10 Banks Facilitate N139trn Investment on FMDQ OTC Securities Exchange

Goddy Egene
Stanbic IBTC Bank Plc, Access Bank Plc, Ecobank Nigeria Limited led the top 10 banks that facilitated N139.13 trillion investment in fixed securities and currency on the FMDQ OTC Securities Exchange in 2018.

The 10 banks accounted for 76.1 per cent of the N182.856 trillion total transactions in the market in 2018, according data obtained by THISDAY.

However, Stanbic IBTC Bank Limited, Access Bank Plc and United Bank for Africa Plc ranked first, second and third respectively. The three banks were responsible for N81.13 trillion trading, which is about 58.31 per cent of the total market turnover for the year.

Standard Chartered Bank Nigeria Limited occupied the fourth position, while Ecobank Nigeria Limited occupied the fifth position. Other banks among the 10 are: First Bank of Nigeria Limited, Citibank Nigeria Limited, Guaranty Trust Bank Plc, Coronation Merchant Bank Limited and Zenith Bank Plc.

An analysis of the FMDQ OTC Securities Exchange turnover in 2018 showed that treasury bills accounted for the highest, recording N72.123 trillion transactions. It was followed by foreign exchange (forex), which recorded N43.975 trillion transactions, while repurchase agreements/buy-back recorded N30.179 trillion. Forex derivatives accounted for N23.748 trillion, just as FGN Bonds recorded N11.8 trillion among others.

A total of 46 securities were registered and quoted on the exchange in 2018. The securities comprise 13 bonds and 33 commercial papers (CPs). Since it commenced operations about five years ago, the FMDQ OTC has helped to deepened the financial markets general and debt capital markets in particular.

Following its long-time agenda to foster market integration, improve network effects and promote liquidity in the Nigerian financial markets, FMDQ last launch of its Dealing Member Specialists (DMS) Market, which went live on December 19. According to the exchange, that unprecedented market development initiative came on the back of the fragmentation identified in the fixed income market and will provide seamless integration of the fixed income inter-bank market -FMDQ Dealing Member Banks DMBs and the securities dealers, who are Members of the newly-created membership category.

The DMS category is a subset of the FMDQ Dealing Member category, which also warehouses the DMBs and is made up of securities dealers, including investment banking firms, securities trading/stockbroking firms and OTC fixed income dealers licenced to make market in all fixed income products admitted for trading on the FMDQ platform.

FMDQ said in the last three years, it has worked with the Securities and Exchange Commission (SEC) and market participants to create the DMS market, and this new market affords both the SEC- registered Nigerian
Stock Exchange (NSE) as well as FMDQ dealers the opportunity to trade together in a liquid fixed income market operated by banks, who are the foundation members of FMDQ.

The participation of DMSs in the Nigerian fixed income market will not only enhance liquidity, but also serve as an efficient channel for FMDQ to integrate retail participants into the Nigerian fixed income market. Furthermore, in a first-time move, the banks have committed to support the DMS market with trading liquidity by accepting to provide two-way quotes to the DMSs, whereas FMDQ Clear Limited, will act as the clearing house for the market and Stanbic IBTC Bank Plc as the settlement bank,” it said.
The FMDQ OTC Securities Exchange was license by SECS in 2013 as an over-the-counter (OTC) securities exchange and self-regulatory organisation to run the fixed income trading platform.