Archive for the 'Technology' Category

Strate’s CEO Monica Singer steps down to focus on blockchain

Monica Singer, the former CEO of South African central securities depository Strate, stepped down at the end of August 2017. Monica had been the project manager of Strate since its inception, and has led the organization for nearly 20 years. She will concentrate full time on blockchain.

Maria Vermaas, who has been Head of the Legal and Regulatory Division since the start of Strate, has been appointed as Interim CEO. The long-standing executive team will continue to drive strategic objectives, according to an announcement from Strate, which adds that Monica is leaving “to fulfil her dream of living in Cape Town and to pursue new opportunities”.

“Monica’s entrepreneurial spirit, together with her visionary leadership” drove the introduction of electronic settlement for South Africa’s financial markets. Strate is proud of “being a Conscious Company that creates shared value for all stakeholders” and globally recognized as one of the most progressive CSDs.

Monica says (in the statement): “I have always had a passion for innovation and technology that drives societal change. With the potential disruption that the financial markets may face, particularly with disruptive technologies like blockchain, I will continue to research to stay ahead of developments which may lead me to consulting on these topics.”

She has been key in several networks that share ideas internationally including as Vice President of the Africa & Middle East Depositories Association (AMEDA), over 18 years in the International Securities Services Association (ISSA), World Forum of CSDs (WFC) and Americas’ Central Securities Depositories Association (ACSDA).

Strate Chairman Rob Barrow, comments: “The Board, together with the Executive team and staff, would like to thank Monica for her contribution to Strate and the legacy that she has left behind. We would like to wish her all the best for her future endeavours.”

Full time in blockchain
According to this news story by Michael de Castillo on Coindesk, Monica is devoting her considerable energies “to dedicate her career to bringing blockchain to industries from finance and insurance to medicine and retail”.

Monica Singer: Blockchain is coming and its going to change the world (Photocredit: coindesk)

“In her first conversation with the media since her resignation, Singer explained how she believes the tech could help her finally cut out what she describes as ‘unnecessary middlemen.’

“Singer told CoinDesk: ‘I’m so in love with blockchain, that the only thing I’m doing, all the time, is telling the world, “Guys, wake up! This is coming, and this is going to change the world.”’ According to the story, Monica will use her global contacts to widen her interest beyond the financial sector. The article mentions ethereum startup ConsenSys and digital ledger startup Ripple among the “fintech” companies Monica is interested in working with.

She still believes CSDs can provide important services, even if blockchain means they will “not have a role to play” in the blockchain world. She is set to speak at the Sibos banking conference in October on blockchain in the cash and securities settlement space and at the World Federation of CSDs in Hong Kong in November.

It quotes her saying: “I love saying to people: ‘Give me a brief description of your industry.’ I can quickly tell them in which way that industry will be affected by this new, incredible technology. So, that’s what I need to do.

“I was the person who moved South Africa’s financial markets from paper to digital.. When I discovered blockchain, I thought this is exactly what we need in the world.”

Brief history of clearing and settlement in South Africa
Johannesburg Stock Exchange rang the final bell on 108 years of open-outcry trading on 7 June 1996. Most recently trading had been in a huge hall at the bottom of its then headquarters in Diagonal Street, so the noise of trading filled the whole building when the market got busy. From market open on 10 June all equity trading has been on the automated Johannesburg Equity Trading system. As volumes increased, stockbroker back offices talked about “how many feet of work do you have?” referring to the huge piles of share certificates and transfer forms stacked high on desks, while the motorcycle delivery drivers at the back of Diagonal Street and Kerk Street, Johannesburg, got ever busier.

Electronic clearing and settlement were urgently needed but the banks that dominate this aspect of capital markets had each invested in their own systems. They had further formed the Bond Market Association to create a self-regulating bond exchange in 1990 and had worked with the South African Reserve Bank the same year to form UNEXcor to set up an electronic settlement system using a CSD. The first fully electronic settlement through UNEXcor and the CSD (called CD Ltd) had been on 26 October 1995.

Monica, famous for long-term vision backed by unstoppable energy, was brought in to break the logjam and move the market forward in 1998. Gold-mining group Harmony was the first equity on the JSE to move to full dematerialization of securities in 1999 and the whole market followed in orderly stages.

