FX Trading Dominates as Top Banks Lead in Market Activity

The FMDQ Exchange reported a total turnover of N356.86 trillion in the first ten months of 2024, reflecting a remarkable 93.01 per cent increase compared to October 2023. This update was disclosed in the FMDQ Spotlight, the in-house newsletter of the FMDQ Group.

The turnover encompasses trading activity across all products in the FMDQ secondary market, including foreign exchange (FX), treasury bills (T-bills), Open Market Operation (OMO) bills, Central Bank of Nigeria (CBN) special bills, promissory notes, bonds (FGN bonds, agency, sub-national, corporate, supranational, sukuk, and eurobonds), commercial papers, and money market transactions (repurchase agreements and unsecured placements). Primary market auctions of T-bills and bonds were excluded from the data.

Breakdown of Trading Activity

According to the report, trading in the FX market (Spot FX and FX Derivatives) led the turnover with a 46.85 per cent share of the total, followed by repurchase agreements (Repos) at 26.12 per cent and OMO bills at 10.54 per cent. Other key contributors included:

Bonds: 5.97 per cent

Treasury Bills: 9.55 per cent

CBN Special Bills: 0.82 per cent

Promissory Notes: 0.01 per cent

Unsecured Placements & Takings: 0.14 per cent

The report highlighted that Stanbic IBTC Bank Limited, United Bank for Africa PLC, and First Bank of Nigeria Limited ranked as the top three Dealing Members by market turnover. Collectively, the top 10 Dealing Members, which also included Standard Chartered Bank Nigeria Limited, Wema Bank PLC, Access Bank PLC, Zenith Bank PLC, Sterling Bank PLC, Citibank Nigeria Limited, and Ecobank Nigeria Limited, accounted for 69.20 per cent of total turnover (N246.9tn). The top three contributed 38.66 per cent (N137.94tn).

FX Futures Milestones

The FMDQ Exchange also marked the maturity of its 101st Cleared Naira-Settled Non-Deliverable Forwards (NDF) contract—NGUS NOV 27 2024—with a nominal value of $15.00 million. This milestone brings the total value of matured FX futures contracts on the Exchange since its inception in June 2016 to approximately $67.70 billion, with $67.79 billion traded to date.

In addition, the Exchange introduced a new FX futures contract, NGUS NOV 28 2029, at a rate of $/N5,523.30 to replace the matured contract.

Looking Ahead

The significant growth in market turnover underscores the increasing depth and vibrancy of the FMDQ Exchange, driven by robust trading activities in FX and money markets. With continued innovations like the introduction of new futures contracts, the Exchange remains pivotal in shaping Nigeria's financial market landscape.