NGX, CIS enhance stakeholders’ capacity for exchange traded derivatives

NGX: Capitalisation gains N47bn

The Chief Executive Officer, Nigerian Exchange Ltd,. (NGX), Mr Temi Popoola, says the organisation is committed to promoting a robust derivatives market ecosystem in the country.

Popoola said this at a capacity-building workshop organised by NGX in collaboration with the Chartered Institute of Stockbrokers (CIS) for Exchange Traded Derivatives’ stakeholders on Thursday.

The virtual event had the theme; “Exchange-Traded Derivatives: Enhancing the Capital Market for Robust Value Creation.”

Popoola, while delivering his opening remarks, said the workshop was designed to deepen the knowledge of market operators, investors, and other stakeholders on the workings of Exchange Traded Derivatives, and drive participation in the market segment.

He said the derivatives workshop was consistent with the shared aspiration of NGX and CIS to promote and protect the interests of the securities and investment profession by upholding the highest standards of service and integrity.

“Since 2017, the Exchange has been building the capacity of market stakeholders on Derivatives, leveraging X-Academy, our learning and capacity development platform.

“We are pleased to collaborate with CIS in hosting this workshop aimed at facilitating a better understanding of how derivatives work, including how the contract is traded and settled on a day-to-day basis, the margining process and risk management issues,” he said.

The News Agency of Nigeria (NAN) reports that NGX earlier in the year launched West Africa’s first Exchange Traded Derivatives Market, with Equity Index Futures Contracts.

The launch saw the unveiling of equity index futures contracts based on the most widely followed and recognised equity indices in the Nigerian capital market – NGX 30 Index Futures and NGX Pension Index Futures.

“We believe that NGX Derivatives market will potentially address significant risk management needs of market participants such as PFA’s, Fund Managers, Corporate Treasuries, and Trading License Holders, being the first line of contact for investors in the capital market.

“In addition, NGX Exchange Traded Derivatives will provide investors and other market players, with the necessary tools for asset allocation, and cost management for effective portfolio management,” Popoola added.

Also speaking during the webinar, the president, CIS, Mr Oluwole Adeosun, explained that derivatives instruments traded on the Exchange were essential in the market.

According to him, derivatives instruments enable market sophistication, transparent financial contracts and offer a useful risk management tool for implementing risk mitigation, or hedging strategies against financial risk.

Adeosun said they also present an alternative investment acceptance useful for pursuing diversification and investment strategies.

He further said stockbrokers and securities traders had been undergoing a series of training on derivatives instruments and an adaption had been synchronised with the examination syllabus for securities traders and brokers.

The webinar, which brought together over 500 participants, also featured speakers such as Ade Omolehinwa, ACS, Managing Partner; Ademola Omolehinwa and Co; Ayokunle Aderalegbe, COO, NG Clearing Ltd., and Faroq Oreagba, Partner, Karaho Capital Partners.

Others are: Ellie Olutimayin, FCS, MD, Cardinal Stone Securities Ltd; Adedeji Ajadi, FCS, Co-Founder and Partner, 100xConcepts and Dr John Osuoha, ACS, Nigeria Country Representative, CISI UK.

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