NGX, CIS Enhance Stakeholders’ Capacity for Exchange Traded Derivatives

Nigerian Exchange Limited (NGX) and the Chartered Institute of Stockbrokers (CIS), on Thursday, June 23, 2022, held a capacity-building workshop for Exchange Traded Derivatives stakeholders, as part of promoting a robust derivatives market ecosystem in Nigeria.

The virtual event themed, “Exchange-Traded Derivatives: Enhancing the Capital Market for Robust Value Creation”, the organisers said, was designed to deepen the knowledge of market operators, investors, and other stakeholders on the workings of Exchange Traded Derivatives, and drive participation in the market segment.

Speaking, the Chief Executive Officer, NGX, Temi Popoola, said the workshop is consistent with the shared aspiration of NGX and CIS to promote and protect the interests of the securities and investment profession by upholding the highest standards of service and integrity.

“Since 2017, the Exchange has been building the capacity of market stakeholders on derivatives, leveraging X-Academy, our learning and capacity development platform. We are pleased to collaborate with CIS in hosting this workshop aimed at facilitating a better understanding of how derivatives work, including how the contract is traded and settled on a day-to-day basis, the margining process, and risk management issues”, he said.

Earlier this year, NGX launched West Africa’s first Exchange Traded Derivatives Market, with Equity Index Futures Contracts. The launch saw the unveiling of equity index futures contracts based on the most widely followed and recognized equity indices in the Nigerian capital market – NGX 30 Index Futures and NGX Pension Index Futures.

“We believe that NGX Derivatives market will potentially address significant risk management needs of market participants such as PFA’s, Fund Managers, Corporate Treasuries, and Trading License Holders, being the first line of contact for investors in the capital market. In addition, NGX Exchange Traded Derivatives will provide investors and other market players, with the necessary tools for asset allocation, and cost management for effective portfolio management”, Popoola added.

Also speaking, the President, CIS, Mr. Oluwole Adeosun, explained that Derivatives instruments traded on the Exchange are essential in the market as it allows for market sophistication, transparent financial contracts and offers a useful risk management tool for implementing risk mitigation, or hedging strategies against financial risk while also presenting an alternative investment acceptance useful for pursuing diversification and investment strategies.

Additionally, he mentioned that stockbrokers and securities traders have been undergoing a series of training on derivatives instruments and an adaption has been synchronized with the examination syllabus for securities traders and brokers.

The webinar which brought together over 500 participants, also featured speakers such as Ade Omolehinwa, Managing Partner; Ademola Omolehinwa & Co; Ayokunle Aderalegbe, COO, NG Clearing Limited; Faroq Oreagba, Partner, Karaho Capital Partners; Ellie Olutimayin, FCS, MD, Cardinal Stone Securities Limited; Adedeji Ajadi, FCS, Co-Founder & Partner, 100xConcepts and Dr John Osuoha, ACS, Nigeria Country Representative, CISI UK.