Nigeria’s financial markets recorded a surge in activity in January 2025 with total secondary market turnover hitting N57.04 trillion, according to the latest financial markets monthly report released by FMDQ Exchange.
The report revealed a year-on-year (YoY) increase of 170.69% to N35.97 trillion growth compared to January 2024.
The month-on-month (MoM) increase stood at 35.31%, an additional N14.88 trillion in trading volume from the N42.16 trillion turnover recorded in December 2024.
FX and Money Market Transactions Dominate Activity
Foreign exchange (FX) and money market (MM) transactions accounted for 72.55% of total secondary market turnover.
The sharp increase in activity was largely driven by a 45.98% MoM surge in FX turnover to N7.04 trillion, alongside a 42.03% or N4.98 trillion rise in money market transactions.
The spot FX market turnover stood at $14.56 billion (N22.36 trillion) in January 2025, reflecting a 49.43% increase from the $9.74 billion recorded in December 2024.
This came as the Naira appreciated against the US dollar with the spot exchange rate declining 1.86% to N1,536.46/$ from N1,564.97/$ in December.
Fixed Income and Money Markets Drive Expansion
The fixed income (FI) market turnover in January 2025 stood at N15.65 trillion, marking a 13.23% MoM increase driven by heightened activity in Treasury Bills (T-Bills), CBN Bills, OMO Bills, and FGN Bonds. However, Other Bonds declined 57.46% during the period.
In the money market, total turnover rose 42.03% MoM to N16.84 trillion, with Repos/Buy-backs contributing N4.99 trillion. The increase in money market transactions was solely driven by the rise in Repo and Buy-back activities.
Meanwhile, in the FX derivatives market, turnover surged 93.57% MoM to $1.42 billion (N2.18 trillion), with FX Swaps and FX Forwards transactions increasing 104.65% and 7.08%, respectively.
Primary Market Activity and Yield Movements
The Debt Management Office (DMO) sold T-Bills worth N1.271 trillion in January, representing a 21.40% decline from the N1.617 trillion issued in December 2024. However, FGN Bonds sales surged 184.66% MoM to N601.04 billion, reflecting strong demand from investors.
The sovereign yield curve flattened with the spread narrowing by 6.33 percentage points to -2.63 percentage points.
Outlook for Nigeria’s Financial Markets
Analysts believe that the robust growth in secondary market turnover reflects improving investor confidence as the market navigates evolving macroeconomic conditions.
With corporate earnings season underway and monetary policy shifts influencing investment strategies, financial market activity is expected to remain strong in the near term with liquidity dynamics in the fixed-income and foreign exchange segments playing a critical role in shaping investor sentiment.
The report underscores the growing depth of Nigeria’s financial markets and highlights the sustained demand for investment instruments across FX, fixed income and money markets, further solidifying the country’s position as a key financial hub in Africa.
