Chinwendu Obienyi
Transactions in the Fixed Income and Currency (FIC) markets for the month of January 2018 amounted to N11.71 trillion from N11.86 trillion recorded in December 2017, resulting to a 1.28 per cent/ N0.15 trillion decrease and a 28.17 per cent increase year-on-year (YoY1).
Data obtained from the Exchange’s website revealed that the Treasury (T.bills) market accounted for 39.24 per cent of market turnover as against 35.26 per cent in December, while the Foreign Exchange (FX) market accounted for 37.50 per cent of the total turnover compared to 33.63 per cent in December 2017.
The Money Market (Repurchase Agreements (Repos)/Buy-Backs & Unsecured Placements/Takings) accounted for 16.90 percent of market turnover compared to 24.31 per cent recorded in the previous month as these three segments combined, contributed 93.64 per cent of the total turnover in the FIC markets FX Market.
Transactions in the FX market settled at $14.01 billion for the reporting period, an increase of $1.15 billion when compared with $12.86 billion recorded in December 2017.
In the month under review, the Naira appreciated slightly at the Investors’ & Exporters’ (I&E) FX Window closing at $/N360.00 from $/N360.33 as at December 29, 2017 whilst also trading at a discount to the parallel market which closed at $/N364.00 from $/N363.00 as at January. 2, 2018). The CBN4 Official Spot rate appreciated slightly, gaining N0.30 to close at $/N305.70 (from $/N306.00 as at December 29, 2017.
Further analysis of the data showed that the total value traded in the I&E FX Window settled at $5.25 billion, an increase of 36.87 per cent relative to the value recorded in December while the total value traded at the I&E FX Window since inception (April 21, 2017) stood at $31.46 billion.
Turnover in the Fixed Income market for the month under review settled at N5.33 trillion, a 7.16 per cent (N0.36 trillion) increase MoM while transactions in the T.bills market accounted for 86.11 per cent of the overall Fixed Income market, an increase from the 84.00 per cent recorded in December 2017.
Outstanding T.bills at the end of the month stood at N11.47 trillion as against N10.60 trillion recorded in the previous month, an increase of 8.21 per cent MoM whilst FGN bonds outstanding value also increased by 0.96 per cent MoM to close at N7.64 trillion, from N7.57 trillion in December 2017.
Inter-Member trades recorded $1.10 billion in Jan. 2018, an increase of 11.67 per cent relative to the trade value of $0.99 billion recorded in December 2017, and a 71.66 per cent increase YoY ($0.46 billion) while Member-Client trades stood at $8.72 billion, an increase of 4.72 per cent from the previous month ($0.39 billion) and a 119.85% increase YoY ($4.76 billion).
Member-CBN trades recorded $4.18 billion in January 2018 compared with $3.54 billion recorded in December 2017, representing an increase of 17.98 per cent MoM ($0.64bn) and a 577.58 per cent increase YoY ($3.56 billion), a likely effect of the Secondary Market Intervention Sales (SMIS) introduced by the Central Bank of Nigeria (CBN) in February 2017.
The 18th Naira-settled OTC FX Futures contract, NGUS JAN 31, 2018, worth $321.60mm, matured and settled in January, whilst a new 12-month contract – NGUS JAN 30, 2019 – for $1.00bn, was introduced by the CBN at $/N362.27 Fixed Income Market (T.bills and FGN5 bonds).