BY BAMIDELE FAMOOFO
Investment in the Fixed Income and Currency market recorded a growth of 15.6 percent or N2.04 trillion in November as total turnover stood at N15.58 trillion on the last trading day of the month.
Turnover in FMDQ Exchange however recorded a year on year decrease of 1.47 percent (N0.23trn) from November 2021 figures. Foreign Exchange (FX), Money Market (MM) and Treasury Bills transactions dominated secondary market activity in November 2022, accounting for 77.69 percent of the total secondary market turnover.
Breakdown of turnover in the review period showed that total spot market turnover for all products traded in the secondary market was N12.54trillion in November 2022, representing a MoM increase of 8.69 percent (N1.00trn) from October 2022 figures.
The MoM increase in total spot market turnover was majorly driven by an increase in Fixed Income (FI) and FX turnover which increased MoM by 8.84 percent (N0.45trn) and 31.25 percent (N0.89trn) respectively thereby offsetting the MoM marginal decrease in MM turnover in November 2022.
The slump in MM turnover was solely driven by the MoM decrease in Repos/Buy-backs.
Conversely, the increase in Fixed Income turnover was mutually driven by an uptrend in T.Bills and FGN Bonds turnover which offset the MoM decrease in CBN Bills and Other Bonds turnover respectively in the review period.
Spot FX market turnover was N3.74 trillion ($8.39bn) in November 2022, representing a MoM increase of 31.25 percent (N0.89trn) from the turnover recorded in October 2022 (N2.85trn).
In the Spot FX Market, the Naira depreciated against the US Dollar, with the exchange rate ($/N) increasing by 1.07 percent ($/N4.74) to close at an average of $/N445.76 in November 2022 from $/N441.02 recorded in October 2022.
Further, exchange rate volatility decreased in November 2022 as the Naira traded within an exchange rate range of $/N444.70 – $/N446.67 compared to $/N436.63 – $/N444.75 recorded in October 2022.
Fixed income market turnover was N5.48trillion in November 2022, representing a MoM increase of 8.84 percent (N0.45trn) from the turnover recorded in October 2022 (N5.04trn). The MoM increase in the FI market turnover was driven by the increase in T.bills and FGN Bonds turnover which offset the MoM decrease of 35.86 percent (N1.20trn), and 76.84 percent (N0.06trn) in CBN Bills and Other Bonds turnover respectively.
As a result, the trading intensity (TI) for T.bills, and FGN Bonds increased by 0.34 and 0.01 points to 0.57 and 0.05 respectively, whilst TI for OMO Bills decreased MoM by 1.86 points to 3.15.
The Debt Management Office sold treasury bills valued at N523.55 billion across its auctions in November 2022, representing a 263.57 percent (N379.55bn) MoM increase on the value of T-bills sold across its auctions in October 2022 (N144.00bn).
Similarly, the DMO sold FGN Bonds worth N269.15billion in November 2022 via re-openings of two (2) 10Y and one (1) 20Y bonds (exceeding the total amount of FGN Bonds offered by N44.15bn), as well as representing a 149.49 percent (N161.27bn) MoM increase relative to the amount sold in October 2022 (N107.88bn) for the same FGN Bond maturities. In the review month, the CBN sold OMO Bills worth N20.00 billion, representing the first issuance of OMO Bills by the CBN in Q4 2022.
The total value of corporate bonds listed on FMDQ Exchange in November 2022 was N199.31billion across three (3) issuers and representing a 297.95 percent (149.23bn) MoM increase from the value of corporate bonds listed in October 2022.
Corporate bond listings emanated solely from issuers in the Financial Services (1) and the Manufacturing sectors (2). As a result, the total outstanding value for corporate bonds increased MoM by 16.29 percent (N197.53bn) to N1.41 trillion.
The total value of CPs quoted on FMDQ Exchange in November 2022 was N72.53billion, representing a MoM increase of 9.06 percent (N6.03bn) from the value of CPs quoted in October 2022.
Quoted CPs were issued by institutions from sectors including Financial Services (14), Real Estate (5), and Manufacturing (2).
In November 2022, CPs with a total value of N79.37 billion matured and were redeemed resulting in a MoM decrease of CPs outstanding by 1.65 percent (N6.84bn) to N407.71billion.
