Precious Metal Derivatives - Kenya

Kenya

The nominal value in the Precious Metal Derivatives market is projected to reach US$11.92bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 5.58% resulting in a projected total amount of US$15.64bn by 2029.
The average price per contract in the Precious Metal Derivatives market amounts to US$0.10 in 2024.
From a global comparison perspective it is shown that the highest nominal value is reached in the United States (US$11,920.00bn in 2024).
In the Precious Metal Derivatives market, the number of contracts is expected to amount to 158.90k by 2029.

Market

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Analyst Opinion

The Precious Metal Derivatives market in Kenya is experiencing a notable increase in participation and trading activities.

Customer preferences: Investors in Kenya are increasingly turning to Precious Metal Derivatives as a way to diversify their portfolios and hedge against market volatility. The appeal of these derivatives lies in their potential for high returns and as a strategic tool for risk management.

Trends in the market: One of the key trends in the Precious Metal Derivatives market in Kenya is the growing interest from institutional investors, such as pension funds and insurance companies. These entities are attracted to the market due to the potential for stable returns and portfolio protection that precious metal derivatives offer. Additionally, there is a rising trend of retail investors engaging in trading these derivatives, facilitated by the availability of online trading platforms.

Local special circumstances: Kenya's position as a regional financial hub and its relatively stable economic environment are contributing factors to the development of the Precious Metal Derivatives market. The country's well-established financial infrastructure and regulatory framework provide a conducive environment for investors to participate in derivative trading activities. Furthermore, the increasing awareness and education about financial markets are driving more individuals and institutions to explore investment opportunities in precious metal derivatives.

Underlying macroeconomic factors: The macroeconomic landscape in Kenya, characterized by moderate inflation rates and a growing economy, is fostering confidence among investors to explore alternative investment avenues like Precious Metal Derivatives. The stability in the local currency and the overall economic growth trajectory are encouraging factors for market participants to consider diversifying their investment portfolios through derivative products. Additionally, the global economic uncertainties and fluctuations in traditional asset classes are prompting investors in Kenya to seek out alternative investment options like precious metal derivatives.

Methodology

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.