Archive for the 'Stockbrokers' Category

More hires at leading Africa and frontier investment bank Exotix Capital

A leading emerging and frontier markets investment bank, Exotix Capital, continues to add senior hires in key African markets. Exotix has offices in London, New York, Dubai, Lagos and Nairobi and is a licensed stockbroker on both the Nigerian and Nairobi stock exchanges – and in July rated #1 with 24% market share in Nairobi. The hires, which take immediate effect, add to the strengthening of the team in recent months and new appointments across business lines and geographies to harness growing investor interest in the world’s highest-growth economies.

The past year has seen significant growth for Exotix across Africa’s equity capital markets both in clients and market share. In Kenya, Exotix has been steadily increasing month-on-month this year. In June the firm launched a Research, Analytics and Data division, by Paul Domjan, the former Chief Executive of Roubini Global Economics and Founder of Country Insights.

It has also been expanding its investment-banking reach in Africa, with particular focus on the energy, financial and consumer sectors. On 3 October, Exotix was one of the three deal managers, alongside JPMorgan and Morgan Stanley, for the tender offer by Guaranty Trust Bank on its $400 million 2018 Eurobond.

The new appointments are
Serge Marston, currently Head of EMEA sales at NEX Markets, Serge Marston from NEX Markets as Non-Executive Director on Exotix’s Executive Management Board
Chiamaka Ezenwa, formerly at Morgan Stanley in London and FBN Capital in Lagos, as the new Head of Investment Banking West Africa
Mbithe Muema, previously with African Alliance Kenya, is appointed as Head of Equity Sales in Nairobi

CEO Duncan Wales says in a press release: “We are excited to have Serge, Chiamaka and Mbithe on board to help us take full advantage of the opportunity presented by our unique place in the world’s most exciting economies. Serge brings unparalleled expertise from his experience at the cutting edge of financial innovation.”

Marston is Head of EMEA sales at NEX Markets, a division within NEX Group that provides electronic trading technology services in the fixed income and foreign exchange markets. As Non-Executive Director he will work closely with CEO Duncan Wales and Chairman Mark Richards. Prior to joining NEX, he spent 19 years at Deutsche Bank in a variety of roles, most recently as Co-Head of Fixed Income, Currencies & Commodities, and e-Commerce Sales in the Global Markets division. NEX Group is a key shareholder of Exotix.

Ezenwa will be working with Andrew Moorfield (Natural Resources) and Fabrizio Ferrero (Financial Institutions), co-heads of Investment Banking at Exotix, and Esili Eigbe, Head of Equities, Africa, based in Lagos, to expand business in West Africa. She had previously spent 6 years at Morgan Stanley in London with primary focus on equity capital markets for Sub-Saharan Africa, the UK and Northern Europe, and the past 4 years in Lagos at FBN Capital, the investment-banking subsidiary of FBNH, Nigeria’s largest bank by total assets, most recently as Head of Equity Sales. She has originated and executed a variety of transactions across jurisdictions for international and Nigerian corporations.

According to Ferrero: “Chiamaka’s appointment enhances our investment bank offering in West Africa and overall in Sub-Saharan Africa through her extensive experience and relationships in the local markets. I am confident she will be a valuable addition to our team and further expand Exotix Capital’s investment banking footprint in the region.”

Muema was previously Head of Institutional Sales at African Alliance Kenya, where she was largely responsible for building the company’s local client base in the Nairobi office. She will lead Equity Sales further boosting Exotix’s position. She had previously worked at Renaissance Capital and Equity Bank as a research analyst and is currently on the board of the Konza Technopolis Development Authority in Kenya in a non-executive role, where she steers the business development committee. She will work closely with Eigbe and Debbie Rees, Global Head of Equity Sales.

Eigbe commented: “Mbithe has the necessary experience of markets in the region to support our commitment to expand Exotix’s business in Kenya and the wider region.”

