Photo: Asoko Insight
AFEX Commodities Exchange Limited has signed memorandum of understandings (MOU) with FMDQ Holdings Plc and the Dubai Gold and Commodities Exchange (DGCX) to develop products that would deepen the Nigerian capital market and provide new market opportunities for the commodities traded in both exchanges respectively.
This was disclosed in a statement issued by AFEX and seen by Nairametrics. In the statement, the commodity exchange stated that the partnership between AFEX and FMDQ recognizes the importance of product innovation to market development and encourages participation of a wider range of investors in the capital market. The partnership will also help deliver new initiatives focused on deepening the capital market.
In a similar circumstance, the collaboration between AFEX and Dubai Gold and Commodities Exchange (DGCX) covers a number of activities ranging from knowledge sharing to commodity contract design and the listing of a Shari’ah Gold Product.
The DGCX Spot Gold contract – Shari’ah compliant, provides an opportunity for Islamic funds and investors in and outside Nigeria to diversify their portfolio efficiently by investing in gold. In addition, agricultural commodities from Nigeria can find a route to international markets with the commodities being traded fairly and transparently on the Exchanges.
Speaking at the signing ceremony on March 4, 2020, the CEO of AFEX, Mr Ayodeji Balogun said the commodity exchange firm was on a path to building Africa’s second commodities derivative market and this partnership sets the tone for that journey.
He said that they were proud to be collaborating with FMDQ as it helps to increase product offering. As for the partnership with DGCX, Ayodeji said that the collaboration is important as it would help to revive the commodities exchange industry in Nigeria and also serve as a gateway to the Middle East for the export market.
The CEO of FMDQ Group, Mr Bola Onadele expressed his delight on the partnership between AFEX and FMDQ. He pointed out that as members of Securities and Exchange Commission’s implementation Committee on Commodities Trading Ecosystem, an area of focus for the partnership will be the Nigerian Agricultural Commodities Ecosystem.
The goal of FMDQ, according to him, is to support the growth of the sector through commercial and market-driven proposition.
The CEO of DGCX, who represented the firm at the signing ceremony stated that as the largest derivatives exchange in the Middle East, his firm is pleased to share their rich experience in the derivatives business with AFEX in order to foster innovation and global cooperation. The partnership would go a long way in creating more efficient markets and strengthening trade flows between UAE and Nigeria.
About AFEX Commodities Exchange Limited: Founded in 2014, it has developed and deployed a viable commodities exchange model for the West African market. AFEX operates 45 warehouses in key grain-producing regions and has reached about 106,000 farmers whole also trading on 145,000 MT of commodities.