Wednesday, June 23, 2021

    FGN Bond Yields Moderate for Most Maturities Tracked amid Sustained Buy Pressure…

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    Godwin Okafor
    Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

    In line with our expectations, the values of FGN bonds traded at the over-the-counter (OTC) segment appreciated further for most maturities tracked.

    Specifically, the 7-year, 13.53% FGN MAR 2025 note, the 10-year, 16.29% FGN MAR 2027 debt and the 20-year, 16.25% FGN APR 2037 bond appreciated by N3.80, N3.97 and N0.01 respectively; their corresponding yields fell further to 6.31% (from 7.14%), 8.12% (from 8.76%) and 10.04% (from 10.05%) respectively.

    However, the 5-year, 14.50% FGN JUL 2021 paper, depreciated by N0.53 (yield rose to 4.48% from 4.16%). Meanwhile, the value of FGN Eurobonds traded at the international capital market appreciated further for all maturities tracked amid demand pressure.

    The 10- year, 6.75% JAN 28, 2021 bond, the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047
    debt gained USD0.16, USD0.35 and USD0.99 respectively; while their corresponding yields moderated to 4.57%
    (from 4.92%), 8.63% (from 8.67%) and 8.57% (from 8.68%) respectively.

    In the new week, we expect OTC bond prices to appreciate (and yields to moderate) against the backdrop of
    expected boost in financial system.

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