Earlier in October Exotix appointed Matthew Pearson, former Head of Equities at ICBC Standard Bank, as Global Head of Equities, joining the firm’s Executive Committee, and Christopher Dielmann, formerly Research Analyst in the International Monetary Fund’s Strategy, Policy & Review Department, as Senior Economist with responsibility for markets including Egypt, Kenya, Nigeria, Bangladesh, Pakistan and Vietnam.

Other new additions to the team include Rafael Elias, formerly Head of Emerging Markets Research and Strategy for Fixed Income at Cantor Fitzgerald, returning to Exotix to continue his core focus on Latin America as Corporate Credit Analyst, and Rex Nowell, who has successfully directed independent research sales and account management teams in the Americas, Europe and Asia for the past 20 years, most recently for Roubini Global Economics, joining Exotix in New York as Managing Director for New Client Development.

Exotix has also been expanding financials research with the hire of three new analysts last month inlcuding Temitope Ode, previously an analyst at Sankore Global Investments and before that at Goldman Sachs, joining Exotix’s Lagos office to cover financial companies. Faith Mwangi, formerly Senior Research Analyst at Genghis Capital, covering banking and media, and prior to that Investment Analyst at Standard Investment Bank, covers financials in East Africa after joining in August.

Exotix Capital says it “provides the most comprehensive and integrated cross-asset platform to penetrate the full capital structure in frontier and emerging markets.” Its analysts cover over 160 companies, more than any other frontier-markets firm, in emerging Europe, the Middle East, Africa, Asia and the Americas. It is specialist in equity and fixed-income markets and the Exotix advisory team provides the full range of investment-banking services to companies, financial institutions, investment funds and governments. These include strategic advisory assignments from debt capital to private equity fund raising.

Serge Marston, Chiamaka Ezenwa and Mbithe Muema

SADC stockbrokers linking for cross-border investment

Stockbroking firms across Southern Africa are invited for networking on 7 December 2016 to learn more about investment opportunities in neighbouring capital markets. The Committee of SADC Securities Exchanges (CoSSE) aims to implement SADC ideals of close linkages between the region’s capital markets and to support cross-border capital-raising and investments.
First steps are to encourage information flow between the markets and to establish networks so that brokers can route trading to other local exchanges by working with a local broker in the target exchange.

cosselogo_about-cosse

On the agenda for the 1st SADC Brokers’ Network Session will be to facilitate and provide a platform for SADC brokers to meet each other, agree to enter into a SADC database, agree on a standard counter-party agreement which will be used when brokers trade for each other in their respective jurisdictions, and share information about their respective markets.
Every firm is invited to send representatives to meet other broking firms and learn about their activities. After the networking session, brokers will be encouraged to keep each other informed on local opportunities such as initial public offers (IPOs) which brokers in other countries and their clients may be interested in. Brokers will be able to share trading commissions on such deals when two firms are working together.
There are increasing linkages between the financial systems in the region’s capital markets, including the SADC Integrated Regional Electronic Settlement System (SIRESS) which was successfully launched in 2013 and has been growing fast since then.
The networking session will last all day from 8-5 and it will be at the Johannesburg Stock Exchange in Sandton, South Africa. It will be followed by a cocktail. Brokers wishing to attend should contact their national stock exchange.
Other information can be obtained by emailing CoSSEBrokerSession@jse.co.za.

Opinion: Steps for regional integration of capital markets

YOUR COMMENTS AND DISCUSSION ARE WELCOMED!

In mature capital markets, regional integration shows significant benefits in unlocking potential and allowing investors to mobilize liquidity across borders by interconnecting diverse markets. Regional integration seems to be the future of world capital markets.

Can it also work for African capital markets, many of which face considerable problems of liquidity?

Many parts of the world have already tackled integration and each has faced its own challenges. In the past, the state of the technology and the feasibility of effective regional integration used to be a major challenge, and often offset the benefits.

