NG Clearing targets N3.6bn monthly derivatives future contracts trade by 2025

…as March Futures Contract expires by 2.30pm on Friday

NG Clearing Limited, the SEC-licenced Central Counterparty Clearing House (CCP) has set a huge target of a minimum of one million trades of derivatives futures contracts per month by next year. This represents a minimum of N3.6billion in derivative futures contracts every month by 2025 considering currently daily trade of N7.2million.

Farooq Oreagba, MD/CEO, Designate NG Clearing Limited noted this on Friday in an interview with select journalists ahead of the expiration of the March Futures Contracts (NGX30 March Futures) which expires 2.30pm on Friday March 15.

He noted that the maturing March futures contract will stop to exist by 2.30pm today, adding that after the expiration investors who still hold the contracts will have their monies moved to or from their accounts.

NG Clearing provides CCP services in the Nigerian capital market as the company interposes itself in financial transactions by becoming the buyer to the seller and the seller to the buyer, thereby, guaranteeing the successful execution of derivatives and other trades from various trade points and managing all the risks associated with derivatives and CCP transactions in Nigeria.

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Oreagba said another five derivatives futures contracts have been approved by the Nigerian Securities and Exchange Commission (SEC), while “another 10 are awaiting approval.”

There has been growing interest in the derivatives market as investors are beginning to take note of and are taking positions in the derivatives market. Specifically, the market has seen significant interest by foreign investors, signalling the need for the local investors to also leverage the market for wealth creation.

On the commitment to grow the market in terms of volume and value, Oreagba further said, “a journey of thousand miles starts with a step.”

He noted that in most countries, the sizes of their derivatives markets are more than that of equities – South Africa for instance.

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NG Clearing also plans to introduce commodities derivatives into the market.

Investors interested in trading derivatives can get in touch with their brokers who are also accredited Trading License Holders (TLHs). Some registered Trading Licence Holders (TLHs) include: Apel Asset Limited, APT Securities, CardinalStone Securities, Chapel Hill Denham Securities, Cordros Securities, FSL Securities, Meristem Securities, PAC Securities, RMB Nigeria Stockbrokers, and Stanbic Securities.

NG Clearing was established by its Promoters, The Nigerian Exchange Group Plc (formerly the Nigerian Stock Exchange) and Central Securities Clearing System Plc, and has other shareholders including Access Bank Plc, Nigeria Sovereign Investment Authority, Consonance Kuramo Special Opportunities Fund I, Coronation Merchant Bank Limited, Greenwich Trust Limited, Union Bank Plc, United Bank for Africa Plc, Association of Stockbroking Houses of Nigeria and Wharf Street Investment Limited.