FGN Bond Prices Rise on Bargain Hunting
By Cowry Asset
In the just concluded week, OTC bond prices appreciated for most maturities on bargain hunting activity. Specifically, the 20-year, 10.00% FGN July 2030 bond, 10-year, 16.39% FGN JAN 2022 paper and the 5-year, 14.50% FGN JUL 2021 paper appreciated by N1.14, N3.30 and N0.58 as the corresponding yields fell to 14.93%, 14.77% and 15.08% respectively.
Meanwhile, the Debt Management Office (DMO), on Wednesday, offered federal government bonds worth N100 billion, viz: 5-year, 14.50% FGN JUL 2021 paper worth N50 billion and 10-year, 16.29% FGN MAR 2017 paper worth N50 billion.
Marginal rates for each maturity moderated to 15.00% from 15.99% and 15.90% respectively.
Elsewhere, FGN Eurobonds depreciated for most maturities amid profit taking activities on the London Stock Exchange.
Specifically, the 10-year bonds, 6.75% JAN 28, 2021 and 6.38% JUL 12, 2023 lost N0.30 and N0.45 respectively (corresponding yields rose to 4.73% and 5.50% respectively) while the 5-year, 5.13% JUL 12, 2018 bond lost N0.02 (yield rose to 3.46%).
This week, we anticipate likely bargain hunting on the back of expected improvement in financial system liquidity.