Wednesday, June 16, 2021

    FGN Bond Yield Falls for Most Maturities Tracked amid Renewed Bullish Trend…

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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 was
    positive in the market as bond prices increased while the FGN Yields fell for most maturities tracked.

    Specifically, the 7-year 13.53% FGN APR 2025 bond, the 10-year 16.29% FGN MAR 2027 bond and the 20-year, 16.25% FGN MAR 2037 bond gained N1.50, N1.46 and N2.82 respectively; their corresponding yields decreased to 12.43% (from 11.94%), 12.75% (from 13.10%) and 14.06% (from 13.66%) respectively.

    However, the 5-year, 14.50% FGN JUL 2021 bond lost N0.16, while its corresponding yield rose to 4.00% (from 3.80%)

    Meanwhile, the value of FGN Eurobonds traded at the international capital market rose for most maturities tracked; the 10-year, 6.375% JUL 12, 2023 bond, the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt gained USD3.61, USD0.85 and USD0.53 respectively; their corresponding yields fell to 2.79% (from 2.82%). 7.29% (from 7.38%) and 7.51% (from 7.56%) respectively.

    In the new week, we expect local OTC bond prices, especially at the longer end of the curve, to decrease (and yields to rise) as traders demand for higher rate amid expected boost in financial system liquidity.

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