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The South African Futures Exchange (Safex) is the principal forum for derivatives trading in South Africa. It provides its members with a safe and efficient trading and clearing mechanism, enabling them, and other users of financial futures and options, to hedge or speculate upon a variety of equities and interest rates.
Safex is a screen and telephone-based market although an automated trading system is planned.
PRODUCTS
The futures products traded on Safex are:
* Equity indices: The share index contracts the All-Share Index, the All-Gold Index and the Industrial Index;
* Interest Rates: The E168 (Long-Bond) contract, for which the underlying instrument is the Eskom 11% 2008 bond (the 'E168' bond); and a short-dated interest rate contract based on the 90-day Banker's Acceptance rate;
* Commodities: A contract based on the dollar price of one ounce of gold.
Far and away the greatest contribution to the liquidity is made by the equity index contracts.
A recent development has been the issue by Transnet of the ELFI (Equity Linked Fixed Interest) products,...