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The Nairobi Securities Exchange (NSE) has said it is finalizing plans to introduce a derivatives market by the end of 2016.
NSE Board Chairman Samuel Kimani Tuesday said the process would start ‘Very Soon.’
Trading of financial instruments is investment trading tools that hedge against risk allow investors to gamble on the direction of the price movement of shares and bonds.
“It is our intention to grow into a globally competitive exchange. As such we have been working on a range of new products, key of which is the launch of a derivatives market, the M-Akiba and exchange traded funds”, said Kimani who was picked from Jamii Bora bank two weeks ago to lead the bourse.
Kimani was speaking during the opening of Commodity Trading and Risk Management seminar in Nairobi saying NSE will launch two futures contracts – a currency contract, and a composite index contract.
Previous attempts such as inadequate interest from Government, poor market infrastructure, high technology costs as well as the complex production and market structures needed for sustainability in the local market have slowed efforts to introduce commodity and derivatives trading in Kenya.
“Attempts to create an open outcry exchange in the 1990s failed. It survives to date as a market information service”, said Matanda Wabuyele, Chief executive of the Kenya National Chamber of Commerce and Industry.
The Nairobi bourse had at last year set to recruit a derivatives market oversight board as part of the preparation to inaugurate the trading. Initially the trading process had been slated for June 2015 but failed to take off.