NSE Plans To Trade Naira Futures

The Nigerian Stock Exchange has said it may start trading naira futures by the end of 2017, according to Bloomberg News.
Futures refer to a financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date and price. The contract must be honoured whether the price of the asset goes up or down.
Bloomberg News reported that the Chief Executive Officer, NSE, Mr. Oscar Onyema, said this in an interview in London on Monday.
According to the report, the trading of naira futures by the Exchange will help investors hedge against movements in the naira.
“It would be awesome if we had a naira-dollar contract that we could trade on the exchange,” Onyema was quoted as saying, adding, “Futures and options are asset classes that we think would be very beneficial to foreign investors.”
Onyema and Nigerian corporate finance experts, lawyers, capital market operators, regulators and companies keen to explore a London/Lagos dual listing, are participating in an investor roadshow at the London Stock Exchange Group.
The move is part of efforts aimed at promoting dual listing and showcasing the potential of quoted companies on the NSE to global markets, a statement by the Exchange ahead of the event, themed ‘London-Lagos: Capital markets in partnership’, had said.
According to the statement, the event is in furtherance to the agreement signed in November 2014 between the NSE and LSEG to strengthen cooperation and promote mutual development between the two exchanges.
Onyema had been quoted as saying the event would bring together key market stakeholders to discuss opportunities for dual listing in the London and Nigerian capital markets.
He said, “It is an opportunity for engagement between the UK and Nigerian capital markets with a view to deepening domestic and regional markets; enhancing liquidity and identifying institutional and capacity building initiatives needed to develop both markets and create long term value for respective stakeholders.
“The plan to get local firms to list both on the NSE and London Stock Exchange is part of our strategy of transforming Nigeria into an international financial centre that serves not only the Africa region but also the global market.”

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