FMDQ Securities Exchange Plc recorded turnover in the Fixed Income and Currency (FIC) markets for the month ended July 31, 2019 was N16.36trillion, representing a 14.44percent (N2.76trillion) monthon-month (MOM) decrease on the turnover recorded in June 2019 (N19.12trillion).
The recorded turnover in July represents 24.89percent (N3.26trillion) year-on-year (YOY) increase from the turnover recorded in July 2018 ( N13.10trillion), according to FMDQ Fixed Income and Currency Markets Monthly Report.
Effect of recent transition to fullfledged Securities Exchange
Following the recent transition of the Company from an OTC market to a full-fledged Securities Exchange, and the attendant change of name from FMDQ OTC Securities Exchange to FMDQ Securities Exchange Plc, the monthly markets’ report, though maintaining its profundity and continuing to provide one-stop holistic update on the markets, has been upgraded to reflect this new status.
The erstwhile FMDQ OTC Monthly Report has been renamed as the FMDQ Fixed Income and Currency (FIC) Markets Monthly Report.
T Bills, FX product segments remained major contributors to FIC market turnover
In the review month of July, Treasury Bills ( T Bills) and FX product segments remained the major contributors to turnover in the FIC market, jointly accounting for 70.38percent of the total FIC market turnover in July 2019 and representing 34 basis points (bps) decrease in their joint contribution recorded in June 2019 (70.72percent). Total FX market turnover in July 2019 was $14.53billion (N5.27trillion), representing 13.41percent ($2.25billion) MOM decrease.
Analysis of FX turnover by trade type indicates MOM decrease across all categories, with InterMember trades recording the highest percentage MOM decrease at 24.95percent ($0.77billion), while Member-client trades recorded the highest MOM decrease in dollar (nominal) terms, at 12.66percent ($1.32billion).
Further, analysis by product type indicates that the MOM decrease in FX turnover was mainly driven by the 22.49percent ($1.93billion) MOM decrease in FX Derivatives turnover, with FX Spot turnover also reporting a MOM decrease of 3.94percent ($0.32billion).
In July 2019, the 37th Naira-settled OTC FX Futures Contract (NGUS JUL 24 2019) with a total contract value of $398.87million matured and was settled, with the Central Bank of Nigeria (CBN) introducing a new contract, NGUS JUL 29 2020 for $1billion at $/₦363.38 to replace the matured contract. This brings the total value of OTC FX Futures Contracts offered and settled since inception to date to circa $17.66billion and circa $9.93billion in open contracts.
In July 2019, the CBN Official Spot rate appreciated by $/N0.05 to close at $/N306.85. However, the closing rate for the Naira against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window depreciated by $/N0.94 to close at $/N361.68, while the parallel market rate appreciated by $/N1 to close at $/N360 in July 2019.
Fixed Income (FI) market (T.bills and FGN bonds)
In July 2019, average OMO bills and T.bills outstanding was N15.32trillion and N2.56trillion respectively, representing MOM increases of 2.40percent ( N0.36trillion) and 0.20percent ( N0.01trillion) respectively. Conversely, average outstanding FGN bonds recorded a MOM decrease of 2.49percent (N0.22trillion) to close at N8.62trillion in July 2019 from N8.84trillion in June 2019.
Trading intensity for FGN bonds decreased from 0.18 in June 2019 to 0.15 in July 2019, while trading intensity for T.bills also declined to 0.35 in July 2019 from 0.43 in June 2019. Trading intensity in the T.bills and FGN bonds markets year-todate (YTD) stood at 3.10 and 0.97 respectively compared to 3.06 and 0.83 for the corresponding period
