Nigeria’s stock exchange, Africa’s second largest, will push back the launch of DERIVATIVES TRADING to 2017, starting with stocks futures once a clearing house has been established, its chief executive Oscar Onyema said on Friday. “We have been working very hard to set up a central counter-party clearing house that meets G20 standards,” Onyema said in an interview on the sidelines of a Nigeria investment summit at the London Stock Exchange.
“We think with all the work that is going on, that next year will be realistic in terms of beginning to roll out the full set of products,” he said. In an interview in February, Onyema had said he expected FUTURES AND OPTIONS TRADING to be launched in the course of 2016 at the exchange, which is one of the main entry points for foreign funds into Africa. The collapse in oil prices has plunged the country into recession while eroding public finances and hard currency reserves. Foreign investors have dumped Nigerian assets, and capital controls have left businesses and investors facing a severe dollar shortage.
The lack of investors from abroad at the bourse was keenly felt, said Onyema, adding foreign participation made up half of the $8-10 million daily trading volume. Three years ago, investors from outside Nigeria accounted for 70 percent of the $30 million daily volume. Nigeria’s stock index has fallen nearly 4 percent since the start of the year after tumbling around 17 percent in each of 2015 and 2014. Onyema said the country had to work hard to combine and synchronise fiscal and monetary policy. In June, the central bank dropped its CURRENCY peg to the dollar, prompting a depreciation of 40 percent in a step meant to attract more investors. But stringent capital controls have led to a dearth in liquidity until now. Referring to the lack of dollars, Onyema said: “There is a supply problem and there is a very robust debate that is going on now with regards to how do you solve that supply problem. “If you are not making the right decisions quickly enough, very soon you are running out of options – we need to be very clear what the strategy is, and what the sequencing of implementing that strategy is.”