AFEX, a Nigerian-based commodities player has unveiled its updated pricing methodology for its commodities exchange business unit on the sidelines of the second edition of the AFEX CEO Breakfast Session today in Lagos.
The commodities player is also set to launch a new website on November 1, to accommodate a robust system to give more access to what’s going on in the markets.
The implementation of the price methodology fills a gap in formalising participation in the Nigerian commodities ecosystem, as the firm doubles down on investor education and protection, while enhancing price discovery and eliminating price gaps across the different boards on the Exchange.
The AFEX Commodities Exchange pricing methodology is a framework used by the Exchange to transparently communicate the prices of the commodities that are available for trade. Previously, the pricing methodology aggregated prices across all markets and represented them differently across each of the Exchange’s boards.
However, the new methodology will unify these prices from different markets and boards to generate a homogenised price per commodity.
During his presentation at the CEO breakfast, Akinyinka Akintunde, President/CEO AFEX Nigeria, relayed relevant updates on the Exchange stating that “We have launched initiatives to strengthen data availability and accessibility for the commodities market in the country over our years of operation.
“This is a core fundamental for a robust and vibrant market. Improving our thinking around pricing is a commitment to transparency, and to ensuring that stakeholders understand the pricing and valuation of these commodities while being able to access the data for decision-making.”
According to AFEX, clients on its trading platform are currently exposed to three boards inclusive of a cash settled market board, OTC board and Dawa board.
“These boards enable investors and value chain players to hedge risks, diversify their portfolios and get orders fulfilled by participating on the Exchange.
“In the coming months, investors can also expect the introduction of a fixed income board and derivatives trading board on the upgraded trading platform.”
AFEX is a platform business that enables efficient trade for commodities in Africa. Operating through 3 business units, AFEX addresses the challenges faced by smallholder farmers, providing better access to inputs, credit facilities, micro-insurance, storage services, training, and markets.
Mezuo Nwuneli, MD Sahel Capital, during his Keynote address, stressed the importance of unlocking finance for the $1 trillion commodity market.
Read also: AFEX lists record N100bn 3-year asset-backed CP programme on the Exchange
He said “Food inflation and global trends point to the need to build resilient food supply chain systems, and commodity investment serves as the vehicle to bolster Africa’s regional supply chains.
“By leveraging private sector and foreign investments, we can unlock value for the agriculture value chain and hedge against creeping inflationary pressures.”
The AFEX market turnover currently stands at $300 million, with more education drives planned to serve as a catalyst for the continued development of the commodities market ecosystem in Nigeria.
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