Adedapo Adesanya
By Adedapo Adesanya
FMDQ Securities Exchange recorded a decline in its total turnover for the first time in 29 months, executing transactions worth N11.8 trillion in fixed income and currency (FIC) markets in May 2020.
This was contained in the company’s latest FIC reports, which showed that the turnover in the month showed a disparity of 29.5 percent equivalent to N4.9 billion when compared to N16.7 trillion realised in the heavy lockdown month of April.
The FMDQ data showed that this was the first month the market was recording such a low turnover in the FIC markets since it recorded N11.7 trillion in January 2018, over two years ago.
Giving a breakdown of the figure, FMDQ noted that Money Market comprising repurchase agreements and unsecured placements transactions and open market operations (OMO) bills drove the total FIX market turnover in May, accounting for 61.3 per cent at N7.2 trillion.
This led the money market transactions to replace foreign exchange (FX) as the highest contributor to FIC markets turnover during the month under review.
On the other hand, the FX market turnover during the period, stood at $7.62 billion (N2.94 trillion), representing a decline of 32.9 percent or $3.74 billion from $11.36 billion or N4.38 trillion posted in April.
Further analysis of the FX market turnover indicated a general decrease in FX market activity by trade type, with Member – Client trades accounting for 55.6 percent ($2.08 billion) of the total month-on-month decrease in FX turnover.
The exchange noted that FX Derivatives accounted for 89.3 percent ($3.34 billion) of the total month-on-month decrease in FX turnover by product type in May 2020.
It also revealed that the turnover for Member – Central Bank of Nigeria (CBN) FX Spot trades increased by 100 percent month-on-month from $160 million in April to $320 million in May.
In May, the Naira depreciated against the United States dollar at the Investors’ and Exporters’ FX Window by 0.31 percent or N1.18 to close at an average of N386.17.
Also, in the parallel market, the naira depreciated against the US dollar by 5.2 percent equivalent to N22.37 to close at an average of N450 during the review period.
