Following years of preparation, the Nairobi Derivatives market will commence operations today. Nairobi Securities Exchange received the license to operate from the market regulators, CMA and the Central Bank of Kenya and will be the number two derivatives market in Sub-Saharan Africa after the Johannesburg market.
This follows the successful completion of a six-month Derivatives Pilot Test Phase conducted between July and December 2018, and resolution of key issues that emanated from the test phase.
The exchange will begin trading single stock futures involving the most traded companies at the NSE such as Safaricom, Equity Holdings and KCB Group.
The platform will also trade equity index futures before introducing other derivatives like forward contracts and swaps.
The derivatives market is expected to improve NSE’s status in the Capital Markets world. Additionally, traders will be able to hedge against risks by investing in the futures.
The exchange will be guided by the highest global standards used by the International Swaps and Derivatives Association.
Nairobi Securities Exchange has conducted a comprehensive derivatives training to prepare all market participants for the derivatives market.