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FMDQ FX spot market posts $390.6 million turnover

By Helen Oji
14 August 2023   |   3:50 am
Foreign Exchange (FX) Spot and Derivatives markets recorded a turnover of $390.60 million, representing a decrease of 14.18 per cent ($64.52 million) for the week ended August 11, from $455.12 million achieved in the previous week.

FILE PHOTO: A packet of U.S. five-dollar bills. REUTERS/Gary Cameron

Foreign Exchange (FX) Spot and Derivatives markets recorded a turnover of $390.60 million, representing a decrease of 14.18 per cent ($64.52 million) for the week ended August 11, from $455.12 million achieved in the previous week.

According to FMDQ Securities Exchange, the week-on-week (WoW) decrease in turnover was driven by the 16.21 per cent ($73.62 million) fall in Forex Spot turnover despite the 1070.59 per cent ($9.10 million) increase recorded in FX derivatives turnover.

The exchange explained that the WoW increase in FX derivatives turnover was solely driven by the 1070.59 per cent ($9.1 million) increase in FX forwards turnover, while there was a sustained lack of activity in both Exchange Traded Forex Futures and Naira-Settled OTC FX Futures markets.

Additionally, FMDQ pointed out that the total value of transactions in the Forex Spot market stood at $380.65 million, representing a decrease of 16.21 per cent ($73.62 million) from the value of transactions executed in the week ended August 4, 2023, which stood at ($454.27 million).

It noted that there were no trades executed in the Exchange-Traded Forex Futures and extant Naira-Settled OTC Forex Futures markets for last week-ended.

Also, the average Nigerian Autonomous Foreign Fixing (NAFEX) rate was $/₦770.75, compared to $/₦768.77 recorded in the week ending on August 4, 2023, representing a depreciation of the naira against the dollar by 0.26 per cent ($/₦1.98).

Meanwhile, the Nigerian Exchange Limited (NGX) recorded a turnover of 1.74 billion shares worth N25.1 billion in 30,652 deals, down from 2.56 billion units, valued at N29.6 billion that were exchanged in 37,713 deals during the preceding week.

The financial services industry (measured by volume) led the activity chart with 1.24 billion shares valued at N12.6 billion traded in 13,398 deals.

The sector contributed 71.4 per cent to the total equity turnover volume. The conglomerates Industry followed with 133 million units worth N575.7 million in 1,572 deals. The ICT industry ranked third with a turnover of 87.6 million shares worth N2.3 billion in 2,404 deals.

Trading in the top three equities namely Sterling Financial Holdings Company Plc, FBN Holdings Plc, and Universal Insurance Plc (measured by volume) accounted for 518.847 million shares worth N3.9 billion in 1,901 deals, contributing 29.8 per cent to the total equity turnover.

On the price movement chart, investors’ interest in MTNN (+1.1 per cent) and some Tier-one banking stocks buoyed transactions last week, causing the NGX All-share index and market capitalisation to appreciate by 0.2 per cent and 0.26 per cent to close the week at 65,325.37 and N35.572 trillion respectively.

Similarly, all other indices finished higher except NGX Main Board, NGX AFR. Div. Yield, NGX MERI Growth, NGX Consumer Goods, NGX Oil and Gas, NGX Lotus II, and NGX Industrial Goods indices which depreciated by 0.1 per cent, 1.6 per cent, 0.4 per cent, 0.92 per cent, 0.32 per cent, 0.09 per cent, and 0.39 per cent respectively while the NGX ASeM index closed flat.

Consequently, the month-to-date and year-to-date returns were slightly higher at +1.5 per cent and +27.5 per cent respectively.

Reacting to market performance, the Chief Research Officer of Investdata Consulting Limited, Ambrose Omordion said: “We expect mixed sentiments on bargain hunting, amid expected positive news and corporate earnings ahead July inflation data and first-tier banks earnings reports.

“Pullbacks are creating buying opportunities, just as more policy pronouncements and economic managers hit the ground running, a situation expected to offer investment direction eventually.

“Discerning investors have continued to target dividend-paying stocks to protect their portfolios.”

Cordros Capital said: “We expect market performance to remain mixed in the week ahead as investors rebalance their portfolios based on an assessment of corporate earnings released thus far for H1, 2023.

“Nevertheless, we expect earnings from the Tier-1 banks in the coming week(s) to spur positive market sentiments, especially given the anticipation of interim dividends.

“Overall, we reiterate the need for positioning in only fundamentally sound stocks as the weak macro environment remains a significant headwind for corporate earnings,” he said.

Vetiva Dealings and Brokerage said: “Sectors traded mixed this week, with just the banking and insurance indices closing the week in the green. We expect similar mixed sessions next week.”

Further breakdown of last week’s transactions showed that a total of 70,841 units valued at N2.863 million were traded this week in 85 deals compared to 27,073 units valued at N1.335 million transacted last week in 90 deals during the preceding week.

Also, a total of 133,413 units valued at N142.419 million were traded this week in 38 deals compared with a total of 143,414 units valued at N146.16 million transacted in 26 deals.

Forty-one equities appreciated during the week lower than 42 equities in the previous week. 44 equities depreciated lower than 52 in the previous week, while 70 equities remained unchanged, higher than 62 recorded in the previous week.