WeekAheadBond: FGN Bond price seen mellow amid expected bearish activity

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As Bond Prices Sink on Renewed Profit Taking…

In the just concluded week, the value of FGN bonds traded at the over-the-counter (OTC) segment depreciated (and yields rose) across the maturities tracked against the backdrop of strain in financial system liquidity.

Specifically, 5-year, 14.50% FGN JUL 2021 paper, the 7-year, 13.53% FGN MAR 2025 bond, the 10-year, 16.29% FGN MAR 2027 debt and the the 20-year, 16.25% FGN APR 2037 instrument softened by N1.28, N0.97, N0.62 and N0.24 respectively; their corresponding yields rose to 14.64% (from 13.91%), 14.53% (from 14.27%), 14.37% (from 14.24%) and 14.54% (from 14.51%) respectively.

Elsewhere, the value of the FGN Eurobonds traded at the international capital market recovered for most maturities tracked amid renewed bargain hunting – the 20-year, 7.69% FEB 23, 2038 and the 30-year, 7.62% NOV 28, 2047 bonds gained USD2.30 and USD3.49 respectively; their corresponding yields fell to 8.10% (from 8.35%) and 8.20% (from 8.55%) respectively.

In the new week, in the absence of any major inflows, we expect FGN bond prices to mellow (with corresponding rise in yields) at the OTC market amid expected bearish activity.

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Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

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