FGN Bond Yields Moderate for Most Maturities Tracked amid Buy Pressure…

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In the just concluded week, Debt Management Office (DMO) sold bonds worth N29.35 billion, viz: 12.75% FGN APR 2023 (5-Yr Re-opening) worth N3.80 billion, 13.53% FGN MAR 2025 (7-Yr Re-opening) worth N5.55 billion and 13.98% FGN FEB 2028 (10-Yr Re-opening) worth N20.00 billion respectively.

The 5-year, 7-year and 10-year bonds were auctioned at lower stop rates of 13.50% (from 14.52%), 13.50% (from 14.80%) and 13.50% (from 14.94%) respectively.

Amid lower primary market stop rates, the value of FGN bonds traded at the over-the-counter (OTC) segment gained for most maturities: the 5-year, 14.50% FGN JUL 2021 paper, the 7-year, 13.53% FGN MAR 2025 note and the 10-year, 16.29% FGN MAR 2027 debt gained N1.16, N0.98 and N0.15; their corresponding yields moderated to 14.06% (from 14.67%), 14.13% (from 14.38%) and 14.25% (from 14.29%) respectively.

Elsewhere, the value of the FGN Eurobonds traded at the international capital market depreciated for most maturities tracked amid renewed sell-offs – the 10-year, 6.75% JAN 28, 2021 debts and the 20-year, 7.69% FEB 23, 2038 note fell by USD0.20 and USD0.45 respectively; their corresponding yields rose to 4.97% (from 4.87%) and 7.79% (from 7.75%) respectively.

In the new week, we expect FGN bond prices to increase (with corresponding fall in yields) at the OTC market amid expected ease in financial system liquidity.