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Nigeria’s fixed income (FI) market turnover in February was N18.47trillion, which represents month-on-month (MoM) increase of 17.96 percent (N2.81trillion) from the turnover recorded in January (N15.65trillion), according to FMDQ Securities Exchange in its recently released financial markets monthly report for February.
The report shows that the month-on-month increase in turnover was driven by the increase in T-Bills, CBN Bills, OMO Bills, FGN Bonds, and other bonds transactions during the review period.
“In February 2025, the trading intensity (TI) for T-Bills increased MoM by 0.01 basis points (bps) to 0.36 while the TI for FGN Bonds increased by 0.07 basis points (bps) to 0.14,” the report shows.
“T-Bills with term-to-maturity (TTM) between >6M – 12M and FGN Bonds with TTM between >5Y – 10Y were the most traded sovereign FI securities, accounting for 43.12 percent (N3.82trillion) and 28.56 percent (N2.53trillion) of the secondary market turnover for sovereign FI securities in the spot market, respectively,” FMDQ Exchange further noted in the report.
The sovereign yield curve experienced a 1.22 percentage points (ppts) MoM increase in yield spread to -1.41ppts in February 2025, depicting a flattening of the yield curve. In February 2025, one (1)-year real (inflation-adjusted) yields in Nigeria and Turkey remained negative at (1.81percent) and (4.72percent), respectively, compared to selected emerging markets.
Total turnover in the Money Market (MM) segment increased MoM by 11.28 percent (N1.90trillion) to N18.74trillion in February 2025. The MoM increase was driven by the 11.28 percent (N1.90trillion) increase in Repos/Buy-backs.
The average Overnight (O/N) rate and Open Repos (OPR) rate (secured lending rate) increased MoM by 2.53ppts and 2.64ppts, respectively, to close at an average of 32.11 percent and 31.65 percent in February 2025.
Secondary market turnover by products
Total secondary market turnover recorded on FMDQ Exchange in February 2025 was N59.83trillion, representing a MoM and year-on-year (YoY) increase of 4.89 percent (N2.79trillion) and 48.41 percent (N19.52trillion) from January 2025 and February 2024 figures, respectively.
Foreign Exchange (FX) and Money Market (MM) transactions dominated secondary market activity, jointly accounting for 69.14 percent of the total secondary market turnover in February 2025.
Read also: Fixed income market seen taking shine off equities
Spot Market
Total spot market turnover for all products traded in the secondary market recorded on FMDQ Exchange in February 2025 was N57.40trillion, representing a MoM increase of 4.64percent (N2.55trillion) from January 2025 figures. The MoM increase in total spot market turnover was driven by the increase in fixed income (FI) and money market (MM) turnover by 17.96 percent (N2.81trillion) and 11.28 percent (N1.90trillion) respectively, offsetting the 9.68 percent (N2.17trillion) decrease in FX market turnover.
The increase in MM turnover was solely driven by the MoM increase in the Repos/Buy-backs product category. Similarly, the increase in Fixed Income turnover was driven by the MoM increase across all product categories, while CBN Special Bills remained inactive during the review period.
Spot FX Market
Spot FX market turnover recorded on FMDQ Exchange was $13.43billion (N20.19trillion) in February 2025, representing a 7.76 percent ($1.13billion) MoM decrease from the turnover recorded in January 2025 ($14.56billion). In the FX Market, the Naira appreciated against the US Dollar, with the spot exchange rate ($/N) decreasing by 2.10 percent ($/N32.27) to close at an average of $/N1,504.18 recorded in February 2025 from $/N1,536.46 recorded in January 2025. Further, exchange rate volatility decreased in February 2025, with the Naira trading within an exchange rate range of $/N1,495– $/N1,515 compared to $/N1,475– $/N1,560 recorded in January 2025.
FX derivatives market
The report shows that total turnover in the FX derivatives segment in February 2025 was $1.61billion (N2.43trillion), representing a MoM increase of 13.52 percent ($0.19billion) from January 2025 figures ($1.42billion). The MoM increase in the FX derivatives turnover was jointly driven by the 7.23 percent ($0.10billion) and 107.26 percent ($0.10billion) increase in FX Swaps and FX Forwards transactions during the review period.
According to the report, in the Cleared Naira-Settled (USD/NGN) Non-Deliverable Forwards market, the near month contract (NGUS Feb 26, 2025) expired with no open positions settled during the period. No new far month (60M) contract was introduced in the Cleared Naira-Settled Non-Deliverable Forwards market in the review period, continuing the trend since August 2023. Consequently, the TTM of the farthest open contract is eleven (11 months (that is NGUS JAN 28, 2026 contract).
As a result, the cumulative Notional Value (NV) of open Cleared Naira-Settled Non-Deliverable Forwards contracts was $0.08billion as at February 28, 2025, representing a MoM and YoY decrease of 10.14 percent ($0.01billion) and 96.53 percent ($2.20billion), respectively.
Non-sovereign securities
In February 2025, there were no new listings on FMDQ Exchange. However, the redemption of N7.50billion in non-sovereign bonds reduced the total outstanding value of non-sovereign bonds to N2.238trillion.
Meanwhile, the total value of Commercial Papers (CPs) quoted on FMDQ Exchange declined by 31.86percent (N51.23billion) MoM to N109.56billion from N160.79billion in January 2025. During the period, eleven (11) CPs were quoted in February 2025, with the majority issued by institutions in the Manufacturing sector (4).
Despite the decline in quoted CPs the outstanding value of CPs increased MoM by 9.96 percent (N59.54billion) to N657.43billion, offsetting the impact of the N50.02billion worth of CPs that matured during the review period.
Sovereign securities
In February 2025, the DMO sold T.bills valued at N1.444trillion across its auctions, representing a 13.62 percent (N173.11billion) Month-on-Month (MoM) increase in the value of T-bills sold across its auctions in January 2025 (N1.271trillion). Similarly, the DMO sold FGN Bonds worth N910.39billion, reflecting a MoM increase of 51.47 percent (N309.35billion) on the amount sold in January 2025 (N601.04billion).
The demand for sovereign securities remained strong during the review period, with T.bills and FGN Bonds oversubscribed1 by 1,097.10 percent and 366.35 percent. Meanwhile, the CBN sold OMO Bills worth N1.395trillion, representing a 6.94 percent (N104.15billion) decrease on the amount sold in January 2025 (N1.5trillion). These securities were oversubscribed by 219.26 percent.
