FGN Bond Yields Moves in Mixed Directions across Maturities…

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In the just concluded week, the values of FGN bonds traded at the secondary market moved in mixed directions across maturities tracked.

Specifically, investors were bearish at the short end of the curve.

Hence, we saw the value of 5-year, 14.50% FGN JUL 2021 and the 7-year, 13.53% FGN APR 2025 paper lose N0.20 and N8.91 respectively; their corresponding yields rose further to 1.58% (from 1.47%) and 9.05% (from 6.74%) respectively.

However, the 10-year 16.29% FGN MAR 2027 debt gained N0.16; its corresponding yield fell to 10.06% (from 10.10%) while the 20-year, 16.25% FGN MAR 2037 remained flat; corresponding yield stood at 11.10%.

Meanwhile, the value of FGN Eurobonds traded at the international capital market lost for all maturities tracked amid global rise in yields.

The 10-year, 6.375% JUL 12, 2023 paper, the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt lost USD0.24, USD0.38 and USD0.54 respectively, while their yields rose to 2.80% (from 2.73%), 7.46% (from 7.42%) and 7.49% (from 7.44%) respectively.

In the new week, we expect the FGN Eurobond prices to appreciate (and yields to decrease) as investors hunt for bargains amid rising crude oil prices and accretion to Nigeria’s external reserves.

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