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Turnover in fixed income market hits N20.54tr in December 2021

By Helen Oji
27 January 2022   |   4:05 am
FMDQ Securities Exchange has announced that turnover in the Fixed Income and Currencies Markets (FIC) hit ₦20.54 trillion in December 2021, representing a month-on-month increase of 29.89 per cent (₦4.73 trillion).

Naira notes

FMDQ Securities Exchange has announced that turnover in the Fixed Income and Currencies Markets (FIC) hit ₦20.54 trillion in December 2021, representing a month-on-month increase of 29.89 per cent (₦4.73 trillion).

The figure represents a Year-on-year (YoY) increase of 31.86 per cent (₦4.96 trillion) from N15.57 trillion achieved in December 2020.

In its December 2021 edition of Fixed Income and Currencies (FIC) Markets analysis, FMDQ Exchange also stated that total foreign exchange (FX) market turnover during the period stood at $16.37 billion or ₦6.84 trillion, representing a monthly increase of 58.96 per cent or $6.07 billion from $10.30 billion recorded in November 2021.

According to the exchange, Naira depreciated against the dollar in the FX market, losing 0.45 per cent ($/₦1.89) to close at an average of $/₦416.81 in December 2021 from $/₦414.92 recorded in November 2021, trading within a range of $/₦414.06 – $/₦435.00.

It explained that Foreign Exchange (FX), CBN3 Special Bills (SB) and OMO4 bills were the highest drivers of market turnover, jointly accounting for 60.63 per cent of the total FIC markets turnover in December 2021, mainly due to an increase in FX supply and a 452.71 per cent (₦1.72 trillion) increase in secondary market activity for CBN special bills.

In the OTC FX Futures market, the near month contract (NGUS DEC 29, 2021) expired and open positions with a total Notional Value (NV) of $0.55 billion were settled. A far month (60M6) contract, NGUS DEC 30, 2026 was introduced at a futures price of $/₦614.32. The total NV of open OTC FX Futures contracts as at December 31, 2021 stood at circa $5.33 billion 7 representing a Month on Month (MoM) decrease of 2.20 per cent ($0.12 billion) from its value as at November 30, 2021.

On market activity, the total number of executed trades reported on FMDQ trading systems decreased by 14.34 per cent to 3,326 in December 2021, driven mainly by the monthly decrease in trading activity for T-bills and OMO Bills.

This offset the monthly increase in CBN special bills and FGN bonds.

Furthermore, daily average trade size in December 2021 was ₦19 trillion compared to ₦18 trillion in November 2021, mainly driven by the 257.08 per cent (N2 trillion) increase in the daily average trade size of CBN special bills.

Total turnover in the money market segment increased monthly by 23.41 per cent from ₦96 trillion to ₦5.06 trillion in December 2021.

Also, the MoM increase was driven by the 23.82 per cent ₦96 trillion increase in Repos/Buy-backs turnover, respectively.

Further analysis of the report showed that OMO bills within the period were the most traded FI securities, with a 10.00 per cent (₦32 trillion) MoM increase in turnover.

FMDQ also stated that trading intensity for OMO bills increased by 37 basis points (bps) to 1.98 from 1.61 in November 2021.

Similarly, turnover across other fixed income products such as FGN bonds, CBN special bills and other securities also increased MoM in December 2021, except turnover for T-bills which decreased MoM by 49.08 per cent (₦1.33 trillion) to ₦1.38 trillion within the period.

Also in December 2021, T-bills within the >6M – 12M tenor range were the most traded sovereign debt securities, accounting for 43.77 per cent (₦1.25 trillion) of the total turnover for sovereign debt securities, while FGN bonds with term-to-maturity of 20 years or higher were the most traded long-term 13 sovereign debt securities, accounting for 17.63 per cent (₦50 trillion) of the total turnover for sovereign debt securities.

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