Nigerian Government Eurobond Yields Depreciated on renewed Bearish Sentiment.

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In the just concluded week, investors were
mostly bearish on maturities tracked in the
secondary market as the value of FGN bonds
traded in mismag direction for the maturities
tracked.

The 10-year, 16.29% FGN MAR
2027 instrument rose by N0.25 to N120.31
from N120.06 while its yield declined to
10.82% (from 10.88%)., the 15-year 12.50%
FGN MAR 2035 instrument rose by N0.22 to
N100.61 (from N100.40) while its yield declined to 12.40% (from 12.44%).

However, 20-year 16.25% FGN APR 2037 debt and the 30-year 12.98% FGN MAR 2050 bond depreciated by N1.83, N2.01 and N0.67 respectively; their corresponding yields increased to 12.47% (from 12.25%) and 12.93% (from 12.85%) respectively.

Elsewhere, the value of FGN Eurobonds traded at the international capital market depreciated for all maturities tracked on renewed bearish sentiment.

The 10-year, 6.375% JUL 12, 2023 bond, the 20-year, 7.69% FEB 23, 2038 paper and the 30-year, 7.62% NOV 28, 2047 debt lost USD 1.44 , USD 5.51 and USD6.70 respectively; their corresponding yields rose to 6.53% (from 5.28%), 11.02% (from 10.15%) and 10.99% (from 10.23%) respectively.

In the new week, we expect the value of FGN Bonds, especially for longer maturities to fall (and yields to rise) as investors demand for higher returns given the recent rate hike on 364-day Bill.

Nevertheless, we expect investors to demand for Nigerian Eurobonds as yields trade at attractive levels.