Just a month after joining the African Exchanges Linkage Project (AELP), the Egyptian Exchange (EGX) has received a mission to foster greater integration in securities trading across the continent.
The AELP project, jointly initiated by the African Development Bank (AfDB) and the African Securities Exchanges Association (ASEA), has the main objective of increasing intra-African investment flows through linking African Stock Exchanges.
EGX Executive Chairman, Mohamed Farid Saleh, said requirements for the launch of an electronic platform to link all brokerage firms in securities across the African continent had been completed and that procedures of trading and investment needed to be simplified.
Creating value chains for brokerage firms
The Egyptian Exchange became one of the seven stock exchanges that will be linked in AELP’s first phase a month ago.
Currently, Saleh said, EGX was communicating with brokerage firms about the initiative and on how to participate and maximize their benefits and on how to create value chain for the securities industry.
“Meeting with the Bank mission in Cairo was crucial to speed up the process of preparing a comprehensive study on key determinants of activating the initiative and starting the discussions between stock exchanges and brokerage firms,” Saleh said.
Increased securities offered for investment
Saleh added, “The platform will increase the number of securities offered for investment and provide a variety of investment options for all investors in African stock exchanges. This project is consistent with EGX’s objective to enhance the demand side by increasing the number of investors along with improving products to improve the trading environment.”
Emmanuel Diarra, Bank Manager for Capital Markets Development Division said the integration of African financial systems is an essential part of the Bank’s Regional Integration Strategy.
90 per cent of Africa’s stock markets capitalization
The Bank supports the EGX and other Exchanges by playing the role of a catalyst and providing the platform for broader collaborative engagements among financial sector stakeholders.
Together, the seven Stock Exchanges, which include the Nairobi Securities Exchange, Nigerian Stock Exchange, Johannesburg Stock Exchange, Stock Exchange of Mauritius, Casablanca Stock Exchange and Bourse Régionale des Valeurs Mobilières (for the West African Economic and Monetary Union), represent more than 90 per cent of Africa’s stock markets capitalization.
Regional Integration Africa’s stock exchanges
AfDB Country Manager for Egypt, Malinne Blomberg, highlighted the importance of Egypt’s involvement in the African financial integration initiative, which aligns with the theme of the Bank’s 2019 Annual Meetings, which this year is focusing on regional Integration.
During the two-day mission, the Bank delegation also met other key stakeholders including the Central Bank of Egypt, the Ministry of Finance, MISR for Central Clearing, Depository & Registry (MCDR), the Egyptian Capital Markets Association, Egyptian Investment Managers Association, CFA Society Egypt and the Egyptian Society of Technical Analysts.
The AELP is supported by a Grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund.
Other African Stock Exchanges will be included in later phases of the project.
World Federation of Exchanges signs DSE
Even as integrating Africa’s stock exchanges gains momentum, Tanzania’s Dar es Salaam Stock Exchange has successfully joined the World Federation of Exchanges (WFE).
The membership approval in January this year marked the completion of a long process and on-site peer review and inspection exercise.
The membership will help in profiling the country and increasing its visibility to global portfolio investors.
WFE is the global industry association for exchanges and clearinghouses headquartered in London.
Stock exchanges in Africa
Africa has 29 exchanges representing capital markets in 38 countries.
The continent has two regional stock exchanges. These are the Bourse Régionale des Valeurs Mobilières d’Afrique Centrale (BVMAC) located in Libreville, Gabon and the Bourse Régionale des Valeurs Mobilières (BRVM) located in Abidjan, Cote d’Ivoire.
Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo are served by the BRVM while the BVMAC serves the Central African Republic, Chad, Democratic Republic of Congo, Equatorial Guinea and Gabon.
Africa’s largest exchanges
Among Africa’s largest exchanges is the Casablanca Stock Exchange, Johannesburg Stock Exchange, EGX, the Nigerian Stock Exchange, the Nairobi Stock Exchange, the Namibian Stock Exchange (NSX), Zimbabwe Stock Exchange, Malawi Stock Exchange, Ghana, Uganda and Mauritius.
You can also read about Jumia’s listing on the New York Stock Exchange, Swala receiving approval to list on Mauritius Stock Exchange and the London Stock Exchange pinpointing companies to shape Africa in 2019.