This has changed. The technology has become cost-effective and industrial standards have evolved, based upon the widespread experience and solid implementations in different regions. Remaining challenges that still prevent smooth implementation are not in technology but in the business processes and political will.

First it is important to understand the landscape. Africa’s exchanges are usually divided into 4 categories:
• Dominant market: South Africa is the biggest contender
• Medium-size market: Each region tends to have its leading market
• Emerging markets: Several markets are growing fast and showing innovation and determination
• Markets yet to take off: Some are recently established, some are showing slow growth.

As African stock markets have become larger and more prevalent over the last 10 years, there have been preliminary moves towards regional integration. This is the global trend, but more importantly because integration can meet the mutual needs of the exchanges themselves.

Lack of liquidity is a major constraint to attracting influxes of foreign capital (portfolio investment) and to efficient allocation of savings and asset pricing. The different businesses (shares) on offer can be limited and the size of potential deals is often small. Pricing and other cross-comparisons within sectors and across companies can be difficult.

Efficient securities markets in Africa will help exchanges act as efficient channels for the growing pools of domestic savings funds (pensions and insurance) towards national growth and development – both infrastructure and enterprises – as well as providing comfort for foreign and domestic investors. Links and eventual integration between national stock exchanges is the way to ensure this.

Talk of pan-African or other continental structures can be a distraction. It may overlook the necessary work to be done on national and regional limits, including exchange controls, prudential regulations, macro-economic stability and others. It ignores the key roles of local securities exchanges, which are already central in their national economies and have working legal frameworks and institutional set-ups that can be built upon.

Each market has evolved according to the needs of the market participants and the challenges that have been impacting them. Each has its own electronic platforms built for the local practices. Existing micro-level frameworks can prevent change being introduced in a straightforward fashion. For example, in certain markets, turn-around trading is yet not available and settlement procedures are longer than necessary. Regional integration can take this into account if it involves a pragmatic framework that accommodates the composition of the markets.

In most regions, regulations are a key limitation on integration. The enabling environment for integration requires common policies, institutions and regional frameworks and, above all, the necessary political commitment that ensures macroeconomic stability. Cross-border settlements are difficult as there are no common currencies and the cost of trading is higher due to intermediary costs. Regulatory work to be overcome includes tackling national exchange controls, harmonization of regulations and recognizing each other’s institutions and intermediaries. Prudential limits on cross-border funds’ investments and regulations that stop share offers being marketed across borders could also be rolled back.

Political will is needed to recognize the importance of national structures and to recognize the added value of an integrated regional structure.

Regional integration demands not only that participants agree on a common standard of procedures at the higher level, but that there are platforms to support the regional integration charter. Initially the process may be structured around entities that exchange information with each other but operate on their own.

An ideal is to think towards forming one mega-enterprise with national outposts – Africa’s example is the BRVM which provides an integrated exchange linking 8 markets and is firmly anchored in the considerable monetary and policy integration structures in the francophone region. The evolving future regional exchanges should link all stakeholders through a set of global processes that bridge the gaps between the diverse systems that exist at various levels and connect all to bring value to customers.

There have already been some healthy efforts by Africa’s regional economic communities. The Southern African Development Community (SADC) is supporting linkages between regulators, central bankers and the Committee of SADC Securities Exchanges. Strong advances include the SIRESS cross-border payments systems and cooperation and harmonization between exchanges and regulators, including on listing requirements. The West Africa Capital Markets Integration Council considerable progress has extended to mutual recognition of stockbrokers and regional structures, as highlighted in this blog, and cross-border share deals between national exchanges, in addition to its ground-breaking BRVM regional exchange for 8 countries. The African Development Bank (AfDB) and other multilaterals and finance institutions are supporting important projects.

