NGX Launches West Africa’s First Exchange-traded Derivatives Market

Nigerian Exchange Limited has launched West Africa’s first Exchange Traded Derivatives Market with Equity Index Futures Contracts.

It said in a statement over the weekend that this was consistent with the Exchange’s commitment to develop the Nigerian capital market by providing a market that thrived on innovation and responded to the needs of stakeholders in accessing and using capital.

“The launch of NGX ETD Market saw the listing of two Equity Index Futures Contracts, NGX 30 Index Futures and NGX Pension Index Futures, with more securities to be added in the future,” the statement said.

To promote clearing efficiency, stability, and confidence, the Exchange said it had collaborated with a premier Central Counterparty in Nigeria, NG Clearing Limited, to provide the clearing infrastructure for NGX Derivatives Market and its clearing members – Access Bank and Zenith Bank.

The ETDs Market would commence with trading activities by the first three Trading License Holders – Cardinal Stone Securities Limited, Meristem Securities Limited and APT Securities and Funds Limited – that have been cleared by NGX Regulation Limited to facilitate transactions on behalf of investors on NGX Derivatives Market, the statement said.

Commenting on the launch, Mr Temi Popoola, the Chief Executive Officer, NGX, commended the efforts of stakeholders who had successfully driven the completion of the derivatives market since 2014.

He said, “I would like to specially acknowledge the work that was done under the previous management of the Exchange, led by Mr Oscar Onyema, whose contributions have formed the foundation of our present gains and accomplishments made manifest through the launch of NGX ETDs market.

“NGX remains committed to building an exchange that can cater to the increasingly sophisticated needs of domestic and foreign investors. A strong pillar in our strategy is to enhance liquidity and expand market capitalisation to the end that we create value for stakeholders, and the introduction of ETDs is a critical step in the right direction.

“The platform will play an essential role in broadening and deepening the market, adding new impetus to NGX’s leading position as Africa’s preferred exchange hub.”

Mr Tapas Das, the Chief Executive Officer, NG Clearing, said, “The launch of the derivatives market in Nigeria is a testament to the maturity of our market, a sign that the market has come of age and is ready to transition into a new era.

“The risks that come with the derivatives market will be managed through NG Clearings’ robust technology-enabled Clearing and Settlement, Collateral Management, and Risk Management offerings as a critical Central Counter Party Financial Market infrastructure.”