According to a brochure by Strate a few years ago: “The transition to an efficient electronic-settlement system increased market activity and improved the international perception of the South African market by reducing settlement and operational risk in the market, increasing efficiency and ultimately reducing costs. Accordingly, by heightening investor appeal, Strate has enabled South Africa to compete effectively with other international markets and not just those of emerging markets.

“Since 2000, Strate has used the South African Financial Instruments Real-time Electronic Settlement system (SAFIRES), an adaptation of the Swiss securities settlement system (SECOM), operated by SIX SIS Ltd, to continuously provide investors with secure and efficient settlement of equities.”

UNEXcor merged with Strate in 2003 and as the platform became more aged, Strate began market consultation to replace the technology and move to a Securities Ownership Register for bonds.

Participants set up the Money Market Forum in 2002 for dematerialization of money-market securities and awarded the contract to do this to UNEXcor, which devolved to Strate after the merger. After extensive market consultation, Strate developed the business requirement and employed Tata Consultancy Services (TCS) to develop the code. Successful testing was completed on 1 October 2008 and Rand Merchant Bank issued the first electronic security to Strate via FirstRand Bank in November 2008. Electronic settlement of newly issued money market securities began in the second half of 2009.

The latest transformation was the switch to T+3 settlement across the South African capital market, carried out successfully on 11 July 2016 and profiled on this blog.

Computers quieter,faster than open outcry

Another floor of shouting traders has just closed in New York, after CME Group (named after Chicago Mercantile Exchange) closed its open outcry trading pits. The trading floor still continues in pits on various commodities in the Chicago building that houses the Chicago Board of Trade, in an approach that dates back to when the building opened in 1930, writes The Economist magazine this week.
The Chicago exchange only has 9 pits, down from 32 in 2007, and closed one trading floor in 2015 that used to be very crowded and busy. Like the rest of the hyperactive world securities and commodities markets that used to heave with life, emotion, despair, greed, fear, ambition, deception and many other human conditions, gradually the computers have taken over.
The magazine writes: “In the end it was not scandal or terrorism that undermined open outcry; it was efficiency. Computers turned out to be quicker, cheaper and more precise than humans”.
It notes that CME Group was quick to understand that most business was in interest rates, stockmarket indices and currencies, not in traditional commodities. It picked up good volumes and made economies of scale in trading and clearing and then bought up other exchanges that ran into problems. Volumes continue to climb and a tumultuous year of surprising votes in UK and US have seen a big spike in activity and volatility. It provided US and UK traders with a record December and record-breaking volumes on exchanges such as the CME.
The Chicago Board of Trade was formed in 1848 and moved in 1856 to make space for 122 new members.

Chicago Board of Trade building, the figure on top is the goddess Ceres (photo Wikipedia)

Rwanda to host 20th African Securities Association conference on 27-29 November

The Rwanda Stock Exchange (RSE) and the African Securities Exchanges Association (ASEA) will host the 20th Annual ASEA Conference in Kigali, Rwanda on 27-29 November. The ASEA annual conference is the flagship event for Africa’s capital markets and all those who work in them. This year’s theme is “The road to 2030: Making the African capital markets relevant to the real economy”.
Celestin Rwabukumba, RSE CEO, explained: “The conference will bring together more than 300 global and regional experts and stakeholders in capital markets, regulators, law firms and issuers, domestic, regional and international investors, rating agencies, portfolio and investment managers, government representatives, and technology providers to ask questions and address the big question of how African securities exchanges should become more effective and play a bigger role in mobilizing capital for African businesses that will drive our economies on the global economic stage.” He added it offers an opportunity for the East Africa Community (EAC) region to demonstrate how much can be achieved through integration of regional securities markets – the EAC is leading the way with an exciting capital markets integration programme as part of stronger regional economic links.
The gathering will also celebrate the RSE’s 5th birthday, it was formed in 2011. “It’s been an exciting 5 years for us. We have grown on all fronts and are increasing our numbers every year in terms of market participation, companies coming on board and technology. This will definitely be a good occasion,” Rwabukumba added.
There will also be scope for tourism and other enjoyment after the conference.

