FMDQ in retreat with 8.15% drop to N15.81trn on FGN bonds, FX slowdown

Turnover falls in October, November

AFTER CLIMBING TO N24.03 TRIL LION in September, market turnover from trading activities at the FMDQ OTC market is gradually witnessing free falls, falling 28 percent to N17.21 trillion in October and now, a further decline by 8.15 percent to N15.81 trillion in November 2021.

The monthly decline can be attributed to the slowdown of activities in the foreign exchange and the foreign exchange derivatives category, as well as a reduction in the trading of FGN bonds on the private market.

The market performance is contained in the recent trading data collated from the FMDQ of its monthly trading activities with its dealing members, such as banks, dealing clients, as well as the Central Bank of Nigeria (CBN), every week and published on its websites. The continuous engagement of trading activities in the market is an indication of the growing confidence in the private market from the market participants where activities across various product categories are offered by FMDQ, Nigeria’s over-the-counter securities exchange.

The November turnover comes from all products traded at the FMDQ secondary market, including the foreign exchange, treasury bills, money market (repurchase agreements, buy-backs and unsecured placements and takings) and bonds, which include the FGN bonds and Other bonds, the Eurobonds, foreign exchange and money market derivatives. The figures, however, do not account for the primary market auctions in treasury bills, bonds and foreign exchange on the platform, during the review period.

An orderly breakdown of the market turnover as obtained by Business A.M. Intelligence shows that during the month of November, a total of N2.33 trillion was traded in the foreign exchange category, while the foreign exchange derivatives dropped further to N1.94 trillion from N2.64 trillion in the previous month. Also, in 20 business working days on the over the counter (OTC) securities exchange, there was an average daily turnover of $1.91 billion or N790.5 billion from October’s $2.18 billion or N905.71 billion as traded on the exchange.

Moreover, while more activities were witnessed going into the money market and treasury bills categories, the total treasury bills traded on the platform increased to N2.71 trillion, from N1.82 trillion the previous month owing to the standoff approach adopted by investors in the market while taking a cautious stance for other fixed income securities.

In the same token, while the OMO bills fell further to N3.20 trillion in November, from N3.53 trillion a month before, the CBN Special bills printed at N379.5 billion in November from the previous month’s N312.3 billion.

In another place in the bond segment of the OTC securities exchange, a total of N989.2 billion was traded on the FGN bonds as portfolio managers, as well as fixed-income investors, begin the prowl for better returns for their investors; hence, the increased activity level in the treasury bills space. Similarly, 147.89 billion worth of trades was exchanged in the Eurobond segment of the market.

In the meantime, at the money market end of the secondary market on the FMDQ exchange, the repurchase agreements and buy-backs and unsecured placements or takings were valued at N4.03 trillion and N64.36 billion respectively, while there were no records of trading activities in commercial papers and other money market derivatives at the FMDQ market and other bonds, which includes Agency, Sub-national, Corporate, Supranational Bonds & Promissory Notes printed at N11.20 billion from N23.77 billion in the previous month.