Nairobi Securities Exchange Launches its ‘NEXT’ Derivatives Market

Nairobi Securities Exchange (NSE)  launched the trading of futures contracts on Thursday becoming the second bourse to offer exchange-traded derivatives after South Africa’s Johannesburg Stock Exchange.

“The newly launched NEXT Derivatives Market will enhance investors’ portfolio performance by availing risk management tools in the wake of increasing asset price volatility in both domestic and international markets,” said the NSE chief executive Geoffrey Odundo during the launch.

The Next Derivatives Market, will offer investors index futures contracts on the NSE-25 share index 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.

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 launch of the NSE NEXT Derivatives Market is a momentous achievement towards the attainment of the Financial Services Sector aspiration of, creating a vibrant and globally competitive financial sector that will promote high level of savings to finance Kenya’s overall investments needs, as envisaged in the Vision 2030 blueprint,” said Treasury Cabinet Administrative Secretary Nelson Gaichuhie.

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