FGN Eurobond Yields Rise amid Declining Crude Oil Prices
By Cowry Asset
In the just concluded week, the value of the FGN Eurobonds traded at the international capital market tanked for all maturities tracked amid decline in global crude oil prices and Nigeria’s external reserves: 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 by $0.61, $1.32 and $1.85 respectively, with their corresponding yields rising to 6.11 percent from 5.81 percent, 7.53 percent from 7.18 percent and 8.60 percent from 8.28 percent respectively.
On the local scene, the value of FGN bonds traded at the over-the-counter (OTC) segment moved in different directions across maturities tracked: the 10-year, 16.39% FGN JAN 2022 debt and the 7-year, 16.00% FGN JUN 2019 paper gained N0.38 and N0.06 respectively, while their corresponding yields fell to 14.80 percent from 14.95 percent and 13.85 percent from 14.02 percent respectively.
However, the 20-year, 10% FGN JULY 2030 debt and the 5-year, 14.50% FGN JUL 2021 note lost N0.49 and N0.02; with their corresponding yields rising to 15.75 percent from 15.62 percent and 15.44 percent from 15.42 percent.
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.