Trading financial derivatives will contribute to economic development—NGX

By Peter Egwuatu

The Nigerian Exchange Limited (NGX) has disclosed that the innovation of financial derivatives in Nigeria and trading them through the organized Exchange will play a pivotal role in contributing to economic development.

The Exchange stated this at the sixth edition of its market data workshop in Lagos, stressing that the derivative instrument for price discovery and reducing transaction costs for both financial and non-financial firms. 

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Speaking at the event, the Chief Executive Officer, NGX, Mr. Temi Popoola, CFA, noted that, “The innovation of financial derivatives in Nigeria and trading them through the organized Exchange will play a pivotal role in contributing to economic development by making risk manageable, enabling price discovery and reducing transaction costs for both financial and non-financial firms. Their continued contribution to economic growth will depend on the markets becoming more transparent and liquid, enabling end users to generate competitive returns while effectively hedging risk”.

He highlighted the importance of leveraging market data in this regard stating that, “Through cutting-edge technology, NGX continues to promote a high level of market transparency by enabling easy access to quality Real Time Market Data to all market participants including regulators. Market Data such as transaction prices, bids/offers and other trading information becomes the bedrock for price discovery and investment strategies. Derivatives traded on exchanges disseminate price information that aids both private and public entities because exchanges make contract volume and price publicly available. Such transparency helps markets function more efficiently.”

The conference featured presentations and panel discussions from the following speakers, Dr. Izzy Nelken, Founder, Super Computer Consulting Inc; Mr. Uwa Agbonile, Chief Executive Officer (CEO), InfoWARE Limited; Joshua Uwedinisu, Head, Risk Management, Zenith Bank Plc; Dr. Mary Akinyemi, Senior Lecturer, Mathematics and Statistics, University of Lagos; Mr. Ayokunle Adaraalegbe, Chief Operating Officer, NG Clearing Limited; Mr. Folagbade Adeyemi, Head, Start Up Operations, CSCS Plc; and Mr. Olufemi Balogun, Head, Market Services, NGX.

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