FMDQ Achieves N130trn Turnover In 11 Months

  • 10 dealing members account for N93.36trn

By Nse Anthony-Uko
(Sundiata Finance) — FMDQ OTC Securities Exchange recorded a turnover of N130.17 trillion in the first 11 months of 2017. With average exchange rate of N317.24 per dollar, the 11-month turnover stood at $410.32 billion.

Average daily turnover stood at N565.96 billion or $1.78 billion during the 230-day trading session
The turnover included all products traded on the FMDQ secondary market including foreign exchange, treasury bills, sovereign bonds, other bonds issued by agency, sub-national, corporate and supranational institutions, Eurobonds and money market instruments such as repos and buy-backs and unsecured placements and takings.
The turnover excluded primary market auctions in treasury bills and bonds. The data, collated from trade data submissions by FMDQ dealing-member banks, represents trades executed amongst the Dealing Member (Banks); Dealing Member (Banks) and Clients; and Dealing Member (Banks) and the Central Bank of Nigeria (CBN).
A breakdown of the turnover showed that treasury bills accounted for the largest turnover of N56.14 trillion. Repurchase agreements and buy-backs followed with the second largest turnover with N29.16 trillion.
Others included foreign exchange N18.70 trillion, foreign exchange derivatives, N15.51 trillion; sovereign bonds, N9.04 trillion; other bonds N27.85 billion; Eurobonds N82.14 billion; unsecured placements and takings N1.49 trillion and money market derivatives, which recorded a turnover of N22.9 billion.
Meanwhile, the 10 Dealing Member (banks) accounted for 71.72 per cent or N93.36 trillion of the overall turnover in the market, with the top three: Stanbic IBTC Bank, Access Bank and Ecobank Nigeria accounting for 48.73 per cent or N45.49 trillion of this sub-section of the market.
Also, 2017 saw a steady flow of transactions and activities in the naira-settled OTC foreign exchange (FX) futures market. The market, which was borne out of the desire to address the need for risk management in the Nigerian FX market has continued to show appreciable potential as an effective hedging product for investors, businesses and government institutions alike.
By December 7, 2017, $10.38 billion worth of OTC FX Futures contracts have traded so far with the CBN remaining steadfast in its commitment to ensuring the success of the market. The Exchange said that it set out in 2017 to innovate and position the markets and invariably, the Nigerian economy, for growth amidst the recessionary trends and other economic headwinds which marked activities within the year.
“For FMDQ, this saw the redefinition of the OTC Exchange’s role in the Nigerian financial markets landscape to include unlocking capital for infrastructural development in support of the Nigerian Economic Recovery and Growth Plan, financial markets diplomacy with both local and international stakeholders and increased economic development advocacy with key regulator, in addition to its marker organising role.
“The year also saw the birth and nurturing of strategic initiatives with key support from and collaboration with market stakeholders and regulators, towards making the Nigerian financial markets globally competitive,” it said.
Recently at the listing of the latest Eurobond issues on FMDQ by the Federal Republic of Nigeria (FRN), managing director/CEO of FMDQ, Mr. Bola Koko said “this is another highly commendable step by the Debt Management Office (DMO) towards deepening the domestic Debt Capital Markets (DCM).
“The DMO continues to set the pace for key development in the Nigerian DCM. The listing of foreign currency-denominated debt securities by the FRN paves the way for the issuance and domestic listing of Nigerian corporate Eurobonds. It also lights up the vision for the issuance of foreign currency-denominated debt locally” said.
In 2018, FMDQ stated that it remains very optimistic about the possibilities of the Nigerian markets with much eagerness and expectation, saying the OTC Exchange recognises the potential of fully-functional DCM and financial markets at large, and will remain steadfast in innovating and providing efficient services and infrastructure, to support issuers, investors, government and their agencies and other corporate businesses at large, towards achieving an economy that would support sustainable development and directly impact the citizenry.
It added that some key market development initiatives will be embarked this year, which are infrastructure/housing development, sustainable finance development, clearing and settlement solutions, expansion of the derivatives markets, new products development, financial markets education and capacity building and proprietary market system launch.
FMDQ was established with the mandate to develop the Nigerian debt capital, foreign exchange (FX) and derivatives markets to global standards.

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