10 Banks Facilitate N52tr on Investment in Fixed Income Securities, Currency

Goddy Egene

Stanbic IBTC Bank Plc, Access Bank Plc, and the United Bank for Africa Plc led the top 10 banks that facilitated investment in fixed securities and currency valued at N69.16 trillion on the FMDQ OTC Securities Exchange between January and May 2018, according to data made available to THISDAY.

Specifically, the 10 banks accounted for 74.7 per cent or N51.67 trillion of the total investment in five months.

However, the top three banks (Stanbic IBTC Bank, Access Bank and UBA) accounted for 45.2 per cent or N31.28 trillion.

Apart from the three banks, others among the top 10 banks were: Standard Chartered Bank Limited, Ecobank Nigeria Limited, CitiBank Nigeria Limited, Union Bank of Nigeria Plc, First Bank of Nigeria Limited, Zenith Bank Plc and First City Monument Bank Limited.

A breakdown of the transactions showed that treasury bills contributed the largest to overall turnover, accounting for 40.86 per cent (N28.26 trillion) of the market.

Also, forex market transactions (Spot FX and FX Derivatives) accounted for 36.64 per cent whilst Repurchase Agreements (Repos)/Buy-Backs product categories recorded 15.25 per cent and Bonds and Unsecured Placements & Takings representing 6.54 per cent and 0.71 per cent respectively.

As part of efforts to make the market more efficient and attractive, FMDQ with the support of the Central Bank of Nigeria (CBN) and the dealing members (banks) recently deployed a fixed income market straight through process (STP) settlement solution.

The settlement solution was deployed through exchange’s proprietary market system – FMDQ’s Q-ex – a customised fully-integrated multi-asset trading system with post-trade services capabilities.
“FMDQ’s Q-ex has been integrated with the CBN’s Scripless Securities Settlement System (S4) to provide STP capabilities for efficient settlement in the fixed income market, improving the efficiency of the trading, reporting and settlement processes, whilst further developing, in no small measure, the Nigerian financial markets,” FMDQ OTC the exchange explained.

The exchange said with integrity being one of the key ingredients for a successful market, as adjudged by global counterparts, the achievement of STP in the fixed income market via the integration of Q-ex and the CBN’s S4 could not have come a moment too soon.

Commenting on development, the Managing Director/Chief Executive Officer of FMDQ OTC, Bola Onadele.Koko, said: “The development of FMDQ’s Q-ex and its subsequent linkage to the CBN’s S4 is one of the key medium- to long-term initiatives of FMDQ, aimed at making the Nigerian financial market operationally excellent – delivering on the “O” in FMDQ’s GOLD Agenda. With the continued collective efforts of the CBN, the Securities & Exchange Commission and indeed, other key regulators and stakeholders, we at FMDQ, are confident that the potential of our domestic markets, acting as a catalyst to propel economic growth, shall be realised. To build and sustain a well-functioning market, it is hoped that all hands remain on deck even as FMDQ continues to re-affirm its commitment to promote a world-class financial market operating in alignment with international best practices.”