This archive report was first published on 8 November 2019.
On November 8, 2019, Nigeria's stock market was facing a significant decline, with the benchmark index down by 17% for the year. This downturn led to a decision by the Association of Securities Dealing Houses of Nigeria to create a new commodities exchange in Lagos.
According to Bloomberg, trading volumes in 2019 were lower than those of 2017 and 2018, further exacerbating the need for a new exchange. The Lagos Commodities and Futures Exchange is set to launch after a mock exercise on November 15th, listing contracts on 40 agricultural commodities and 10 crude oil producers.
The exchange is being launched at a time when President Buhari's administration is encouraging diversification from crude oil and investments in agriculture and minerals. This move is expected to create a competitor to the Abuja Securities and Commodities Exchange.
The Lagos exchange is in talks with banks, underwriters, and certification agencies to facilitate transactions and settlement before the commencement of trading. Trading is expected to be flat in the first two years of operations, then increase by 25% in the third year.
