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NSE to introduce additional single stock futures to its derivatives market

NAIROBI, Kenya May 19-The Nairobi Securities Exchange (NSE)has announced the introduction of additional single stock futures to its derivatives market.

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

This now expands the range of securities offered and provides investors with a broader universe of single stock futures to trade.

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

“The addition of new single stock futures is a significant step in the development of the NEXT Derivatives Market and the advancement of the Capital Markets ecosystem in Kenya,” said Geoffrey Odundo, Chief Executive, NSE.

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

Single stock futures only require a small deposit upfront equivalent to 10 per cent to 20 per cent of the value of the transaction and also attract low trading fees (0.17 per cent) thus giving investors maximum capital efficiency and flexibility.

“The NEXT Derivatives Market represents our continued commitment to offering investors a wide range of innovative solutions that provide new avenues for the efficient deployment of capital and enhancement of 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 registered a turnover of Sh20million in 2019, Sh40million in 2020, and Sh289million in 2021 following the introduction of market making the same year.

The market continues to grow steadily and as at Q1 2021 market turnover stood at Sh43 million.

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