NIGERIA and 13 Africa’s largest economies and capital markets have created a unified platform for trading of securities.
The breakthrough promises to enhance free flow of investments across the continent without hitches.
The other countries involved in the first phase of the cross-border trading are: South Africa, Egypt, Kenya, Mauritius, Casablanca, Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo.
The Exchanges in the first phase of the cross-border trading include Nigerian Exchange (NGX), Bourse Régionale des Valeurs Mobilières (BRVM)- which serves eight West African countries; Casablanca Stock Exchange (CSE), The Egyptian Exchange (EGX), Johannesburg Stock Exchange (JSE), Nairobi Securities Exchange (NSE) and Stock Exchange of Mauritius (SEM).
Already, four Exchanges – NGX, BRVM, CSE and EGX have been successfully connected to the continental trading terminal live environment as the integration process continues for the other Exchanges.
BRVM is a regional stock exchange serving eight West African countries of Benin, Burkina Faso, Guinea Bissau, Côte d’Ivoire, Mali, Niger, Senegal and Togo.
The cross-border trading project, known as African Exchanges Linkage Project (AELP), allows investors to access all Africa-listed securities through the AELP Link, as well as all securities that are available for cross-border investors.
The platform will enable investors to trade on Africa’s most promising and profitable businesses and global leaders, as well as corporate and government bonds, Exchange Traded Funds (ETFs) and derivatives; where these are listed on the participating exchanges and the sponsoring stockbroker provides access.
The AELP Link is generally expected to boost pan-African investment flows and bring more liquidity to African markets.
Under the auspices of African Securities Exchanges Association (ASEA) and African Development Bank (AfDB), the AELP aims at facilitating cross-border trading among seven participating Exchanges and select broker firms. In July 2021, ASEA had signed a contract with DirectFN Limited for the design and implementation of the AELP Link trading system in the seven markets.
President, African Securities Exchanges Association (ASEA), Dr. Edoh Kossi Amenounve said the facilitation of cross-border trading would open up the markets to a diverse portfolio and investment opportunities, saying “brokers and investors will be able to access a variety of asset classes available in their markets of interest.”
He added that increased and regular cross-border trading is expected to enhance liquidity in the AELP Exchanges.
Amenounve said African Funds Flow statistics measuring trade transactions between the seven Exchanges showed that cross-border trading has increased in the past three years.
He said: “The AELP aims to automate the trading process and enable brokers to access information and see the market depth and liquidity of the participating markets.
“The linkage will happen through two main processes where Exchanges will be connected to the live market data Link, enabling traders to see live order-books across the markets, thereafter brokers will be interfaced with the system for order placement and execution.
Five Nigerian stockbrokers participating in the first phase include FBNQuest Securities Limited, Stanbic IBTC Stockbrokers Limited; Rencap Securities (Nig) Limited, Cardinal Stone Securities Limited and Cordros Securities Limited.
Organising Secretary, African Stockbrokers and Securities Dealers Association (ASSDA), Willie Njoroge said stockbrokers and securities dealers are excited about the AELP Project that shall enable them to offer to their clients a much wider selection of investable securities across Africa.