BY BAMIDELE FAMOOFO
Investment activities on the FMDQ Exchange platform increased by 27.87 percent month-on-month as turnover rose by N4.33 trillion to about N19.86 trillion in September.
Turnover dropped by 17.35 percent year on year by N4.17 trillion in the review period.
Foreign Exchange, Money Market and CBN Bills transactions dominated secondary market activity in September 2022, accounting for 84.99 percent of the total secondary market turnover.
Total spot market turnover for all products traded in the secondary market was N16.22 trillion in September 2022, representing a MoM increase of 20.50 percent (N2.76trn) from August 2022 figures.
The MoM increase in total spot market turnover was driven by an uptick in turnover across all products, especially FX turnover which increased MoM by 42.62 percent (N1.07trn), likewise Fixed Income and Money Market turnover in September 2022 increased by 16.94 percent (N1.13trn) and 13.15 percent (N0.57trn), respectively.
The increase in MM turnover was solely driven by an Increase in Repos/Buy-Backs, offsetting the slump in Unsecured Placements/Takings. Similarly, the uptick in Fixed Income turnover was jointly driven by MoM increases in all Fixed Income products with the exception of CBN Special Bills.
Spot FX market turnover was N3.56trn ($8.19bn) in September 2022, representing a MoM increase of 42.62 percent (N1.07trn) from the turnover recorded in August 2022 (N2.50trn).
In the Spot FX Market, the Naira depreciated against the US Dollar, with the exchange rate ($/N) increasing by 1.41 percent ($/N6.05) to close at an average of $/N435.83 in September 2022 from $/N429.78 recorded in August 2022.
Further, exchange rate volatility increased in September 2022 compared to August 2022 as the Naira traded with in an exchange rate range of $/N430.00-$/N437.03 in September 2022 compared to $/N428.13-$/N431.00recorded in August 2022.
“In September 2022, CPs with a total value of N29.56bn matured and were redeemed resulting in a MoM decrease of CPs outstanding by 1.45 percent (N7.16bn) to N87.73bn”
The DMO sold T.bills valued at N553.66bn across its auctions in September 2022, representing a 24.10 percent (N107.51bn) MoM increase on the value of T-bills sold across its auctions in August 2022 (N446.15bn).
Similarly, the DMO sold two(2)10Yandone(1)20Y FGN Bonds worth N261.50bn via re-openings in September 2022 (exceeding the total amount of FGN Bonds offered 1 by N36.50bn).Likewise, this represents a 30.37 percent (N60.92bn)MoM increase relative to the amount sold in August 2022 (N200.58bn)for the same FGN Bond maturities.
In September 2022, the CBN sold OMO Bills worth N25.60bn exceeding the amount offered by 28.00 percent (N5.60bn), representing the first issuance since June 2022.
There were no corporate bonds listed on FMDQ Exchange in September 2022 compared to N27.28bn worth of corporate bonds listed in August 2022. As a result, the total outstanding value for corporate bonds decreased MoM by 0.91 percent (N10.78bn) to N1, 169.81bn.
Total value of CPs quoted on FMDQ Exchange in September 2022 was N22.40bn, representing a MoM decrease of 22.91 percent (N6.66bn) from the value of CPs quoted in August 2022. Quoted CPs were issued by institutions from various sectors including Financial Services (2), Agriculture (4), Real Estate (1) and Manufacturing (2).
In September 2022, CPs with a total value of N29.56bn matured and were redeemed resulting in a MoM decrease of CPs outstanding by 1.45 percent (N7.16bn) to N87.73bn.
In the first half (H1) of 2022, companies and the government have listings/quotations size totaled at N185.8 billion and N689.48 billion on the FMDQ Exchange, which include bond and Commercial Paper, respectively.
The FMDQ in its monthly financial market monthly report announced N5.9 trillion and N2.00 trillion total outstanding values of corporate bonds and CPs, respectively as of June 30, 2022.
The report also disclosed that the total amount of Treasury bills sold between January and June of 2022 was N2.31 trillion and N1.84 trillion FGN Bonds total sold in the period under review.
Among the notable issuance, this year was the listing of FGN’s $4 billion Eurobond and MTN Nigeria Plc’s N127 billion CP.
FMDQ Exchange in February announced the listing of the Federal Government of Nigeria 6.125 per cent $1.25 billion SEP 2028, 7.375 per cent $1.50 billion SEP 2033 and 8.250 per cent $1.25 billion SEP 2051 Eurobonds under its Global Medium-Term Note Programme on its platform.
The listing of these foreign currency-denominated debt securities is yet another commendable feat for the Federal Government of Nigeria (FGN) through the Debt Management Office (DMO), and demonstrates the government’s unrelenting commitment to supporting the development of the nation’s debt capital markets (DCM) towards sustainable economic development.
These issuances represent the FGN’s seventh Eurobond issuances, following the issuances in 2011, 2013, 2017, and 2019.
However, the telecommunication giant led with the issuance of a historic N127 billion Series 1 & 2 CP under its registered N150 billion programme.
The issuance consisted of two tenors – a 184-day series issuance priced at a 7.50% yield and a 254-day Series 2 issuance priced at an 8.50 percent yield.