The Nairobi Securities Exchange (NSE) will complete an upgrade
of its trading system by June, a move it says will put an end to
technical hitches that have disrupted trading in recent years.
NSE
chief executive Geoffrey Odundo said the updated system would also
allow the bourse to finally roll out its derivative products and
liquidity tools like securities’ lending and borrowing.
The
current version of the trading system was set up in 2006. Mr Odundo
Wednesday said the bourse is now upgrading to the latest available
version, although he did not disclose the cost of the upgrade.
The NSE has in the past blamed some of the hitches on the fact
that its trading system is coupled with the CDSC platform, meaning that
any problem on either affects trading.
“This will allow
us to trade new products and reduce the dependency risk we have in the
coupled environment in the system with the depository. The last outage
(this month), for instance, was a problem on the depository side…after
we decouple them we will just have file exchanges through connectivity,”
he said.
Apart from the upgrade, the exchange plans to
go slow on further capital expenditure this year, instead concentrating
on pushing the uptake of existing and new products and attract new
listings to end the initial public offerings drought in the market.
The
NSE will launch its long-awaited futures market with an index
derivative on the NSE 25 share index and five single stock contracts
targeting liquid stocks including KCB, Equity Holdings and Safaricom.
Head
of derivatives market Terry Adembesa said they have now concluded the
pilot phase, where market players took part in virtual trades and
familiarised themselves with front and back office operations of the new
market.
“We have placed a final application for
approval from the Capital Markets Authority. Generally, we want to
launch by the end of the first half of the year,” he said.
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