Lagos Commodities Exchange Set to List First Gold - THISDAY
BY Goddy Egene
The Lagos Commodities and Futures Exchange (LCFE) is set to admit Dukia Gold‘s diversified financial instruments, backed by gold as the underlying assets in a sector worth over N300 trillion.
Addressing journalists at the pre-listing media interactive session in Lagos, the Dukia Gold’s Chairman of Dukia Gold, Mr. Tunde Fagbemi, said that the instruments which would be in form of Exchange Traded Notes (ETN), Commercial Papers (CP) and other gold-backed securities would enable the company deepen the commodities market in Nigeria, increase capacity, generate foreign exchange for the government to diversify external reserve and create massive employment across the metal production value chain.
Fagbemi hailed the Ministry of Mines and Steel Development and the Securities and Exchange Commission (SEC) for supporting trading of gold in Nigeria, saying this remained one of the ways to diversify Nigeria’s sources of foreign exchange at this critical period of Nigeria’s economy.
He said: “We are proud to be the first Gold company whose products would be listed on the LFCE. The listing shall enable us facilitate our infrastructure development, expand capacity and create fungible products. This has potential to shore up Nigeria’s foreign reserve and create an alternative window for preservation of pension funds. A gold-backed security is a hedge against inflation and convenient preservation of capital.” According to him, they have refinery services to smelt metals with capacity to meet local and international demand.
“As a global player, we comply with the practices and procedures of London Bullion Market Association (LBMA) and many other international bodies. Our refinery will also have multiplier effects on the development of rural areas anywhere it is located. There must be constant power supply, good road network and other social amenities, apart from employment opportunities for the rural dwellers,” Fagbemi said.
Speaking in the same vein, the MD/CEO of Heritage Bank Plc, Ifie Sekibo, who was represented by the Divisional Head, Strategy and Business Solutions, Heritage Bank and only licenced gold settlement bank in Nigeria, Mr. Olusegun Akanji, stated that the bank had created a buying centre for verification of quality and quantity of gold and reference price to ensure price discovery in line with the global standard. According to him, every transaction is auditable to protect investors.
The Managing Director, LCFE, Mr Akin Akeredolu-Ale, who commended SEC for issuing the exchange a licence to trade gold said commodities exchanges play strategic roles introducing structures into the ecosystem which was in urgent need for regulation, funding and data collation
“ Nigeria’s International Trade in Solid Minerals and commodities is behind par and the absence of a listed gold investible instrument on a commodities exchange limits export potential for the exploration of solid minerals in Nigeria, particularly Gold. The need to harness the potential growth in the Nigerian Solid Mineral/ Gold sector and commodity trades justifies the timely establishment of a gold trading platform and the objectives of the promoters of Dukia Gold,” he said.
According to him, LCFE is ready to support all the stakeholders in the Gold Sector in the areas of market creation, dissemination of market information, price risk management, reduction of counter party risk for trades, price discovery and transparency, standardisation, facilitation of commodity finance and innovative applications for an exchange mechanism.