N$214 million against an offer of N$140 million, but no allocation was made. Across the GC board, N$1.5 billion was offered, yet N$1.7 billion was allocated, resulting in an overallocation.
“It is interesting to note that the GC40 also attracted significant interest of N$214 million, however, no allocation was made despite an initial offer of N$140 million. Across the GC board, N$1.5 billion was initially on offer, yet allocations reached N$1.7 billion, resulting in an overallocation. Average yields showed an upward adjustment, with HYA and WAY climbing 10.81 and 10.72 basis points, respectively,” said Kara van den Heever of Simonis Storm Securities in a note to investors.
On the inflation-linked side, bids totalled N$729 million compared to an offer of N$500 million. The GI27 saw the lowest demand at N$18.9 million against an offer of N$95 million, leading to no allocation.
The GI41 drew the most attention with N$207 million in bids against an offer of N$70 million and was slightly over-allocated at N$75.1 million. Overall, the GI board remained under-allocated, with N$325.4 million allocated against an offer of N$500 million. Yields strengthened slightly, posting single-digit basis point gains.
The next auction is scheduled for 3 September.
According to the Bank of Namibia and the Ministry of Finance, the 2025/26 borrowing strategy projects a fiscal deficit of N$12.8 billion, or 4.6% of GDP. With foreign loan repayments of N$3.8 billion, local bond redemptions of N$3.9 billion, the Eurobond balance, and additional financing needs, the net financing requirement for 2025/26 is estimated at N$29.8 billion.
Of this, N$21.2 billion will be sourced domestically and N$8.6 billion externally.
Caption
The bond auction by the Bank of Namibia attracted strong interest.
Source: Simonis Storm Securities
