The Nairobi Securities Exchange (NSE) is set to unveil new FTSE indexes this week, the move will pave way for derivatives such as Futures, Electronic Traded Fund's (ETF'S) and Real Estate Investment Trusts (REITS) to be traded at the bourse, as part of my investor education series i will shed more light in this article on what futures are all about, the sequel to this one will focus on ETF's and REITS.

What are Futures?

A future is a contract between two people in which they agree a price for a commodity to be delivered at a particular date, what that simply means is that by buying the contract you simply agree to buy something which is not yet produced at a predetermined price i.e a Farmers up coming Seasons Tomato harvest, in this scenario the buyer holds a long position while the seller (Farmer) has a short position. Futures are available for almost every commodity out there i.e Gold, Wheat and Uranium e.t.c

Read more here http://www.contrarianinv...s-but-what-are-they.html

[quote=the deal]The Nairobi Securities Exchange (NSE) is set to unveil new FTSE indexes this week, the move will pave way for derivatives such as Futures, Electronic Traded Fund's (ETF'S) and Real Estate Investment Trusts (REITS) to be traded at the bourse, as part of my investor education series i will shed more light in this article on what futures are all about, the sequel to this one will focus on ETF's and REITS

Jamani Deal ETFs are not Electronic Traded Funds, ama you are confusing them with EFTs? ETFs are Exchange Traded Funds, basically just an index fund which tracks a particular index. Now my question, seeing there are not many stock listing at the NSE, why would one buy an ETF? Why pay a fund manager extra money to buy you a couple of stocks and while at it, only mimick the index, not really outdo it? Unless there's a Peter Lynch at the NSE,I dont see any use. But the REITs, those I am interested in!!

Thanks @Nabwire bdw you are welcome to do an article on ETF's i will credit the article to your name. @Cde yes there will be strong foreign inflows into Kenya esp into tea,flowers and coffe futures that in turn will strengthen the Shilling.

Moreover, what will happen to the earlier proposed Commodities Ex by NCPB (for grains I suppose) probably it should be consolidated on the NSE to avoid mkt fragmentation and also enhance visibilty & transperency.

Yes Mombasa will remain as the spot market for coffe and tea while some sophisticated farmers will be at the NSE...interesting times are this.