FGN Bond Yields Rise for Most Maturities amid Renewed Bearish Activity…


In the just concluded week, the values of FGN bond traded at the secondary market
moderated for most maturities tracked amid
renewed bearish activity.

Notably, yields at the short and mid end of the curve rose higher as traders shed their positions in anticipation for higher yields at the February Bond auction.

Hence, we saw the 5-year, 14.50% FGN JUL
2021, 7-year, 13.53% FGN APR 2025 and 10-
year, 16.29% FGN MAR 2027 lost N0.57%,
N7.21 and N8.29 respectively; their
corresponding yields rose to 1.59% (from 0.91%), 8.12% (from 634%) and 9.90% (from 8.42%) respectively.

However, the 20-year, 16.25% FGN MAR 2037 closed flattish. Meanwhile, the value of FGN Eurobonds traded at the international capital market moderated for most maturities tracked.

The 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt lost USD0.94 and USD0.87 respectively, while their yields rose to 7.00% (from 6.92%) and 7.09% (from 7.02%) respectively.

However, the 10-year, 6.375% JUL 12, 2023 paper gained USD4.85 while its corresponding yield fell to 2.52% (from 2.51%).

In the new week, the DMO will auction N150 billion worth of bonds; viz: N50 billion (a piece) for the 16.29% FGN MAR 2027 note, 12.50% FGN MAR 2035 paper and 9.80% FGN MAR 2045 bond Re-Openings.

Hence, we expect the local OTC bond prices to moderate (and yields to decrease) as investors demand for higher rates.