FMDQ OTC 2014 Market Turnover Hits the ₦100 Trillion Mark. The Nigerian over-the-counter (OTC) market for Foreign Exchange (FX), Treasury Bills (T.Bills), Bonds, Money and Derivatives achieved an overall turnover in 2014 of circa ₦104 trillion. This figure slightly exceeded the BusinessDay estimate of N100 trillion published on September 4, 2013, based on its growth projections of the nation’s OTC market following the launch of FMDQ OTC PLC (FMDQ) onto the financial market landscape.
FMDQ was officially launched in November 2013 with a mandate to work with stakeholders to develop the Nigerian OTC market and in the course of just over a year, has engaged in a number of initiatives to deliver on this mandate. In its capacity as the market organiser and frontline market regulator, FMDQ is improving market transparency in the OTC market with its trading systems, price discovery applications, website and the weekly data submissions by its Dealing Members i.e. banks and discount houses on their trading activities in the OTC market.
In the first half of 2014, the Dealing Members achieved an overall OTC market turnover of ₦45 trillion and by the end of December 2014, this rose significantly to ₦104 trillion, with the top 10 Dealing Members accounting for over 70% of this turnover. FX (including FX derivatives) was the most actively traded product, accounting for the largest share of the market turnover at 37.5%, followed by T.Bills and Repos/Buy-Backs with a share of 25.4% and 22.8% respectively. The bond market accounts for only 7.7% of the market turnover, an area where FMDQ and other market stakeholders are looking to boost in 2015, through market development initiatives to be championed by FMDQ. This turnover represents trades executed between Dealing Members, Dealing Members & Clients, and Dealing Members & the Central Bank of Nigeria (CBN). It excludes primary market auctions in T.Bills, Bonds and FX.
FMDQ will continue to engage in initiatives that will make the Nigerian OTC market globally competitive by working with the stakeholders to improve liquidity, transparency, governance and efficiency in the OTC market. With new initiatives and activities planned for 2015 – listings and quotations of Bonds, Commercial Papers and Short Term Notes, product diversity, fixed income indices, systems integration to achieve straight-through processing, trading systems enhancement, price discovery solutions, stakeholder education, membership diversification etc. – FMDQ is optimistic about the year and expects a resultant increase in secondary market activity.