NGX says increased investor education, stakeholder collaboration needed to develop derivatives market

More investor education and stakeholder collaboration are needed for the Exchange Traded Derivatives markets in Africa to experience increased growth, said Jude Chiemeka, divisional head, of Capital Market, Nigerian Exchange Limited (NGX).

Chiemeka made the remark at the Capacity Building Workshop of the CFA Society, South Africa held virtually on Tuesday, April 4, 2023 with the theme “Building and Scaling Derivatives Markets in Africa”.

He said, “Enabling the development of the derivatives markets on the African continent requires more investor education and capacity building. Our markets are still nascent, and investors need to be aware of the risks and opportunities inherent to derivatives”.

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“Stakeholder engagement and collaboration is also needed to catalyse growth. At NGX, we have organised various capacity building sessions in partnership with major stakeholders in the capital market to educate investors on the intricacies of Exchange Traded Derivatives market. We also continue to drive conversations and engage regularly through forums and other marketplace development initiatives.”

While making his presentation, Chiemeka further explained that the Exchange Traded Derivatives market of NGX which took off in April 2022 as West Africa’s first ETDs market launched with the NGX30 and NGX Pension Index Futures contracts and currently has three accredited trading license holders and two clearing members actively participating.