The Nairobi Securities Exchange (NSE) Derivatives Market turnover for the first 5 months of 2024 has surpassed the total turnover for the full year 2023.
- In the first 5 months of 2024, total turnover traded stood at KSh 64.67 million, a 0.6% uptick from KSh 64.28 traded in the 12 months of 2023.
- The NSE derivatives market has grown steadily since its launch in July 2019, with turnover growing to record highs.
- NSE launched NEXT in July 2019 to become the second exchange in Africa to offer Exchange Traded Derivatives.
Derivatives are investment tools whose value is derived from underlying assets such as currencies, bonds, commodities, interest rates and market indexes, and stock value based on the expected future price movement.
NEXT is the NSE derivatives market that facilitates trading of futures contracts in the Kenyan market and is regulated by the Capital Markets Authority (CMA).
It allows trading in Equity Index Futures and Single Stock Futures, enabling investors to make a gain or hedge against losses by taking a bet on the future price movement.
“Single stock futures give investors exposure to the price movements on an underlying stock,” the NSE explains on its website, “Parties agree to exchange a specified number of stocks in a company for a price agreed today (the futures price). NEXT Single Stock Futures will initially be cash settled.”
