FMDQ: Investors capitalizes N178trn on Securities in Nine Months

Investors traded a total of N117.99 trillion securities in the fixed income and currency market between January and September 2019. According to reports released by FMDQ Securities Exchange Plc, N19.20 trillion was transacted in September alone, which is lower than N23.21 trillion recorded in August.

However, Treasury bills and foreign exchange (FX) product segments were the major drivers of turnover in September, jointly accounting for 78.4 per cent.

Total FX market turnover was N6.56 trillion led by Central Bank of Nigeria (CBN) trades, accounting for 47.6 per cent. Further, analysis by product type indicated that the decrease in FX turnover was mainly driven by 21.2 per cent and 39.9 per cent decrease in FX Spot and FX Derivatives turnover respectively.

During the month under review, the Naira-settled OTC FX Futures Contract (NGUS SEP 18 2019) with a total open contract value of $1.29 billion matured and was settled, and a new contract, NGUS OCT28 2020for $1.00 billion at $/N365.50 was introduced.

Also, in September 2019, the CBN Official Spot rate for $/N remained constant at $/N307.00. Similarly, the parallel market rate remained constant at $/N360.00, while the Naira appreciated against the US Dollar at the Investors’ and Exporters’ FX Window by $/N0.70to close at $/N362.23in September 2019.

Meanwhile, total treasury bills issued was N15.22 trillion, representing an increase of 0.53 per cent, while average treasury bills outstanding remained constant at N2.58 trillion. Average outstanding FGN bonds recorded an increase of 0.68 per cent to close at N8.83 trillion in September, from N8.77 trillion in August.

Trading intensity for treasury bills decreased to 0.48 in September 2019 from 0.51 recorded in August 2019. Similarly, trading intensity for FGN bonds decreased from 0.14 in August to 0.11 in September 2019.

In all, year-to-date trading intensity for T.bills and FGN bonds stood at 4.09 and 1.22 respectively compared to 3.99 and 1.20 recorded in the corresponding period in 2018.

In September2019, T.bills within the three and six months maturity bracket remained the most actively traded among the short-term securities, accounting for 35.44 per cent of the total fixed income market turnover, while FGN bonds within the 15 years and 20 years maturity bracket were the most actively traded among the medium to long-term securities, accounting for 4.6 per cent of the total fixed income market turnover.

The FMDQ transformed into a full securities platform from an over-the-counter (OTC) market in March 2019.

Commenting on the performance of the market, the Managing Director/Chief Executive Officer of FMDQ Exchange, Mr. Bola Onadele Koko, said the development of the exchange over the last five years was reflective of the progressive and dedicated strategic leadership provided by its board of directors, as well as the company’s ever-intensifying commitment to proactively deliver value to its stakeholders.

“Having successfully consolidated past gains and taken on new frontiers through the operationalisation of a budding integrated FMI Group across the full value chain of the securities market – execute, clear and settle – the group is poised to enhance efficiencies in FMDQ’s markets to the benefit of market participants,” he said.