Kigali under Vision 2020 (photo: www.TopBoxDesign.com)

Kigali under Vision 2020 (photo: www.TopBoxDesign.com)

Korea Exchange success story with SMEs

This article summarizes a talk by Honghee Shin, Executive Director of Korea Exchange, at the World Exchanges Congress in March 2016, which highlighted the KRX experience and lessons to be learned.
Building an exchange environment for small and medium-size enterprises and hi-tech companies to raise capital on a securities exchange requires strategic coordination and support by many different government agencies. The Korean Exchange (KRX) has grown to be the world’s third biggest stock exchange for listing and trading SMEs by creating a virtuous cycle in each stage of growth generates cash-flows which in turn fuel other stages.

The original Korea Stock Exchange was set up in 1956 and KRX evolved in 2005 to offer comprehensive front-to-end services. It has KSD (depository) as a 70% owned-subsidiary and also owns 76% of >koscom, a technology subsidiary. It offers a full range of products, trading and market data, as well as the central counterparty (CCP) and it is a self-regulatory organization performing its own market surveillance.

In 2015, KRX had 1,961 listed companies, 8th highest in the world, and traded $1,929 billion of securities, achieving the 10th highest level globally, according to World Federation of Exchanges. The main board is called KOSPI market and it has a futures and options market that was rated 12th in the world.

koreaSMEs160719_diagramvirtuouscycle

It has two boards for SMEs:
• KOSDAQ was launched in 1996, and provides funds for well-established SMEs and “technology-savvy” area including information technology (IT), bio technology (BT) and cultural technology (CT).
• KONEX was launched in 2013 exclusively for SMEs and start-up companies to support their early-stage financing and development through the capital market.

The ratio of market capitalization compared to GDP is higher at KOSDAQ in Korea than any other major SME markets in Asia. In global terms it ranks third among world SME markets for market capitalization and daily trading volume and 4th with 1,061 listed companies. Technology has been the main driver of the market – IT, BT and CT companies made up 68% of the market in 2015, up from 63% in 2005. In particular, biotech has grown its share 4 times and forms 17% of the total market.

KONEX had 24 companies in the third quarter of 2013, but increased that 5 times to 128 listed companies by the end of 2015. Market capitalization is up 8x, and daily average trading value is up 4x over the period. It offers a fast-track “ladder system” which 14 companies have scaled to transfer from KONEX to KOSDAQ.

Much of the success of the exchange can be attributed to the coordinated efforts of Government, the exchange and other stakeholders.

koreaSMEs160719_diagramstakeholders

Key supports from Government include:
1. Tax incentives
– Corporate tax exemption for investing in newly-listed shares(within 2 years)
2. De-regulation for M&A
– Between KONEX and unlisted stocks
– Relieving corporate governance structure
– Waiver of obligation on appointment of external director and full-time auditor
3. Eased accounting standard application
– Exemption of K-IFRS accounting standard.

Concessions offered by KRX are:
1. Relaxation of Listing Requirements
– Lightened listing requirements for corporations with 20% of total investment from angel investors and venture capital
2. Modified disclosure obligation
– Reduction of timely-disclosure
– Exemption of quarter and semi-annual reports
– Mitigation of obligation to submit registration of securities
3. Minimum deposit requirement for investors adjusted from $300,000 to $100,000.

The exchange brings together companies from diversified industries, with a convergence of the high-tech companies that are the driving force of the economy. There is a solid investor base, including active retail investors with ample liquidity, and the exchange offers them a new way to find investment opportunities. The KRX itself offers relaxed listing requirements and less disclosure and maintenance costs. Government offers supportive policies towards gradual de-regulation as well as tax incentives and benefits.

The 2 Korean boards, KOSDAQ and KONEX play a critical role in a virtuous circle of growth and investment. Typically venture capital (VC), angel investors and government (through policies as well as funds) invests into start-up companies. These grow to list on KONEX, where professional investors tend to invest in what re now start-up SME companies, and VC investors can take some funds out to re-invest into fresh start-ups. As the company grows further, it can more to KOSDAQ where often non-professional investors may be interested in what have evolved into established SMEs, and the VCs can take more funds to reinvest into the earlier growth stages. The virtuous circle means that each stage adds momentum to the other stages, fuelling further growth – for the diagram see above.

