Nigeria Stock Exchange to offer derivatives by 2016

 

The Nigerian Stock Exchange says it plans to start allowing trading by 2016 of derivatives such as futures and options in interest rates, currencies and equity indexes.

The exchange, one of the main entry points for foreign funds looking to tap Africa's fast-growing economies, now only offers shares, bonds and exchange-traded funds.

Chief Executive Officer Oscar Onyema said the exchange's surveys showed there was "encouraging" demand for derivatives, which help investors to manage the amount of risk they take on.

He said the bourse was changing its ownership structure from a mutual company of 240 members in order to add shareholders and prepare for a possible initial public offering (IPO).

The process, known as demutualisation, will help the exchange improve its governance through opening up its ownership and could lead to new fundraising to support expansion.