The total secondary market turnover recorded on FMDQ Exchange in January 2025 was N57.04trillion, according to recently released financial markets monthly report for January 2025.

The report shows that foreign exchange (FX) and Money Market (MM) transactions dominated the secondary market activity, jointly accounting for 72.55 percent of the total secondary market turnover in January 2025.

The record secondary market turnover of N57.04trillion in January represents month-on-month (MoM) and year-on-year (YoY) increase of 35.31 percent (N14.88trillion) and 170.69 percent (N35.97trillion) from December 2024 and January 2024 figures, respectively.

Spot market…

The total spot market turnover for all products traded in the secondary market recorded on FMDQ Exchange in January 2025 was N54.86trillion, representing a MoM increase of 33.80 percent (N13.86trillion) from December 2024 figures.

The month-on-month increase in total spot market turnover was driven by the increase in FX, FI, and MM turnover by 45.98 percent (N7.04trillion), 13.23 percent (N1.83trillion) and 42.03 percent (N4.98trillion) respectively, the report further shows.

The increase in money market turnover was solely driven by the MoM increase in the Repos/Buy-backs product category. The increase in fixed income (FI) turnover was driven by the month-on-month increase across all product categories, with the exception of Other Bonds, which experienced a decline, while CBN Special Bills remained inactive during the review period, the report stated.

“Spot FX market turnover recorded on FMDQ was $14.56billion (N22.36trillion) in January 2025, representing 49.43 percent ($4.82billion) MoM increase from the turnover recorded in December 2024 ($9.74billion).

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“In the FX Market, the Naira appreciated against the US Dollar, with the spot exchange rate ($/N) decreasing by 1.86 percent ($/N28.52) to close at an average of $/N1,536.46 recorded in January 2025 from $/N1,564.97 recorded in December 2024. Further, exchange rate volatility decreased in January 2025, with the Naira trading within an exchange rate range of $/N1,475 – $/N1,560 compared to $/N1,524.88 – $/N1,672.69 recorded in December 2024,” the FMDQ Exchange report further stated.

Fixed Income (FI) market turnover in January 2025 was N15.65trillion, representing a MoM increase of 13.23 percent (N1.83trillion) from the turnover recorded in December 2024 (N13.83trillion). The MoM increase in turnover was driven by the increase in T.bills, CBN Bills, OMO Bills, and FGN Bonds transactions during the review period, while Other Bonds decreased by 57.46 percent (N0.05trillion).

In January 2025, the trading intensity (TI) for T.bills decreased MoM by 0.01 basis points (bps) to 0.35 while the TI for FGN Bonds increased by 0.01bps to 0.07. T.bills with term-to-maturity (TTM) between >6M – 12M and FGN Bonds with TTM between >5Y – 10Y were the most traded sovereign FI securities, accounting for 49.40 percent (N3.26trillion) and 15.81 percent (N1.04trillion) of the secondary market turnover for sovereign FI securities in the spot market, respectively.

The sovereign yield curve experienced a 6.33ppts MoM increase in yield spread1 to -2.63 percentage points (ppts) in January 2025, depicting a flattening of the yield curve.

“In January 2025, one (1)-year real (inflation-adjusted) yields in Nigeria and Turkey remained negative at (1.13 percent) and (6.14percent), respectively, compared to selected emerging markets,” the report stated.

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Total turnover in the MM segment increased MoM by 42.03percent (N4.98trillion) to N16.84trillion in January 2025. The MoM increase was driven by the 42.09 percent (N4.99trillion) increase in Repos/Buy-backs.

The average Overnight (O/N) rate and Open Repos (OPR) rate (secured lending rate) decreased MoM by 0.48ppts and 0.49ppts, respectively, to close at an average of 29.58percent and 29.02percent in January 2025.

Total turnover in the FX derivatives segment in January 2025 was $1.42billion (N2.18trillion), representing a MoM increase of 93.57 percent ($0.69billion) from December 2024 figures ($0.73billion). The MoM increase in the FX derivatives turnover was driven by the 104.65percent ($0.68billion) and 7.08 percent ($0.01billion) increase in FX Swaps and FX Forwards transactions during the review period.

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In the Cleared Naira-Settled (USD/NGN) Non-Deliverable Forwards market, the near month contract (NGUS JAN 29, 2025) expired with no open positions settled during the period. No new far month (60M) contract was introduced in the Cleared Naira-Settled Non-Deliverable Forwards market in the review period, continuing the trend since August 2023.

Consequently, the TTM of the farthest open contract is twelve (12 months (that is, NGUS JAN 28, 2026 contract). As a result, the cumulative NV of open Cleared Naira-Settled Non-Deliverable Forwards contracts remained flat at $0.09billion as at January 31, 2024, representing a YoY decrease of 96.65 percent ($2.54billion), respectively.

Primary market…

Sovereign securities

In the review month, the DMO sold T.Bills valued at N1.271trillion across its auctions in January 2025, representing a 21.40 percent (N346.06billion) MoM decrease in the value of T-bills sold across its auctions in December 2024 (N1.617trillion). The DMO sold FGN Bonds worth N601.04billion in January 2025. This represents a 184.66percent (N389.89billion) MoM increase on the amount sold in December 2024 (N211.14billion).

During the review period, the sovereign securities offered by the DMO in its T.bills and FGN Bond auctions were oversubscribed by 288.06 percent and 48.88percent. In January 2025, the CBN sold OMO Bills worth N1.500trillion, representing a 47.05percent (N1.332trillion) decrease on the amount sold in December 2024 (N2.832trillion). These securities were oversubscribed by 304.93percent.

Non-sovereign securities

In January 2025, there were no new listings or redemptions of Non-Sovereign Bonds on FMDQ Exchange, leaving the total value of Non-Sovereign Bonds outstanding at N2.246trillion. Meanwhile, the total value of Commercial Papers (CPs) quoted on FMDQ Exchange was N160.79billion, representing a MoM decline of 7.89percent (N13.77billion) from the December 2024 value (N174.56billion).

During the period, nineteen (19) CPs were quoted in January 2025, with the majority issued by institutions in the Financial Services (6), Manufacturing (5), and Agriculture (4) sectors. Despite CP maturities totalling N71.73billion in January 2025, the outstanding value of CPs increased by 17.50percent (N89.06billion) MoM to N597.89billion.

Iheanyi Nwachukwu, is a creative content writer with over 18 years journalism experience writing on banking, finance and capital markets. The multiple awards winning journalist is Assistant Editor, BusinessDay. Iheanyi holds BSc Degree in Economics from Imo State University; Master of Science (MSc) Degree in Management from University of Lagos. Iheanyi has attended several work-related trainings including (i) Advanced Writing and Reporting Skills (Pan African University, Lagos); (ii) News Agency Journalism (Indian Institute of Mass Communication {IIMC}, New Delhi, India); and (iii) Capital Markets Development and Regulations (International Law Institute {ILI} of Georgetown University, Washington DC, USA).

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