DMO releases February 2024 bond offer circular

Nigeria's Debt Management Office (DMO) has released the bond offer circular for February 2024, offering government bonds for subscription through an auction of new 7-year 2031 and 10-year 2034 papers to the tune of 1.25 trillion naira each. The move comes after the successful oversubscription of the T-bills auction, signaling ample liquidity in the system, according to Ayodeji Ebo, Managing Director at Optimus by Afrinvest. The DMO aims to capitalize on the liquidity to support the government's budget implementation and potentially mitigate rate hikes that could arise from lower liquidity levels. Ebo forecasts that investors will be bullish at the upcoming auction, with rates expected to be significantly higher than the last auction, potentially reaching levels nearing or exceeding 19%. This presents an opportunity for investors to lock in profits in the current market environment. The DMO's debt raising strategy for 2024 includes sourcing funds both locally and internationally, with plans for a Eurobond issuance and multilateral funding. As the market awaits the next Monetary Policy Committee (MPC) meeting, there are expectations for further interest rate hikes to attract foreign investors and address inflation concerns. The messaging from the CBN will be crucial in signaling the direction of monetary policy and its impact on market dynamics. The upcoming bond auction and MPC meeting will be closely monitored for their implications on Nigeria's debt management and investment landscape.