Stories by Chinenye Anuforo and Chinwendu Obienyi
Transactions turnover in the Fixed Income and Currency (FIC) markets for the month of October recorded a gain of N12.18 trillion, a 7.39 per cent increase from the value of N11.34 trillion traded in September 2017 and a N3.90 trillion increase year-on-year (YoY).
According to the FMDQ OTC Securities Exchange’s website, the Treasury Bills (T.bills) market accounted for 37.20 per cent as against 38.45 per cent in September while FGN2 bonds recorded 6.51 per cent of total turnover in October compared with 9.09 per cent recorded in the previous month.
Activities in the Foreign Exchange (FX) market accounted for 36.92 per cent while Money Market (Repurchase Agreement/Buy-Backs and Unsecured Placements/Takings) recorded 19.21 per cent as against 15.92 per cent of total turnover for the reporting period FX Market.
However, Transactions in the FX market settled at $13.86 billion, representing a decrease of 1.23 per cent ($0.17 billion) when compared with the value of $14.04 billion recorded in September.
Further checks revealed that the rates for the Naira in the month under review, appreciated slightly in the Investors’ & Exporters’ (I&E) window, closing at $/N359.72 (from $/N359.76) whilst also trading at a premium to the parallel market which also appreciated in the month of October to $/N363.00 (from $/N364.00 at the beginning of the month).
However, the CBN official spot rate experienced a slight depreciation, dropping N0.10 to close at $/N305.80 from $/N305.70 at the beginning of the month while the total value traded in the I&E FX window settled at $4.30bn for October, a decrease of 6.68% ($0.31bn) relative to the value of $4.61 billion recorded in September.
Further analysis showed that so far, the total value traded at the window since inception stood at $17.86 billion while Inter-Member trades recorded $0.91 billion in the month of October, a 17.28 per cent increase relative to the trades recorded in September, and a 63.36 per cent increase YoY.
Member Client trades stood at $8.94 billion, decreasing by 2.00 per cent ($0.18bn) from the previous month and increasing by 162.36 per cent ($5.53 billion) YoY. Member-CBN trades stood at $4.01 billion in October ($4.13 billion in September), representing a decrease of 3.02% ($0.12 billion) MoM and an increase of 809.81 per cent ($3.57 billion) YoY.
The 16th Naira-settled OTC FX Futures contract, NGUS OCT 25, 2017, worth $480.87mm, matured and settled in October, whilst a new 12-month contract – NGUS Oct 31, 2018 – for $1.00bn, was introduced by the CBN at $/N361.89.
Turnover in the Fixed Income market in the month under review settled at N5.32 trillion, a 1.25 per cent (N0.07 trillion) decrease MoM while transactions in the T.bills market accounted for 85.10% of the overall Fixed Income market, from 80.88% the previous month.
Outstanding T.bills at the end of the month stood at N9.87 trillion, an increase of 4.43% MoM (N9.45 trillion in September), whilst FGN bonds outstanding value increased by 1.37 per cent (N0.10 trillion) MoM to close at N7.42 trillion, from N7.32 trillion in September.
Trading intensity in the Fixed Income market for the month under review settled at 0.47 and 0.11 for T.bills and FGN bonds respectively, from 0.47 and 0.15 respectively, recorded the previous month. T.bills between the 6 and 12months maturity bucket became the most actively traded, accounting for a turnover of 1.69trn in October.