FGN Bonds Yields Moderate on Sustained Demand Pressure…

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In line with our expectations, the values of FGN bonds traded at the over-the-counter (OTC) segment appreciated for all maturities tracked amid sustained buy 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 N0.01, N1.29, N7.53 and N8.26 respectively; their corresponding yields fell to 1.82% (from 2.09%), 3.94% (from 4.23%), 5.64% (from 6.74%) and 8.17% (from 8.80%) respectively.

Meanwhile, the value of FGN Eurobonds traded at the international capital market appreciated 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 gained USD0.57, USD6.62 and USD6.58 respectively; while their corresponding yields fell to 3.85% (from 5.91%), 8.03% (from 8.80%) and 7.99% (from 8.65%) 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.

We also expect Eurobonds yields to trade lower, especially those maturities trading at relatively higher yields, as local bonds yields become relatively less attractive.

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