Tech will drive African IPOs

Telecoms, e-commerce and technology will be the driving force behind many of Africa’s coming initial public share offers (IPOs) as the continent’s telecom, media and technology (TMT) sector continues to grow fast. Ben Nice, editor of specialist news provider TMT Finance, says in a press release: “Despite global volatility, regional macroeconomic uncertainty, and a rout on commodity prices, recent forecasts are predicting that the next 12 months could see a rebound with IPOs set to reach their highest levels in Africa since 2010, and several TMT companies looking likely to float in 2016 and 2017.

Africa Internet Group (AIG) – which runs the Jumia ecommerce brand – just raised a further EUR75 million ($84m) from Orange, in addition to the recent EUR300m ($338m) from investors including Goldman Sachs, MTN and Rocket Internet. The company is the first real African tech unicorn and we understand that it will be targeting an IPO (initial public offer) by 2017, and is also on the hunt for a new CFO. Orange Egypt (formerly Mobinil) is also preparing to list shares in Cairo to fund US$3.2bn investment into infrastructure, and IHS Towers, the Lagos-based mobile tower operator, is also expected to float over the next 12 to 24 months.”

Other African tech which may bring IPOs in the near and medium term include: Dark Fibre Africa of South Africa, Nigerian payment services provider InterSwitch, Africa’s largest independent fibre operator Liquid Telecom, and South African media company Primedia. According to a previous news story, Interswitch may scoop the prize (and publicity) as Africa’s first tech unicorn, as it is working on a London and Lagos IPO for Q2-Q4 and could be worth at or close to $1bn.

AIG, which was founded in 2012 and now operates in 23 countries with 71 companies, is said to be planning an IPO by 2017. Jumia e-commerce is present in 11 countries and linked to online and mobile consumer services such as Kaymu (shopping), hellofood (food delivery), Jovago (hotel booking) and classified ads Vendito (general merchandise), Lamudi (real estate), Everjobs (jobs) and Carmudi (vehicles).

Orange Egypt, rebranded from Mobinil in March, is preparing an IPO for the Egyptian Exchange, with an offering of up to 20% of the shares. It has 33.4m customers and is Egypt’s second biggest operator after Vodafone. In March it announced Orange intended to invest EGP2.5bn ($281.5m) into upgrading networks and services.

IHS Towers, based in Lagos and owner of over 23,300 mobile phone towers in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda, is expected to float shares within 12-24 months. In December, chief executive and founder Issam Darwish said it would be “the biggest IPO ever in Africa”.

Next week on 14 June, over 200 industry and finance executives, including African telecom CEOs, private equity investors and leading international bankers and advisers, are meeting in London to talk investments at the 7th annual TMT Finance & Investment Africa 2016 conference. Sessions include: Africa telecom leadership; TMT M&A; broadband investment; mobile towers; raising finance for Africa TMT; datacentres Africa; private equity Africa; mobile money and M-Commerce; and digital Africa. Speakers include leaders from Millicom, Google, IHS, Helios, Eaton Towers, Avanti Communications, BNP Paribas, Citi, UBS, Standard Bank, IFC, the World Bank, TransferTo, Icolo, Bima, Dentons and Hardiman Telecommunications.

Tech wizards to IPO (from www.africainternetgroup.com)

Tech wizards to IPO (from www.africainternetgroup.com)

DFIs hunt long-term gains in African financial services

Highlights of the African Financial Services Investment Conference AFSIC 2016, held in London 5-6 May.

Development finance institutions have made $6.5bn of investments in financial institutions. Here are examples of what they are doing:

Proparco, Sophie le Roy, Head of Banking and Capital Markets: “We are 50% invested in Africa and financial services and banking make up 50% of our portfolio. Our aim is to catalyze private investors, we show you can invest and make profit. We have a careful process, we helped create banks in Mauritania, Benin and DRC and they still exist.”

