FGN Bond Yields Rise as Rates in Tandem with Stop Rates in the Primary Market…


In the just concluded week,the DMO allotedN262.10billion worth of bonds across 16.29% FGN MAR 2027 note,12.50% FGN MAR 2035 paper and 9.80% FGN MAR 2045 bond with marginal rates expanding by 10.50%(from 10.25%), 11.50%(from 11.25%) and 12.00% (from 11.80%) respectively as investors demanded for higher rate.

Similarly, the values of FGN bond traded at the secondary market decreased as yields rose for all maturities tracked in tandem with the Primary market rates.

Specifically, the the 5-year, 14.50% FGN JUL 2021, 7-year 13.53% FGN APR 2025 10-year 16.29% FGN MAR 2027and the 20-year, 16.25% FGN MAR 2037 bond lost N0.26, N4.94, N2.50 and N0.97 respectively; their corresponding yields rose to 3.19% (from 3.04%), 8.80%(from 7.50%), 10.49% (from 10.02%) and 11.57% (from 11.46%) respectively.

Meanwhile, the value of FGN Eurobonds traded at the international capital market moderated for all maturities tracked;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 lostUSD0.57,USD1.89 and USD1.79 respectively;their corresponding yields rose to 3.01% (from 2.79%), 7.65% (from 7.45%) and 7.71% (from 7.55%) respectively.

In the new week, we expect local OTC bond prices to appreciate (and yields to decrease) amid expected boost in financial system liquidity.

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