FMDQ Exchange records N14.7trn turnover in one month



Uba Group

Secondary market turnover on FMDQ Exchange in February 2023 was N14.66 trillion, representing a month on month and year on year increase of 12.47 percent (N1.63trn) and 3.03 percent (N0.43trn) from January 2023 and February 2022 figures respectively. Foreign Exchange (FX), CBN Bills and Money Market (MM) transactions dominated secondary market activity in February 2023, accounting for 73.90 percent of the total secondary market turnover.

Total spot market turnover for all products traded in the secondary market was N12.58 trillion in February 2023, representing a MoM increase of 13.81 percent (N1.53trn) from January 2023 figures. The MoM increase in total spot market turnover in the review month was jointly driven by an uptick in turnover across all products with contributions by FI, FX and MM increasing MoM by 10.33 percent (N0.62trn), 0.63 percent (N0.02trn) and 37.94 percent (N0.89trn), respectively. The growth in MM turnover was driven by an increase in Repos/Buy-backs transactions.

Likewise, the uptrend in FI turnover was driven by a MoM increase in FGN and Other Bonds turnover which offset the MoM decrease in T.bills and CBN Bills transactions, respectively in February 2023. Spot FX market turnover was N2.71 trillion ($5.88bn) in February 2023, representing a MoM increase of 0.63 percent (N0.02trn) from the turnover recorded in January 2023 (N2.69trn).

In the FX Market, the Naira appreciated marginally against the US Dollar, with the spot exchange rate ($/N) decreasing by 0.24bps ($/N0.01) to close at an average of $/N461.54 in February 2023 from $/N461.55 recorded in January 2023. Further, exchange rate volatility increased marginally in February 2023 as the Naira traded within an exchange rate range of $/N461.00-$/N462.17 compared to $/N461.00-$/N462.00 recorded in January 2023.

FI market turnover was N6.65 trillion in February 2023, representing a MoM increase of 10.33 percent (N0.62trn) from the turnover recorded in January 2023 (N6.02trn). The MoM increase in the FI market turnover was jointly driven by the 51.08 percent (N0.93trn) and 13.15 percent (N0.11trn) uptick in FGN Bonds and CBN Special Bills transactions which offset the MoM decline in T.Bills, OMO Bills and Other Bonds turnover respectively. As a result, the trading intensity (TI) for T.Bills decreased by 0.08 points to 0.23, whilst TI for FGN Bonds increased MoM by 0.05 points to 0.17. The TI for OMO Bills improved by 1.51points to 6.28points despite the decline in turnover.

This can be attributed to the lower outstanding amount (i.e., no issuances coupled with maturing securities) within the review period. At the primary market, the DMO sold T.bills valued at N263.50bn across its auctions in February 2023, representing a 5.03 percent (N13.97bn) MoM decrease on the value of T-bills sold across its auctions in January 2023 (N277.47bn). Similarly, the DMO sold FGN Bonds worth N770.82 billion in February 2023 via re-openings of two (2) 10Y, one (1) 20Y and one (1) 30Y FGN Bonds. The total sale represented a 214.12 percent over subscription of the amount offered 1, and a 16.33 percent (N108.20bn) MoM increase on the amount sold in January 2023 (N662.62bn) for the same FGN Bond maturities.

The CBN did not auction OMO Bills in the primary market for the second consecutive month in February 2023. The total value of corporate bonds listed on FMDQ Exchange in February 2023 was N115.00 billion, bucking the trend in the last two 2 months where there was no listings on the Exchange The two 2 listings were by a single issuer in the telecommunications sector As a result the total outstanding value for corporate bonds in creased MoM by 6.94 percent (N97.30bn) to about N1.50 trillion in the review month. The total value of CPs quoted on FMDQ Exchange in February 2023 was N101.84 billion, representing a MoM increase of 22.40 percent or N 18.64 billion from the value of CPs quoted in January 2023 Quoted CPs were issued by institutions from various sectors including Financial Services 13 Real Estate 7 Manufacturing 3 and Construction 2. As a result, the total outstanding value of CPs increased MoM by 65.31 percent or N144.69billion to N366 billion.