Cross-border trading is set for a lift as the African Securities Exchanges Association (ASEA) has signed a contract to roll out an African Exchanges Linkage Project (AELP) link technology platform for routing orders and trade confirmations among stockbrokers on NGX and six exchanges.
Seven of Africa’s leading securities exchanges are working together under the AELP to boost pan-African investment flows and bring more liquidity to African markets.
Cross border deals are transactions that involve more than one financial jurisdiction or involving many stock markets and national regulatory authorities.
The supplier is DirectFN, a global IT firm experienced in capital markets solutions across the Middle East and many emerging and frontier markets, which was awarded the contract after a competitive bidding process that attracted applications from top international suppliers in 18 countries.
The AELP is a joint initiative by ASEA and the African Development Bank (AfDB), aimed at unlocking Pan-African investment flows, promoting innovations that support diversification for investors, and addressing depth and liquidity in the markets.
It is funded by a grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund managed by the African Development Bank.
Speaking on the development, Chief Executive Officer, Nigerian Exchange (NGX) Limited, Temi Popoola said: “At NGX, we are optimistic that today’s milestone will further hasten efforts at capital market integration across Africa.”
He said the work of the AELP is significant, as it will ultimately boost Pan-African investment flows, promote innovations that support the diversification needs of investors in Africa, and help address the lack of depth and liquidity in Africa’s financial markets.
“We, therefore, take this opportunity to commend the efforts of ASEA and AfDB, and reiterate our continuing support of the AELP.”
With the AELP Link, investor orders in one market will be channelled by a domestic stockbroker to a stockbroker on the foreign market where the security is listed, to enter into that market for execution in the foreign market.
African Listed Securities to be accessed through the AELP Link include all securities that are available for cross-border investors.
Equity investments available include Africa’s most promising and profitable businesses as well as some global leaders among more than 1,050 companies listed.
Investors will also buy or sell corporate and government bonds, Exchange Traded Funds (ETFs) and derivatives where these are listed on the participating exchanges and the sponsoring stockbroker provides access.
President of ASEA and CEO of the BRVM, Dr. Felix Edoh Kossi Amenounvé said: “We are excited with this big step towards free movement of investments across Africa and free flow of capital.” He said the aim was to open new opportunities for individual and institutional investors to invest productively into Africa’s growth story.
He added that the Exchanges would continue to support African enterprises and governments to raise long-term capital for African jobs, business growth, infrastructure and development.
Managing Director, of DirectFN, Dr. Walid Al Ballaa said with innovative technology and focus to bring digital maturity in building digital relationships through the AELP-Link technology platform establishment, DirectFN feels equally excited to assist practically in realising the goals across the participating African Exchanges and to enable the African capital market ecosystem digitally to create a positive impact on the overall economy.
The AELP exchanges are: Nigerian Exchange (NGX), Casablanca Stock Exchange, Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange,
Others are the Stock Exchange of Mauritius and Bourse Régionale des Valeurs Mobilières (stock exchanges for the West African Economic and Monetary Union’s eight West African countries).
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