Nairobi Securities Exchange Derivatives Market Begin Trading

David Indeje is Khusoko’s Digital Editor, covering East African markets.
A derivative is an instrument that derives value from its underlying asset(s) which can be bonds, shares, currencies, or market indices.

Image I Courtesy NSE

The Nairobi Securities Exchange Derivatives Market (NEXT) went live on Thursday with the trading of selected indices and single stock futures.

This involves the most traded companies at the NSE: Safaricom Plc, Equity Group Holdings, KenGen, KCB Group, East African Breweries Ltd, British American Tobacco Kenya Plc and Bamburi Cement Ltd.

The platform will also trade equity index futures before introducing other derivatives like forward contracts and swaps.

“NEXT provides new opportunities to investors, enabling them to better diversify their portfolios, manage risk and deploy capital more efficiently,” said the NSE in a statement.

NEXT will also enable Kenya to consolidate its position as a leading financial services hub offering a wide variety of investment products.

The NSE further noted that all futures contracts listed on NEXT will have quarterly expiry dates; this will be the third Thursday of March, June, September, and December of every year. All NEXT futures contracts will initially be cash settled.

The Kenyan bourse becomes the second exchange in Sub-Saharan Africa to take such an initiative, after Johannesburg Stock Exchange (JSE) Derivatives Market, which offers to the trade of futures and options on equities, bonds, indices, interest rates, currencies, and commodities.

READ: NEXT Frequently Asked Questions

David Indeje is Khusoko’s Digital Editor, covering East African markets.

In my role as Community Engagement Editor For Khusoko, I care about our audience. engaging them, getting news delivered to them across a variety of platforms, and expanding the diversity of voices on our website.

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