The FMDQ Exchange, a leading financial market infrastructure provider in Nigeria, experienced remarkable growth in trading activities during the first ten months of the year. Total turnover reached an impressive N356.86 trillion, marking a substantial 93.01% increase compared to the same period in the previous year. This surge in trading volume reflects the growing confidence and participation of investors in the Nigerian financial market, facilitated by the robust platform provided by the FMDQ Exchange.
The FMDQ Exchange facilitates trading across a wide spectrum of financial instruments, encompassing foreign exchange, treasury bills, OMO bills, CBN special bills, promissory notes, various bonds (including FGN bonds, agency bonds, sub-national bonds, corporate bonds, supranational bonds, and sukuk), eurobonds, commercial papers, and money market transactions such as repurchase agreements and unsecured placements/takings. This comprehensive product offering caters to the diverse investment needs of market participants, contributing to the overall vibrancy of the exchange.
The foreign exchange market, comprising spot FX and FX derivatives, emerged as the dominant contributor to the total turnover, accounting for 46.85% of the overall market activity. This underscores the significance of the FX market in facilitating international trade and investment flows. Repurchase agreements (Repos) followed closely, contributing 26.12% to the total turnover, highlighting their role in providing short-term liquidity to market participants. Trading in OMO bills also played a substantial role, accounting for 10.54% of the overall turnover.
Other financial instruments also contributed to the overall trading activity, albeit to a lesser extent. Bonds, treasury bills, CBN special bills, promissory notes, and unsecured placements and takings accounted for 5.97%, 9.55%, 0.82%, 0.01%, and 0.14% of the overall market turnover, respectively. The diversity of these traded instruments reflects the breadth and depth of the Nigerian financial market, offering a wide range of investment opportunities for participants.
The top ten Dealing Members (Banks) played a significant role in driving the trading activity on the FMDQ Exchange. These leading financial institutions accounted for 69.20% (N246.9 trillion) of the overall turnover, demonstrating their influence and market share within the exchange. Among them, Stanbic IBTC Bank Limited, United Bank for Africa PLC, and First Bank of Nigeria Limited emerged as the top three players, ranking 1st, 2nd, and 3rd, respectively, based on value traded during the review period. These top three Dealing Members alone contributed 38.66% (N137.94 trillion) of the overall turnover, highlighting their dominant position in the market.
The FMDQ Exchange also plays a crucial role in the FX futures market. The successful settlement of the 101st Cleared Naira-Settled Non-Deliverable Forwards contract, with a nominal value of $15.00 million, signifies the Exchange’s growing importance in the management of currency risk. This milestone brought the total value of matured FX futures contracts on the Exchange to approximately $67.70 billion since its inception in June 2016, with a cumulative trading volume of approximately $67.79 billion. Furthermore, the introduction of a new contract, NGUS NOV 28 2029, with a rate of $/N5,523.30, demonstrates the Exchange’s commitment to providing innovative and relevant hedging instruments to market participants.
