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SEC Approves 7 NGX’s Derivatives Contracts

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Nigerian Exchange Group - Investors King

Nigerian Exchange Limited (NGX or The Exchange) is pleased to announce that it has received approval for seven derivatives contracts from the Securities and Exchange Commission (SEC) on Monday, 28 June 2021.

The approved contracts are Access Bank Plc Stock Futures, Dangote Cement Plc Stock Futures, Guaranty Trust Bank Plc Stock Futures, MTN Nigeria Communications Plc Stock Futures, Zenith Bank Plc Stock Futures, NGX 30 Index Futures, and NGX Pension Index Futures.

This announcement follows the successful registration of NG Clearing by SEC, as a premier Central Counterparty, effective 7 June 2021. With these approvals, NGX is inching closer to launch West Africa’s first Exchange Traded Derivatives supported by NG Clearing in the risk management process.

Ahead of the launch of derivatives, the Chief Executive Officer, NGX, Mr. Temi Popoola, CFA, noted that “The launch of the derivatives market aligns with our commitment to building a market that thrives on innovation and responds to the needs of stakeholders in accessing and using capital. We are, therefore, excited about the prospects of deepening Africa’s position in the global financial markets through ETDs, as well as enhancing liquidity and mitigating against price, duration, and other financial risks that may arise from sophisticated financial transactional activities.”

Leading up to the launch of ETDs in the market, NGX has continued to ensure a widespread understanding of derivatives, its applicability, and how investors can reap maximum value from the asset class. NGX has collaborated with both local and international organisations such as SEC, JPMorgan Chase, CBOE Options Institute, and NG Clearing to facilitate in-depth capacity-building programs on the derivatives market. In addition, through its learning and development arm, X-Academy, NGX has hosted training programs to prepare capital market players who wish to undertake the Chartered Institute for Securities & Investment UK Global Derivatives qualification exam and is on track to host further training for other stakeholders in the near term.

A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset or group of assets. Common underlying instruments include bonds, commodities, currencies, interest rates, market indices, and stocks. The basic principle behind a derivative contract is to earn profits by speculating on the value of the underlying asset at a future date. As such, derivatives are used as a risk management instrument and are suited to both professional and private investors who wish to hedge an open position or gain exposure to assets and markets without necessarily holding the underlying assets. ?ETDs are variants of derivatives traded on an organised securities exchange as against those other derivatives traded through informal over-the-counter (OTC) markets.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Capital Market

Facebook, Apple, Others Lose Big in Market Value

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Stock - Investors King

The global financial market rout has plunged the value of the world’s largest technology companies by over $1 trillion in the last three trading days. This was after the Federal Reserve raised interest rates by 0.25% last week, below the 0.75% projected by experts.

The Federal Reserve had attributed its decision to a series of global uncertainties due to the Russia-Ukraine war and extended COVID-19 restrictions in China, the world’s second-largest economy. These were a few of the uncertainties predicted by a global investment bank, Deutsche Bank to plunge the U.S and the rest of the world into a recession by 2023.

Concerns over projected recession have led to a broad-based selloff in risk assets across the world.

“When risk assets fall and fall fast enough, there’s no question they’re going to hurt growth,” said LaVorgna, who was chief economist for the National Economic Council under former President Donald Trump. “If anything, the relationship is even better when asset prices decline than when they go up.”

Apple Inc, the world’s most capitalised company shed $200 billion in the last three trading days.

While Microsoft lost $189 billion in market value. Tesla, Amazon, Alphabet, Nvidia and Meta (Facebook) lost $199 billion, $173 billion, $123 billion, $85 and $70 billion, respectively.

In only three trading sessions the “Stocks at large have sold off since the Federal Reserve raised its benchmark interest rate on Wednesday, but technology has endured more pain than other sectors of the economy.”

 

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Capital Market

MTN Nigeria to Raise N150 Billion via Commercial Paper

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MTN Nigeria - Investors King

MTN Nigeria Communications Plc on Monday announced plans to raise N150 billion via Commercial Paper (CP) to diversify the company’s financing options.

The leading telecommunications company declared in a statement signed by Uto Ukpanah, Company Secretary for MTN Nigeria and obtained by Investors King.

Commercial paper is an unsecured, short-term debt issued by a company to finance short-term liabilities like payroll, accounts payable, inventories, etc. Maturities of most Commercial Paper range from a few weeks to months.

According to MTN Nigeria, the N150 billion would be raised in two tranches, Series 1 & 2 commercial paper.

Explaining the reasons for the new fundraising, the telecom company said it is part of its strategy to diversify financing options. The proposed funding rasing would be deployed towards working capital and general corporate purposes.

The new fundraising would be in addition to the N200 billion commercial paper issued in 4 series in 2021.

The statement reads “MTN Nigeria Communications Plc (MTN Nigeria or the Company) hereby notifies the Nigerian Exchange Limited and the investing public of its N150 billion Commercial Paper Programme. To this end, the Company proposes the issuance of Series 1 & 2 Commercial Paper (the “Issuance”) of up to N150 billion.

“MTN Nigeria had initiated and successfully concluded 4 series of issuances under its previous N200 billion Commercial paper shelf program.

“Further details on the issuance (as well as subsequent issuances) will be communicated to the market as the transaction(s) occur.”

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Abbey Mortgage Bank Lists Additional 3.692 Billion Shares

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Nigeria Mortgage Refinance Company NMRC

Abbey Mortgage Bank Plc, one of Nigeria’s leading mortgage banks, announced it has listed an additional 3,692,307,692 ordinary shares on Wednesday, 16 February 2022 on the Daily Official List of the Nigerian Exchange Limited (NGX).

The additional shares listed on NGX arose from the Company’s Rights Issue at 82 kobo per share on the basis of four (4) new ordinary shares for every seven (7) ordinary shares held as at Friday, 8 October 2020.

With this listing of the additional 3,692,307,692 ordinary shares, the total issued and fully paid-up shares of Abbey Mortgage Bank Plc. has now increased from 6,461,538,462 to 10,153,846,154 ordinary shares of 50 kobo each.

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