T-Bills account for 48.22% as fixed income, currency markets turnover reaches N9.40trn

Over-the-Counter (OTC) turnover of transactions carried out in the Fixed Income and Currency (FIC) markets for the month of November 2016 increased to N9.40trillion, according to FMDQ OTC Securities Exchange.

This represents an increase of 17.88 percent or N1.43trillion against the value recorded in October 2016, and a 6.84 percent or N690billion increase year-on-year (YoY), FMDQ noted in its “OTC Monthly” released recently.

Activities in the Foreign Exchange (FX) market for the reporting month of November accounted for 19.72 percent (October – 16.89percent), while FGN bonds and Unsecured Placements/Takings accounted for 4.23percent (October – 7.22percent), and 2.37percent (October – 0.97percent) of total turnover respectively. In the same period, Treasury Bills (T.Bills) transactions accounted for 48.22percent (October – 51.69percent) of the total turnover while Secured Money Market [Repurchase Agreements (Repos)/Buy-Backs] accounted for 25.39percent (October – 23.07percent).

Transactions in the FX market settled at $5.95billion in November, an increase of 37.62 percent ($1.63billion) when compared with the value recorded in October ($4.32billion). The fifth Naira-settled OTC FX Futures contract, NGUS NOV 23 2016, with total open contracts worth $421.72million, matured and settled within the month. The Central Bank of Nigeria (CBN) revised the rates offered on all outstanding OTC FX Futures contracts, whilst a new 12-month contract – NGUS NOV 29 2017 – was introduced at $/262.

Member-Member trades stood at $520million in the month of November, a decrease of 6.62 percent ($400million) compared with trades recorded in October 2016 and a decrease of 35.13% ($280million) YoY, while Member-Client trades increased by 34.81percent, ($1.18billion) from the previous month and decreased by 40.92 percent ($3.17billion) YoY.

Member-CBN trades stood at $850million in November (October – $370million), representing a decline of 77.39percent ($2.91billion) YoY. In the month under review, the Naira appreciated by 1.23percent to close at $/N305 in the inter-bank market and depreciated by 2.12 percent to close at $/N480 in the parallel market

Turnover in the fixed income market in the month under review settled at N4.93trillion, 4.96 percent (N230billion) below the previous month’s value with transactions in the T.Bills market accounting for 91.93 percent of the Fixed Income market turnover.

Outstanding T.Bills at the end of the month amounted to N7.27trillion (October – N7.30trillion) whilst FGN bonds outstanding value increased by 0.96percent (N620billion) from October to close at N6.57trillion in the period under review. Trading intensity in the Fixed Income market settled at 0.63 and 0.06 for T.Bills and FGN bonds respectively, with maturities between 6 months – 1 year being the most actively traded (N1.26billion) in the period under review.

The short-end yields of the FGN bond yield curve declined an average of 3.06percent, whilst yields across the medium- and long-ends gained by averages of 0.55percent and 0.71percent respectively.

Spread between the 10-year and 3-month benchmarks closed at -1.69percent points at the end of the month under review, compared with 1.90percent points recorded in October   Money Market (Repos/Buy-Backs and Unsecured Placements/Takings).

Activities in the Secured Money Market (Repos/Buy-Backs) settled at N2.39trillion, 29.73percent (N550billion) below the value recorded in October. On a YoY basis, Repos/Buy-Backs turnover recorded an increase of 13.72percent (N290billion).

Unsecured Placements/Takings increased by 187.04percent (N0.14trillion) to close the month at a turnover of N0.22trillion; a decline of 48.83percent (N210billion) YoY.

The number of executed trades captured on the E-Bond trading platform for the month of November amounted to 16,571 as against 13,040 recorded in the month of October. Executed trades on T.Bills and FGN bonds recorded an increase of 28.70percent and 16.89percent respectively at the end of the month.

 

Iheanyi Nwachukwu