Fixed Income Securities Market Attracts N32tn in Four Months

By Goddy Egene

The fixed securities and currencies market has attracted investments worth N31.93 trillion between January and April 2016, statistics obtained by THISDAY have revealed. The money was invested in the securities via the FMDQ OTC Securities Exchange, which was licensed by the Securities and Exchange Commission (SEC) in 2013 as an over-the-counter (OTC) securities exchange and self-regulatory organisation to run the fixed income trading platform.
While N22.5 trillion   was invested in the first quarter of 2016, N9.43 trillion was invested in April, bringing the total to N31.93 trillion in four months.   A monthly breakdown of the data, showed that N13.92 trillion was invested in January and February, while N8.58trillion was invested in March, just as investors staked N9.43 trillion.
A further analysis of the investment indicated that activities in the foreign exchange (FX) market accounted for 16.69 per cent of the turnover, as against 18.67 per cent recorded in March, while Treasury Bills (T.bills) transactions continued to dominate, accounting for 42.03 per cent of the total market, 4.37 percentage points higher than the previous month.
Secured Money market (Repurchase Agreements/Buy-Backs) and FGN2 Bonds transactions accounted for 30.47 per cent and 9.41 per cent of the total turnover respectively, whilst Unsecured Placements/Takings contributed 1.39 per cent to total turnover
Transactions in the FX market settled at $6.10 billion, which is 6.99 per cent lower than the value recorded in March. Member-Member trades recorded $0.71 billion in turnover for April, compared to $0.59 billion recorded in March, indicating an increase of 19.36 per cent. Turnover in the Member-Client category, on the other hand, settled at $5.39bn, a dip of 9.60 per cent from the previous month.
On an aggregate, turnover on spot transactions dropped 19.92 per cent to settle at $4.23 billion while transactions in the Swaps market increased by 28.61 per cent to end the month at $1.61 billion. FX Options transactions worth $80.16 million were also recorded within the month.
Turnover in the Fixed Income market settled at N4.85 trillion, 17.35 per cent (N0.72 trillion) above the value recorded in the previous month, with transactions in the T.bills market accounting for 81.72 per cent of the turnover compared with 78.21 per cent recorded in March.
Outstanding T.bills stood at N5.41trillion in the month whilst outstanding FGN bonds increased 2.73 per cent to close at N6.41trillion. Trading intensity in the Fixed Income market settled at 0.74 and 0.14 for T.bills and FGN bonds respectively, with maturities between 1M and 3M being the most actively traded in the review period.
Activities in the secured money market (Repos/Buy-Backs) settled at N2.87trillion, 8.90 per cent (N234.68bn) above the value recorded in March whilst Unsecured Placements/Takings dropped 36.45 per cent to close the month at N130.93 billion.