Africa’s largest bourse Johannesburg Stock Exchange (JSE) has officially launched an electronic trading platform (ETP) for government bonds, in partnership with the country’s ministry of Treasury and a multi-stakeholder group consisting of Strate, the Financial Sector Conduct Authority (FSCA) and banking institution.
The electronic trading platform for bonds is meant to allow transparency, price discovery and settlement assurance to allow issuers to transact anonymously both pre-trade and post- trade.
“The Bond ETP was also an important element of South Africa’s commitment to Capital Markets reform at the G-20 group of nations. The culmination of the intensive efforts of a multitude of stakeholders including our technology provider MTS; our nine Primary Dealers, the World Bank as project consultant; the South African Reserve Bank; and Central Securities Depository Participants (CSDPs) has really paid off and this is a proud moment for our country.” Donna Neer Director of Capital Markets JSE
Currently more than $137 million in government bonds is listed on the JSE debt board accounting for over 90% of all debt market liquidity reported to the JSE.
Government entities issue bonds and list them on the JSE to raise funds for large infrastructure projects such as roads, power stations and hospitals.
In February JSE had announced listing of ‘project bonds’ allowing institutional investors a chance to invest in infrastructure and energy projects. The treasury had at the time said that Government and banks alone cannot fund South Africa’s infrastructure programme.
“The use of electronic trading platforms has shown notable positive effects in the secondary markets including: improved liquidity through price discovery; reduced transaction costs and greater competition; increased transparency, and lower trading costs.” says Mondli Gungubele Deputy Minister of Finance
