A retail focus

South Africa has developed one of the world's biggest single-stock futures markets by volume. But the increasing popularity of over-the-counter contracts for difference, much of it driven by retail traders, is challenging the market's growth. By John Ferry

Single-stock futures (SSFs) contracts have overwhelmingly dominated trading activity on the Johannesburg Stock Exchange (JSE) for the past few years. In the last quarter of 2007, SSFs accounted for a whopping 80.5% of all contracts traded on the bourse (see figure 1) - making South Africa one of the world's biggest markets for single-stock futures. But market-makers say the dominance of SSFs is being challenged by increasing demand from retail investors to trade contracts for difference (CFDs).