Economy
Fixed Income, Currencies Markets Transactions Drop 7.6% in 2020
By Adedapo Adesanya
The Fixed Income and Currencies (FIC) markets recorded a total transaction turnover of N215.1 trillion in 2020, a year-on-year decline of 7.6 per cent compared with N232.7 trillion recorded in 2019.
This was disclosed in the latest FMDQ Exchange’s FIC Monthly Report for December 2020, which indicated that the period ended December 31, 2020, total contribution was N19.9 trillion, representing a Month-on-Month (M-o-M) increase of 35.3 per cent and YoY 20.9 per cent respectively.
It was explained that Foreign Exchange (FX) and Money Market transactions were the highest contributors to the FIC markets in December 2020, jointly accounting for 59.2 per cent of the total FIC market turnover, while OMO Bills and Money Market transactions accounted for the majority of turnover in 2020, jointly contributing 50.5 per cent to total turnover.
Giving a further breakdown, the turnover indicated that FX market turnover in December 2020 stood at $19.72 billion (N7.79 trillion), representing a m-o-m increase of 81.3 per cent ($8.84billion) from the turnover recorded in November 2020 – $10.88 billion (N4.21 trillion).
This was majorly driven by increased FX intervention sales by the Central Bank of Nigeria (CBN) to Dealing Member Banks to reduce the build-up of unmet clients’ FX demand in December 2020.
Analysis of the growth in FX market turnover indicated that FX Spot and FX Derivatives turnover increased m-o-m by 60 per cent ($2.55 billion) and 94.9 per cent ($6.29 billion) respectively in December 2020, with 71.2 per cent of the increase in turnover driven by the turnover growth in FX Derivatives.
In the Over-the-Counter (OTC) FX Futures market, the FMDQ report stated that near month contract (NGUS DEC 30 2020) recorded a total outstanding notional value (NV) of $2.2 billion matured and was settled, while a new long-term (60-month or 60M) contract, NGUS DEC 31 2025 was introduced at a Futures price of N608.10/$1, representing 3.24 per cent ($/N19.07) m-o-m increase in the futures price, compared to the offer rate (N589.03/$1) of the previous 60M contract (NGUS NOV 26 2025).
The total notional value of open OTC FX Futures contracts as at December 31, 2020, stood at $8.09 billion, representing a further decrease of 9.5 per cent ($0.85 billion) from its value as at November 30, 2020 ($8.94 billion), and continuing its downward the trend since May 2020.
The average CBN Official Spot Naira/US Dollar exchange rate remained constant at N379/$1 in December 2020.
Conversely, the Naira depreciated against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window, losing 2.07 per cent (N8.01/$1) to close at an average of N394.92/$1 in December 2020 from N386.91/$1 recorded in November 2020.
Also, the Naira depreciated against the US Dollar in the parallel market, losing 0.17 per cent (N 0.81/$1) to close at an average of N476.05/$1 in December 2020 from N475.24/$1 recorded in November 2020.
However the average spread between the exchange rates in the formal (I&E FX Window) and unregulated (parallel) FX markets reduced by 8.2 per cent to N81.13/$1 in December 2020, from N88.33/$1 in November 2020 due to the higher depreciation of the Naira in the I&E FX Window.
Consequently, the primary markets, average discount rates for the 91-day, 182-day and 364-day Treasury bills increased m-o-m by an average of 0.68 percentage points (ppts), to close at a range of 0.03 per cent – 1.85 per cent in December 2020, while the discount rates for CBN OMO bills decreased m-o-m by an average of 1.01 ppts to close at a range of 1.78 per cent – 6.07 per cent in December 2020.
Similarly, the coupon rates of the 15Y and 25Y FGN Bond issuances increased by an average of 1.58 ppts to close at a range of 6.95 per cent – 7.00 per cent in December 2020.
Meanwhile, the total value of T-bills and OMO bills outstanding as at December 31, 2020, remained constant m-o-m at N2.72trillion and N5.37 trillion respectively, whilst the total value of FGN Bonds outstanding as at December 31, 2020, increased M-o-M by 0.28 per cent (0.03 trillion) to N10.70 trillion from N10.67 trillion recorded as at November 30, 2020.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange extended its stay in the south territory with a decline of 0.56 per cent on Wednesday, April 2.
This brought down the market capitalisation by N13 billion to N2.417 trillion from N2.430 trillion, and downed the NASD Unlisted Security Index (NSI) by 22.57 points to 4,062.87 points from the previous session’s 4,062.87 points.
It was observed that the NASD exchange ended with three price gainers and three price losers during the trading day.
MRS Oil Plc depreciated by N19.00 to close at N171.00 per unit compared with the previous price of N190.00 per unit, NASD Plc lost N4.14 to trade at N37.36 per share compared with Wednesday’s N41.50 per share, and Central Securities Clearing System (CSCS) Plc gave up N2.00 to sell at N78.00 per unit versus N80.00 per unit.
On the flip side, FrieslandCampina Wamco Nigeria Plc appreciated by 19 Kobo to N93.00 per share from N92.81 per share, Food Concepts Plc expanded by 15 Kobo to N2.87 per unit from N2.72 per unit, and Great Nigeria Insurance (GNI) Plc improved by 2 Kobo to 52 Kobo per share from 50 Kobo per share.
