Equiti’s EGM Securities launches Kenya’s first NSE derivatives offering

Rick Steves

This new NSE derivatives offering, with a 5-minute onboarding process instead of the two-day average in Kenya, has been made possible through collaboration between the NSE Derivatives Market, EGM Securities and their parent company Equiti Group’s global Product team.

Samwel Kiraka, CEO of EGM Securities

EGM Securities, a subsidiary of Equiti Capital, has become Kenya’s first online trading broker to offer derivative contracts on the NSE (Nairobi Stock Exchange) Derivatives Market.

Based on the most liquid traded equities and index in Kenya, the main benefits of trading on the NSE Derivatives Market versus the cash equity equivalent include the ability to short sell Kenyan cash equities, lower margin costs, and lower transaction costs at a flat rate of 0.14%.

Investors can protect their portfolios against adverse price movements by trading futures that reflect their stock portfolios.

EGM Securities will initially introduce futures contracts on the six most traded Kenyan stocks, namely: 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.

This new NSE derivatives offering, with a 5-minute onboarding process instead of the two-day average in Kenya, has been made possible through collaboration between the NSE Derivatives Market, EGM Securities and their parent company Equiti Group’s global Product team.

Samwel Kiraka, Chief Executive Officer of EGM Securities, said: “We are very 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, eg buy in the morning and sell in the afternoon, across all our trading platforms, including MT4, Webtrader, and Kenya’s well-known FXPesa.”

Geoffrey Odundo, Chief Executive, NSE said: “We are proud to be an Exchange leading in innovation and one of our key priority areas for 2021 is to increase product uptake on the alternative products to our investors.”

Brian Myers, Chief Executive Officer of Equiti Capital, added: “We always work to add local products to our global offering. We are democratising trading for all, giving access to global markets such as U.S equities and Foreign Exchange (FX) as well as local stocks such as Safaricom. Kenyans deserve the ability to diversify.”

Kiprono Kittony, Chairman of the NSE said: “To enhance uptake, the NSE continues to engage with key stakeholders. Specifically concentrating its efforts towards, enhancing the knowledge and training of key market participants, addressing the need to update Investment Policy Statements (IPS) that govern local institutional assets with administrators, trustees and fund managers; and onboarding of online trading members who have built a sizeable community of active retail investors.”

In 2018, EGM Securities, a subsidiary of the global Equiti Group, became Kenya’s first online trading broker to obtain a license from the Capital Markets Authority, and in 2019 the company launched its FXPesa trading App.

The Kenya-based broker also offers in-person financial education at its Nairobi and Nakuru offices as well as other educational offerings like regular seminars and training webinars for free.

On 15 October 2020, EGM Securities was admitted as a trading member of NEXT on the NSE. The admission follows EGM Securities’ satisfaction of the licensing and operating requirements of a Derivatives Broker as stipulated under the Capital Markets, Derivatives Markets Regulations, 2015.

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