Investec Bank

The Johannesburg Stock Exchange (JSE), working with seven African exchanges, the African Development Bank and the African Securities Exchanges Association (ASEA) hosted the African Exchange Linkage Project (AELP) Engagement Forum, designed to bolster investments into the continent.

The Bank explained in a statement that the joint initiative will facilitate cross-border trading and settlement of securities across participating exchanges in Africa. It also seeks to unlock Pan-African investment flows, promote the diversification needs of investors and address the lack of depth and liquidity in Africa’s financial markets.

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In his opening remarks, Emmanuel Diarra, Manager of Capital Markets and Development at the African Development Bank stated: “The African Development Bank has a long history and partnership with the African Securities Exchanges Association. This partnership compliments the Bank’s interventions toward the development of deep and resilient capital markets in Africa.”

“The Bank will continue to enhance its work with regulatory institutions, institutional investors, stock exchanges and other capital market stakeholders to strengthen regulatory frameworks, broaden market participation and product offerings, as well as improve the dissemination of capital markets data for transparent pricing mechanisms,” Diarra said. 

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The AELP, which started in 2016 with only four exchanges, has since expanded to seven participating exchanges. They are the JSE, the Egyptian Exchange, Stock Exchange of Mauritius, the Casablanca Stock Exchange, Nairobi Securities Exchange, the Nigerian Stock Exchange and Bourse Régionale des Valeurs Mobilières, which serves Francophone West Africa. The long-term goal is for all 27 African stock exchanges to join the Project and increase Africa’s competitive advantage compared to other emerging markets.

The seven Stock Exchanges participating in the first phase of the AELP represent about 85% of Africa’s securities market capitalisation.

The AELP has aligned its goals to include the creation of a central trading platform linked to exchange trading systems; the free flow of trading information between linked exchanges; broker access to the linked trading platform, and the creation of products based on securities from the allied exchanges.

Anne Clayton, Head of Public Policy at the JSE said: “The AELP is a great addition to many collaborative initiatives around Africa. As the JSE, our focus is to enable sustainable and inclusive growth and development, not only in South Africa but on the continent as well. There is great interest within Africa for investment, and the AELP provides an opportunity for alignment of exchanges within the continent, therefore collaborations with key stakeholders will continue to be at the centre of securing a growth path for Africa.”