African Securities Exchanges that include some of the most vibrant and biggest bourses in the continent have moved a step closer to doing linking up their trading floors to enable cross-border transactions.
This is after the African Securities Exchanges Association (ASEA) signed a contract to procure an order-routing system. Seven leading African securities Exchanges are working together in the African Exchanges Linkage Project (AELP) to make this happen.
They include the Nairobi Securities Exchange, The Egyptian Exchange, Casablanca Stock Exchange, Bourse Regionale des Valeurs Mobilieres-representing stock exchange for the West African Economic and Monetary Union’s eight West African nations, Johannesburg Stock Exchange Nigerian Exchange and Stock Exchange of Mauritius.
The AELP Link platform will enable trading between brokers in the seven African Securities Exchanges participating in the pilot phase.
DirectFN, an IT solutions provider, is the supplier of the platform after winning the tender that attracted some of the top firms in over 18 countries.
African Securities Exchanges to have a digital link
According to Dr Walid Al Ballaa, Managing Director of DirectFN, this innovative technology will create digital links across participating African exchanges.
The AELP is a joint venture that involves ASEA and the African Development Bank (AfDB) with financial support from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund- managed by the African Development Bank.
Investors in any one exchange will channel their orders, using a local stockbroker, through the AELP Link to a stockbroker on the foreign market where the security is listed.
African Listed Securities accessible through the AELP Link will include all securities that are available for cross-border investors.
Investors will also buy or sell corporate and government bonds, exchange-traded funds (ETFs) and derivatives where these are listed on the participating Exchanges with the sponsoring stockbroker providing access.
According to Dr Felix Edoh Kossi Amenounvé, President of ASEA and CEO of the BRVM, this project is a big step towards free movement of investments across Africa and free flow of capital.
“Our aim is to open new opportunities for individual and institutional investors to invest productively into Africa’s growth story. The Exchanges continue to support African enterprises and governments to raise long-term capital for African jobs, business growth, infrastructure and development,” said Dr Kossi.