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.