FGN Bond Stop Rates Move in Mixed Directions across Maturities…

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In the just concluded week, DMO sold FGN
bonds worth N80.00 billion at the primary
market auction, viz: 15-year, 12.50% FGN MAR 2035 paper worth N40.00 billon and 25-year, 9.80% FGN JUL 2045 bond worth N40.00 billion respectively.

Suprisingly, stop rates moved in
mixed directions for the two maturities
auctioned: while stop rate for 15-year bond rose to 5.00% (from 4.97%), that of 25-year further mellowed to 5.79% (from 6.00%).

Also, the values of FGN bonds traded at the secondary market moved in mixed directions.

Specifically, the 5-year, 14.50% FGN JUL 2021 bond and the 10-year, 16.29% FGN MAR 2027 debt lost N0.31 and N1.05 respectively; their corresponding yields rose to 0.23% (from 0.18%) and 3.77% (from 3.66%) respectively.

However, the 7-year, 13.53% FGN MAR 2025 note and the 20-year, 16.25% FGN APR 2037 paper appreciated by N0.54 and N1.83 respectively; their corresponding yields fell to 2.24% (from 2.38%) and 5.00% (from 5.10%) respectively.

Meanwhile, the value of FGN Eurobonds traded at the international capital market rose for most maturities tracked on sustained bullish activity.

The 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt gained USD1.63 and USD1.52 respectively; while their corresponding yields fell to 7.53% (from 7.70%) and 7.60% (from 7.74%) respectively.

However, the 10-year, 6.75% JAN 28, 2021 bond lost USD0.14; its corresponding yield rose to 3.90% (from 3.47%)

In the new week, we expect local OTC bond prices to appreciate (and yields to moderate) amid expected boost in financial system liquidity.

Also, we expect investors to take advantage of the recent rise in yields for some maturities for trading opportunities.

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