Monday, November 29, 2021

    FGN Bond Yields Rise Further as Traders Stay on the Side lines…

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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 the just concluded week, sentiment remained bearish at the OTC market as the values of FGN bonds traded decreased and yields expanded for all maturities tracked. Sell-offs continued as traders requested for higher rates at the bond market.

    Specifically, the 5-year, 14.50% FGN JUL 2021, 7-year 13.53% FGN APR 2025 and 10-year 16.29% FGN MAR 2027 lost N0.24, N2.38 and N2.90 respectively; their
    corresponding yields rose to 3.10% (from
    3.01%), 12.22% (from 11.47%) and 13.10%
    (from 12.46%) respectively.

    However, the 20-year, 16.25% FGN MAR 2037 closed flat at a yield of 13.96%.

    Meanwhile, the value of FGN Eurobonds traded at the international capital market rose 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 gained USD0.01, USD0.17 and USD0.40 respectively; their corresponding yields decreased to 2.90% (from 2.93%), 7.39% (from 7.41%) and 7.54% (from 7.58%) respectively.

    In the new week, we expect local OTC bond prices to moderate (and yields to increase) as bearish bias continues in the market.

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