BY BAMIDELE FAMOOFO
Investors in the Fixed Income and Currency market invested N13.5 trillion in short term yielding financial instruments on the FMDQ OTC platform in October.
Turnover dropped by N6.33 trillion on a month on month basis, representing 31.84 percent decline compared with the turnover in September. Year on year, turnover recorded a 21.33 percent decrease or N3.67 trillion.
Total turnover for Spot and Derivatives Market was N11.54trn and N2.00trn respectively in October 2022. Spot FX Market Turnover was N2.85trn ($6.46bn) in October 2022, representing a MoM decrease of 20.07% (N0.72trn) from the turnover recorded in September 2022 (N3.56trn).
Further, the Naira depreciated against the US Dollar in the FX market, with the exchange rate ($/N) increasing by 1.19% ($/N5.19) to close at an average of $/N441.02 in October 2022 from $/N435.83 recorded in September 2022, trading within a range of $/N436.63 – $/N444.75.
Similarly, in the Derivatives Market, total turnover in the FX Market segment was N2.00trn ($4.54bn), representing a MoM decrease of 45.06% (N1.64trn) from September 2022.
The DMO sold T.bills valued at N144.00bn across its auctions in October 2022, representing a 73.99% (N409.66bn) MoM decrease on the value of T-bills sold across its auctions in September 2022 (N553.66bn). Similarly, the DMO re-opened two (2) 10Y and one (1) 20Y FGN Bonds worth N107.88bn in October 2022 (lagging the total amount of FGN Bonds offered by N117.12bn).
Likewise, this represents a 58.75% (N153.62bn) MoM decrease relative to the amount sold in September 2022 (N261.50bn) for the same FGN Bond maturities.
In the review month, the CBN did not auction OMO Bills in the primary market compared to N25.60bn worth of bills sold in September 2022.
The total value of corporate bonds listed on FMDQ Exchange in October 2022 was N50.09bn compared to the previous month when no corporate bonds were listed on the Exchange.
Corporate bond listings emanated solely from two (2) issuers in the Financial Services and the Power & Utility sectors.
As a result, the total outstanding value for corporate bonds increased MoM by 3.64% (N42.55bn) to N1, 212.36bn.
The total value of CPs quoted on FMDQ Exchange in October 2022 was N66.51bn, representing a MoM increase of 196.92% (N44.11bn) from the value of CPs quoted in September 2022.
Quoted CPs were issued by institutions from various sectors including Financial Services (8), Real Estate (2), Agriculture (1), Oil & Gas (1), Logistics (1) and Telecommunications (1). In October 2022, CPs with a total value of N139.69bn matured and were redeemed resulting in a MoM decrease of CPs outstanding by 15.00% (N73.18bn) to N414.55bn.
Total spot market turnover for all products traded in the secondary market was N11.54trn in October 2022, representing a MoM decrease of 28.88% (N4.68trn) from September 2022 figures.
The MoM decrease in total spot market turnover was driven by a decrease in turnover across all products, especially Fixed Income (FI) turnover which decreased MoM by 35.34% (N2.75trn), likewise MM and FX turnover decreased in October 2022 by 24.97% (N1.21trn) and 20.07% (N0.72trn), respectively. The slump in MM turnover was jointly driven by MoM decreases in all Money Market products and largely in Unsecured Placements/Takings whilst the decline in Fixed Income turnover was mutually driven by MoM decreases in all Fixed Income products excluding Other Bonds which marginally increased in the review month.