Friday, November 18, 2011

What is Bond Yield Curve?

This week we discuss the Bond Yield Curve.
In finance, the yield curve is the relation between the (level of) interest rate (or cost of borrowing) and the time to maturity, known as the "term", of the debt for a given borrower in a given currency. For example, the Nigeria naira interest rates paid on FGN Treasury securities for various maturities are closely watched by many traders,

NSE Market Review [26-30 Sept]

The markets current mood could be many things to different people. To the bears it could be vindication. To the bulls it could be a gold mine with tremendous upside. To the team at Applied Logic it is content that needs structure to guide the many opinions that are developing on this market. 

What does it mean for Bonds to trade at Premium or Discount?

Last week we discussed the bond current yield, this week we discuss what it means for Bonds to trade at a Premium or Discount.
Par value is the issue price of a bond. Par value for FGN bonds is N100 BroadStreetLagos.Com/Bond-Screener/Par. Once a bond is traded on the open market it becomes subceptible to market perceptions, demand and supply. The result is a bond price can either drop below par value (trading at a discount BroadStreetLagos.Com/Bond-Screener/Discount) or move above it (trading at a premium BroadStreetLagos.Com/Bond-Screener/Premium). These moves have implications for current yields and yields to maturity.