Turnover in fixed in­come, cur­rency mar­kets hits N11.78trn in May 2020 -- FMDQ

Business a.m. - - FINANCE & INVESTMENT - Moses Oba­jemu

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

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