Investors Stake N82.4tr on Currencies, Fixed Income Securities in 9 Months

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Goddy Egene

Investors have found the fixed income and currency market attractive and have invested a total of N82.35 trillion in the market in the past nine months.

According to trading data made available to THISDAY on Monday, N10.85 trillion was invested in the month of September alone, showing a growth of 11.3 per cent above the N9.75 trillion staked on securities in August.

A breakdown of the performance for the nine months showed that investors staked N71. 5 trillion between January and August while N10.85 trillion was invested in September.

The performance indicated that in the month of September, activities in the foreign exchange (FX) accounted for 25.74 per cent, while FGN bonds and Unsecured Placements/Takings accounted for 7.16 per cent. Treasury bills (T.bills) transactions accounted for 36.85 per cent while Secured Money Market [Repurchase Agreements (Repos)/Buy-Backs] accounted for 28.24 per cent.

Transactions in the FX market settled at $7.19 billion in September, an increase of 33.10 per cent compared with the value recorded in August. The third Naira-settled OTC FX Futures contract, NGUS September 28 2016, with a total outstanding amount of $179.93 million priced at $/N296, matured and was settled within the month.

The Central Bank of Nigeria (CBN) revised the rates on all outstanding OTC FX Futures contracts, whilst a new 12-month contract – NGUS SEP 20 2017 was introduced at$1/2N243.50
Member-member trades stood at $1.05 billion in the month of September, an increase of 97.15 per cent compared with trades recorded in August and 41.53 per cent, while member-client trades also increased by 26.08 per cent ($1.27 billion) from the previous month and 17.91 per cent ($1.34 billion).

In the month under review, the Naira appreciated by 1.46 per cent to close at $/N311.62 in the inter-bank market, whilst it depreciated by 13.10 per cent to close at $/N475.00 in the parallel market.

Turnover in the fixed income market in September settled at N4.78 trillion, 6.42 per cent below the previous month’s value, with transactions in the T.bills market accounting for 83.74 per cent of the fixed Income market turnover. Outstanding T.bills at the end of the month amounted to N7.01 trillion (August – N6.62 trillion) whilst FGN bonds outstanding volume increased by 1.91 per cent to close at N6.45trn in the period under review

Trading intensity in the fixed income market settled at 0.60 and 0.12 for T.bills and FGN bonds respectively, with maturities between six months – one year being the most actively traded (N1.82 trillion. The short end yields of the FGN bond yield curve gained an average of 2.38 per cent, whilst yields across the medium and long ends declined by an average of 0.12 per cent and 0.09 per cent respectively.

Activities in the secured money market (repos/buy-backs) settled at N3.07trn, 14.21 per cent below the value recorded in August. Unsecured Placements/Takings declined by 46.14 per cent to close the month at a turnover of N0.21 trillion.