In the just concluded week, sentiment remained bearish in the market despite the unchanged policy rate at 11.50% and the CBN’s effort in harmonizing the Naira to address the exchange rate issues.
Notably, FGN Yields rose for most maturities tracked and we saw the 20-year tenor rise as high as 14.06% during the week.
Specifically, the 5-year, 14.50% FGN JUL 2021 bond, the 10-year 16.29% FGN MAR 2027
bond and the 20-year, 16.25% FGN MAR 2037
lost N0.31, N0.29 and N0.14 respectively; their corresponding yields increased to 4.00% (from 3.27%), 13.10% (from 13.04%) and 14.06% (from 13.85%) respectively.
However, the 7-year 13.53% FGN APR 2025 paper gained N0.16 respectively while its corresponding yield fell to 12.43% (from 12.49%).
Meanwhile, the value of FGN Eurobonds traded at the international capital market rose for most maturities tracked; the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt gained USD0.35 and USD0.51 respectively; their corresponding yields fell to 7.38% (from 7.42%) and 7.56% (from 7.60%) respectively.
However, the 10-year, 6.375% JUL 12, 2023 paper lost USD3.44 while its yield rose to 2.82% (from 2.81%).
In the new week, we expect local OTC bond prices, especially at the longer end of the curve, to increase (and yields to moderate) as yield remain relatively attractive.