Nairobi Stock Exchange All Set to Add FX Derivatives Trading

Currency trading is set to grow in East Africa as one of the region's largest and most established financial trading venues plans to introduce currency futures contracts. The Nairobi Stock Exchange, part of Africa's big-four elite exchanges, will roll-out the new contracts this year which gives investors and corporates the ability to hedge and manage currency exposure through the online contracts.

An official at the NSE spoke about developments of the product at a financial analysts' forum in the city. The NSE has been battling with policy makers on the introduction of the new contracts. Terry Adembesa, product manager, commented at the forum: "We already have approvals from the regulator."

Nairobi Going Global

The NSE will become the second major exchange that caters to the needs of Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term derivatives traders. South African-based venue the Johannesburg Stock Exchange was a front-runner in the region offering currency derivatives to both domestic and international users. Furthermore, the JSE became the first venue in the continent to offer an extended range of domestic currency contracts.

The exchange is expected to launch new currency futures contracts that trade against the Kenyan Shilling. Kenya is one of Africa's best-performing economies with an average annual growth rate of 5%. Furthermore, its pro business attitude and investment approach is attracting new funds into the country. A similar theme pervaded the stock exchange with performance outperforming its peers. In 2013 the stock market rose 44%, with a 17% increase in 2014.

The new FX futures products will support the exchange's international growth strategy as global fund managers will have Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term products to safeguard their investments. Kenyan firms such as Safari.com and M-Pesa have attracted global attention.

Africa has been developing its financial markets infrastructure in order to compete with other emerging market nations. Several exchanges have partnered with developed venues such as Euronext and Deutsche Borse in order to take heed of their technological expertise.