Emmanuel OchayiFMDQ Securities Exchange reported a total turnover of N40.43 trillion in August 2024, reflecting an increase in market activity.
FMDQ Secondary Market Turnover Reaches N40.43trillion
FMDQ Securities Exchange has reported a total secondary market turnover of N40.43 trillion in August 2024, representing a month-on-month (MoM) increase of 31.97% from July and a year-on-year (YoY) increase of 128.57%. This growth was highlighted in the FMDQ’s recently released financial report.
Join our WhatsApp Channel“The jump in turnover reflects the increasing interest in FX and Money Market transactions,” FMDQ said in its statement.
FX and Money Markets Drive Growth
The report emphasised that Foreign Exchange (FX) and Money Market (MM) transactions were key drivers, jointly accounting for 69.98% of the total turnover in August.
FX activity saw a significant boost, with spot market turnover reaching $9.90 billion (N15.74 trillion), a 33.88% MoM increase from July.
READ ALSO: FMDQ Exchange Records N30.63trn Secondary Market Turnover In July
The Naira’s depreciation against the US Dollar was also notable, with the exchange rate moving from $/N1,560.32 in July to an average of $/N1,586.56 in August.
“The FX market continues to experience high volatility as the naira fluctuates within a wider range,” added the FMDQ.
Money Market Records Steady Growth
In the Money Market, turnover reached N9.76 trillion, driven by a 5.22% increase in Repos/Buy-backs transactions, which offset a slight decline in Unsecured Placement/Takings.
FMDQ explained that “The MoM increase in the Money Market was primarily due to increased activity in the Repos market, showing confidence in short-term borrowing instruments.”
Fixed Income Gains Momentum
The Fixed Income (FI) segment saw a sharp increase, with turnover surging by 76.43% to N12.14 trillion in August. This rise was attributed to higher activity in T.bills, OMO Bills, and FGN Bonds transactions.
The FMDQ noted, “The fixed income market’s growth offset declines in other bond transactions, contributing to the overall increase in market turnover.”
August Oversubscription in FGN Bonds
The Debt Management Office (DMO) sold T.bills worth N507.13 billion in August 2024, marking an 82.44% MoM increase. FGN Bonds were also in high demand, with N374.75 billion sold, a 66.03% MoM rise.
FGN Bond auctions were oversubscribed by 142.20%, highlighting strong investor demand. “Despite oversubscription, only 81% of T.bills were sold,” FMDQ’s report mentioned.
Corporate Bonds and Commercial Papers See Uptick
In addition to government securities, two corporate bonds valued at N62.40 billion were listed on FMDQ in August 2024. The market for Commercial Papers (CPs) also expanded, with a MoM increase of 276.23%, reaching N66.93 billion.
“This is a testament to the growing confidence in corporate bonds and commercial papers,” said a market analyst.
FX Derivatives Slow Down
While other segments saw growth, FX derivatives recorded a decline in turnover. The MoM decrease of 8.39% was driven by a reduction in FX Swaps and FX Forwards transactions.
Despite the slowdown, FMDQ remains optimistic about the market. “We expect continued growth in the coming months as more market participants engage with derivative products,” the exchange stated.
The August 2024 performance of the FMDQ Securities Exchange highlights strong market dynamics across various segments, particularly FX, Money Market, and Fixed Income.
With continued investor interest and a steady rise in market turnover, the exchange is poised for further growth.
The rise in secondary market turnover underscores the increasing confidence in the Nigerian financial markets.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
