NGX leads other African exchanges to facilitate cross-border trading platform

Nigerian Exchange Limited (NGX) joined other African Exchanges in facilitating cross-border trading platform and free movement of investments in the continent.

Other African Exchanges participating in the Phase 1 cross-border trading initiative are:   Bourse Régionale des Valeurs Mobilières (BRVM, integrating 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).

A total of four Exchanges (NGX, BRVM, CSE and EGX) have been successfully connected to the Link trading terminal live environment as the integration process continues for the other Exchanges.

AELP is a flagship project of ASEA and the African Development Bank (AfDB) is aimed at facilitating cross-border trading among seven participating Exchanges and select broker firms. In July 2021, ASEA signed a contract with DirectFN Ltd for the design and implementation of the AELP Link trading system in the seven markets.

The ASEA President, Dr. Edoh Kossi Amenounve in a statement said: “The facilitation of cross-border trading will open up the markets to a diverse portfolio and investment opportunities.  “Brokers and investors will be able to access a variety of asset classes available in their markets of interest. Increased and regular cross-border trading is expected to enhance liquidity in the AELP Exchanges.”

The statement noted that African Funds Flow statistics measuring trade transactions between the seven Exchanges showed that cross-border trading has increased in the past three years.

According to the statement, “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. “Stockbrokers and Securities Dealers are critical stakeholders in the Linkage process. In the first phase of the project, five brokers from each of the seven participating Exchanges will be integrated to the AELP Link.”

Through the coordination of the Exchanges and the African Stockbrokers and Securities Dealers Association (ASSDA), 30 broker firms have confirmed participation in the pilot phase. ASSDA which was formed in 2019 is an association of national associations of stockbrokers and securities dealers from six of the participating Exchanges.

The selection was based on an agreed criteria, and expression of interest by approved licensed dealing members from each of the participating Exchanges.

Five Nigerian stockbroker firms participating are: FBNQuest Securities Limited, Stanbic IBTC Stockbrokers Limited; Rencap Securities (Nig) Limited, Cardinal Stone Securities Ltd and Cordros Securities Limited constitute the lists of 26 other firms.

The ASSDA Organizing Secretary, Mr. Willie Njoroge observed that “stockbrokers and securities dealers are excited about the AELP Project that shall enable them offer their clients a much wider selection of investable securities across Africa.”