Forex, T-bills, other turnovers hit N145.7trn in 10 months

…Transactions turnover decline by N3.30trn in one month
…As CBN reports $3.98bn FX net flow loss in Q3
As trading activities in the Fixed Income and Currency (FIC) market wind down in 2018, not less than a whopping N145.68 trillion has been traded in Foreign exchange (FX), Treasury bills (T. bills), FGN Bonds, among other translations, findings by The Daily Times revealed.

However, trading activities in Treasury bills (T. bills) and Foreign exchange contributed the largest to overall turnover, jointly accounting for 73.98 per cent of turnover in October alone, despite being lower by 5.02 percentage points (ppts) from their level of contribution of 79.00 per cent in September.

Other products traded on the FMDQ secondary market include Bonds (FGN Bonds, other Bonds (Agency, Sub-national, Corporate & Supranational) & (Eurobonds) Commercial Papers and Money Market (Repurchase Agreements (Repos)/Buy-Backs and Unsecured Placements/Takings). These figures exclude primary market auctions in T. bills and Bonds.

The breakdown of the total transactions turnover for the month ended October 31, 2018 was N13.35 trillion, representing a N3.30 trillion decline or 19.81 per cent Month on Month (MoM1) decrease on the turnover of N16.65 trillion recorded in September, and a 9.60 per cent or N1.17 trillion, Year on Year (YoY2) increase.

But the turnover in the FIC market from January to August 2018 period amounted to N115.68 trillion, totaling N145.68 trillion.

Further breakdown showed that the FX market transactions, including (Spot FX and FX Derivatives) accounted for 37.51 per cent, Treasury bills posted the highest with 39.48 per cent, whilst Repos/Buy-Backs product categories accounted for 15.39 per cent of overall market turnover in the first eight months of the year.

Others are Bonds and Unsecured Placements & Takings, which contributed the least to overall market turnover, accounted for 7.08 per cent and 0.54 per cent respectively.

In October, total FX market turnover stood at N4.55 trillion or $12.52 billion, representing 34.08 per cent of FIC market turnover and a 31.62 per cent or $5.79billion, MoM decline from the turnover recorded in September $18.31 billion.

Turnover at the Investors & Exporters (I&E) FX Window recorded a 37.94 per cent ($2.9bn) MoM decrease to close at $3.91bn from the $6.30bn recorded in September. YTD3 turnover at the I&E FX Window closed at $49.39bn as at October 31, 2018.

The decrease in FX turnover in October, however, was largely attributed to the decline in Member- Clients and Member-CBN4 trades 32.82 per cent and 40.71 per cent respectively, as against the marginal increase in Inter-Member trades of 0.22 per cent.

The figure, in August, indicated that N28.278 trillion Forex was traded on the FMDQ OTC market turnover, higher than N23.77 trillion between January and July, while N15.104 trillion was traded on the foreign exchange derivatives market, better than N13.04 trillion sold in the first seven months of 2018.

On Treasury Bills and FGN Bonds outstanding recorded MoM increases of N0.21 trillion and N0.10 trillion to close at N12.87trillion and N8.21trn respectively as at October 31, 2018 mainly due to net issuances, as against a total of N45.668tr that was traded between January and August.

Meanwhile, the CBN has reported a foreign exchange net flow loss of $3.99 billion in third quarter (Q3) of 2018.

The apex bank in its economy economic report for Q3 of 2018 stated that aggregate outflow in the quarter under review increased as against inflow that decreased.

The report by CBN disclosed that $16.9 billion aggregate outflow was reported in Q3 of 2018 while inflow aggregate foreign exchange inflow amounted to $12.95 billion, bringing the foreign exchange net flow to a loss of $3.98 billion in Q3.

It is however worthy of note that this is the first time the apex bank since fourth quarter of 2016 reported a net flow loss, even as our findings revealed that $13.29 billion was aggregate foreign exchange outflow in Q2 of 2018 as against $13.8 billion reported in Q2 of 2018.

In fact, the aggregated foreign exchange inflow in the first quarter of 2018 stood at $14.2 billion while outflow was $9.65 billion, translating into $4.5 billion gain in foreign exchange net flow.

However, the Q3 report by CBN stated that “despite the decline in domestic oil production, there was improvement in foreign exchange revenue from oil export in Q3 of 2018, on account of the favourable international price of crude oil.

“The development was, however, moderated by the significant decline in inflow from non-oil exports.”

“Aggregate outflow through the CBN amounted to $16.93 billion in the Q3 of 2018. This represented 27.4 per cent and 81.3 per cent increase, above $13.29 billion and $9.34 billion in the preceding quarter and the corresponding period of 2017, respectively.

“The increase in outflow relative to the preceding quarter was attributed to 32.2 per cent and 28.0 per cent increase in public sector payments and interventions in the foreign exchange market.”