One of the leaders is the East African Community (EAC), following the signature and ratification of its Common Market Protocol. The EAC Secretariat, working with the World Bank and other development partners, established the EAC Financial Sector Development and Regionalization Project I (EAC-FSDRP I) to support the development of the financial sector through the establishment of a single market in financial services among EAC Partner States. The project objective is to establish the foundation for financial-sector integration among EAC partner States, including the broadening and deepening of the financial sector through the establishment of a single market in financial services, with a view to making a wide range of financial products and services available to all, at competitive prices. InfoTech, a Pakistani IT vendor with expertise in capital markets, particularly in Africa, is delivering the capital markets linkages.

To complement work on the IT and other systems, there is much to be done at policy-making level to harmonize the rules of the game across the region, backed by full commitment of all direct and indirect stakeholders, such as stock exchanges, depository companies, regulatory authorities etc. and their IT vendors to support their existing systems so they can support the regional integration.

Implementing the capital markets regional integration project will be a big milestone and a big step in tackling the core issues that hinder effective integration. The prospects are huge.

Capacity-building at all levels is also critical. Policymakers and regulators need to enhance skills on how to grow efficient markets to ensure they support national and regional development objectives. Exchanges, brokers, banks and key advisors such as lawyers are also central. Knowledge and skills among potential issuers, including small and medium-enterprises, and investors including both institutions and the investing public, all contribute to fast growth of more efficient markets.

Integration has already been proven in advanced markets and the technology works. The biggest challenge and responsibility is with the policymakers who have to formulate a governance framework with effective support to implement the framework at grassroots level.

Working together, African capital markets are moving to the next level of their evolution.

 

Building African Financial Markets seminar

The 5th Building African Financial Markets (BAFM) capacity-building seminar is coming to the Nigerian Stock Exchange Event Centre in Lagos on 28-29 April. This is the top seminar for professionals and strategic leaders from capital markets all over the continent, including securities exchanges, clearing and settlement, stockbrokers, investors, government officials and any organisations which are part of capital markets system. It is organized by the NSE and the African Securities Exchanges Association.

The seminar includes a market closing/opening ceremony and focused learning interactive sessions on key topics around driving liquidity in African capital markets. Topics are very relevant, including securities lending, strengthening equity market structures, derivatives and CCP, optimal price mechanism, global reporting standards, information security, and capital markets integration.

Its suitable for seniors from capital and financial markets in product development, regulation and policy, information technology, investor relations, trading, clearing and settlement.

BAFM-III (1)

  • Role of securities lending in boosting liquidity in African capital markets
  • Strengthening equity market structures in Africa to better address low liquidity
  • Instituting an optimal price mechanism on African stock exchanges
  • Capital market integration – a catalyst for boosting liquidity on African stock exchanges
  • Liquidity enabling regulation
  • Role and importance of CCP in a derivatives market
  • Trading derivatives products – how the products work?
  • Rules governing CCP
  • Adhering to best global reporting standards
  • Information security – protecting your market’s digital assets.

According to the organizers: “As African economies reposition themselves following the significant impact of global headwinds that have challenged the continent’s growth prospects, African capital markets are instrumental in financing the continent’s infrastructure and capital requirements.”

Cost is NGN70,000 plus VAT/$350. For more go to NSE website.

Local bond markets to fore at AfDB workshop

The African Development Bank’s African Financial Markets Initiative (AFMI) is discussing local-currency bond markets this week in Johannesburg, and over 30 countries will be there according to the press release. Key topics include how to develop domestic institutional investors, with experiences shared from across Africa, and updates on gathering data and help to include more countries in an AfDB-Bloomberg bond index.
AFMI runs a helpful financial markets database, available through their website www.africanbondmarkets.org, featuring bond and money-market news and helpful capital market descriptions for different African countries as well as a data portal.
The first day of the workshop, today 30 Nov, covers the database and the African Fundamental Bond Index as well as technical assistance. It includes how to collect accurate pricing data so that more countries can be included in the African Development Bank (AfDB/AFMI-SM) Bloomberg® African Bond Index (ABABI).
Tomorrow, 1 Dec, is open to investment banks, stockbrokers, exchanges and financial institutions. This includes presentations on the ABABI index, an African Domestic Bond Fund, and perspectives from institutional investors.

