Fixed Income, Currency markets transactions record 8.62% decline to N11.53trn
by Iheanyi Nwachukwu
August 24, 2017 | 12:21 am| | | Start Conversation
The value of transaction in the Fixed Income and Currency (FIC) markets for the month of July amounted to N11.53trillion, the FMDQ OTC market summary for July shows.
This represents 8.62percent (N1.08trillion) decrease from the value recorded in June and 10.97percent (N1.42trn) decrease year-on-year (YoY), as the Central Bank of Nigeria (CBN) continues cutting back on its interventions in the FX market.
The Treasury Bills (T.bills) segment continued to dominate market share, accounting for 43.66percent (43.22percent in June) while FGN bonds recorded 4.53percent (6.22percent in June) of total turnover in July.
Activities in the Foreign Exchange (FX) market accounted for 22.01percent (21.60percent in June) while Money Market (Repurchase Agreements [Repos]/Buy-Backs and Unsecured Placements/Takings) accounted for 29.71percent (28.91percent in June) of total turnover for the reporting period.
Access Bank Plc, Stanbic IBTC Bank Plc and Ecobank Nigeria Limited topped the League Table, ranking 1st, 2nd and 3rd respectively, in the value traded for the overall over-the-counter (OTC) market, maintaining their position in the League Table as the top three (3) banks for four (4) consecutive months.
Access Bank Plc and Ecobank Nigeria Limited have, however, maintained this position for seven (7) months running –that is since the start of the year. Access Bank Plc, Stanbic IBTC Bank Plc and Ecobank Nigeria Limited have a combined market share representing 29percent of the overall trades executed (buy and sell sides) in the markets.
Heritage Banking Company Limited, Keystone Bank Limited and Unity Bank Plc continue to occupy 21st, 22nd and 23rd places respectively, maintaining their positions at the bottom of the League Table for four (4) consecutive months
Ecobank Nigeria Limited, United Bank for Africa Plc and Access Bank Plc, for the 6th month in a row, topped trading amongst Dealing Member (Banks) for the overall OTC market. Leaders in the Dealing Member (Banks) versus Client trading category were Stanbic IBTC Bank Plc, Access Bank Plc and Standard Chartered Bank Nigeria Limited, while the top three (3) in the Dealing Member (Banks) versus CBN trading category were Access Bank Plc, Zenith Bank Plc and Stanbic IBTC Bank Plc.
Transactions in the FX market settled at $7.71billion in July, a decrease of 4.90percent ($400million) when compared with the value recorded in June ($8.11billion). The CBN sold a total of $1.17billion through various interventions conducted during the period under review, a 32.21percent ($560million) decrease from the figure recorded in June ($1.73billion).
The apex bank also maintained its marginal rate for the Secondary Market Intervention Sales (SMIS) – Wholesale Forwards intervention at $/N320; and $/N357 for Small and medium-sized enterprises (SMEs) and Invisibles.
In the month under review, rates for the Naira converged even further, as the Parallel Market closed the month at $/N365 trading at a premium to the Investors’ & Exporters’ (I&E) FX Window which closed at $/N367.88. The CBN official spot rate experienced a slight appreciation, gaining N0.30 to close at $/N305.65 from $/N305.95 at the beginning of the month
Total volumes traded in the I&E FX Window settled at $1.85billion for July, an increase of 13.80percent ($225million) when compared with volumes recorded in June ($1.63billion). So far, the total volumes traded on the Window since its inception stand at $5.42billion.
Inter-Member trades stood at $980million in the month of July, an increase of 3percent when compared with trades recorded in June, and a decrease of 44.85percent YoY. Member-Client trades stood at $5.56billion in July, a decrease of 4.91percent ($290million) from the previous month.
Member-CBN trades stood at $1.17billion in July ($1.73billion in June), representing a decrease of 32.21percent ($560million) month-on-month (MoM) and a decrease of 53.72perent ($1.36billion) YoY
The 13th Naira-settled OTC FX Futures Contract NGUS JUL 19, 2017, with total open contracts worth $657.57million, matured and settled in July, whilst a new 12-month contract – NGUS JUN 25, 2018 – for $1.00bn was introduced at $/N364.33.
In the Spot FX market, the top three (3) Dealing Member (Banks) – Stanbic IBTC Bank Plc, United Bank for Africa Plc and Access Bank PLc –with a combined Spot FX market share represented circa 46percent of the overall trades executed in the market. The Dealing Member (Banks) versus Client trades comprised the bulk of this market, accounting for 65percent of the trades executed.
