NGX, NG clearing foster deeper understanding of single stock futures

Nigerian Exchange Limited (NGX) and NG Clearing Limited on Thursday February 29, 2024, enabled deeper understanding of the Single Stock Futures product in the Exchange Traded Derivatives market with a virtual workshop.

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Jude Chiemeka, acting CEO Nigerian Exchange Limited Derivatives while giving his welcome remarks noted that derivatives play a crucial role in global risk management, with over 90 percent of leading companies using them. “The derivatives market continues to grow rapidly, reaching $39.17 billion by 2027.

“In Nigeria, the NGX Derivatives Market is positioned to drive innovation and diversification in the financial sector, offering a transparent platform aligned with international standards. Today’s webinar, themed ‘Understanding the Trading of Single Stock Futures’, serves as a beacon of enlightenment, illuminating the pathways to unlocking value in this dynamic asset class.”

Speaking on the Central Counterparty’s role in managing the trading infrastructure, Farooq Oreagba, CEO NG Clearing emphasised the importance of research and analysis to investors before embarking on trading futures. “Just as there is leverage on the upside, there is leverage on the downside.

“As regards market oversight and transparency, our operations department at NGCL is at alert and sees all market positions before market opening to ensure operators do not exceed their limits.”

Oluwole Adeosun, president of the Chartered Institute of Stockbrokers stated, “This is an exciting period for our market. As investors and players we should be familiar with the rules and regulations guarding the market and also update our knowledge on the derivatives market.

“CIS has over the years provided intellectual leadership in the conduct and practice of finance, securities and investment in Nigeria. The Institute is prepared more than ever before to play this role of aiding capacity building for this market and the new product, Single Stock Futures.”

Seinde Adenagbe, 1st Vice Chairman, Association of Securities Dealing Houses, representing the Chairman, Sam Onukwue noted that it is pivotal for securities dealers to maintain trust to ensure the confidence of investors in the market. “Derivatives are a contract that buyers and sellers must meet their obligations. This contributes to market integrity. Introducing more products like single stock futures is important to the depth of the market as we need to create another pool of investment for our investors.”