Fixed income, forex turnover hit N11.7trn in January — Daily Times Nigeria

Fixed income, forex turnover hit N11.7trn in January


. As forex, T. bills’ markets account for 76.74% total transaction

Total transaction turnover in the Fixed Income and Currencies (FIC) markets for the month of January, 2018 amounted to N11.71trillion, representing a 1.28 per cent decrease or N0.15trn from the value recorded in December, 2017.

Although, it increased by 28.17 per cent pr N2.57 trn Year- on -Year (YoY), just as the activities in the Treasury Bills (T.bills) market accounted for 39.24 per cent of market turnover, against 35.26 per cent recorded in December. 2017, while the Foreign Exchange (FX) market accounted for 37.50 per cent, compared to the total turnover of 33.63 per cent for the last month in 2017.

The latest monthly report by the FMDQ OTC Security Exchange indicated that transactions in the FX market settled at $14.01billion in January, 2018, an increase of 8.91 per cent or $1.15bn when compared with $12.86billion value recorded in Dec. 2017.

It is however, worthy of note that in the month under review, the Nigerian currency, Naira, appreciated slightly at the Investors’ & Exporters’ (I&E) FX Window closing at N360 to the dollar from N360.33 sold the preceding month.

At the same time, trading at a discount to the parallel market which closed at N364.00 per dollar, from N363.00 against the greenback as at January 2, 2018.

The Central Bank of Nigeria (CBN) official Spot rate appreciated slightly, gaining N0.30 to close at N305.70 to the dollar from N306.00 stood as at December 29, 2017.

The FMDQ report, showed that total value traded at the I&E FX Window in Jan. 2018 settled at $5.25bn, an increase of 36.87 per cent ($1.41bn) relative to the value recorded in Dec. 2017 ($3.87bn). Total value traded at the I&E FX Window since inception (April 21, 2017) stands at $31.46bn.
“Inter-Member trades recorded $1.10 billion in Jan. 2018, an increase of 11.67 per cent ($0.11bn) relative to the trades recorded in Dec. 2017 ($0.99bn), and a 71.66 per cent increase YoY ($0.46bn). Member-Client trades stood at $8.72bn, an increase of 4.72 per cent from the previous month ($0.39bn) and a 119.85 per cent increase YoY ($4.76bn).

“Member-CBN trades recorded $4.18bn in Jan. 2018 ($3.54bn in Dec. 2017), representing an increase of 17.98 per cent Month on Month (MoM) $0.64bn and a 577.58 per cent increase YoY ($3.56bn), a likely effect of the Secondary Market Intervention Sales (SMIS) introduced by the CBN in Feb. 2017”, FMDQ OTC report has stated.

Meanwhile, the 18th Naira-settled OTC FX Futures contract, NGUS JAN 31, 2018, worth $321.60 million, matured and settled in January, whilst a new 12-month contract – NGUS JAN 30, 2019 – for $1.00 bn, was introduced by the CBN at N362.27 per dollar.

Considering the turnover in the Fixed Income market for the month under review, which settled at N5.33trn, a 7.16 per cent increase MoM (0.36trn). Transactions in the T.bills market accounted for 86.11 per cent of the overall Fixed Income market, an increase from the 84.00 per cent recorded in Dec. 2017.

But outstanding T.bills at the end of the month stood at N11.47trn (N10.60trn in Dec. 2017), an increase of 8.21 per cent MoM (N0.87trn). FGN bonds outstanding value also increased by 0.96 per cent MoM (N0.08trn) to close at N7.64trillion, from N7.57trn in Dec. 2017.

FMDQ noted that trading intensity in the Fixed Income market for the month under review settled at 0.40 and 0.10 for T.bills and FGN bonds, respectively, from 0.38 and 0.11 recorded the previous month, respectively. T.bills between the six (6) and twelve (12) months maturity buckets became the most actively traded, accounting for a turnover of ₦2.52trn in Jan. 2018

“Short-term yields on the sovereign yield curve decreased by an average of 0.89 basis points (bps) and yields in the medium- and long-term spectrum lost an average of 0.68bps & 70.39bps respectively.

“The spread between 10-year and 3-month benchmark yields closed negative at 0.49bps for Jan. 2018 (0.01bps in Dec. 2017), as yields dropped in Jan. 2018 following the redemption of T.bills that matured in Dec. 2017 by the Debt Management Office,” the report stated.

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