African exchanges link AELP demonstrates share trades
The cross-border trading platform linking seven of Africa’s leading securities exchanges was launched yesterday 7 December in Abidjan. The link gives access to over 1,000 of Africa’s biggest and most promising companies, companies with nearly $1.4 trillion of market capitalization (total value of equities listed).
The African Exchanges Linkage Project trading platform is an order-routing system and allows sharing of market and order-book data. Technology firm DirectFN is deploying the system, which went live on 18 November following a beta testing period.
The launch featured a live screen link-up to demonstrate an order for trading sent from stockbroker FGI Finance Gestion Intermediation in the BRVM exchange in Abidjan to Nairobi stockbroker Dyer and Blair to buy 10 Kenya Commercial Bank shares at KES37.00 each. Equity Trader Elizabeth Njoroge at Dyer and Blair entered the order through a few clicks into the Nairobi Securities Exchange for execution, and sent an order from Nairobi to Abidjan to buy Sonatel shares on the BRVM (Bourse Régionale des Valeurs Mobilières).
The first phase of the AELP will exchanges operating across 14 countries: Morocco, Egypt, Nigeria, Kenya, Mauritius, South Africa and the West Africa Economic and Monetary Union, which comprises Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo. So far 35 stockbrokers have signed up, according to Project Manager Lina Tonui.
She explained that the link also involves multiple regulatory processes in each market and she thanked the national regulators for their commitment to ensure that cross-border trading goes ahead.
Edoh Kossi Amenounve, ASEA’s President yesterday, said, “With AELP, we are entering a new era of African capital markets where all our members will gradually transact cross-border trades from one African securities exchange to another. This project represents a great opportunity for investors and issuers across the continent.”
Ahmed Attout, the African Development Bank’s Manager for Capital Markets Development, said: ‘'It is our pleasure to partner with ASEA through this process culminating in the operationalization of the African Exchanges Linkage Project Link Trading Platform. The AELP is a transformational project that aligns with the African Development Bank’s High 5 priorities, especially ‘Industrialize Africa’ and “Integrate Africa.’ It is also in tandem with the African Continental Free Trade Agreement’s objective of establishing a liberalized market to aid the movement of capital, facilitate investments and deepen the continent’s economic integration.”
AELP is a joint initiative of the African Securities Exchanges Association (ASEA) and the African Development Bank. The bank is funding the phased rollout of the project through a grant from Korea-Africa Economic Cooperation Trust Fund (KOAFEC).
AELP provides training programmes for financial market practitioners on cross-border investment practices, and investment rules across the participating markets. Programmes have benefitted financial market regulators, stockbrokers and securities dealers, custodians, central bankers and other stakeholders.
The African Development Bank and ASEA jointly supported the establishment of the African Stockbrokers and Securities Dealers Association (ASSDA) as a pioneering pan-African platform for collaboration between securities dealers for capital markets integration.
There are big plans ahead, Lina Tonui said the AELP will eventually extend to all 26 ASEA member exchanges. Botswana and Ghana stock exchanges are due to join in Phase 2 in 2023 while Anne Clayton, Head Public Policy & Regulatory Affairs at the JSE, said another plan is to expand functionality to include an integrated settlement and payment platform.
Congratulations to Thapelo Tsheole, CEO of the Botswana Stock Exchange, who was elected the new President of ASEA at the AGM on 7 December, and to Celestin Rwabukumba, CEOof the Rwanda Stock exchange who was elected Vice-President.
Congratulations also to Temi Popoola the Chief Executive Officer of Nigeria Stock Exchange and Ms. Abena Amoah the Managing Director of Ghana Stock Exchange who both join the Executive Committee. Mr. Tsheole takes over from Edoh Kossi Amenounve, CEO of the BRVM, who was President for two years and advanced key projects including the implementation of the AELP.