Economy
NEXIM Bank, Indonesia Eximbank Fortify Bilateral Ties
By Modupe Gbadeyanka
In a bid to enhance cooperation and forge stronger relationships in promoting regional and global trade and investment between Indonesia and Nigeria, a Memorandum of Understanding (MoU) has been signed between the Indonesia Eximbank and the Nigerian Export-Import Bank (NEXIM Bank).
The MoU, according to a statement issued by the Head of Corporate Communication Department at NEXIM, Chinedu Moghalu, is strictly limited to the expressed desires of the parties to enhance cooperation in respect of the matters set out in the document. It is not intended to impose or create any legally binding rights or obligations on the parties.
It is also to foster trade, technical assistance, experience and information sharing, including other investment relations in a way that would promote financing, guarantees, insurance and counter trade instruments to increase transactions between Indonesia and Nigeria.
Managing Director of NEXIM, Mr Abba Bello, expressed his delight that both banks were able to quickly come to terms on the Articles of the MoU considering the brevity of time spent in the negotiations, showing commitment on both sides to work towards a more mutually beneficial relationship.
He further indicated that by virtue of both banks’ membership of the Global Network of Eximbanks and Development Finance Institutions (DFIs) G-NEXID, he hopes that the intentions expressed in the MoU would be much easier to pursue.
NEXIM Bank has been the honorary president of G-NEXID since May 2015.
Mr Abba informed the Indonesia Eximbank team that NEXIM Bank was established by Act 38 of 1991 as an Export Credit Agency with the broad mandate of promoting the diversification of the Nigerian economy and deepening the external sector, particularly the non-oil export sector.
The bank, he said, pursues this through the provision of credit facilities in both local and foreign currencies; risk-bearing facilities through export credit guarantee & export credit insurance as well as business development and financial advisory services etc.
Presently, its current strategic initiatives are geared towards boosting job creation and foreign exchange earnings in the Manufacturing, Agro-processing, Solid Minerals and Services (MASS) sectors in alignment with the efforts of the federal government to diversify the economy, create jobs and increase both the value and sources of foreign exchange earnings in the country.
Mr Bello assured his Indonesian counterpart that NEXIM would do all within its mandate in regard to the intentions expressed in the document. Concluding, he expressed his hope that the MoU will strengthen Nigeria’s existing bilateral relations with Indonesia through increased technical assistance, promotion of non-oil export trade and other economic activities and thereby provide more support to the Government’s efforts to diversify the economy.
In his response, the Managing Director of Indonesia Eximbank, Mr Dwi Wahyudi, expressed his satisfaction that the two institutions have established a viable intention to forge strong collaborative relationship as signalled by the MoU.
Mr Wahyudi expressed hopes that the MoU signed with NEXIM Bank would spur meaningful bilateral cooperation between the two countries for the promotion of the intentions expressed in the Articles.
This becomes more germane given the readiness of the Government of Indonesia to enhance more mutually beneficial economic relations with Nigeria as indicated during the official visit of the Minister for Foreign Affairs of the Republic of Indonesia, Mrs Retno Marsudi, in June this year.
Mr Wahydi disclosed that the Indonesia Eximbank was incorporated by virtue of Law Number 2/2009, as an export credit institution that provides export financing in the form of security, insurance and consultation services.
Like NEXIM, the Indonesian Eximbank supports its Government’s economic development aspirations by providing financing for (a) businesses that are into production of goods and services for export; (b) viable projects that are not attractive to commercial banks but have the prospects to increase the national export base; and (c) providing assistance to overcome the obstacles facing banks or other financial institutions in providing financing for exporters through various export credit instruments.
By Dipo Olowookere
The much-awaited listing of shares of the Nigerian National Petroleum Company (NNPC) Limited may happen soon as the state-owned oil agency has expressed its readiness to join the nation’s capital market.
At a consultative meeting with partners at the NNPC Towers, Abuja, on Thursday, the Chief Finance and Investor Relations Officer (CFIO) of the NNPC, Mr Olugbenga Oluwaniy, said the process of listing on the Nigerian Exchange (NGX) Limited is at the final stage.
The NNPC is required to make its stocks available to members of the public based on the provisions of the Petroleum Industry Act (PIA) 2021.
The PIA provides for the NNPC Ltd to list its shares in the capital market in line with the provisions of the Company and Allied Matters Act (CAMA) 1990.
This exercise should have happened, but it has been delayed, but with the latest information, the wait may soon be over.
Mr Oluwaniyi, via a statement today by the company’s Chief Corporate Communications Officer, Mr Olufemi Soneye, disclosed that NNPC was currently engaging with prospective partners in an exercise tagged NNPC Ltd. IPO Beauty Parade in line with capital market regulations before the commencement of the Initial Public Offer (IPO).
According to the CFIO, the aim of the IPO Beauty Parade is to access potential partners and determine in what ways they could be of support to the company.
He listed the areas of partnership required to include Investor Relations, IPO Readiness Advisers, and Investment Bank Partners, noting that the organisation with the best offer in terms of project partnership would be selected for each of the three categories.
By Adedapo Adesanya
The pump price of petrol will likely increase in coming weeks as the landing cost of a litre of imported Premium Motor Spirit (PMS) into the country increased by N88 from N797 per litre last week to N885 per litre this week.
This informing is according to the latest data from the Major Energies Marketers Association of Nigeria (MOMAN) on Wednesday.
The association confirmed the rise in the landing cost in its daily energy bulletin released on Wednesday, arguing that price changes are inevitable in a deregulated market.
The new landing cost is N25 higher than the N860 per litre that end-user customers pay for Dangote petrol from MRS and other partners.
