Fixed income market soar by 33% in 2015


January 31, 2016/Daily Trust

By Kayode Ogunwale

In spite of the challenges the market faced in 2015, FMDQ OTC provider of Over- The-Counter trading platform for fixed income in Nigeria saw its turnover grow from N103.60 trillion in 2014 to N137.40 trillion in 2015, a growth rate of 33 per cent year-on-year.
In the first half of 2015, the dealing members achieved an overall OTC market turnover of N58.60 trillion and by December 2015, this rose significantly by 134 per cent to close at N137.40 trillion. This figure saw the forecast of N125 trillion turnover for 2015 surpassed by 10 per cent.

According to FMDQ OTC, the most actively traded products were Treasury Bills (T.bills), accounting for the largest share of the market turnover at 35 per cent, followed by foreign exchange (including FX derivatives) with a share of 25 per cent and Repurchase Agreements (Repos)/Buy-Backs at 23 per cent.
Unsecured Placements/Takings and Federal Government of Nigeria (FGN) bonds, on the other hand, had a smaller share of the market, accounting for 9 per cent and 8 per cent respectively.
The turnover represents trades executed between dealing members, dealing members & clients, and dealing members & the Central Bank of Nigeria (CBN).
FMDQ, like in 2015, is optimistic about the year ahead, albeit with caution, considering the expected challenges the financial markets will likely face, and remains committed to initiating and engaging in initiatives that will develop and make the FMDQ markets globally competitive by improving liquidity, transparency, governance and efficiency in the Nigerian capital market.
To achieve success in its objectives, FMDQ will continue to work collaboratively with and garner the support of its stakeholders.
In 2016, FMDQ expected to be exciting for the Nigerian financial markets as a result of its planned initiatives for the year.
The initiatives include but are not limited to offering a more diversified products portfolio including short-term and Islamic (Sukuk) bonds, quotation of private companies’ bonds, integration of FMDQ markets to include securities dealing and investment banking firms in the fixed income secondary markets and introduction of a new membership category -Specialist Dealing Members.
Other initiatives are capacity building and financial markets education for FMDQ stakeholders, financial markets support for economic development, Nigerian debt capital market (DCM) transformation and introduction of OTC Derivatives.

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