Increased bond market activities are expected in 2024, according to FSL Securities
FSL Securities Limited anticipates an elevated level of bond activities in 2024, driven by the Federal Government's need to address the N9.18 trillion budget deficit for achieving its growth objectives.
During the FSL Securities’ Economic Review and Outlook for 2024, themed "Navigating the tides," Victor Chiazor, the Head of Research and Investment, emphasized the necessity for private sector involvement in addressing the budget deficit. He stated, “Given the need to fund the budget deficit, private sector activity in the segment of the market is needed. We see the bond market remaining active this year as money would be raised from the market to fund the deficit budget."
“Moreover, the dwindling interest in state bonds persists, although we anticipate that states with substantial revenues will tap into the bond market, considering the numerous reconstruction projects undertaken on certain state bonds.”
Regarding the economy, he remarked, “In 2024, the federal government is poised to grapple with the persistently high debt levels, given the considerably elevated debt-to-service ratio. The equities market is likely to face challenges in replicating the performance seen in 2023, with domestic players dominating as foreign investor interest is expected to be subdued. Market dynamics will be chiefly influenced by the Central Bank of Nigeria's dovish stance and corporate performance.
The fiscal authority's visibility is anticipated to improve throughout the year, while monetary policy for 2024 is forecasted to remain variable, as it will continue to monitor unfolding events and decide whether to adopt an expansionary or contractionary monetary policy.”
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