Similarly, the Dangote refinery’s ex-depot petrol price is N815 per litre, N70 lower than the new landing cost..
The landing cost fell from about N927 below Dangote’s ex-depot price, forcing the refinery to react with a price cut.
The development resulted in the loss of billions of Naira by marketers as they were made to sell petrol below their costs.
There are, however, indications that this may lead to increase in petrol prices in the coming weeks as a result of the disagreement between the Dangote refinery and the Nigerian National Petroleum Company (NNPC) Limited over the Naira-for-crude deal and the rise in the landing cost.
While announcing the suspension of the sale of the product in local currency last week, the Dangote Group said, “Dear valued customers, we wish to inform you that the Dangote Petroleum Refinery has temporarily halted the sale of petroleum products in naira. This decision is necessary to avoid a mismatch between our sales proceeds and our crude oil purchase obligations, which are currently denominated in US dollars.
“To date, our sales of petroleum products in naira have exceeded the value of naira-denominated crude we have received. As a result, we must temporarily adjust our sales currency to align with our crude procurement currency.”
Immediately after the announcement, the cost of loading petrol at private depots in Lagos jumped to about N900/litre.
In a related development, seven vessels carrying imported PMS were expected to berth at seaports along the nation’s borders between March 17 and 23.
These vessels, carrying 115,000 metric tonnes, representing 154.22 million litres of PMS, brought in products through three seaports – Tincan port in Lagos, the Lekki Deep Seaport in Lagos, and the Calabar port – to improve fuel supply nationwide.
Introduction
Trading in futures and options (F&O) has become a popular way to diversify investments and hedge risks in the financial markets. With the right knowledge and strategy, anyone can start trading and leverage F&O to maximize returns. This guide will walk you through the fundamentals of business with futures and options, how to start trading, and essential strategies for success.
Understanding Futures and Options
What Are Futures?
A futures contract is a financial agreement to buy or sell an asset (stocks, commodities, or indices) at a predetermined price on a future date and to start future and option trading futures and options. Futures are standardized contracts traded on exchanges like NSE (National Stock Exchange) and BSE (Bombay Stock Exchange).
Key Features of Futures Contracts:
- Obligatory Execution: Buyers and sellers must fulfill the contract on the expiry date.
- Margin Trading: Traders only pay a fraction of the total contract value as a margin.
- Leverage: Investors can take large positions with limited capital.
What Are Options?
Options give traders the right (but not the obligation) to buy or sell an asset at a specific price before or on the contract expiry date.
Types of Options:
- Call Options – Gives the right to buy an asset at a fixed price.
- Put Options – Gives the right to sell an asset at a fixed price.
Why Trade Futures and Options?
- Hedging Against Market Risks: Investors use F&O to hedge risks in volatile markets.
- High Leverage: Traders can control large positions with minimal capital.
- Profit in Bull and Bear Markets: Options trading allows earning from both rising and falling markets.
- Portfolio Diversification: F&O trading provides exposure to various asset classes.
How to Start Trading in Futures and Options
1. Open a Trading and Demat Account
To trade in F&O and how to start trading you need a Demat and trading account with a registered stockbroker.
Steps to Open an Account:
- Choose a SEBI-registered stockbroker (e.g., Zerodha, Upstox, Angel Broking).
- Submit KYC documents (PAN, Aadhaar, bank details, income proof).
- Complete account verification and receive login credentials.
2. Understand Market Fundamentals
Before trading, gain knowledge about:
- Stock Market Trends: Track NIFTY, SENSEX, and India VIX to understand volatility.
- Fundamental and Technical Analysis: Learn to analyze financial reports and price charts.
- Option Greeks (Delta, Gamma, Theta, Vega): These help in assessing option price movements.
3. Learn About Margin Requirements
Trading in F&O requires margin money, which varies based on contract size and market conditions. Stockbrokers provide margin calculators to help traders plan their positions.
4. Choose the Right Trading Strategy
Popular Futures Trading Strategies:
- Trend Following Strategy – Buy futures in an uptrend, sell in a downtrend.
- Spread Trading – Buy and sell futures contracts simultaneously to minimize risk.
- Scalping – Profit from small price movements by making multiple trades.
Popular Options Trading Strategies:
- Covered Call Strategy – Holding a stock while selling call options to earn premiums.
- Straddle Strategy – Buying both a call and put option to profit from high volatility.
- Iron Condor Strategy – Combining multiple options contracts to limit risk and enhance returns.
5. Start Trading with a Demo Account
Most stockbrokers provide paper trading accounts where beginners can practice trading without real money. This helps in understanding price movements, placing orders, and managing risk.
6. Monitor and Manage Risks
- Stop-Loss Orders: Protect against significant losses by setting stop-loss levels.
- Position Sizing: Avoid investing all capital in a single trade.
- News & Events: Track financial news, RBI policies, and corporate earnings reports.
Essential Tips for Successful F&O Trading
- Start Small: Begin with a few contracts and increase exposure gradually.
- Stay Updated: Follow market news, economic indicators, and stock trends.
- Avoid Overtrading: Excessive trading can lead to high brokerage fees and losses.
- Maintain a Trading Journal: Keep records of trades to analyze mistakes and improve strategies.
- Use Hedging Techniques: Reduce risk by using protective puts and call options.
Conclusion
Trading in futures and options is a powerful way to maximize investment opportunities and manage risks. By understanding market trends, choosing the right strategies, and practicing risk management, traders can build a profitable trading career. If you’re new to F&O trading, start with a Demat account, practice with demo trades, and gradually scale up as you gain confidence.
With the right approach, trading in futures and options can be a lucrative business venture and a strong financial tool for long-term success.
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