Capital Markets

NSE set to launch new trading system in June


NSE chief executive Geoffrey Odundo. FILE PHOTO | NMG

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.