FGN Bond Prices Surge on Renewed Buy Pressure

By Cowry Asset

In the just concluded week, FGN bonds traded at the over-the-counter (OTC) segment appreciated in value for most maturities tracked on renewed buy pressure in line with our expectations: the 20-year, 10% FGN JULY 2030 debt, the 7-year, 16.00% FGN JUN 2019 debt and the 5-year, 14.50% FGN JUL 2021 debt appreciated by N0.01, N0.10 and N0.01 respectively; their corresponding yields declined to 14.18% (from 14.19%), 12.64% (from 12.83%) and 13.68% (from 13.69%) respectively; however the 10-year, 16.39% FGN JAN 2022 debt decreased in value by N0.69 and its corresponding yield rose to 13.77% (from 13.55%).

Meanwhile, the value of the FGN Eurobonds traded on the London Stock Exchange depreciated 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 lost USD0.24, USD0.27 and USD1.30; their corresponding yields rose to 4.93% (from 4.85%), 5.92% (from 5.86%) and 7.04% (from 6.84%) respectively.

Next week, we expect FGN bond prices to rise (with corresponding decrease in yields) at the OTC market amid expected ease in financial system liquidity.