NSE to introduce additional single stock futures to its derivatives market

NAIROBI, Kenya May 19 – The Nairobi Stock Exchange (NSE) has announced the introduction of additional single equity futures contracts on its derivatives market.

This addition, which brings the total number of single stock futures contracts offered to ten, follows a review of the eligibility criteria for admission of single stock futures contracts to the NEXT Derivatives Market.

This now expands the range of securities on offer and provides investors with a wider universe of unique stock futures to trade.

The new single stock futures contracts added to the derivatives market are; NCBA Group Plc, Co-operative Bank of Kenya, Standard Chartered Bank Kenya Ltd and I&M Group Plc.

“The addition of new single equity futures contracts is an important step in the development of the NEXT derivatives market and the advancement of the capital markets ecosystem in Kenya,” said Geoffrey Odundo, Managing Director of NSE.

Single stock futures contracts give investors exposure to specific stock price movements and can be used to protect existing stock portfolios (hedging) or to speculate and profit from market movements.

Single stock futures require only a small initial deposit equivalent to 10%-20% of the trade value and also attract low trading fees (0.17%), thus providing investors with efficiency and maximum capital flexibility.

“The NEXT Derivatives Market represents our continued commitment to providing investors with a wide range of innovative solutions that provide new pathways for efficient capital deployment and enhanced returns,” he added.

NEXT was launched in July 2019, making the NSE the second African market to offer exchange-traded derivatives.

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The market recorded a turnover of 20 million shillings in 2019, 40 million shillings in 2020 and 289 million shillings in 2021 following the introduction of market making in the same year.

The market continues to grow steadily, and in the first quarter of 2021, the market’s turnover stood at 43 million shillings.

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