Forex, T-bills, other turnover hit N165.1trn in 11 months

…As Access Bank, Stanbic IBTC, others account for N73.13trn trading …Currency in circulation hits N2.1trn in November – CBN As trading activities in the Fixed Income and Currency (FIC) market ended in 2018, not less than a whopping N165.15 trillion has been traded in Foreign exchange (FX), Treasury bills (T.bills), FGN Bonds, among other transactions, between January to November 2018, latest figure obtained from FMDQ OTC Securities Exchange revealed. This is even as Stanbic IBTC Holdings Plc, Access Bank Plc and United Bank for Africa Plc (UBA) accounted for 73.313 trillion overall turnovers trading on the FMDQ platform during the same period of 2018. The report stated that total turnover for the January to November 2018 period amounted to N165.15 trillion with trading activities in Treasury bills contributing the largest to overall turnover, accounting for N65.7 trillion of the market. Foreign Exchange market transactions (Spot FX and FX Derivatives) accounted for N40.13 trillion while Repurchase Agreements (Repos)/Buy-Backs product categories (Repos/Buy-backs) accounted for N26.8 trillion. Foreign exchange derivatives accounted for N20.5 trillion between January and November 2018. A total of N11.07 trillion and N105.5 billion FGN Bonds and Agency, Sub-national, Corporate & Supranational Bonds were traded between January and November 2018 respectively. The report explained that “FMDQ continues to avail its credible and efficient platform as well as tailor its Listings, Quotations and Noting services to suit the needs of issuers. “With the growing interest of corporate entities in the commercial paper (CP) market to finance their short-term funding needs, the OTC Exchange has, following the due diligence of the responsible Board Committee, approved the successful registration of the Mixta Real Estate Plc N15.00 billion CP Programme and the Eterna Plc N10.00 billion CP Programme. “These are in addition to the approval for formal admission and quotation of the FBNQuest Merchant Bank Limited N7.42 billion Series 1 – 4 CPs under its N100.00 billion CP Programme and the FSDH Merchant Bank Limited N257.57 million Series 7 and N15.08 billion Series 8 CPs under a N30.00 billion CP Issuance Programme on the FMDQ platform. “By quoting these CPs on FMDQ, these issuers are availed benefits which include, but are not limited to, enhanced investor confidence in the issuer, transparent/relevant information disclosure on the issue, effective price formation, and global visibility. “As these corporate entities and a host of others continue to effectively and sustainably meet their funding needs, as well as contribute to the development of the nation’s debt markets, FMDQ will continue to take crucial steps, in collaboration with market stakeholders, towards promoting transparency, governance, integrity and efficiency in the Nigerian CP market.” The report by FMDQ OTC said 10 commercial banks accounted for 75.77 per cent or N125.14 trillion of the overall turnover in the value traded in 11 months of last year. According to the report, “The top ten (10) Dealing Member (Banks) accounted for 75.77 per cent orN125.14 trillion of the overall turnover in the market, with the top three accounting for 58.44per cent or N73.13 trillion of this sub-section of the market. “Stanbic IBTC Bank, Access Bank and United Bank for Africa were the leaders in the value traded for the overall over-the-counter (OTC) market, ranking first, second and third respectively.” According to FMDQ report, Standard Chartered Bank Nigeria Limited came fourth, while Ecobank Nigeria Limited and First Bank Of Nigeria Limited came fifth and sixth respectively. Citibank Nigeria Limited ranked seventh, Guaranty Trust Bank Plc came eight while Coronation Merchant Bank Limited and Zenith Bank Plc were ranked ninth and 10th respectively. Meanwhile, the Central Bank of Nigeria (CBN) has said currency in circulation increased to N2.1 trillion in November, the highest in 2018. The CBN on its official website said currency in circulation was at N1.96 trillion in October, and between September and August, it was N1.93 trillion and N1.92 trillion respectively. According to CBN, new Currency notes were issued to deposit money banks through the branches of the CBN, and old notes retrieved through the same channel. “Currency deposited in the CBN by the banks are processed and sorted to fit and unfit notes in line with the clean note policy. The clean notes are re-issued while the dirty notes are destroyed,” the CBN said on its website. Hitherto, the CBN had reported that N2.15 trillion was in circulation in December 2017 ending. The apex bank in 2002 introduced the cashless policy to eliminate the amount of physical cash (coins and notes) circulating in the economy and encouraging more electronic-based transactions (payments for goods, services, transfers, among others.). Commenting on increasing currency in circulation, currency analyst at Ecobank Nigeria, Mr. Kunle Ezun, had explained to our correspondent that excess liquidity in the economy was driven by Yuletide celebration that has leveraged growth in currency in circulation, stressing that Nigerians are finding it difficult to embrace the cash policy of the CBN. “The market is liquid and it is due to the current season of the year.” He explained further that Nigeria is still more of a cash economy, facing infrastructure challenges. “Someone can blame infrastructure deficit to CBN’s good intention of making Nigeria a cashless society. The infrastructure that will make the cashless policy work is missing compared to what we have in Kenya,” he added. The Managing Director, Maxifund Investments and Securities Limited, Mr. Okechukwu Unegbu, attributed the growth to Nigerians not embracing CBN’s cashless policy. According to Unegbu, “The growth in currency in circulation is tied to Inflation and the cost of doing business. “One of the worst things is that there is no retirement of old currency. Because of the cost of buying new currencies from CBN, no commercial banks keep recycling old currencies,” Unegbu stated The apex bank reported said N1.95 trillion in January; N1.94 trillion was in circulation in February but it increased to N2.04 trillion in March. The amount of Naira in circulation according to CBN in April 2018 was N1. 96 trillion and closed May at N1.93 trillion. In June, it dropped to N1.9 trillion and dropped further to N1.82 trillion in July. Motolani Oseni