The FMDQ Securities Exchange’s total market turnover in the fixed income and currency (FIC) markets totaled N142.03 trillion in 2017, 25 per cent higher than the value recorded for the same period in 2016, which stood at N113.66 trillion, according to a document obtained by the New Telegraph.
The top three contributors to market turnover were the Treasury Bills, Repos/ Buy-backs and Foreign Exchange market segments, accounting for 42.48 per cent, 22.46 per cent and 14.85 per cent respectively of the value traded in the market.
According to the Director/CEO of FMDQ, Mr. Bola Onadele Koko, the expansion into new services is designed to further diversify the OTC Exchange’s revenue over time.
He noted that FMDQ’s business performance in 2017 was reflective of the modest improvement in Nigeria’s economy and subsequently financial markets, which saw the country exit from an economic recession during the year.
“The launch of the Investors’ & Exporters’ (I&E) FX Window (in April 2017), following the introduction of the Naira-settled OTC FX Futures product in the prior year, facilitated the recuperation of investor (domestic and foreign) confidence and FX market liquidity, paving the way for new business opportunities and contributing to an overall improvement in the economy. The increased foreign investors’ participation towards the end of the year further bolstered the liquidity of the FX market,” Onadele said.
Speaking on transaction fees, he said that the overall market activity levels had direct impact on FMDQ’s transaction fees revenue.
“Consequently, the modest improvement in the economy, which led to slightly improved market turnover in 2017 when compared with 2016, had a corresponding effect on transaction fees revenue. Transaction Fees revenue increased by 18.30 per cent in 2017 to N1.63 billion from N1.38 billion in 2016,” he explained.
“Activities in the Treasury Bills and Secured Money Market (Repos/Buy-Backs) product categories were the main drivers for transaction fees revenues generated, contributing over 70 per cent to overall transaction fees revenue generated in 2017; a similar result to what occurred in 2016.
“Transaction fees continue to capture the bigger share of overall FMDQ revenue when compared with non transaction fees, although the share has considerably reduced from 2016’s. In 2017, transaction fees percentage contribution to overall revenue was recorded at 63.50 per cent.”
On listings and quotations, Onadele said that FMDQ, through its listings and quotations franchise, provides a reliable and efficient platform for companies to list and quote debt securities.
“The OTC Exchange admitted debt securities from different sectors of the economy, ranging from government, financial services institutions to companies in the real estate and fast-moving consumer goods industries and other corporate institution,” he said.
“In 2017, the OTC Exchange admitted to its listings board, three Federal Government of Nigeria (FGN) Eurobonds with total face value of $4.00 billion, with the Federal Republic of Nigeria making history by listing, for the first time on a Nigerian Exchange, alongside the listing of the pioneer FGN Diaspora bond with face value of $0.30 billion.
“The Company also admitted 37 commercial papers (CPs) series, alongside 10 bonds issues and three mutual funds. Eight companies issued and quoted the 37 CPs, which were worth N155.25 million, while six issuers listed 10 bonds on the OTC Exchange. The percentage contribution of the listings and quotations fees line to total revenue in 2017 stood at 11.37 per cent.
“The OTC Exchange, in furtherance of its commitment to facilitate the development of the Nigerian debt capital markets, continues to collaborate with key stakeholders to further initiatives that will ensure the realisation of this objective. Notable of one of these initiatives was the introduction of the FMDQ Private Companies’ Bonds Noting Service in 2017.”
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