The Nigerian over- the-counter (OTC) market for Foreign Exchange (FX), Treasury Bills (T.Bills), Bonds, Money and Derivatives achieved an over- all turnover in 2014 of approximately N104trn, slightly above Business- Day estimate of N100trn based on our growth projections of the nation’s OTC market following the launch of FMDQ OTC PLC (FMDQ) onto the financial market landscape. FMDQ was officially launched in November 2013 with a mandate to work with stakeholders to develop the Nigerian OTC market and in the course of just over a year, has engaged in a number of initiatives to deliver on this mandate.
In its capacity as the market organiser and frontline market regulator, FMDQ is improving market transparency in the OTC market with its trading systems, price discovery applications, website and the weekly data submissions by its Dealing Members i.e. banks and discount houses on their trading activities in the OTC market.
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In the first half of 2014, the Dealing Members achieved an overall OTC market turnover of N45trn and by the end of December 2014, this rose significantly to N104trn, with the top 10 Dealing Members accounting for over 70 percent of this turnover. FX (including FX derivatives) was the most actively traded product, accounting for the largest share of the market turnover at 37.5 percent, followed by T.Bills and Repos/Buy-Backs with a share of 25.4 percent and 22.8 percent respectively. The bond market ac- counts for only 7.7 percent of the market turnover, an area where FMDQ and other market stakeholders are looking to boost in 2015, through market development initiatives to be championed by FMDQ.
This turnover represents trades executed between Dealing Members, Dealing Members & Clients, and Dealing Members and the Central Bank of Nigeria (CBN). It excludes primary market auctions in T.Bills, Bonds and FX. FMDQ said it will continue to engage in initiatives that will make the Nigerian OTC market globally competitive by working with the stake- holders to improve liquidity, transparency, governance and efficiency in the OTC market.
With new initiatives and activities planned for 2015 – listings and quotations of bonds, commercial papers and short term notes, product diversity, fixed income indices, systems integration to achieve straight-through processing, trading systems enhancement, price discovery solutions, stakeholder education, membership diversification, among others.
