NSE’ll inaugurate derivatives market in 2014– Dangote

The Nigerian Stock Exchange has disclosed plans to inaugurate a derivatives market by next year.

The Council President, NSE, Alhaji Aliko Dangote, made this announcement at the 52nd Annual General Meeting of the NSE in Lagos on Friday.

Derivative markets are investment markets that are geared toward the buying and selling of a certain type of securities, or financial instruments. These securities derive their value, or at least part of their value, from the value of another security, which is called the underlier.

According to Dangote, the move is as part of plans to deepen the Exchange and enable investors to have more diversified portfolio of investments in the capital market.

He said, “As part of our transformation agenda, the Exchange is focused on inaugurating new products and services in our market to address our clients’ needs. In this regard, we have proposed launching a derivatives market in Nigeria by 2014.

“The Exchange plays an active role in advocating financial system reforms at the government level, and is involved in an official program to develop Nigeria’s financial system strategy for 2020.”

He noted that in 2012, the NSE made two strategic investments in imminent alternative trading platforms for the Nigerian capital market through its wholly owned subsidiary, NSE Consult Limited adding the important Over-the-Counter market to the Exchange’s business coverage.

He said, “The first investment was in the Nigerian Association of Securities Dealers Limited, which is a formal OTC platform offering a structured trading arena for unlisted equities, bonds and money market instruments.

“The second strategic investment was in the FMDQ OTC Plc, which is a newly established firm registered to carry out the business of securities dealing and to promote and oversee OTC market platforms for trading securities.”

He added that on the regional front, the NSE continues to play a major role in the West African Monetary Institute’s goal to integrate West Africa’s securities exchanges in line with the West African Capital Markets integration program.

Speaking on the plans for the future, he said, “As we look forward, we are focused on facilitating the creation of corporations that will be the African Champions of tomorrow. With this in mind, the NSE is on course to deliver a first-rate capital market experience that will make us the gateway to African capital markets.”