Market Overview
The FMDQ Exchange recorded a secondary market turnover of N57.04 trillion in January 2025, as revealed in its latest financial markets report. This marks a notable increase from previous figures.
Foreign exchange (FX) and money market (MM) transactions remained dominant, contributing 72.55% of total market activity.
Turnover in January reflected a month-on-month (MoM) rise of 35.31% (N14.88 trillion). Additionally, year-on-year (YoY) growth stood at 170.69% (N35.97 trillion), surpassing figures from both December 2024 and January 2024.
Spot Market Trends
Total spot market turnover across all products stood at N54.86 trillion, showing a 33.80% MoM increase of N13.86 trillion from December 2024.
Growth in FX, fixed income (FI), and MM transactions drove the increase. FX turnover saw the highest rise, expanding by 45.98% (N7.04 trillion). MM activity followed with a 42.03% (N4.98 trillion) increase, while FI turnover grew by 13.23% (N1.83 trillion).
Repos/Buy-backs significantly contributed to the MM segment’s growth. FI turnover also saw gains across all product categories, except Other Bonds, which declined. CBN Special Bills remained inactive during the review period.
Foreign Exchange Market Activity
Spot FX market turnover reached $14.56 billion (N22.36 trillion) in January, marking a 49.43% MoM rise ($4.82 billion) from December’s $9.74 billion.
The Naira strengthened against the US Dollar. The average exchange rate appreciated by 1.86%, shifting from $/N1,564.97 in December to $/N1,536.46 in January. Additionally, exchange rate volatility declined, with the Naira trading within a range of $/N1,475 – $/N1,560, compared to December’s wider spread of $/N1,524.88 – $/N1,672.69.
Fixed Income Market Performance
The FI market recorded N15.65 trillion in turnover, reflecting a 13.23% MoM increase of N1.83 trillion from December’s N13.83 trillion.
This increase was fueled by higher trading in T-bills, CBN Bills, OMO Bills, and FGN Bonds. However, Other Bonds experienced a 57.46% decline (N0.05 trillion).
T-bill trading intensity (TI) declined by 0.01 basis points (bps) to 0.35 MoM, while FGN Bond TI increased by 0.01 bps to 0.07. The most traded sovereign FI securities were T-bills with maturities between six and twelve months (49.40% of turnover, N3.26 trillion) and FGN Bonds with maturities between five and ten years (15.81% of turnover, N1.04 trillion).
The sovereign yield curve flattened, with the yield spread increasing by 6.33 percentage points (ppts) to -2.63 ppts in January.
Money Market Performance
MM turnover climbed by 42.03% MoM to N16.84 trillion in January, driven by a 42.09% (N4.99 trillion) rise in Repos/Buy-backs.
The Overnight (O/N) rate and Open Repos (OPR) rate, both reflecting secured lending costs, saw slight MoM declines of 0.48 ppts and 0.49 ppts, respectively, closing at averages of 29.58% and 29.02%.
FX Derivatives Market
FX derivatives turnover reached $1.42 billion (N2.18 trillion) in January, reflecting a 93.57% MoM increase ($0.69 billion) from December’s $0.73 billion.
This growth resulted from a 104.65% ($0.68 billion) surge in FX Swaps and a 7.08% ($0.01 billion) increase in FX Forwards.
In the cleared Naira-settled (USD/NGN) non-deliverable forwards market, the near-month contract (NGUS JAN 29, 2025) expired with no open positions settled. No new 60-month contracts were introduced, continuing the trend observed since August 2023.
As a result, the farthest open contract remains NGUS JAN 28, 2026. The cumulative notional value (NV) of open contracts remained flat at $0.09 billion as of January 31, 2025, reflecting a 96.65% YoY decline ($2.54 billion).
Primary Market Developments
Sovereign Securities
In January, the Debt Management Office (DMO) auctioned N1.271 trillion in T-bills, marking a 21.40% (N346.06 billion) MoM decrease from December’s N1.617 trillion.
FGN Bond sales, however, surged to N601.04 billion, representing a 184.66% (N389.89 billion) MoM increase from December’s N211.14 billion.
Investor demand remained strong, with T-bill auctions oversubscribed by 288.06% and FGN Bonds by 48.88%. The Central Bank of Nigeria (CBN) also sold N1.500 trillion in OMO Bills, though this reflected a 47.05% (N1.332 trillion) MoM decline. These securities were oversubscribed by 304.93%.
Non-Sovereign Securities
No new listings or redemptions of Non-Sovereign Bonds occurred on the FMDQ Exchange in January, keeping the total outstanding value at N2.246 trillion.
Meanwhile, the total value of Commercial Papers (CPs) quoted on the exchange fell by 7.89% MoM to N160.79 billion from December’s N174.56 billion.
Nineteen CPs were quoted in January, primarily issued by companies in financial services (6), manufacturing (5), and agriculture (4). Despite CP maturities totaling N71.73 billion, outstanding CP value increased by 17.50% MoM to N597.89 billion.
