FMDQ OTC Securities Exchange (‘FMDQ’ ), has since its launch onto the Nigerian financial markets landscape in 2013, championed initiatives geared towards providing an enabling environment for the growth and development of the Nigerian fixed income, currencies and derivatives markets and the economy at large. As a market organiser, the OTC Exchange has through its product and market development initiatives empowered the markets within its purview to enhance their global competitiveness, transparency, and liquidity. As a self-regulatory organisation and front-line regulator of its Members’ activities, FMDQ has led strategic initiatives, ensuring that requisite and quality oversight is availed to make the Nigerian markets credible, in line with international standards.
The year 2016, challenged and beleaguered with plummeting oil prices, limited access to foreign exchange (FX), high inflation, low investor confidence (both local and foreign), etc., had a significant impact on trading activities. As a result, FMDQ saw its turnover decrease from ₦137.43trn in 2015 to ₦113.66trn in 2016, a year-on-year (YoY) decline of 17.00%. However, despite the overall YoY decline, the OTC Exchange experienced positive growth in the Foreign Exchange Derivatives product line, propelled by the introduction of the OTC FX Futures product into the market.
Trading activities in T.bills contributed the largest to overall turnover, accounting for 40.00% of the market. Secured market transactions (Repos/Buy-backs) accounted for 27.00%, whilst FX market transactions accounted for 22.00%, Bonds, 8.00% and Money Markets transactions (which include Unsecured Placement & Takings, Commercial Papers, and Money Market Derivatives), 3.00%, of overall market turnover. The turnover represents trades executed among Dealing Members, Dealing Members & Clients, and Dealing Members & the Central Bank of Nigeria.
Though mindful of the economic headwinds, FMDQ looks ahead into 2017 with much enthusiasm. The OTC Exchange expects to continue to focus on its core mandate, leveraging on and garnering the collaborative support of its stakeholders, in order to foster economic development relevant to the growth of the Nigerian financial markets. Chief among the initiatives which FMDQ will focus on for 2017 include, Standardisation of repurchase agreements trading (with collateral management), New products development geared towards short-term and private companies’ bonds and Financial markets education for FMDQ markets’ stakeholders.
Others areas of focus are, Development of the non-interest finance (Sukuk) market, Expansion of the fixed income and currency derivatives market, Nigerian debt capital market development in line with the Capital Market Master Plan of the Securities and Exchange Commission