Investors Stake N13.4tn on Currency, Fixed Income Securities

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By Goddy Egene

Transactions in fixed income and currency markets for the month of rose by 10.5 per cent as investors committed N13.42 trillion in March, compared with N12.15 trillion recorded in February.  However, the Treasury Bills (T.bills) segment of the market continued to dominate and accounted for 49.5 per cent in February, while Federal Government of Nigeria (FGN) Bonds accounted for 8.01 per cent. Activities in the foreign exchange (FX) market accounted for 22.9 per cent, while Money Market accounted for 19.4 per cent.

A further analysis of the activities  in the market that is  facilitated by FMDQ OTC Securities Plc,  showed  that transactions in the FX market settled at $9.72 billion in March, an increase of 50.5 per cent when compared with the $6.46 billion  recorded in February. This increase, according to FMDQ,   was largely due to increased supply of FX into the market by the Central Bank of Nigeria (CBN).  The central bank sold a total of $1.24 billion through various interventions conducted during the period under review.

 Inter-member trades stood at $0.78 billion in the month of March, an increase of 15.3 per cent compared with trades recorded in February.  Member-client trades increased by 6.6 per cent from the previous month, while member-CBN trades stood at $3.9 billion in March, representing an increase of 252 per cent month-on-month and an increase of 164 per cent.

 Meanwhile, turnover in the fixed income market in the month under review settled at N7.7 trillion, showing an increase of 3.7 per cent above the previous month’s value. Outstanding T.bills at the end of the month amounted to N8.79 trillion, an increase of 0.81 per cent compared with N8.72 trillion in February.

Similarly, FGN Bonds’ outstanding value increased by 2.2 per cent to close at N7.19 trillion in the period under review, while trading intensity in the fixed income market settled at 0.76 and 0.15 for T.bills and FGN Bonds respectively, with maturities between one  and three  months being the most actively traded N2.12 trillion.

Short-term yields on the FGN Bonds yield curve gained an average of 1.2 per cent while yields in the medium- and long-term spectrums declined by averages of 0.63 per cent and 0.54 per cent respectively

Activities in the Secured Money Market (Repos/Buy-Backs) settled at N2.48 trillion in March, 2.7per cent lower than the value recorded in February. But Unsecured Placements/Takings decreased by 13.5 per cent to close at N0.12 trillion.

The Securities and Exchange Commission (SEC), on December 6, 2013, licensed FMDQ OTC Securities Exchange as an over-the-counter  securities exchange and self-regulatory organisation to run the fixed income securities and currency  trading platform and organise the market to international standards.