The African Development Bank (AfDB) Group, and the African Securities Exchanges Association (ASEA), on Friday announced the launch of the African Exchanges Linkage Project (AELP), an electronic trading platform for the seamless cross-border securities trading among seven stock exchanges in Nigeria, Johannesburg, and Kenya.
Others in the first phase are Egypt Morocco, Mauritius and the West Africa Economic and Monetary Union, which comprises Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo, comprising 2,000 companies worth roughly $1.5tr market value.
The second phase of the project will involve the Ghana and Botswana stock exchanges, in what is expected to improve the depth and liquidity of Africa’s capital markets and foster investment flows among the participating Exchanges.
A statement by the AfDB Group described the AELP Link Trading Platform as an order routing system, and market and order-book data sharing, executed through a grant from the Korea-Africa Economic Cooperation Trust Fund (KOAFEC).
Both AfDB and ASEA have therefore, jointly supported the establishment of the African Stockbrokers and Securities Dealers Association as a pioneering pan-African platform for collaboration between security dealers on capital markets integration and financial products innovation.
The AELP Trading Link, the statement continued, went live on November 18, following a beta testing period, and is being deployed in partnership with DirectFN Limited.
AfDB, the statement added, is funding ASEA’s phased rollout of the project which was launched December 7, 2022, on the sidelines of the ASEA 2022 Annual General Meeting and Annual Conference, held in Abidjan, Cote d’Ivoire, from December 7 to 9, 2022.
The launch was attended by executives from African stock exchanges, the AfDB, institutional investors, stockbrokers, and the investor community, with Edoh Kossi Amenounve, ASEA’s President, saying with AELP his association is entering “a new era of African capital markets where all our members will gradually transact cross-border trades from one African securities exchange to another. This project represents a great opportunity for investors and issuers across the continent.”
AELP also provides training programmes targeting financial market practitioners on cross-border investment practices, and investment rules across the participating markets.
Capacity-building programmes have benefitted financial market regulators, stockbrokers/security dealers, custodians, central bankers, and other stakeholders.
The statement also quoted AfDB’s Manager for Capital Markets Development, Ahmed Attout, as expressing “pleasure to partner with ASEA through this process culminating in the operationalization of the African Exchanges Linkage Project Link Trading Platform.
“The AELP is a transformational project that aligns with the African Development Bank’s High 5 priorities, especially Industrialize Africa” and Integrate Africa. It is also in tandem with the African Continental Free Trade Agreement’s objective of establishing a liberalized market to aid the movement of capital, facilitate investments and deepen the continent’s economic integration.”