To participate in the 1 Dec African bond markets workshop please contact afmi@afdb.org as soon as possible.

AfDB launched the initiative in 2008 as part of its strategy to develop Africa’s financial sector. It contributes to developing domestic bond markets through: the African Financial Markets Database (AFMD); and the African Domestic Bond Fund (ADBF).

African Financial Markets Initiative data portal

African Financial Markets Initiative data portal

Namibia’s stockbrokers switch to IRESS to access NSX

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All 4 Namibian stockbrokers have switched their front-end links into the local bourse trading system to the trading solutions supplied by IRESS. The company is a leading supplier of innovative technology for financial markets, wealth management and the mortgage industry in South Africa, Asia, United Kingdom, Canada, New Zealand and Australia.

IRESS says that the fully integrated solution incorporates order and execution management means that brokers no longer have to use multiple and legacy trading systems when managing orders on the local Namibian Stock Exchange (NSX) and their institutional order flow to South African brokers for execution on the Johannesburg Stock Exchange (JSE). Order routing is fully managed by IRESS and delivered within a unified multi-market order-management system. Brokers can leverage IRESS’ international trading connectivity and seamlessly access counterparties on the IRESS network, which includes many “buy-side” or institutional investors. Efficiency benefits include unified systems and no need to enter data twice or more, removing the potential for human data entry error.

Ridwaan Kharva, Head of Trading Solutions at IRESS, explains in a press release: “Having an integrated order-management system and execution platform creates a huge amount of efficiency in terms of both cost and workflow. We are delighted to include all Namibian brokers as IRESS exchange trading clients in addition to our presence in South Africa. IRESS has been connecting market participants for over 10 years and brokers in Namibia will now be able to benefit from enhanced trading capability, delivering improved speed and reliability with reduced cost.”

IRESS has also supplied the NSX with IRESS Professional Market Data, enabling comprehensive market monitoring and analysis.

The NSX made history in 1998 when it became the first African exchange to run its trading systems on the system offered by the JSE under an agreement to exchange technology, skills and . That has ensured, over the years, that it has remained with one of the world’s best and most up-to-date trading systems, currently running out of Johannesburg and previously run by the London Stock Exchange. The arrangement was renewed in 2014, and details of its benefits are given in this JSE press release.

The NSX has 34 listed companies and 4 listed exchange-traded funds (ETFs), 4 stockbroking members and 7 sponsoring brokers.

IRESS, headquartered in Australia, employs over 1,340 staff globally, with local knowledge and industry experience. All its product streams support a diverse range of roles and offer front, middle and back-office functionality for clients that range from financial service institutions through to independent operators

London Stock Exchange allowed to give Hong Kong brokers direct access

The London Stock Exchange has been licensed by Hong Kong’s Securities and Futures Commission to operate as an alternative exchange operator. This means that brokers based in Hong Kong can join as direct members of the LSE and trade for Hong Kong clients in LSE-listed stocks and fixed-income products, provided they meet requirements. They will also get access to the LSE derivatives market, according to this Reuters story.
LSE chief executive Alexander Justham said on Monday (15 June), according to a report in South China Morning Post: “The SFC license is an important move for the London Stock Exchange to further develop our business related to Hong Kong and Chinese companies.”
He expects the new links would encourage more mainland firms to list for trading on the LSE as well as more dim sum bonds, which could create more competition for Hong Kong Exchanges and Clearing. He said: “The London Stock Exchange is not a competitor to Hong Kong but we could have a cooperation relationship.”
Two Hong Kong financial firms are members of the London Stock Exchange through branches in London and 57 mainland Chinese firms are listed. The LSE signed a memorandum of understanding with 4 companies – Agricultural Bank of China, Bank of China, China Construction Bank, and Haitong Securities – to help bring more Chinese firms to list in London.
London is developing as a trading hub for yuan.
The LSE has a list of its 883 members based in various countries around the world.