Yesterday, the volume of securities dipped by 91.8 per cent to 260.2 million units from 3.2 billion units, the value of securities went down by 98.1 per cent to N154.2 million from N8.3 billion, while the number of deals soared by 53.3 per cent to 46 deals from 30 deals.
GNI Plc was the most active stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by CSCS Plc with 56.9 million units valued at N3.9 billion, and Okitipupa Plc with 27.5 million units traded for N1.8 billion.
The most traded stock by volume on a year-to-date basis was also GNI Plc with 3.4 billion units sold for N8.2 billion, trailed by Resourcery Plc with 1.1 billion units exchanged for N415.7 million, and Infrastructure Guarantee Credit Plc with 400 million units transacted for N1.2 billion.
By Adedapo Adesanya
The Naira dropped N2.09 or 0.15 per cent against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, April 2, to trade at N1,380.79/$1 compared with Wednesday’s rate of N1,378.70/$1.
However, it appreciated against the Pound Sterling in the official market by N2.77 to quote at N1,824.86/£1 versus the N1,836.57/£1 it was traded at midweek, and improved its value against the Euro by N10.54 to N1,591.92/€1 from N1,602.46/€1.
Yesterday was the last trading session of the week for the local currency in the spot market, as the market will be closed on Friday and Monday for the Easter Holiday.
At the black market, the Nigerian Naira maintained stability against the greenback yesterday at N1,405/$1, but gained N8 at the GTBank FX counter to settle at N1,388/$1, in contrast to the previous session’s N1,396/$1.
Pressure eased on the domestic currency as strong policy indicators have helped calm the majority of worries within the financial systems. Particularly in the remittance segment, the apex bank has directed all International Money Transfer Operators (IMTOs) to route remittance transactions through designated Naira settlement accounts in banks, a move aimed at boosting transparency and channelling more foreign exchange into the formal market.
This helps take off pressure from the foreign reserves, which have fallen below the $50 billion mark as they are gradually decreasing rather than falling sharply.
Meanwhile, the cryptocurrency market was bullish on Thursday, as macro sentiment shifted against recent optimism after reports that Iran is drafting a protocol with Oman to manage traffic through the Strait of Hormuz, easing concerns about disruptions to a key global oil route.
The remarks came after U.S. President Trump on Wednesday night vowed to hit Iran “extremely hard” in the coming weeks and that the Strait of Hormuz would “open naturally” once the war ends.
Cardano (ADA) chalked up 1.9 per cent to trade at $0.2435, Dogecoin (DOGE) grew by 1.2 per cent to $0.0912, Ethereum (ETH) appreciated by 0.8 per cent to $2,066.37, Bitcoin (BTC) added 0.5 per cent to sell at $67,080.53, Solana (SOL) increased by 0.5 per cent to $79.91, and Ripple (XRP) jumped 0.2 per cent to $1.31.
Conversely, Binance Coin (BNB) dipped 0.7 per cent to $586.90, and TRON (TRX) depreciated by 0.3 per cent to $0.3147, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 each.
By Dipo Olowookere
The local stock market was relatively flat on Friday, as the bears and the bulls shared the spoils of war, though investor sentiment turned bullish compared with the preceding session’s bearish posture.
Data from the Nigerian Exchange (NGX) Limited showed that the All-Share Index (ASI) was marginally down by 4.66 points as it ended at 201,698.89 points versus Wednesday’s 201,703.55 points, and the market capitalisation slightly contracted by N3 billion to N129.806 trillion from N129.809 trillion.
Customs Street was shut on Friday because of the public holidays declared by the federal government today and next Monday.
Business Post reports that John Holt declined by 9.91 per cent to N15.45, Abbey Mortgage Bank shed 9.60 per cent to trade at N8.95, International Energy Insurance slipped by 6.48 per cent to N3.32, Chams shrank by 5.30 per cent to N3.75, and Tantalizers depreciated by 5.18 per cent to N4.03.
On the flip side, Unilever Nigeria improved by 10.00 per cent to N103.40, Fortis Global Insurance gained 9.82 per cent to trade at N1.23, Multiverse appreciated 9.81 per cent to N20.15, Legend Internet advanced by 9.38 per cent to N6.30, and Zichis grew by 9.02 per cent to N14.14.
The market breadth index was positive during the trading session, as there were 35 appreciating stocks and 24 depreciating stocks.
Yesterday, investors traded 560.0 million equities valued at N19.3 billion in 49,676 deals, in contrast to the 815.5 million equities worth N33.3 billion transacted in 52,641 deals in the preceding day, representing a drop in the trading volume, value, and number of deals by 31.33 per cent, 42.04 per cent, and 5.63 per cent, respectively.
Secure Electronic Technology dominated the activity log with 59.7 million shares valued at N61.1 million, Wema Bank exchanged 52.0 million equities worth N1.4 billion, VFD Group transacted 36.0 million stocks for N410.5 million, Access Holdings sold 35.3 million shares valued at N914.8 million, and Chams traded 31.0 million equities worth N115.0 million.
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