Buy Pressure Raises Bond Prices for all Maturities

By Modupe Gbadeyanka

The prices of FGN bonds traded this week by investors at the over-the-counter (OTC) segment appreciated as a result of buy pressure.

Analysts at Cowry Asset said the prices appreciated for all the maturities as the bulls dominated the market.

The firm said in line with its expectation, the 20-year, 10 percent FGN JULY 2030 debt, the 10-year 16.39 percent FGN JAN 2022 debt, the 7-year 16 percent FGN JUN 2019 and the 5-year, 14.50 percent FGN JUL 2021 debt appreciated by N1.98, N1.91, N0.14 and N1.51 respectively; their corresponding yields fell to 13.70 percent from 14.16 percent, 13.43 percent from 14.03 percent, 14 percent from 14.36 percent and 13.40 percent from 13.95 percent respectively.

Also, FGN Eurobonds traded on the London Stock Exchange (LSE) appreciated in value across all the maturities amid bargain hunting.

It was gathered that the 10-year, 6.75 percent JAN 28, 2021, the 5-year, 5.13 percent JUL 12, 2018 and 10-year, 6.38 percent JUL 12, 2023 bonds appreciated by $0.90 (yield fell to 4.27 percent from 4.58 percent), $0.12 (yield fell to 3.10 percent to from 3.31 percent) and $1.01 (yield fell to 4.91 percent from 5.10 percent) respectively.

“This week, we expect increases in the bond prices at the OTC market on the back of expected ease in financial system liquidity,” Cowry Asset said.