By Cowry Asset
In the just concluded week, Debt Management Office (DMO) issued bonds worth N110billion, viz: 12.75% FGN APR 2023 (5-Yr Reopening) worth N35 billion, 13.53% FGN MAR 2025 (7-Yr Re-opening) worth N35 billion and 13.98% FGN FEB 2028 (10-Yr Re-opening) worth N40 billion respectively.
The 5-year and 7-year bonds were auctioned at relatively flat stop rates of 15% and 15.15% respectively.
However, the 10-year bond was auctioned at higher stop rate of 15.32% (from 15.25%) even as it was 127% oversubscribed.
Amid higher primary market stop rates, the value of FGN bonds traded at the over-the-counter (OTC) segment fell for all maturities tracked amid sustained bearish investor sentiment: the 20-year, 10% FGN JULY 2030 debt, 10-year, 16.39% FGN JAN 2022 debt, 7-year, 16.00% FGN JUN 2019 debt and the 5-year, 14.50% FGN JUL 2021 debt lost N0.19, N0.01, N0.10 and N0.12 respectively; their corresponding yields rose to 15.23% (from 15.19%), 14.71% (from 14.71%), 14.38 (from 14.28%) and 15.22% (from 15.16%) respectively.
Meanwhile, the value of the FGN Eurobonds traded on the LSE tanked for all maturities tracked – the 10-year, 6.75% JAN 28, 2021 bond, the 10-year, 6.38% JUL 12, 2023 note and the 15-year, 6.50% NOV 28, 2027 paper fell USD0.20, USD0.56 and USD1.16 respectively; their corresponding yields rose to 5.18% (from 5.10%), 6.41% (from 6.27%) and 7.67% (from 7.48%) respectively.
In the new week, against the backdrop of increased financial system liquidity, we expect higher bond prices at the OTC bonds market amid bargain hunting opportunities.
Adedapo Adesanya