Goddy Egene
The FMDQ OTC Securities Exchange has facilitated investments of N71.49 trillion in fixed income securities and currencies in the last eight months, statistics obtained by THISDAY have shown.
An analysis of the data revealed that investors traded N61.74trillion between January and July, while N9.75trillion was invested in August.
A further analysis of the August’s performance showed that activities in the foreign exchange (FX) market accounted for 23.29 per cent, down by 27.56per cent recorded in July, while FGN2 bonds and Unsecured Placements/Takings accounted for 2.92 per cent (July – 3.79 per cent), and 4.06 per cent (July – 3.99 per cent) of the total turnover respectively.
Treasury bills (T.bills) transactions accounted for 33.02 per cent (July – 33.60 per cent) of total turnover while Secured Money Market [Repurchase Agreements (Repos)/Buy-Backs] accounted for 36.65 per cent (July – 31.00 per cent).
Transactions in the FX market settled at $3.16 billion in August, a drop of 66.53 per cent ($6.28bn) compared with the value recorded in July. The second Naira-settled OTC FX Futures contract, NGUS AUG 24 2016, with a total outstanding amount of $152.48 million, priced at $/N310, matured and was settled within the month.
The CBN revised the rates on all outstanding OTC FX Futures contracts, whilst a new 12-month contract – NGUS AUG 16 2017 was introduced at $1/N241.00. Member-member trades stood at $0.26 billion in August, member-client trades stood at $4.78 billion.
The Naira appreciated by 1.56 per cent to close at $/N316.24 for the month whilst the parallel market depreciated by 9.93 per cent to close at $/N413.00.
Turnover in the fixed income market settled at N3.5trillion, 26.43 per cent below the previous month’s value, with transactions in the T.bills market accounting for 91.70 per cent of fixed income market turnover.
Outstanding T.bills at the end of the month amounted to N6.62 trillion whilst outstanding FGN bonds closed at N6.33trillion as a result of an August bond maturity.
Trading intensity in the fixed income market settled at 0.54 and 0.04 for T.bills and FGN bonds respectively, with maturities between 6 months – one year being the most actively traded (N1.28 trillion) in the period under review.
Activities in the Secured Money Market (Repos/Buy-Backs) settled at N3.57 trillion just as Unsecured Placements/Takings declined stood at N0.40 trillion.
Liquidity was generally low in the banking system evidenced by spikes in the open buy back and overnight rates which closed the month at 16.00 per cent and 17.67 per cent respectively, compared to 3.75 per cent and 4.25 per cent recorded in July.
