FGN Bonds Yields Further Move Southwards on Sustained Buy Pressure…

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In the just concluded week, the values of FGN bonds traded at the over-the-counter (OTC) segment appreciated for all maturities tracked amid demand pressure.

The 5-year, 14.50% FGN JUL 2021 bond, the 7-year, 13.53% FGN MAR 2025 note, the 10-year, 16.29% FGN MAR 2027 debt, and the 20-year, 16.25% FGN APR 2037 paper gained N0.05, N0.01, N0.03 and N1.61 respectively; their corresponding yields fell to 2.09% (from 2.36%), 4.23% (from 4.26%), 6.74% (from 6.76%) and 8.80% (from 8.93%) respectively.

Meanwhile, the value of FGN Eurobonds traded at the international capital market depreciated further for all maturities tracked on sustained bearish activity.

The 10-year, 6.75% JAN 28, 2021 bond, the 20- year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt lost USD0.09, USD0.24 and USD0.29 respectively; while their corresponding yields increased marginally to 5.91% (from 5.67%), 8.80% (from 8.77%) and 8.65% (from 8.62%) respectively.

In the new week, we expect local OTC bond prices to appreciate (and yields to moderate), amid bullish activity in the fixed income space. Hence, we expect Eurobonds yields to trade lower, especially those maturities trading at relatively higher yields, as local bonds yields become relatively less attractive amid lower yields.

EQUITIES MARKET: Local Equities Market YTD Performance Turned Positive on 2.52% W-o-W Gain…
In line with our expectations, it appears players in
the domestic equities market now have reasons to
smile to their banks in FY 2020, as the year to date
performance of the local bourse turned positive
amid a 2.52% week-on-week rise in its All Share
Index. The positive momentum was chiefly driven
by gains in the share prices of bellwethers such as
ZENITHBANK, GUARANTY and WAPCO as their
financial performance in the first half of 2020
were impressive. Notably, all the sub-sector
gauges tracked closed higher except for the NSE
Consumer Good index which moderated by 0.75%
to 455.27 points. The NSE Banking index appreciated the most by 4.24% to 315.33 points, followed by the NSE Industrial, NSE Oil/Gas and the NSE Insurance indices which rose by 3.25%, 1.79% and 0.64% to 1,199.19 points, 195.43 points and 136.45 points respectively. In the course of the week, DANGSUGAR listed additional 146,878,241 ordinary shares as a result of its merger with Savannah Sugar Company Limited. Elsewhere, market activity went in mixed directions; while total Naira votes moderated by 7.30% to N15.46 billion, total deals and volume advanced by 14.26% and 10.34% to 16,933 deals and 1.33 billion shares respectively.
12.00% 9.00% 6.00% 3.00% 0.00%
OTC Bond Yields (MTM)
28-Sep-20
29-Sep-20
30-Sep-20
01-Oct-20
02-Oct-20
14.50% FGN JUL 2021 (5-Year) 16.29% FGN MAR 2027 (10-Year)
13.53% FGN MAR 2025 (7-Year) 16.25% FGN APR 2037 (20-Year)

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