The Debt Management Office (DMO) sold Treasury Bills (T.bills) valued at N204.50 billion across its auctions in June 2023.
This was contained in FMDQ Markets Monthly Report for May seen by Nairametrics.
The amount represents 36.97% (N119.93 billion) Month on Month (MoM). A decrease in the value of T-bills sold across its auctions in May 2023 (N324.43 billion).
Similarly, the DMO sold FGN Bonds worth N473.16 billion in June 2023 via the reopening of one (1) off-the-run and issuance of three (3) on-the-run FGN Bonds.
The report noted that the total sale represented a 131.43% oversubscription of the amount offered, and a 13.22% (N72.10 billion) MoM decrease on the amount sold in May 2023 (N545.26 billion) across the two (2) 10Y, one (1) 20Y and one (1) 30Y reopened FGN Bond maturities.
FMDQ noted that the CBN did not auction OMO Bills in the primary market for the sixth consecutive month in June 2023.
Corporate bonds:
According to the report, the total value of corporate bonds listed on the FMDQ Exchange in June 2023 was N17.50 billion representing a 43.55% (N13.50 billion) MoM decrease from May 2023 listings.
- “The corporate bond listings emanated solely from a single issuer in the Construction sector. As a result, the total outstanding value for corporate bonds increased MoM by 0.82% (N13.35 billion) to N1,650.34 billion in the review month,” it said.
Commercial Papers:
The report stated that the total value of Commercial Papers (CPs) quoted on the FMDQ Exchange in June 2023 was N52.13 billion, representing an MoM decrease of 68.17% (N111.64 billion) from the value of CPs quoted in May 2023.
- “Quoted CPs were issued by institutions from various sectors including Financial Services (12), Manufacturing (3), Agriculture (2), Real Estate (2), and Commodities Trading (2).
- As a result, the total outstanding value of CPs increased MoM by 4.85% (N38.24 billion) to N826.67 billion,” it said.
Secondary market turnover:
According to the report, secondary market turnover on FMDQ Exchange in June 2023 was N21.74 trillion, representing an MoM and YoY increase of 37.78% (5.96 trillion) and 19.41% (N3.53 trillion) from May 2023 and June 2022 figures, respectively.
It noted that foreign Exchange (FX), Money Market (MM), and CBN Bills transactions dominated secondary market activity, accounting for 80.49% of the total secondary market turnover in June 2023.
- “Total spot market turnover for all products traded in the secondary market was N17.82 trillion in June 2023, representing an MoM increase of 33.24% (N4.45 trillion) from May 2023 figures.
- The MoM increase in total spot market turnover was jointly driven by an improvement in turnover across all products with FX, MM, and FI transactions increasing MoM by 65.82% (N1.89 trillion), 33.70% (N1.39 trillion) and 18.21% (N1.16 trillion), respectively.
- The uptick in MM turnover was driven by an increase in Repos/Buybacks, offsetting the MoM decline in Unsecured Placement/Takings transactions. Likewise, the improvement in FI turnover was driven by a MoM increase across all FI products, excluding OMO Bills and Other Bonds which decreased in the review period,” the report noted.
According to the report, Spot FX market turnover was N4.77 trillion ($7.73 billion) in June 2023, representing an MoM increase of 65.82% (N1.89 trillion) from the turnover recorded in May 2023 (N2.88 trillion).
- “In the FX Market, the US Dollar appreciated against the Naira, with the spot exchange rate ($/N) increasing by 35.07% ($/N162.51) to close at an average of $/N625.90 in June 2023 from $/N463.39 recorded in May 2023.
- Further, exchange rate volatility spiked in June 2023 as the Naira traded within an exchange rate range of $/N464.67 – $/N770.38 compared to $/N462.23 – $/N465.13 recorded in May 2023,” the report said.
Fixed Income:
The report stated that the Fixed Income (FI) market turnover was N7.52 trillion in June 2023, representing an MoM increase of 18.21% (N1.16 trillion) from the turnover recorded in May 2023 (N6.36 trillion).
- “The MoM increase in the FI market turnover was driven by the 31.88% (N0.43 trillion), 24.11% (N0.34 trillion), and 39.59% (N0.69 trillion) uptick in turnover across T.Bills, CBN Special Bills, FGN Bonds which offset the MoM decrease in turnover by 16.58% (N0.30 trillion) and 26.98% (N0.003 trillion) for OMO Bills and Other Bonds respectively.
- As a result, the trading intensity (TI) for T.Bills, OMO Bills, and FGN Bonds increased MoM by 0.09, 3.82, and 0.04 points to 0.38, 25.50, and 0.14 respectively,” the report noted.
