Kenya's Nairobi Securities Exchange has delayed the roll out of a derivatives market to this quarter from the earlier target date of the second quarter to adequately prepare the market for the launch, it said on Wednesday.
NSE plans to offer derivative instruments, becoming the second bourse in Sub Sahara Africa to do so after Johannesburg, in a bid to boost liquidity. "The launch has been deferred slightly. We are targeting this quarter," the bourse said. "It is imperative that prior to launch of this product, the market understands clearly the positive impact of derivatives as tools to manage investment risk," it said. Progress had been made towards the setting up of the market, the NSE said, citing the establishment of a clearing house, a guarantee fund and an oversight committee made up of industry professionals.
NSE wants to become the third biggest exchange on the continent, up from fifth currently, its chief executive, Geoffrey Odundo told Reuters in March. The Kenyan bourse serves as an entry point for foreign funds looking to tap into fast economic growth rates in east Africa but it currently ranks behind South Africa, Nigeria, Egypt and Morocco in terms of market size.
