H1: Transactions in Fixed Income, Currently Market Hit N67.4tn

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By Goddy Egene

The fixed income and currency over-the-counter (OTC) market enjoyed high patronage in June as the value of transactions rose by 32.89 per cent from the previous month’s level.

Specifically, turnover recorded in the market in June stood at N12.62 trillion, up from N9.49 trillion recorded in May. This implies that between January and June, the market, which is facilitated by FMDQ OTC Securities Exchange, has recorded a turnover of N67.37 trillion.

A breakdown of the N12.62 trillion traded in June, showed that  the  Treasury Bills (T.bills) segment continued to dominate, accounting  for  43.22 per cent   (40.73 per cent  in May) while  FGN bonds  recorded  6.22 per cent  (5.23 per cent  in May)  of total turnover in June. Turnover in the Fixed Income market in the month under review settled at N6.24trn, transactions in the T.bills market accounted for  87.41 per cent of the fixed income market, from 88.67 per cent  the previous month. Outstanding T.bills at the end of the month stood at N8.51 trillion, a decrease of 3.98 per cent  N8.87 trillion in May whilst FGN bonds’ outstanding value increased by 1.44 per cent  to close at N7.03 trillion in the period under review.

Transactions  in  the  FX  market  settled  at  $8.52 billion   in June,  an  increase  of  29.87 per cent  when compared with the $6.65 billion   recorded in May.

The Central Bank of Nigeria (CBN) sold a total of $1.476 billion through various interventions conducted during the period under review.  The apex bank also maintained its  marginal rate  for the Secondary Market Intervention Sales (SMIS) –Wholesale Forwards intervention at $/3N320; and $/N357 .

In the same period, Money Market and Foreign Exchange market activities accounted for 28.91 per cent and 21.60 per cent of total turnover respectively.

The value of transactions in the FX Market increased by 29.87 per cent ($1.96 billion), as the supply of FX into the market by the CBN also increased by 50.15 per cent to settle at $1.476 billion in the month under review.

The twelfth Naira-settled OTC FX Futures contract NGUS June 21 2017, with a total open contract worth $657.67 million, matured and settled within the reporting month.

According to the FMDQ OTC, this also marked the first time the settlement amount was paid in favour of the contract seller, the CBN, as the Nigerian Autonomous Foreign Exchange Fixing (NAFEX) on the settlement date closed lower the contract rate.

 “Liquidity flows via I&E FX Window continued to improve as total volumes traded for the month settled at $1.81 billion, an increase of 37.73 per cent from the previous month,” it said.

The Managing Director/CEO of FMDQ, Mr. Bola Onadele. Koko, last week said that apart from facilitating currency trading, the OTC Exchange was working hard, in collaboration with other key stakeholders, to facilitate the development of a sustainable finance strategy for the country.