Business

Currency contracts go on bonds, derivative exchange

NKOLE MULAMBIA, Ndola
THE Bonds and Derivative Exchange (BADeX) has listed the Kwacha/United States dollar and a Kwacha/Rand contracts with expiry dates scheduled for March and June 2015 respectively.
Newly-appointed BADeX chief executive officer Peter Sitamulaho said the Kwacha/United States dollar and Kwacha/Rand contracts have been listed on the BADeX.
BADeX has listed the currency contracts which are a binding agreement in the foreign exchange market that locks in the exchange rate for the purchase or sale of a currency on a future date which is essentially a hedging tool that does not involve any upfront payment.
Mr Sitamulaho said the listed contracts are for Zambian companies and individuals wishing to protect themselves against foreign exchange rate risk.
He said last year, the exchange successfully carried out trading on a pilot basis with Finance Bank and BancABC.
“The two banks are now operationally ready to provide trade and clear in the Exchange Traded Derivative market,” he said in response to a query.
The exchange further plans to invest in branding and marketing to enhance its visibility by establishing a comprehensive investor awareness and education programme which will include an online learning centre.
Mr Sitamulaho said one of the positive impacts of a derivative exchange such as the bond and derivative exchange is the creation of business opportunities and satellite industries.
The exchange which is fully operational and seeking new customers has an ambitious plan to expand its business and, “extend our product and service offerings to individual and corporate customers in the domestic and international markets.”
Mr Sitamulaho urged customers to use derivatives for paying school fees overseas, second hand vehicles, and spare parts among other imported goods.
“Mining suppliers, mining firms exporting minerals, multinational companies who pay dividends in foreign currency, railway companies and electricity companies, supermarkets , fund managers and managers who are looking to generate income from their assets and eliminate the currency risk can use the exchange,” he said.

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