The Bond and Derivatives Exchange (BaDEx) went live and executed its maiden live transaction yesterday at 14:49pm – a June 2014 US Dollar/ZM Kwacha futures contract. The transaction was between Banc ABC (who is a trading member) and their client. This was an historic transaction for one of a handful of Bond and Derivative Exchanges in Africa. BaDEx was incorporated in 2009 and became a licensed exchange in 2011. It is regulated by the Securities and Exchange Commission (SEC) of Zambia.
BaDEx has a trading platform supplied by Securities and Trading Technology (STT). The system is considered suitable for frontier markets like Zambia and is used by most trading and clearing members in South Africa. The exchange is looking to provide a range of products from currency futures and options to fixed income derivatives.
Dreadnought Capital Management has been instrumental in the setting and operation of BaDEx – from training local Zambian market participants to providing BaDEx with their CEO, Allan Thompson, in the initial phase. The firm is also working with Kenyan authorities on derivative exchange there as well.
This is a very positive development which should go a long way in helping deepen the financial markets in Zambia. A lot of companies have had their financials negatively impacted by the double-digit depreciation of the Kwacha – this should lead to a lot more demand for currency futures transactions. This is a sector to keep an eye on especially when the on-and-off-again Zambia Agricultural Commodities Exchange (ZAMACE) resumes operations (hopefully soon!).
Trying to decipher this puzzle that is Zambia by using a variety of publicly available data (structured and unstructured) in conjunction with my own skill/experience. * * *