Due to the persistent woe the Nigerian Stock Exchange (NSE) is facing, Nigerian stockbrokers under the aegis of Association of Securities Dealing House of Nigeria have decided to trade commodities in a bid to diversify earnings and boost income.
The association’s managing director, Akinsola Akeredolu-Ale, disclosed this on Wednesday in Lagos.
He said the association plans to start the Lagos Commodities and Futures Exchange later this month.
According to Akeredolu-Ale, the exchange will begin operations after a final mock exercise scheduled for November 15, 2019.
At inception the new bourse will focus on listing contracts on 40 agricultural commodities including sesame, sorghum, millets and maize, as well as 10 crude oil producers.
The Lagos Commodities and Future Exchange will compete with the Abuja Securities and Commodities Exchange, which also trade agricultural products.
The new Lagos bourse is also in talks with banks, insurance and certification agencies including Geneva-based SGS SA, Cotecna SA and Bureau Veritas SA to facilitate transactions and settlement ahead of trading.
Trading is expected to be flat for the first 2 years and jump by 25% by the third year, he said.
The association boss said 23 brokerage firm have registered to trade on the exchange and 750 individuals will be added after a commodity trading course.
The NSE All Share Index have slide down more than 16% so far this year, while trade volume is lagging compared to that of 2017 and 2018. This is happening when Nigerian Government is struggling to jump-start the economy that is yet to fully recover from 2014 crude prices crash.
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