Investment in the Fixed Income and Currency market resisted the country’s prevalent economic climate in 2023, with investors splashing N196.79tn on short to medium-term securities on the FMDQ platform in 10 months.
The PUNCH examined data received from the FMDQ platform and discovered that investment increased by 8.9 percent, or N16.07 trillion, compared to N180.72 trillion invested in the market in the 11 months ending November 2022.
The FMDQ Exchange’s secondary market turnover in November 2023 was N27.87tn, showing a MoM and YoY rise of 28.43 per cent (N6.17trn) and 109.39 per cent (14.56trn), respectively, above October 2023 and November 2022 numbers.
Foreign Exchange, CBN Bills, and Money Market transactions dominated secondary market activity in November 2023, accounting for 71.68 per cent of total secondary market volume.
In November 2023, total spot market turnover for all products traded in the secondary market was N24.89tn, representing a MoM increase of 21.53 per cent (N4.41tn) over October 2023 statistics.
The MoM rise in overall spot market turnover was driven by an increase in turnover across all spot market product categories, with FX, MM, and FI transactions contributing 18.31% (N0.67tn), 18.94% (N0.93trn), and 23.68% (N2.82tn), respectively.
The removal of fuel subsidies in May and the harmonization of exchange rates in both the official and parallel markets by President Bola Tinubu’s government in 2023 worsened Nigeria’s economic predicament.
Despite the impact of the dual policies, which drove inflation to 28.2 per cent in November 2023, foreign portfolio investment in Africa’s largest economy surged, as did GDP.
According to reports, FDI inflows on the Nigerian Exchange Limited jumped by 45.93% to N13.79 billion in August 2023, up from N9.45 billion in July 2023.
Foreign portfolio inflows of investments increased in May 2023, the same month as President Bola Tinubu’s inauguration, indicating favourable investor optimism. However, it fell in successive months to N22.72 billion in June and N9.45 billion in July before rising to N13.79 billion at the end of August.
Similarly, the nation’s GDP increased by 2.54% year on year in the third quarter of 2023, according to the National Bureau of Statistics.
”This growth rate is greater than the 2.25% achieved in the third quarter of 2022 and the 2.51% reported in the second quarter of 2023. The GDP performance in the third quarter of 2023 was primarily driven by the Services sector, which grew by 3.99% and contributed 52.70% to the aggregate GDP,” NBS reported in a report.
On the other hand, investing in the Nigerian Exchange Limited resulted in a gain of almost 13 trillion dollars for equity market investors, reaffirming investors’ faith in the government’s policies.
This gain nearly treble the N5.619tn achieved in 2022, as the market capitalization finished at N27.915tn.
At the end of the year’s trading on Friday, investors on the local exchange had gained N13.003 trillion, with the market capitalization closing at N40.917 trillion.
Similarly, the exchange’s benchmark index, the All-Share Index, had risen. Its year-to-date gains were 45.90%, with the ASI closing at 74,773.77 points at the end of trade in 2023. This is a big improvement, since the ASI ended 2022 with a YTD of 19.98%.
President Tinubu promised Nigerians and investors in his new year speech on January 1 that he would battle every impediment to Nigeria’s business competitiveness in 2024.
”I will not hesitate to remove any impediment to making Nigeria a preferred destination for domestic and foreign investment,” he said.
In his pursuit of economic recovery, Tinubu has changed policies significantly since taking office as president.
