Kenya’s first online trading broker to obtain a license from the Capital Markets Authority, EGM Securities Limited has hit another milestone, becoming the first online trading company in Kenya to offer derivative contracts on the Nairobi Stock Exchange (NSE) derivatives market.
This offer which has been available since April 20th provides investors with access to trade at the NSE derivatives market in a process that takes a very short time, five minutes, as compared to the prior process that took up to two days.
According to Samwel Kiraka, CEO of EGM Securities, the move is about to revolutionize the sector.
“We are pleased to deliver another innovative and world-class offering to Kenya’s financial markets that enables investors to take quick advantage of intraday trading opportunities on the NSE derivatives markets, for instance, buy in the morning and sell in the afternoon, across all our trading platforms, including MT4, Webtrader, and Kenya’s well-known FXPesa,” he said.
With NSE derivatives contracts being based on the most liquid traded equities and index in Kenya, the online trading broker initially introduced futures contracts on the six most traded Kenyan stocks; British American Tobacco Kenya, KCB Group Plc, Equity Group Holdings, Safaricom Plc, East African Breweries Plc and ABSA Bank Kenya Plc, as well as the NSE 25 Index created to cover 25 of the most liquid and blue-chip stocks in Kenya.
Those who look to invest in the NSE derivatives market will be able to enjoy low transaction costs, low margin costs as well as the ability to short sell their Kenyan cash equities. Also investors will have the opportunity to protect their portfolios against adverse price movements by trading futures that reflect their portfolios.
The move was possible as a result of collaboration between the NSE Derivatives Market, EGM Securities and their parent company Equiti Group. In fact, according to Geoffrey Odundo, Chief Executive, NSE, the bourse was proud to be part of the move as it went hand in hand with one of their key priorities for the year, ‘to increase product uptake on the alternative products to their investors.’