2019 1 st CMC Presentation 21 March 2019 Private and confidential and should not be shared with any third party 1
Important Developments on Capital Market Activities from the Last CMC Meeting Commenced intensive engagement with select Asset Managers on the creation and listing of an agric fund (Food Securities Fund) by Q2 2019, aimed at investing in the entire agriculture value chain all year round. Engaged other market players on creating other agric focused capital market instruments such as a ETCs and repo contracts for investors interested in gaining exposure to commodities. Formed a partnership with the Nigerian Export-Import Bank (NEXIM) as Collateral Managers, to help promote export stimulation, leading to increased production output in the country, higher employment rates and increased foreign exchange earnings for the country. Successfully unveiled a user friendly trading platform called ComX, where brokers, traders and all other authorized players can trade physical commodities and/or securities. 2
Important Developments on Capital Market Activities from the Last CMC Meeting Volume Traded (MT) Commodity (MT) Q4 Q3 Maize - White 8,905.55 363.37 Maize - Yellow 49.15 3.20 18,000.00 Paddy Rice - Long Grain 1,988.47 628.41 Turnover (NGN ’mill) Soybean 279.51 29.59 16,000.00 Ginger 120.43 0.00 14,000.00 Sorghum 123.50 0.00 352.42 Q4 Y-O-Y 1,026.76 Cocoa 15.29 0.00 12,000.00 1,026.76 116.135 Q4-vs- Q3 ’18 Total 11,481.90 1,025.00 10,000.00 8,000.00 Year on year market turnover increased by 6,000.00 191.35% from NGN352.42mn to NGN1.026bn AFEX market turnover increased by 784% from 4,000.00 NGN116.135mn in Q32018 to NGN1.026bn in Q4 2,000.00 2018. 0.00 Volume traded increased by 1,020% from 1,025MT Maize - Maize - Paddy Soybean Ginger Sorghum Cocoa 3 White Yellow Rice - - Yellow in Q3 2018 to 11,482MT in Q4 2018. Long Grain
Factors Responsible for the Developments Factors Comments Working with the regulators to develop clear rules on playing in the commodities space Continuous engagement with capital market players on creating investable products/ Market alternative asset class Sensitization Organizing trainings on how to trade commodities and innovative approaches to investing in commodities Creation of a sound technology infrastructure with real time trading data, where transactions can occur efficiently, with trust embedded Use of Technology Creating an effective and transparent platform to address all concerns and ensure solutions are feasible Leveraging off other exchanges to bridge the gap between the capital markets and commodities market Leveraging off regulators and clearing houses to ensure fast and efficient settlement of trades and strong contract enforcements Collaboration Leveraging off relationships with offtakers to ensure constant demand of grains and with Partners promote standardization Leveraging off partnerships with associations, groups and committees to design products and trainings in line with their needs Leveraging off partnerships with media houses to promote low cost marketing for commodities investing 4
Steps Taken by AFEX for the Developments Market Data Systems – trust system which creates efficiency and increase in trade flows. • Trading Platform - price discovery and transparency. • Commodities Index - first of its kind, tracks the price of maize, soybeans and paddy rice. • Financial Inclusion - transforming traditionally “ unbankable ” segments of the agricultural • value chain to bankable segments. Market Infrastructure - agricultural risks are efficiently measured, managed, and priced. • 5
Thank You… 6
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