FMDQ OTC Exchange records N130trn transactions in 11 months

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The FMDQ OTC Securities Exchange recorded a turnover of N130 trillion between January and November  2015. Market turnover report obtained by THISDAY showed that transactions were  across  all products lines on  the FMDQ secondary market. They include: Foreign Exchange (FX), Treasury Bills (T.bills), Bonds (Federal Government of Nigeria (FGN) Bonds, Other Bonds (Agency, Sub-national, Corporate & Supranational)& Eurobonds), Money Market (Repurchase Agreements (Repos)/Buy-Backs and Unsecured Placements/Takings).

An analysis of the transactions showed that  T.bills accounted for the highest turnover of N46.285 trillion, followed by  Repurchase agreements/buy-back with N29.697 trillion. FX with recorded  N25.5 trillion. Others included: Unsecured placement (N11.621 trillion); FGN bonds (10.1 trillion) and Foreign Exchange Derivatives (N6.579 trillion).

Within the two years  that FMDQ OTC  Securities Exchange  began operations  the  value of transactions OTC market for fixed income securities and currency   witnessed a growth of 202 per cent.

The Securities and Exchange Commission (SEC), on December 6, 2013, licensed FMDQ OTC Plc as an OTC securities exchange and self-regulatory organisation to run the fixed income trading platform and organise the market to international standards.

However, the value of transactions jumped from N39.693 trillion in 2013 to N119.919 trillion as at the end of October 2015, showing a growth of 202 per cent.

During the review period  T.bills  accounted for the highest value of N42.128 trillion as at October, rising from N11.350 trillion in 2013.   Repurchase agreements/buy backs followed with N27.598 trillion, up from nothing in 2013 and N23.661 trillion in 2014.

Foreign exchange recorded N23.754 trillion in 2015 compared with N19.549 trillion in 2013. Unsecured placements/takings accounted for N11.186 trillion, up from N935 billion in 2013. Federal Government of Nigeria (FGN) bonds recorded r N8.733 trillion, as against N7.8 trillion in 2013.

Foreign exchange derivatives grew from zero in 2013 to N6.554 trillion in 2013 and stood at N6.263 trillion as at the end of October 2015.

Managing Director/Chief Executive Officer of FMDQ OTC,  Mr.  Bola Onadele Koko recently said stakeholders should expect better deal from the platform in the years ahead.

According to him, having succeeded in turning around the market within two years, the next move is to bring more innovations that will benefit all stakeholders and make the platform more attractive to issuers and investors.

Onadele disclosed that while the platform has been quoting federal government and corporate bonds of public companies among others, there are plans to quote bonds of private companies as part of its commitment to support efforts aimed at galvanising the development of the Nigerian economy.

“FMDQ will establish the requisite market governance over these private companies’ bonds as part of its investor protection standards in making the Nigerian debt capital market globally competitive to attract pension funds and foreign capital,” he said.

He added that FMDQ is establishing the building blocks to redefine access to long-term debt capital for private companies and ventures in Nigeria. “

FMDQ is establishing the building blocks to redefine access to long-term debt capital for private companies and ventures in Nigeria. FMDQ is promoting the market structure that will facilitate the injection of credibility and transparency to the quotation of private companies’ bonds that, by law, can only be issued through private placements. The platform is promoting the market structure that will facilitate the injection of credibility and transparency to the quotation of private companies’ bonds that, by law, can only be issued through private placements,” Onadele said.

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