The report stated that a net outflow of $3.98 billion was recorded through the Bank, compared with $0.53 billion and $2.64 billion in the second quarter of 2018 and the corresponding period of 2017, respectively.

The report stated that aggregate foreign exchange inflow into the economy amounted to $26.01 billion at end-September 2018, indicating a decrease of 20.3 per cent and 3.7 per cent, compared to the levels in the second quarter of 2018 and the corresponding period of 2017, respectively.

The development, according to CBN report, was as a result of the 6.3 per cent and 30.6 per cent decrease in inflow through apex bank and autonomous sources.

The report by CBN on oil sector receipts, disclosed that 14.2 per cent of the total was $3.69 billion compared with $3.15 billion and $3.17 billion in the preceding quarter and the corresponding period of 2017, respectively.

“Non-oil inflow at $9.26 billion (35.6 per cent of the total) fell by 13.3 per cent below the level at the end of 2018 second quarter, but rose by 5.1 per cent over the level at the corresponding period of 2017.

“Autonomous inflow, at $13.06 billion, fell by 30.6 per cent and 13.1 per cent below the levels at end of the preceding quarter of 2018 and the corresponding period of 2017, respectively. Inflow from autonomous sources accounted for 50.2 per cent of the total,” the report by CBN stated.

The report added that, “Aggregate foreign exchange outflow from the economy, at $17.83 billion, rose by 25.6 per cent and 75.3 per cent, above the levels in the preceding quarter and the corresponding period of 2017, respectively. The development reflected, mainly, the rising outflow through the Bank.

“Thus, foreign exchange flows through the economy resulted in a net inflow of $8.18 billion in the review quarter, compared with $18.44 billion and $16.85 billion in the second quarter of 2018 and the corresponding period of 2017, respectively.”

Zenith Bank, UBA, Sterling Bank, First Bank of Nigeria led others in N577.34bn CACS disbursement.

The likes of Zenith Bank Plc, United Bank for Africa Plc (UBA), Sterling Bank and First Bank of Nigeria led 16 other banks in N577.34 billion Commercial Agricultural Credit Scheme (CACS) disbursement for 568 projects in nine months.

The credit scheme that was introduced by CBN in collaboration with the Federal Ministry of Agriculture and Water Resources (FMA&WR) in 2009 was meant provide finance for agricultural value chain (production, processing, storage and marketing).

The breakdown revealed that Zenith Bank between January and September 2018 disbursed N120.16 billion for 75 projects while UBA with 50 projects has disbursed N81.06 billion.

Interestingly, Sterling Bank Plc with 42 projects disbursed N72.17 billion, ranking the Tier-II as one of the most active banks in the credit scheme of the CBN.

Sterling Bank’s management has shown commitment to the agriculture value chain aligns with the Federal Government’s current policy focus of diversifying the economy and re-positioning the agriculture sector to play a lead role in economic development.

The Executive Director, Corporate and Investment Banking, Sterling Bank, Mr. Kayode Lawal, had said: “We are quite proud of our intervention in the agriculture value chain which is creating food security, stimulating job creation,

while also enhancing the income of farmers in Bauchi, Abuja, Imo, Kebbi and Ogun, among other agrarian states in the country.”

On her part, Group Head, Agric and Export, Sterling Bank, Mrs. Bukola Awosanya, said: “We are excited to be at the forefront of improving access to finance among farmers and uplifting agriculture from subsistence to commercial levels through the transformation of its value chain.

Improved access to finance is boosting local food production, improving nutrition, fostering rural development and generating foreign exchange for the country.

Meanwhile, First Bank of Nigeria with highest number of projects, 99, disbursed N42.89 billion in nine months.

Other leading Tier-1 banks – Guaranty Trust Bank and Access Bank, disbursed N39.85 billion and N36.66 billion for 29 and 26 projects respectively in nine months of this year.

Others are Stanbic IBTC Bank with N27.66 billion for 45 projects; Union Bank Nigeria Plc with N28.91 billion disbursed for 39 projects; Unity Bank Plc – N25.18 billion disbursed for 27 projects;

Keystone Bank with N26.05 billion disbursed for 20 projects; Fidelity Bank Plc- N21.67 billion for 17 project; FCMB Plc., – N15.53 billion for 26 projects and Skye Bank Plc – N13.77 billion for 10 projects.

In addition, Heritage Bank Plc – N6.82 billion for 14 projects; Wema Bank – N2.89 billion for 13 projects; Citibank Plc – N3 billion for two projects; Diamond Bank Plc – N4.85 billion disbursed for 21 projects;

Suntrust Bank Ltd – N1.85 billion for two projects; Ecobank Nigeria – N6.38 billion for 10 projects and Jaiz Bank Plc for one project.