The Association of Securities Dealing Houses of Nigeria are planning to create Lagos Commodities and Futures Exchange later this November due to the decline in the stock market.
According to Bloomberg, Nigeria’s benchmark index has decreased by 17% this year and the trading volumes in 2019 are lower than those of 2017 and 2018.
The Lagos Commodities and Futures Exchange will be launched after a mock exercise on November 15th. The exchange is to list contracts on 40 agricultural commodities including sesame, sorghum, millet, and maize as well as 10 crude oil producers.
The exchange is being launched at a period when President Buhari’s administration has ordered diversification from crude oil and encouraged investments in agriculture and minerals.
Lagos Commodities and Futures Exchange will be a competitor to Abuja Securities and Commodities Exchange. The Lagos exchange is in talks with banks, underwriters and certification agencies to facilitate transactions and settlement before the commencement of trading.
Trading is expected to be flat in the first two years of operations then increase by 25% in the third year. Twenty-three brokerage firms have been registered to trade on the exchange and 750 individuals are expected to be registered to trade after undergoing a trading course.