Fixed Income, Forex Markets Slow Down as Turnover Dips by N3tr

Turnover at the FMDQ OTC Securities Exchange, the over-the-counter (OTC) market for debts and foreign exchange (forex), dropped by almost a quarter as investors showed less appetite for securities across the various categories.

In the latest summary of activities at the OTC market, FMDQ indicated that turnover of transactions in the fixed income and currency markets in August dropped by 23.5 per cent or N2.99 trillion to N9.75 trillion compared with the performance in July. This also represented a decline of 15.9 per cent or N1.84 billion compared with the comparable period of 2015.

A breakdown of the turnover indicated that activities in the foreign exchange (forex) market accounted for about 23.3 per cent in August as against 27.6 per cent in July. The Federal Government bonds accounted for 2.9 per cent in August as against 3.79 per cent in July while unsecured placements and takings accounted for 4.06 per cent in August as against 3.99 per cent in July.

Also, treasury bills transactions accounted for 33.0 per cent in August compared with 33.6 per cent in July while secured money market including repurchase agreements and buy-backs accounted for 36.7 per cent as against 31.0 per cent in previous month.

In the forex market, transactions amounted to $3.16 billion, a drop of 66.5 per cent or $6.3 billion when compared with the value recorded in July. The second Naira-settled OTC forex futures contract, NGUS AUG 24 2016, with a total outstanding amount of $152.48 million, was priced at $/N310, matured and was settled within the month.

The Central Bank of Nigeria revised the rates on all outstanding OTC forex futures contracts, while a new 12-month contract – NGUS AUG 16 2017 was introduced at $1/N241. The Naira appreciated by 1.56 per cent to close the month at $/N316.24 while the parallel market depreciated by 9.9 per cent to close at $/N413.