NGX to deepen market with financial derivatives as capitalisation sheds N19bn

The Nigeria Exchange Limited (NGX) has stated that trading of financial derivatives in Nigeria through the organised exchange will play a pivotal role in developing the nation’s bourse and the economy.

Speaking at a virtual 6th Market Data Workshop, NGX Chief Executive Officer, Temi Popoola, said trading in derivatives aligns with the exchange’s commitment to building a market that thrives on innovation and responds to the needs of stakeholders in accessing capital.

According to him, the innovativeness in trading of derivatives would make risk manageable, enable price discovery and reduce transaction costs for both financial and non-financial firms.

He however noted that the NGX contribution to economic growth will depend on the markets becoming more transparent and capitalised, enabling end-users to generate competitive returns while effectively hedging risk.

Themed: “How to market data powers investment strategies using derivatives products”, he said the workshop was designed to provide capital market stakeholders, particularly institutional investors, actuaries, portfolio managers with insights into price, valuation and investment strategies using derivatives and fixed income products, as well as technical tools that can be applied to mitigate risk.

Meanwhile, transactions closed on a bearish note yesterday, as market capitalisation dipped by N19 billion.

Yesterday, the All-Share Index (ASI) declined by 37.94 absolute points, representing a decrease of 0.09 per cent, to close at 41,975.45 points.

Similarly, the overall market capitalisation value dropped by N19 billion to close at N21.906 trillion.

The market negative performance was driven by price depreciation in large and medium capitalised stocks which are; Ardova Plc, Lafarge Africa, Nigerian Exchange Group (NGXGroup), Zenith Bank and Eterna.

Market breadth closed negative, recording 20 losers and 13 gainers. Multiverse Mining and Exploration and Universal Insurance recorded the highest price gain of 10 per cent each to close at 22 kobo each while Honeywell Flour Mills followed with a gain 9.78 per cent to close at N3.48 kobo.

Sterling Bank went up by 6.85 per cent to close at N1.56 kobo. Wapic Insurance appreciated by 6.25 per cent to close at 51 kobo.

On the other hand, Lasaco Assurance led the losers’ chart by 9.40 per cent to close at N1.06 kobo. Sovereign Trust Insurance and Chams Plc followed with a decline of 8.33 per cent each to close at 22 kobo each.

Ardova shed 7.53 per cent to close at N13.50 kobo while Linkage Assurance depreciated by 7.02 per cent to close at 53 kobo.

The total volume of trades decreased by 37.2 per cent to 292.936 million units, valued at N2.060 billion, and exchanged in 4,899 deals.

Transactions in the shares of FBN Holdings (FBNH) topped the activity chart with 58.608 million shares valued at N614.764 million.

Multiverse Mining and Exploration followed with 32.080 million shares worth N6.442 million, while Mutual Benefits Assurance traded 21.553 million shares valued at N5.257 million.

Sterling Bank traded 18.482 million shares valued at N28.151 million, while Transnational Corporation of Nigeria (Transcorp) transacted 15.965 million shares worth N16.144 million.