DMO sold treasury bills valued at N406.10 billion in July - Report

The Debt Management Office (DMO) sold T.bills valued at N406.10 billion across its auctions in July 2023.

This was contained in the FMDQ Markets Monthly Report for July seen by Nairametrics.

The amount represents 0.39% (N1.59 billion) Month-on-month (MoM). An increase in the value of T-bills sold across its auctions in June 2023 (N404.51 billion).

Similarly, the DMO reopened two (2) 10Y, one (1) 15Y and one (1) 30Y FGN Bonds worth N657.84 billion in July 2023.

The report noted that the total sale represented a 182.73% oversubscription of the amount offered, and a 39.03% (N184.68 billion) MoM increase on the amount sold in June 2023 (N473.16 billion) for the same FGN Bond maturities.

FMDQ noted that the CBN did not conduct any public OMO Bills auctions in July 2023.

Corporate bonds

According to the report, there were no corporate bonds listed on the FMDQ Exchange in July 2023 compared to N17.50 billion worth of corporate bonds listed in June 2023.

“As a result, the total outstanding value for corporate bonds remained unchanged at N1,757.95 billion in the review month,” it said.

Commercial Papers

The report stated that the total value of Commercial Papers (CPs) quoted on the FMDQ Exchange in July 2023 was N117.32 billion, representing a MoM increase of 42.85% (N35.19 billion) from the value of CPs quoted in June 2023.

“Quoted CPs were issued by institutions from various sectors including Financial Services (5), Manufacturing (4), Real Estate (3), Agriculture (2), Chemical Supply & Oil Field Services (2), Commodities Trading (1), Public Sector (1), Telecommunications (1) and Consumer Staples (1). 

As a result, the total outstanding value of CPs increased MoM by 14.10% (N117.32 billion) to N949.26 billion,” it said.

Secondary market turnover

According to the report, secondary market turnover on the FMDQ Exchange in July 2023 was N19.92 trillion, representing a MoM decrease of 8.37% (1.82 trillion) and a YoY increase of 0.81% (N0.16 trillion) from June 2023 and July 2022 figures, respectively.

It noted that Foreign Exchange (FX), Money Market (MM), and CBN Bills transactions dominated secondary market activity, accounting for 73.98% of the total secondary market turnover in July 2023.

“Total spot market turnover for all products traded in the secondary market was N18.47 trillion in July 2023, representing a MoM increase of 3.68% (N0.66 trillion) from June 2023 figures. 

The MoM increase in total spot market turnover was driven by an improvement in turnover across MM and FI transactions which increased MoM by 16.35% (N0.90 trillion) and 12.16% (N0.91 trillion), respectively, despite the MoM decline in FX transactions by 24.34% (N1.16 trillion). 

The uptick in MM turnover was driven by an increase in Repos/Buybacks, offsetting the MoM decline in Unsecured Placement/Takings transactions.

Likewise, the improvement in FI turnover was driven by a MoM increase across all FI products, excluding CBN Special Bills and FGN Bonds which decreased in the review period,” the report noted.

According to the report, Spot FX market turnover was N3.61 trillion ($4.66 billion) in July 2023, representing a MoM decrease of 24.34% (N1.16 trillion) from the turnover recorded in June 2023 (N4.77 trillion).

“In the FX Market, the US Dollar appreciated against the Naira, with the spot exchange rate ($/₦) increasing by 22.94% ($/N143.60) to close at an average of $/N769.51 in July 2023 from $/N625.90 recorded in June 2023.
 
Further, exchange rate volatility decreased in July 2023 as the Naira traded within an exchange rate range of $/N740.08 – $/N803.90 compared to $/N464.67 – $/N770.38 recorded in June 2023,” the report said.

Fixed Income: The report stated that the (FI) market turnover was N8.43 trillion in July 2023, representing a MoM increase of 12.16% (N0.91 trillion) from the turnover recorded in June 2023 (N7.52 trillion).

“The MoM increase in the FI market turnover was driven by the 52.55% (N0.94 trillion), 63.75% (N0.98 trillion), and 402.37% (N0.03 trillion) uptick in turnover across T.Bills, OMO Bills, 

Other Bonds which offset the MoM decrease in CBN Special Bills and FGN Bonds transactions by 57.36% (N1.00 trillion) and 1.24% (N0.03 trillion), respectively,” the report noted.