…represents year-on-year increase by 174.97%
Secondary market turnover on FMDQ Exchange in February 2024 was N40.31trillion. This record turnover represents a month-on-month (MoM) and year-on-year (YoY) increase of 91.31percent (N19.24trillion) and 174.97percent (N25.65trillion) from the turnover recorded in January 2024 and February 2023, respectively.
FMDQ Securities Exchange Limited just released it market monthly report for February which also shows that total turnover for the Spot and Derivatives Market was N33.48trilllion and N6.83trillion, respectively, in February 2024.
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According to the report, total spot market turnover for all products traded in the secondary market in February 2024 was N33.48trillion, representing a MoM increase of 98.58percent (N16.62trillion) from January 2024 figures.
The report also noted that the month-on-month increase in total spot market turnover was jointly driven by an increase in turnover across all spot market product categories, with contributions by foreign exchange (FX), money market (MM) and fixed income (FI) transactions increasing MoM by 216.87percent (N8.74trillion), 77.18percent (N4.35trillion) and 48.99percent (N3.52trillion), respectively.
According to FMDQ Exchange, the uptick in money market turnover was solely driven by the month-on-month increase in Repos/Buy-backs, offsetting the MoM decrease in Unsecured Placement/Takings transactions.
Similarly, the surge in FI turnover was jointly driven by a MoM increase across all FI products excluding CBN Special Bills and FGN Bonds which declined in the review period.
Spot FX Market Turnover was $8.54billion (N12.77trillion) in February 2024, representing a MoM increase of 95.47percent ($4.17billion) from the turnover recorded in January 2024 ($4.37billion).
Further, the US Dollar steeply appreciated against the Naira in the FX market, with the spot exchange rate ($/N) increasing by 53.89percent ($/N534.05) to close at an average of $/N1,525.01 in February 2024 from $/N990.96 recorded in January 2024, trading within a range of $/N1,418.78 – $/N1,665.50 compared to $/N838.95 – $/N1,482.57 recorded in January 2024.
Similarly, in the Derivatives Market, total turnover in the FX Market segment was $4.57billion (N6.83trillion), representing a MoM increase of 0.22percent ($0.01billion) from January 2024 figures.
FI market turnover in February 2024 was N10.71trillion, representing a MoM increase of 48.99percent (N3.52trillion) from the turnover recorded in January 2024 (N7.19trillion).
The MoM uptick in the FI market turnover was jointly driven by the 113.98percent (N2.24trillion), 59.44percent (N1.36trillion), and 154.09percent (N0.05trillion) increase in turnover across T.Bills OMO Bills and Other Bonds, offsetting the 3.33percent (N0.03trillion) and 5.07percent (N0.10trillion) decline across CBN Special Bills and FGN Bonds transactions, respectively. As a result, the trading intensity (TI) for T.Bills increased MoM by 0.27 basis points (bps) to 0.57, while TI for FGN Bonds decreased MoM by 0.01bps to 0.09.
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T.bills and FGN Bonds within the >6M – 12M and >10Y – 15Y tenors respectively were the most traded sovereign FI securities, accounting for 55.57percent (N3.39trillion) and 12.13percent (N0.74trillion) of the secondary market turnover for sovereign FI securities in the spot market, respectively.
In February 2024, the sovereign yield curve experienced an increase in level and a corresponding 6.56 percentage points (ppts) MoM decrease in yield spread to 2.81ppts, indicating a bearish flattening of the yield curve. Real (inflation-adjusted) yields remained negative across the yield curve in February 2024, declining further on the back of surging inflation which remains higher than policy interest rates and continues to outpace increase in nominal yields.
