By Nkiruka Nnorom
FMDQ Securities Exchange Plc has recorded N113.6 trillion in market turnover for the year ended December 31, 2016.
Trading activities in treasury bills contributed the highest, accounting for 40 per cent of the total market turnover. Secured market transactions (Repos/Buy-backs) accounted for 27 per cent, whilst foreign exchange (FX) market transactions accounted for 22 per cent of the transactions. Trading in bonds contributed eight per cent, while money market transactions, which include Unsecured Placement & Takings, Commercial Papers and Money Market Derivatives accounted for three per cent of the overall market turnover.
The turnover, according to FMDQ in its January edition of Newsletter termed “FMDQ Spotlight”, represents trades executed among dealing members, dealing members and clients, and dealing members and the Central Bank of Nigeria, CBN.
“The year 2016, challenged and beleaguered with plummeting oil prices, limited access to foreign exchange (FX), high inflation, low investor confidence (both local and foreign), among others, had a significant impact on trading activities. As a result, FMDQ saw its turnover decrease from N137.43 trillion in 2015 to N113.66 trillion in 2016, a year-on-year (YoY) decline of 17 per cent.
“However, despite the overall YoY decline, the OTC Exchange experienced positive growth in the Foreign Exchange Derivatives product line, propelled by the introduction of the OTC FX Futures product into the market,” FMDQ said in the report.
“Though mindful of the economic headwinds, FMDQ looks ahead into 2017 with much enthusiasm. The OTC Exchange expects to continue to focus on its core mandate, leveraging on and garnering the collaborative support of its stakeholders, in order to foster economic development relevant to the growth of the Nigerian financial markets,” the OTC Exchange newsletter stated.
The Exchange listed some of the initiatives it would focus on in the course of the year to include standardisation of repurchase agreement trading (with collateral management), new products development geared towards short-term and private companies’ bonds, financial markets education for FMDQ markets’ stakeholders, development of the non-interest finance (Sukuk) market, expansion of the fixed income and currency derivatives market and Nigerian debt capital market development in line with the Capital Market Master Plan of the Securities and Exchange Commission, SEC, among others.