NGX launches West Africa’s first exchange derivatives market

Nigerian bourse loses N519bn in another bearing trading
Written by Maritime First

… As Naira marginally slumps to 417.50/dollar at investors and exporters window***

Nigerian Exchange Ltd., (NGX) has on Monday, launched West Africa’s first Exchange Traded Derivatives (ETD) market with Equity Index Futures Contracts.

The Exchange disclosed this in a statement by Mr Clifford Akpolo, Head, Marketing and Corporate Communications in Lagos.

Also read: NGX: Capitalisation surges by N88bn; Sunu Assurances, Sterling Bank lead losers’ chart

Akpolo said that the launch was consistent with the Exchange’s commitment to developing the Nigerian capital market by providing a market that thrives on innovation and responds 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,” he said.

According to him, the Exchange had collaborated with a premier Central Counterparty (CCP) in Nigeria, NG Clearing Ltd., to provide the clearing infrastructure for NGX Derivatives Market and its clearing members – Access and Zenith Bank.

Akpolo said the ETDs Market would start with trading activities by the first three trading license holders – Cardinal Stone Securities Ltd., Meristem Securities Ltd., and APT Securities and Funds Ltd.

He said the trading license holders that had been cleared by NGX Regulation Ltd., would facilitate transactions on behalf of investors on the NGX Derivatives Market.

Commenting on the launch, the Chief Executive Officer (CEO), NGX, Mr Temi Popoola, commended the efforts of stakeholders, who had successfully driven the completion of the Derivatives Market since 2014.

“I would like to specially acknowledge the work done under the previous management of the Exchange, led by Mr Oscar Onyema OON, whose contributions 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.

“Our partnership with the best in class Central Counterparty, NG Clearing Ltd., further engenders confidence in the ETDs market segment amongst market participants, as the clearing infrastructure is capable of reducing systemic risks and enhancing market transparency,” he added.

On his part, Mr Tapas Das, Chief Executive Officer of 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 had come of age and was ready to transition into a new era.

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


The newsmen report that ETDs are standardized, highly regulated, and transparent financial contracts, listed and traded on a securities exchange, and guaranteed against default through the clearing house of the derivatives exchange.

NGX ETDs market would complement existing asset classes, provide investors and other market players with the necessary tools for tactical asset allocation, as well as improve risks and cost management for effective portfolio management.

It would further enhance the participation of domestic and international investors in Nigeria’s financial markets, which would positively impact the performance of the economy.

In the meantime, the Naira exchanged at 417.50 to the dollar at the Investors and Exporters window on Thursday, representing a 0.20 per cent depreciation, compared to 416.67 naira to the dollar recorded on Wednesday.

The open indicative rate closed at 417.40 naira to the dollar on Thursday.

An exchange rate of 444 naira to the dollar was the highest rate recorded within the day’s trading before it settled at 417.50 naira.

The naira sold for as low as 410 to the dollar within the day’s trading.

A total of 196.28 million dollars was traded in foreign exchange at the official Investors and Exporters window on Wednesday.



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Maritime First