Economy
FMDQ Introduces Settlement Platform for Fixed Income Market
By Dipo Olowookere
A new platform aimed to boost confidence of investors in the nation’s financial markets has been introduced by the management of FMDQ OTC Securities Exchange.
The new platform, called the FMDQ’s Q-ex, is a customised fully-integrated multiasset trading system with attendant post-trade services capabilities.
The FMDQ’s Q-ex has been integrated with the Central Bank of Nigeria (CBN)’s Scripless Securities Settlement System (S4) to provide Straight-through-Processing (STP) capabilities for efficient settlement in the fixed income market, improving the efficiency of the trading, reporting and settlement processes, whilst further developing, in no small measure, the Nigerian financial markets.
Business Post reports that the platform had the inputs of the CBN, FMDQ and the Financial Markets Dealers’ Association (FMDA), the association of FMDQ Dealing Member (Banks).
It was successfully deployed on Friday, June 8, 2018. The FMDQ’s Q-ex provides an unrivalled means through which trades executed by its Members (currently the Dealing Member (Banks), are reported and subsequently settled, with minimal to no human intervention, via the respective channels.
The deployment of the FMDQ Q-ex Settlement Solution operated by FMDQ Clear Limited, a wholly-owned subsidiary of FMDQ, will essentially streamline business processes to reduce friction along the fixed income trades settlement value-chain, boost productivity of the market participants and promote efficiency of post-trade services.
It can be argued that the Nigerian fixed income market has not been performing at its optimum, as the market has been marked with bouts of low productivity, inefficiency and invariably, settlement defaults, all of which would likely have marred the market’s integrity and significantly lowered investor confidence.
With integrity being one of the key ingredients for a successful market, as adjudged by global counterparts, the achievement of STP in the fixed income market via the integration of Q-ex and the CBN’s S4 could not have come a moment too soon, as this integration sets a clear and certain path for market-wide confidence in the Nigerian fixed income settlement processes, and by extension, the fixed income market, to be restored.
The integration also makes possible, unparalleled visibility and transparency of the post-trade workflow (settlement obligations, reconciliations etc.) amongst FMDQ Members and their trading counterparties – another must for a successful market.
From informing the customisation of its applications and systems to allowing for seamless and robust integration to Q-ex, the CBN has again demonstrated its progressiveness and affirmed its interest in re-engineering the Nigerian financial markets towards achieving global competitiveness.
This is highly commendable, and the market applauds the CBN for its market development initiatives. On the other hand, also key to the success of this initiative, has been the FMDA, who has provided an avenue for market engagements, ensuring effective and value-adding communication with FMDQ and has remained dogged in its desire to see through the delivery of an automated clearing and settlement process that works for the market.
Managing Director of FMDQ, Mr Bola Onadele Koko, explained that the, “Development of FMDQ’s Q-ex and its subsequent linkage to the CBN’s S4 is one of the key medium- to long-term initiatives of FMDQ, aimed at making the Nigerian financial market operationally excellent – delivering on the “O” in FMDQ’s GOLD Agenda.”
With the continued collective efforts of the CBN, the Securities and Exchange Commission (SEC) and indeed, other key regulators and stakeholders, FMDQ says it is confident that the potential of the nation’s domestic markets, acting as a catalyst to propel economic growth, shall be realised.
“To build and sustain a well-functioning market, it is hoped that all hands remain on deck even as FMDQ continues to re-affirm its commitment to promote a world-class financial market operating in alignment with international best practices,” Mr Koko added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
By Dipo Olowookere
The All-Share Index (ASI) of the Nigerian Exchange (NGX) Limited has again crossed the 150,000-point threshold on Thursday as the demand of for local intensifies.
The market was up by 0.35 per cent during the session, with the NGX index inching higher by 520.23 points to 150,363.05 points from the previous day’s 149,842.82 points and the market capitalisation climbed by N332 billion to N95.857 trillion from N95.525 trillion.
During the session, the consumer goods index grew by 1.23 per cent, the banking counter expanded by 0.56 per cent, and the energy sector appreciated by 0.05 per cent.
However, the insurance industry went down by 0.23 per cent, while the commodity and the industrial goods sectors closed flat.
Nestle Nigeria gained 10.00 per cent to trade at N1,958.00, Guinness Nigeria improved by 9.98 per cent to N289.70, Aluminium Extrusion Industries rose by 9.76 per cent to N11.25, DAAR Communications soared by 9.20 per cent to 95 Kobo, and Mecure Industries surged by 9.13 per cent to N55.00.
On the flip side, Stanbic IBTC lost 9.33 per cent to settle at N95.20, Lasaco Assurance went down by 9.09 per cent to N2.50, Africa Prudential slipped by 8.82 per cent, Austin Laz depreciated by 8.82 per cent to N12.40, and Sterling Holdings crashed by 6.12 per cent to N6.90.
There were 35 price gainers and 26 price losers yesterday, implying a positive market breadth index and bullish investor sentiment.
During the session, a total of 839.8 million equities valued at N32.8 billion exchanged hands in 23,211 deals compared with the 5.9 billion equities worth N216.2 billion traded in 25,205 deals a day earlier, indicating a decline in the trading volume, value, and number of deals by 85.77 per cent, 84.83 per cent, and 7.91 per cent apiece.
The day’s busiest stock was First Holdco with a turnover of 385.6 million units sold for N15.6 billion, FCMB traded 76.0 million units worth N805.3 million, Lasaco Assurance exchanged 43.6 million units valued at N111.8 million, Access Holdings transacted 29.6 million units worth N616.8 million, and Chams sold 24.8 million units valued at N75.4 million.
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