FGN Bond Yields Rise as Traders Demand for Higher Rates…


In the just concluded week, the values of FGN bond traded at the secondary market further moderated as yields increased for all maturities tracked as traders demanded for higher rates.

Specifically, the 5-year, 14.50% FGN JUL 2021 and 7-year 13.53% FGN APR 2025 lost N0.05 and N0.47 respectively; their corresponding yields rose to 2.84% (from 2.74%) and 8.92% (from 8.80%) respectively.

However, the 20- year, 16.25% FGN MAR 2037 bond gained N0.63 while its yield fell to 11.50% ( from 11.57%), while the 10-year 16.29% FGN MAR 2027 closed flat.

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 lost USD0.38, USD2.31 and USD2.00 respectively; their corresponding yields rose to 3.15% (from 3.01%), 7.90% (from 7.65%) and 7.89% (from 7.71%) respectively.

In the new week, we expect local OTC bond prices to depreciate (and yields to increase) as traders anticipate higher yields amid rising inflation rate.

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