By Peter Egwuatu
CONTRARY to the expectations that the Lagos Commodities and Futures Exchange (LCFE) would adopt a warehouse commodity model of trading, the Exchange has disclosed that it will adopt a fungible assets trading model.
Confirming this development, the LCFE’s Managing Director and Chief Executive Officer, Mr Akin Akeredolu-Ale who spoke to Vanguard on the direction of the Exchange underlined its uniqueness as Commodities Exchange that will trade on fungible assets rather than pre-occupy itself with warehouse operations.
He said: “Our business model is to trade fungible assets. We have carefully selected globally acceptable operators in various fields. Our core business is to trade electronic receipts. The receipts must be signed off by relevant agents before trading. We are not out to operate warehouses. We have certification agents for warehouses to ensure global best practices. Our focus is on aggregators that already have certified warehouses. We shall engage with all members in the ecosystem.”
Meanwhile, stockbrokers have continued to express their support for the forthcoming Exchange as a major platform that will raise the bar for the Nigeria’s financial system.
Meanwhile, the brokers, second endorsement for the Exchange in less than one year that they endorsed their support was the focal point at the breakfast meeting, organized by the management of LCFE for senior stockbrokers at the weekend in Lagos.
Stockbrokers had in April last year unanimously passed a vote of confidence in LCFE.
Re-affirming the support of the senior stockbrokers for the new Exchange, the Chairman, NASD Plc, Mr Tola Mobolurin declared that stockbrokers had collectively endorsed LCFE to commence operation. He emphasized the essence of investor confidence in the market through quality service delivery and advised the company’s management to uphold professionalism in order to sustain investor confidence.
Corroborating him, the second Vice President, Chartered Institute of Stockbrokers (CIS), Mr Oluwole Adeosun stated that stockbrokers formed the core of ownership of LCFE and assured the management of continuous support of the Institute. According to him, the Institute runs a specialist programme in Commodities Trading, indicating symbiotic relationship between the two entities.
In his own comment, the LCFE’s Chairman, Chief Oyinyechukwu Ezeagu explained that stockbrokers were major stakeholders in the commodities market, hence, the need to keep them abreast of every development: “ The stockbrokers are the major players in This Exchange. Without you trading, it would be very difficult if not impossible to operate. We have taken the special interest to invite you to have a full understanding of what LCFE stands for and how you will be playing an important role in our success .”