From Lagos to Johannesburg to Nairobi to Cairo and other major African markets, African stock markets may soon collapse the walls and open up for a synchronised market that allows everyone to trade and deal across the countries, through a simple push of button. Deputy Group Business Editor, Taofik Salako reports on the ongoing process to link up African stock markets.
Major African securities exchanges have reached advanced stage in an ambitious project to de-compartmentalise cross-border trading in Africa-listed securities and leverage technology to create a single pool of Africa-listed securities, accessible to all across the continent.
Investors of all ilks and worth and issuers of all grades will have access to hundreds of companies in a continental pool limited only by the fund of the investor and size of the issuer.
Such that an average investor in ‘Kutuwenji’, the proverbial remotest town in Nigeria or Duse in Northeast Kenya can create a portfolio, including South Africa’s Sonangol, Nigeria’s Dangote Cement, Kenya’s Safaricom, Mauritius’ MCB Group, Egypt’s Suez Canal Authority and Morocco’s Groupe Maroc, among others, and be part of the continental wealth creation, irrespective of geographical, demographical and financial groupings.
Under the auspices of African Securities Exchanges Association (ASEA) and African Development Bank (AfDB), major stakeholders in the African securities markets have agreed to set up order-routing technology platform for routing orders and trade confirmations between stockbrokers across Africa’s major exchanges.
The cross-border trading project, known as African Exchanges Linkage Project (AELP), included major African exchanges. They are Nigerian Exchange (NGX), Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, Stock Exchange of Mauritius and Bourse Régionale des Valeurs Mobilières (BRVM). The stock exchange for eight African countries under the West African Economic and Monetary Union (WAEMU) are Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.
With all the major African stock markets in the loop, the project is designed to scale up to all African stock markets, including the emerging markets. The AELP is aimed at unlocking pan-African investment flows, promoting innovations that support diversification for investors, and addressing depth and liquidity in the markets. It is funded by a grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund managed by the AfDB.
With the AELP Link, investor’s orders in one market will be channelled by a domestic stockbroker to a stockbroker on the foreign market where the security is listed, to enter into that market for […]