Traders will now be able to buy and sell derivative contracts on the NSE derivatives market through an online platform after EGM Securities gained approval to perform the transactions.
According to a statement released by the Nairobi Securities Exchange, EGM clients will be able to trade “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”.
Online trading is revolutionary as investors will be able to perform transactions in under five minutes, in line with global standards. The current trading process takes an average of two days to finalize.
Kiprono Kittony, Chairman, NSE said that the move will boost the uptake of NSE’s innovative products by bringing the online trading community who form a sizable group of active retail investors.
“We are proud to be an Exchange leading in innovation and one of our key priority areas for the year 2021 is to increase product uptake on the alternative products for our investors,” NSE CEO Geoffrey Odundo added.
The NSE derivatives markets is a great investment avenue as it allows investors to short sell equities, it has lower margin costs and lower transaction costs at a flat rate of 0.14%.
EGM securities is the first broker to provide derivatives trading services through an online platform in Kenya. It is a subsidiary of the global Equiti Group.