JSE and ASEA host African exchanges for capacity-building

Best wishes to the organizers and all the African exchanges personnel attending the Building African Financial Markets (BAFM) seminar in Johannesburg from 10-12 September!

The Johannesburg Stock Exchange (JSE) and the African Securities Exchanges Association (ASEA), supported by the World Bank Group, are hosting the third BAFM seminar this week, bringing together representatives from stock exchanges, regulatory bodies, stockbroking firms and other interested parties from several African countries including Nigeria, Mauritius, Zimbabwe and Malawi.

Topics to be covered include the future of African stock exchanges and whether they can play a meaningful role in the growth and development of the African continent. Zeona Jacobs, Director: Marketing and Corporate Affairs at the JSE, says in a press release: “Stock exchanges play a crucial role in the development of economies by allowing companies to raise capital through an efficient and transparent platform.” Jacobs says the conference provides an opportunity for exchanges from around the continent to share ideas and learn from each other’s experiences.

“Exchanges are key parts of the economies in which they operate. Initiatives such as this form an integral part of the continued development of sustainable economies within the continent by enabling open conversations about how to strengthen investor confidence, address governance issues and promote financial literacy.”

The conference will also include sessions around the development of commodity markets, exchange traded funds, electronic bond markets and demutualisation.

JSE seminar on African capital markets development

Johannesburg Stock Exchange (credit www.jse.co.za)

Johannesburg Stock Exchange (credit www.jse.co.za)


The Johannesburg Stock Exchange and the African Securities Exchanges Association, supported by the World Bank Group, will host the 3rd Building African Financial Markets capacity-building seminar. This will be in Johannesburg, South Africa from 10-12 September.
The aim of the seminar is to promote growth and development of African financial markets by giving representatives from stock exchanges, regulatory bodies, stockbroking firms and other interested parties the opportunity to learn about topical subjects in the area of capital markets.
The seminar includes speakers from African and global securities exchanges, banks, stockbrokers, major financial institutions, issuers, multilateral organisations and regulators. The topics covered include Are exchanges playing a meaningful role in African growth and development?, Exchange demutualization – perspectives and considerations, Listings – what do exchanges need to do to get companies to list
This year is the first to introduce a series of parallel workshop sessions to allow for a more interactive environment for engagement. Workshops include constructing exchange-traded funds, building electronic bond markets and the role of exchanges in bond markets, data commercialization, effective ways to enhance financial literacy, commodity derivative exchanges, increasing market liquidity, sustainable stock exchange initiative.
The conference sessions will be held at the JSE during the day time of 11 and 12 September. The seminar will start with a cocktail function at the Johannesburg Stock Exchange (JSE) for all delegates and speakers on the evening of 10 September, and a stockbroker networking session will in the afternoon of 11 September.
The detailed programme can be downloaded from the JSE website via the link BAFM Programme on this page.

New York Institute of Finance launches Nigerian links

Nigerian stockbrokers are to build their expertise under a working relationship between the New York Institute of Finance (NYIF) and the Chartered Institute of Stockbrokers (CIS) on capacity building, according to this story in Leadership newspaper.
Patrick Fitzgerald, Managing Director/CEO of NYIF visited the Nigerian Stock Exchange and said the two institutes have had several meetings and are close to concluding an agreement.
The NYIF, established 1922 is described as a global learning institute where professionals study, work and exchange ideas and information regarding financial products and also discuss legal and regulatory issues affecting the global financial market. It also produces leadership videos and training and Success television.
Ariyo Olushekun, President of CIS, said talks between CIS and NYIF started in 2009 when Nigeria’s bond market as being reactivated. CIS took 27 stockbrokers to NYIF for fixed-income and alternative-investment training. The relationship has since been revived and he says CIS will be the outpost for NYIF in Nigeria as well as in Africa. He anticipates a memorandum of understanding, which is in progress.