NSE launches pilot phase of derivatives market

Written By: O'Brien Kimani


The Nairobi Securities Exchange (NSE) has launched a pilot phase of the derivatives market setting stage for the launch of the delayed instrument.

NSE Chief Geoffrey Odundo says the pilot phase will trade in the equities with Co-operative Bank and the Stanbic bank acting as clearing houses.

The bourse has also launched Zamara equity index that tracks the performance of listed equity market in the country.

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Three years ago, the Capital Markets Authority (CMA) approved the launch of the derivatives market by the NSE setting stage for the launch of the introduction of the futures contracts for equities.

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However, the launch has been beset by delays due to lack of information and interest from investors.

Already, the Central Bank of Kenya (CBK) has cleared co-operative and Stanbic banks to act as clearing house for the instruments.

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Odundo says the trial phase is expected to be completed in December this year with plans to launch the market in the first quarter of 2019.

Four more banks, Barclays, NIC, CBA and Chase Banks had shown interests in acting as clearance houses but never submitted their application letters.

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Zamara chief executive Sundeep Raichura says the launch of the instrument will help deepen the market which by attracting pension managers and other players.

NSE in partnership with Zamara assets have launched the Zamara equity index to help track the local equity market. The index is also expected to offer institutional investors with information on the performance of various counters.


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