By Kayode Tokede
The Nigerian Exchange (NGX) Limited has announced that it has received approval for seven derivatives contracts from the Securities and Exchange Commission (SEC) on June 28.
The NGX Chief Executive Officer, Mr Temi Popoola, disclosed this in a statement said the approved contracts were; Access Bank Plc Stock Futures, Dangote Cement Plc Stock Futures, Guaranty Trust Bank Plc Stock Futures, MTN Nigeria Communications Plc Stock Futures, Zenith Bank Plc Stock Futures, NGX 30 Index Futures, and NGX Pension Index Futures.
He noted that the announcement followed the successful registration of NG Clearing by SEC, as a premier Central Counterparty, effective June 7.
According to him, with these approvals, NGX is inching closer to launch West-Africa’s first Exchange Traded Derivatives (ETDs) supported by NG Clearing in the risk management process.
“The launch of the derivatives market aligns with our commitment to build a market that thrives on innovation and responds to the needs of stakeholders in accessing and using capital.
“We are, therefore, excited about the prospects of deepening Africa’s position in the global financial markets through ETDs.
“As well as enhancing liquidity and mitigating against price, duration and other financial risks that may arise from sophisticated financial transactional activities,” he said.
He said the NGX had continued to ensure widespread understanding of derivatives, its applicability and how investors can reap maximum value from the asset class ahead of thr launch of the ETDs.
“NGX has collaborated with both local and international organisations such as SEC, JPMorgan Chase, CBOE Options Institute, and NG Clearing to facilitate in-depth capacity building programme on the derivatives market.
“In addition, through its learning and development arm, X-Academy, NGX has hosted trainings to prepare capital market players who wish to undertake the Chartered Institute for Securities & Investment UK Global Derivatives qualification exam, and is on track to host further trainings for other stakeholders in the near term.
A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset or group of assets.
The common underlying instruments include bonds, commodities, currencies, interest rates, market indices and stocks: the basic principle behind a derivative contract is to earn profits by speculating on the value of the underlying asset at a future date.
Derivatives are used as a risk management instrument, and are suited to both professional and private investors.
Naira closes at N881/$ in official trading window
The Nigerian Naira on Tuesday depreciated 7.63 percent to close at N881.88 to a dollar at the close of business on Tuesday, data from the NAFEM where forex is officially traded, showed./ /
Nigerian NewsDirect also gathered that the naira traded N1157 to a dollar at the close of market in the parallel market./ /
This represents an N67.28 loss or a 7.63 percent decline in the local currency compared to the N814.60 it closed on Monday.
The intraday high recorded was N1159/$1, while the intraday low was N701/$1, representing a wide spread of N458/$1./ /
According to data obtained from the official NAFEM window, forex turnover at the close of the trading was $118.06 million, representing a 17.99 percent increase compared to the previous day.
Similarly, the naira weakened at the parallel forex market where forex is sold unofficially, the exchange rate depreciated by 0.17 percent, quoted at N1157/$1, while peer-to-peer traders quoted around N1160.18/$1.
FBNH, Access Corporation lead gainers on NGX
First Bank of Nigeria Holdings and Access Corporation led gainers on the Nigerian equities market on Monday.
This is as investors also lost N132.43billion on the Nigerian equities market yesterday.
The NGX All-Share Index advanced by 0.17 percent, closing at 71,353.81 basis points, compared to the previous day’s gain of 0.25 percent, which closed at 71,230.48 basis points.
YTD, the NGXASI stands at 39.22 percent.
The total volume traded advanced by 28.12 percent to close at N746.67 million, valued at N5.95 billion and traded in 9,267 deals. UNIVINSURE was the most traded stock by volume with N161.10 million, while ACCESSCORP was the most traded stock by value with N1.47 billion units traded.
The Gate Index closed flat at 188.47, while the Toni index advanced by 1.39 percent to close at 371.15 basis points.
At the close of trading, the market recorded 32 gainers, 20 losers, and 69 unchanged. FBNH topped the gainers list, while ETRANZACT topped the list of losers.
Thus, market breadth closed positively as the Market Breadth Index (MBI) is 0.17x.
UNIVINSURE had the highest volume contribution with 21.58 percent, while ACCESSCORP and UNITYBNK followed closely behind.
According to the value chart, ACCESSCORP is at the top with a 24.68 percent contribution. UBA and ZENITHBANK followed closely behind.
FG raises oil price, exchange rate projections
The Federal Government of Nigeria has pegged its 2024 projections for crude oil and the dollar to naira exchange rate at $77.96 and N750 respectively.
This new projection is a deviation from the earlier projection announced by Atiku Bagudu, Minister of budget and planning in October.
Bagudu had earlier stated that the FEC established a reference price of $73.96 per barrel for crude oil and an exchange rate of N700/$ as key assumptions for budgetary planning.
“Now, it was presented on the background of the commendable measures that have been taken since June in order to restore macroeconomic stability by particularly the deregulation of petroleum prices, which we maintained that subsidies are gone and indeed the regulation of the foreign exchange market,” he said.
Nigerian NewsDirect however gathered that the projected crude oil price benchmark by the Federal Government is below the $94.91 projection of the US Energy Information Administration (EIA) and the $100 a barrel forecast by Goldman Sachs for next year.
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