FMDQ OTC Securities Exchange Market Records N54.9tn Turnover in 4 Months

Bamidele Famoofo

In four months (January-April), the FMDQ OTC Securities Exchange market recorded N54.90 trillion (about $165.64 billion) worth of transactions, as turnover grew 22 per cent year-on-year as at April 2018. Turnover in the first four months in the 2017 financial year stood at N45.01 trillion, representing a growth of 22 per cent when compared to N54.90 trillion achieved between January and April in 2018, as investors injected additional N9.89 trillion into the short- term instruments market.

Average daily turnover recorded during the 82 trading days between January and April, 2018 stood at N669.14 billion (about $2.02 billion). Investment in Treasury Bills (T-bills) was the biggest contributor to turnover, accounting for 41.22 per cent, while dealings in the Foreign Exchange (FX) segment of the market contributed 36.70 per cent to aggregate turnover in the review period.

Investors splashed N22.61 trillion on T-bills, representing an average of 5.7 trillion per month, while FX recorded N13.41 trillion, averaging about N3.35 trillion monthly.

FX market transactions (Spot FX and FX Derivatives) accounted for 36.70 per cent, while Repurchase Agreements (Repos)/Buy-Backs transactions accounted for 14.79 per cent, with Bonds and Unsecured Placements & Takings representing 6.55 per cent and 0.75 per cent, respectively, of overall market turnover.

The top 10 DMBs accounted for 70.77 per cent (N38.83 trillion) of the overall turnover in the market, with the top three accounting for 58.64 per cent (N32.18 trillion) of this sub-section of the market.

Stanbic IBTC Bank PLC, Access Bank PLC, and United Bank for Africa PLC were the leaders in the value traded for the overall over-the-counter (OTC) market, ranking first, second, and third, respectively.

The summary of transactions in the market in January showed that turnover in the Fixed Income and Currencies (FIC) markets for the month of January 2018 amounted to N11.71 trillion, a 1.28 per cent decrease (N0.15 trillion) from the value recorded in December 2017 and a 28.17 per cent increase (N2.57trn) year on year.

Activities in the T-bills market in January 2018, accounted for 39.24 per cent of market turnover compared to 35.26 per cent recorded in December 2017, while the FX market accounted for 37.50 per cent of the total turnover (33.63 per cent in December 2017). The Money Market (Repurchase Agreements (Repos)/Buy-Backs & Unsecured Placements/Takings) accounted for 16.90 per cent of market turnover (24.31 per cent in December 2017). These three segments combined contributed 93.64 per cent to the total turnover in the FIC markets.

Turnover in February, however, grew by N85 billion, from N11.71 trillion to N12.56 trillion in February. Transaction turnover in the Fixed Income and Currencies (FIC) markets for February amounted to N12.56 trillion, a 7.34 per cent (N0.86 trillion) increase from the value recorded in January (N11.71) and a 3.46 per cent (N0.42 trillion) increase YoY.

Activities in the T-bills market accounted for 44.44 per cent of market turnover (39.24 per cent in January), while the FX market accounted for 33.13 per cent of the total turnover (37.50 per cent in January).

The Money Market (Repurchase Agreements (Repos)/Buy-Backs & Unsecured Placements/Takings) accounted for 16.90 per cent of market turnover, maintaining the same market share from the previous month. These three segments collectively contributed circa 94.47 per cent to the total turnover in the FIC markets.

Transaction turnover in the FIC markets for March amounted to N15.66 trillion, representing an increase of N3.1 trillion a 24.68 per cent increase from the value recorded in February and a 16.26 per cent (N2.19 trillion) increase YoY.

Turnover in the T-bills market accounted for 35.69 per cent of market turnover (44.44 per cent in February), while the FX market accounted for 39.06 per cent of the total turnover (33.13 per cent in February).

The Money Market (Repurchase Agreements (Repos)/Buy-Backs & Unsecured Placements/Takings) accounted for 17.62 per cent of market turnover (16.90 per cent in February). These three segments collectively contributed circa 92.37 per cent to the total turnover in the FIC markets.

In April, transaction turnover in the FIC markets amounted to N14.94 trillion, a 4.59 per cent (N0.72 trillion) decrease from the value recorded in March and a 69.81 per cent (N6.14 trillion) increase year-on-year.

Activities in the T-bills market accounted for 45.85 per cent of market turnover (35.69 per cent in March), while the FX market accounted for 36.60 per cent of the total turnover (39.06 per cent in March).

The Money Market (Repurchase Agreements (Repos)/Buy-Backs & Unsecured Placements/Takings) accounted for 11.17 per cent of market turnover (17.62 per cent in March). These three segments collectively contributed 93.61 per cent to the total turnover in the FIC markets.