10 Banks Trade N121trn Securities on FMDQ OTC Exchange

Ten banks, led by Access Bank Plc, accounted for N121.59 trillion securities traded on the FMDQ OTC Securities Exchange in 2016. This value represents 71 per cent of the overall turnover in the market.

According to data from the exchange for fixed income and currencies, the 10 banks are Access Bank Plc, United Bank for Africa Plc, Ecobank Nigeria Limited and First Bank of Nigeria Plc. Others are: Diamond Bank Nigeria Limited, Citibank Nigeria Plc, First City Monument Bank Limited, Standard Chartered Bank Nigeria Limited and Union Bank of Nigeria Plc.

The top three banks-Access Bank Plc, UBA and Stanbic IBTC accounted for 28 per cent or N47.76 trillion transactions.

Since it commenced operations in 2013, the FMDQ OTC Securities Exchange has facilitated transactions worth N340.98 trillion in the fixed income securities and currency market within three years.
FMDQ OTC was licensed by the Securities and Exchange Commission (SEC) in 2013 as an OTC securities exchange and self-regulatory organisation to run the fixed income trading platform and organise the market to international standards.

The coming of FMDQ OTC has significantly boosted the fixed income market leading to transactions N340.98 trillion within three years. This shows an average yearly transaction of N114 trillion, which is a significant improvement on N39.693 trillion recorded a year before the platform commenced operations.

An analysis of the yearly transaction data obtained from FMDQ OTC showed that N103.57 trillion was recorded in 2014, which rose to N137.43 trillion in 2015. However, it dropped to N99.98 trillion last year, apparently due to the challenges in the foreign exchange market.

A further analysis of the transactions indicates that Treasury Bills accounted for the highest value of N113.29 trillion, followed by repurchased agreements/buy buy-backs, which recorded N83.86 trillion. Foreign exchange accounted for N72.81 trillion, while federal government bonds recorded N25.92 trillion. Foreign exchange derivatives accounted for N23.02 trillion just as unsecured placements/takings recorded N17 trillion among others.
With a “mission to empower financial markets to be innovative and credible in support of the Nigerian economy,” a vision “to be number one in Africa in the fixed income and currency market by 2019, FMDQ OTC is seen as a revolution in the financial sector.
Managing Director/Chief Executive Officer of FMDQ OTC, Mr. Bola Onadele.Koko had always assured that stakeholders should expect better deal from the platform in the years ahead.

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

The FMDQ OTC recently set up the Debt Capital MarketDevelopment (DCMD) Project to ensure the effective implementation of the recommendations drawn its debt capital market (DCM) workshop in 2015.

According to the exchange, the resolutions from the workshop have been translated into the Nigerian DCM Transformation Roadmap to be executed through the DCMD Project.

“The DCMD Project, having received the unrivalled support of the apex regulator, SEC, was officially launched during the Commission’s third Quarter Capital Market Committee Meeting, on November 24, 2016. Its focus on identifying and implementing quick-win strategies that would transform the Nigerian DCM into a world-class, properly functioning DCM by 2020 drawing strongly from SEC’s 10-year Nigerian Capital Market Master Plan (NCMMP), with the DCMD Project seeking to fast-track the realisation of the DCM initiatives in the NCMMP,” FMDQ said.

by Goddy Egene /Thisdaylive