In the overall FX Derivatives market, the top three (3) positions (with a combined market share of circa 66percent) were occupied by Stanbic IBTC Bank Plc, Access Bank Plc and Standard Chartered Bank Nigeria Limited; with the Dealing Member (Banks) versus Client trades accounting for 57percent of these trades.
Stanbic IBTC Bank Plc, Standard Chartered Bank Nigeria Limited and Access Bank Plc came in at 1st, 2nd and 3rd positions respectively, in the FX Swaps market; while in the FX Forwards market, Access Bank Plc, Standard Chartered Bank Nigeria Limited and Stanbic IBTC Bank Plc ranked 1st, 2nd and 3rd positions respectively. In the OTC FX Futures market, Access Bank Plc, Stanbic IBTC Bank Plc and Ecobank Nigeria Limited ranked 1st, 2nd and 3rd places respectively.
Turnover in the Fixed Income market in the month under review settled at N5.60trillion, a 10.92percent (N680billion) increase MoM. Transactions in the T.bills market accounted for 90.58percent of the Fixed Income market, from 87.41percent the previous month. Outstanding T.bills at the end of the month stood at N9.06trillion, an increase of 6.38percent MoM (N8.51trillion in June), whilst FGN bonds’ outstanding value increased by 1.22percent (N80billion) MoM to close at N7.12trillion in the period under review
Trading intensity in the Fixed Income market for the month under review settled at 0.58 and 0.07 for T.bills and FGN bonds respectively, from 0.62 and 0.11 recorded for the previous month. Maturities between one (1) and three (3) months became the most actively traded, accounting for a turnover of N1.98trillion in July.
Short-term yields on the sovereign yield curve lost an average of 0.06percent, yields in the medium-term and long-term spectrums gained 0.01percent and 0.03percent respectively. The spread between 10-year and 3-month benchmark yields closed positive at 3.20percent points for July (4.08percent in June). The leaders in the T.bills market were Access Bank Plc, United Bank for Africa Plc and Stanbic IBTC Bank Plc. The three (3) banks had a combined market share of 28percent of the overall trades executed. Dealing Member (Banks) carried out 91percent of the trades amongst themselves in this market during the period under review.
The leaders in the Bond market were Ecobank Nigeria Limited, Access Bank Plc and Stanbic IBTC Bank Plc occupying 1st, 2nd and 3rd places respectively. Their combined market share of the total value traded in Bonds was recorded at 42percent. Trades amongst Dealing Member (Banks) accounted for 88percent of this total market share, with Dealing Member (Banks) versus Client trades accounting for the remainder.
Activities in the Secured Money Market (Repos/Buy-Backs) settled at N3.28trillion in July, 6.68percent (N230billion) more than the value recorded in July. On a YoY basis, turnover on Repos/Buy-Backs recorded a 16.99percent (N670billion) decrease.
Unsecured Placements/Takings closed the month at a turnover of N140billion, an increase of 9.39percent (N10billion) MoM and a decrease of 71.10percent (N360billion) YoY.
Average NIBOR for the period under review stands at 18.30percent (24.15percent in June), signifying an increase in inter-bank liquidity via bond coupon payments. In the Secured Money Market (Repos/Buy-Backs), First Bank of Nigeria Limited, Ecobank Nigeria Limited and Access Bank Plc, for the 7th month running, ranked 1st, 2nd and 3rd places respectively, as leaders in the value traded in this market.
Inter-member trades (that is trades between Dealing Member (Banks)) dominated this market, with all trades executed by these top three (3) Dealing Member (Banks) accounting for 28percent of the market share.
In the trading of Unsecured Placements/Takings, the top three (3) leaders, with a combined market share representing circa 69percent of the overall trades executed in this market and occupying 1st, 2nd and 3rd positions respectively, were Stanbic IBTC Bank Plc, United Bank of Africa Plc and Standard Chartered Bank Nigeria Limited. Trades between Dealing Member (Banks) accounted for about 95percent of this market share
On market surveillance, the number of executed trades captured on the E-Bond trading system for the month of June amounted to 17,209 as against 19,948 recorded in June. Meanwhile, executed T.bills and FGN bonds trades decreased by 13.01percent and 18.80percent respectively.
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