BIO (Belgium), Carole Maman, Chief Investment Officer: “We have Eur600m under management, Africa is about 40% of portfolio, most of it is invested in financial institutions. We work on smaller transactions, our sweet spot is from EUR 6m+. We work mostly with tier 2 financial institution through microfinance, equity and loans. In countries such as Ethiopia and DRC where many people are unbanked, there will be lots of opportunities.”

FMO the Dutch development bank, Bas Rekvelt, Manager Financial Institutions Africa: “We have been investing in developing countries for 45 years, we have been able to catalyze EUR 1bn into the markets last year. We try to ensure the markets where we work are attractive enough for the private sector. Our portfolio is 25% Africa, spread between financial institutions, energy and agriculture.”

SIDA, the Swedish International Development Cooperation Agency, Christopher Onajin, Loan and Guarantees Partnerships & Innovation: “Our role is to give money and guarantees, covering credit risk and market risk. Our Africa portfolio is $135m, and we encourage banks, microfinance and others to push them to lend to under-served sectors.”

DEG – German Development and investment company, Peter Onyango, Investment Manager, Financial Institutions Group, Africa: “We have about 50 years of emerging markets expertise and Africa is a particular focus. We see more countries becoming bankable. Internally our risk appetite is improving, we see opportunities in more countries. We see opportunities in growing insurance and the nascent leasing markets, which will improve. There is a lot more in fintech. A setback for Africa is an opportune time for long-term investors, including DFIs and private investors.”

Bangladesh Central Bank hit for $951m, its cybersecurity relied on second-hand, $10 switches

This story is not strictly capital markets, but a useful cautionary tale

REUTERS, 21 APRIL 2016
Bangladesh’s central bank was vulnerable to hackers because it did not have a firewall and used second-hand, $10 switches to network computers connected to the SWIFT global payment network, an investigator into one of the world’s biggest cyber heists said.
The shortcomings made it easier for hackers to break into the Bangladesh Bank system earlier this year and attempt to siphon off nearly $1 billion using the bank’s SWIFT credentials, said Mohammad Shah Alam, head of the Forensic Training Institute of the Bangladesh police’s criminal investigation department.
“It could be difficult to hack if there was a firewall,” Alam said in an interview.
The lack of sophisticated switches, which can cost several hundred dollars or more, also means it is difficult for investigators to figure out what the hackers did and where they might have been based, he added.
Experts in bank security said that the findings described by Alam were disturbing.
“You are talking about an organization that has access to billions of dollars and they are not taking even the most basic security precautions,” said Jeff Wichman, a consultant with cyber firm Optiv.
Tom Kellermann, a former member of the World Bank security team, said that the security shortcomings described by Alam were “egregious,” and that he believed there were “a handful” of central banks in developing countries that were equally insecure.
Kellermann, now chief executive of investment firm Strategic Cyber Ventures LLC, said that some banks fail to adequately protect their networks because they focus security budgets on physically defending their facilities.

Police blame bank, SWIFT
Cyber criminals broke into Bangladesh Bank’s system and in early February tried to make fraudulent transfers totaling $951 million from its account at the Federal Reserve Bank of New York.
Most of the payments were blocked, but $81 million was routed to accounts in the Philippines and diverted to casinos there. Most of those funds remain missing.
The police believe that both the bank and SWIFT should take the blame for the oversight, Alam said in an interview.
“It was their responsibility to point it out but we haven’t found any evidence that they advised before the heist,” he said, referring to SWIFT.
A spokeswoman for Brussels-based SWIFT declined comment.
SWIFT has previously said the attack was related to an internal operational issue at Bangladesh Bank and that SWIFT’s core messaging services were not compromised.
A spokesman for Bangladesh Bank said SWIFT officials advised the bank to upgrade the switches only when their system engineers from Malaysia visited after the heist.
“There might have been a deficiency in the system in the SWIFT room,” said the spokesman, Subhankar Saha, confirming that the switch was old and needed to be upgraded.
“Two (SWIFT) engineers came and visited the bank after the heist and suggested to upgrade the system,” Saha said.

