FGN Bond Prices Drop on Profit Taking

By Cowry Asset

In the just concluded week, local OTC bond prices declined (and yields increased) across most maturities followed renewed profit taking activity.

Specifically, the 20-year, 10.00 percent FGN July 2030 bond, the 10-year, 16.39 percent FGN JAN 2022 paper, the 7-year, 16.00 percent FGN JUN 2019 paper and the 5-year, 14.50 percent FGN JUL 2021 paper depreciated by N0.20, N0.06, N0.76 and N0.78 respectively while their corresponding yields increased to 14.66 percent (from 14.62 percent), 14.52 percent (from 14.51 percent), 15.05 percent (from 14.51 percent) and 15.05 percent (from 14.76 percent).

Elsewhere, FGN Eurobonds prices tanked across the maturities amid resumed profit taking activity on the London Stock Exchange (LSE).

Specifically, the 10-year bonds, 6.75 percent JAN 28, 2021 and 6.38 percent JUL 12, 2023 shed N0.03 and N0.21 respectively (corresponding yields increased to 4.57 percent and 5.26 percent from 4.57 percent and 5.22 percent respectively); however, the 5-year, 5.13 percent JUL 12, 2018 bond gained N0.04 (yield fell to 3.35 from 3.49 percent).

This week, we anticipate a mix of bargain hunting and profit taking activity at the domestic OTC bond market amid expectation of limited boost liquidity.