Turnover in fixed income, currency markets hits N11.78trn in May 2020 -- FMDQ
TURNOVER IN THE FIXED INCOME AND Currency markets for the month ended May 29, 2020 was N11.78trn, indicating a month on month on month decrease of 29.46 percent (N4.92trn) from the turnover recorded in April 2020 (N16.70trn) and a year on year decrease of 42.51% (N8.71trn) from the turnover recorded in May 2019 (N20.49trn).
The turnover recorded in the FIC markets in May 2020 represents the lowest turnover recorded since January 2018 (N11.71trn). However, YTD turnover increased to N100.80trn representing a YoY increase of 0.70% ( 0.70trn) on the YTD turnover of N100.10trn recorded in May 2019
Money Market i.e. repurchase agreement s(“Repos”) & unsecured placements transactions and OMO bills jointly accounted for 61.26% of the total FIC market turnover recorded in May 2020 as
money market transactions (mainly Repos) replaced Foreign Exchange (“FX”) as the highest contributor to FIC markets turnover in May 2020, compared to April 2020.
Total FX market turnover in May 2020 was $7.62bn (N2.94trn), representing a MoM decrease of 32.92% ($3.74bn) from the turnover recorded in April 2020
($11.36bn; N4.38trn), continuing the recent downward trend in FX turnover since April 2020, albeit at a slower rate than the MoM decrease recorded in April 2020 (60.72%; $17.57bn).
Analysis of FX market turnover indicated a general decrease in FX market activity by trade type, with Member-Client turnover for member-CBN FX Spot trades increased by 100.00% MoM from $0.16bn in April 2020 to $0.32bn in May 2020.
In the OTC FX Futures market, the near month contract (NGUS MAY 27, 2020) with a total outstanding notional value of $2.51 billion expired and was settled, value of open contracts as at April 30, 2020 (c.$15.00bn), while the total notional value of OTC FX Futures contracts traded since inception stood at $46.80bn as at May 29, 2020.
The average CBN Official Spot US$/fl exchange rate remained flat at $/fl361.00 in May 2020 compared to the average rate recorded in April 2020, while the Naira depreciated against the US Dollar at the Investors’ and Exporters’ (“
I&E”) FX Window,losing $/N1.18 (average of $/ N384.99 in April 2020) to close at an average of $/fl386.17 in May 2020.
In the parallel market, the Naira depreciated against the US Dollar losing $/N22.37 (average of $/N426.35 in April 2020) to close at an average of $/fl450.00 in May 2020 Fixed Income (“FI”) Market (T.bills, OMO bills and FGN Bonds)
In the primary market, average discount rates on the 91-day T.bill increased by 49 basis points to 2.48% in May 2020, representing the first (1st) time discount rates have increased since October 2019 when the CBN effectively
bifurcated the bills (T.bills and OMO bills) segment of the FI market
trades accounting for 55.61% ($2.08bn) of the total MoM decrease in FX turnover, while FX Derivatives accounted for 89.30% ($3.34bn) of the total MoM decrease in FX turnover by product type in May 2020. However, it is noteworthy to mention that the
whilst a new far month (60-month) contract, NGUS MAY28, 2025 was introduced at a contract rate of $/N584.11. The total notional value of open OTC FX Futures contracts as at May 29, 2020 stood at $13.94bn, representing a 7.07% ($1.06bn) decrease on the
L-R: Reginald Karawusa, new executive commissioner, legal and enforcement, Securities and Exchange Commission (SEC); Lamido Yuguda, new director general, SEC; Dayo Obisan,Dayo Obisan, new executive commissioner, operations, SEC; and Ibrahim Boyi, new executive commissioner, corporate sales, SEC, during the resumption of the new management of SEC in Abuja, recently