The case of Derivatives

Derivative Securities have greatly changed the landscape of the Investment markets. It is without doubt that these investment tools have enhanced the returns on investments and as well as increasing productivity of many basic and non-basic commodities. These can be viewed as an alternative form of insurance.

However the recent upheaval in the financial markets has meant that the underlying parameters and factors need to be explored and understood deeply. As a direct result sound mathematical methods of analysis and evaluation need to be enhanced or developed in order to meet the new changes in the global investment markets and patterns. It is also of paramount significance that different markets might require different methods of analysis or point to particular adjustments being made to the existing models depending on market fundamentals.

I believe that Financial Mathematics is also very important in the area of research. With the recent developments in globalisation new market trends are being discovered and a number of markets are emerging that require experts who establish the market fundamentals across all boundaries and subsequently develop relevant models or update the existing ones. It is also important as it can be used to predict or measure the impacts of different paradigm shifts in the markets.

Zimbabwe is lagging behind such levels of investment tools and analysis and hence not many derivatives or derivatives based products are being developed. It is particularly saddenning as some countries are fogging ahead in this new are of finance in Africa, something akin to the lagging behind of England during the Newtonian period when they refused other schools of thought contrary to Newtons publications.