Global whodunnit
The heist’s masterminds have yet to be identified.
Bangladesh police said earlier this week they had identified 20 foreigners involved in the heist but they appear to be people who received some of the payments, rather than those who initially stole the money.
Bangladesh Bank has about 5,000 computers used by officials in different departments, Alam said.
The SWIFT room is roughly 12 feet by 8 feet, a window-less office located on the eight floor of the bank’s annex building in Dhaka. There are four servers and four monitors in the room.
All transactions from the previous day are automatically printed on a printer in the room.
The SWIFT facility should have been walled off from the rest of the network. That could have been done if the bank had used the more expensive, “managed” switches, which allow engineers to create separate networks, said Alam, whose institute includes a cyber-crime division.
Moreover, considering the importance of the room, the bank should have deployed staff to monitor activity round the clock, including weekends and holidays, he said.
(Additional reporting by Jim Finkle in BOSTON; Editing by Paritosh Bansal, Raju Gopalakrishnan and Alan Crosby).

$81m to Manila casinos
If you want to read more about how the missing $81m ended up in casinos and with junket operators in the Philippines, brought in by 2 Chinese residents of Manila and Beijing, Fortune takes up the story.

 

Photo credit: www.dhakatribune.com

Photo credit: www.dhakatribune.com

Sudan’s Khartoum Stock Exchange launches electronic trading system

Sudan’s Khartoum Stock Exchange inaugurated its electronic trading system on 24 March. The system is funded by the African Development Bank as part of its $34.8 million Public Financial and Macroeconomic Management (PFM) project. The bank says in a press release: “The e-trading system will be instrumental in promoting rapid development of the Khartoum Stock Exchange Market, which is a central element in the country’s financial market.”

According to a report on Sudan News Agency, Dr. Azhari Al-Tayib Al-Faki Director-General of KSE, said the launch was for the second phase of the trading system, financed by a $400,000 AfDB grant to cover system development and capacity building. He says it will reactive the market operations and allow remote access. He adds the update is by a company called FMH International and adds that it did a first phase of the project in 2012.

Abdul Kamara, Resident Representative of the AfDB in Sudan, said electronic trade is increasingly important. He stressed that the Bank’s support emanates from the considerable advantages of trading electronically, which reduces the risk associated with physical cash transactions, lowers transaction costs and saves time. He also noted the potential of e-trading to improve transparency, flow of information and enhance domestic resource mobilization, such as Sukuk bonds on which Sudan heavily depends on for financing infrastructure and service delivery. He assured the government of the Bank’s continued assistance in the area of public financial management and enhancing accountability in the use of public resources.

The market was previously open for 1 hour a day Sunday to Thursday. The KSE has 66 listed companies, including 25 banks, 8 insurance companies and 11 investment and development companies. The primary market was launched in 1994 and In 2012 a total of $113m worth of shares were issued. There was also primary market issues for each Government Musharaka Certificates (Shahama), Government Investment Funds (Sukuks) and investment fund sukuks, bringing the total value of primary market issues in 2012 to $1.08 billion.

Other parts of the PFM project aim to create a “platform for establishing electronic public financial systems, which will ultimately form basis for the transition of electronic governance and administration of public resources. Other complementary systems that are being developed by the PFM include an Integrated Financial Management and Information System (IFMIS). This will integrate Sudan’s public financial management systems with other systems in line ministries, through a customized IT infrastructure that will enhance electronic transactions, information flow and interaction across ministries,” according to the AfDB press release.

khartoumstockexchange_sudan-afdb-03-16

Will Interswitch be Africa’s first $1bn tech “unicorn”?

Nigeria’s digital payments and payment card giant Interswitch Ltd could become Africa’s first tech “unicorn” or technology company valued at over $1 billion. Private equity firm Helios Investment Partners (majority owner) is preparing to sell and Citigroup Inc are hired to handle the sale, which could involve an initial public offer (IPO) and listing on the London and Lagos stock exchanges.
Website TechCrunch reported that Interswitch has 32 million customers for its “Verve” chip-and-PIN cards and its Quickteller digital payment app processed $2.4 billion in transactions. It processes most of Nigeria’s electronic bank, government and corporate transactions.
A subsequent report from Bloomberg says Helios paid $92 million for a 52% stake in 2010.
Techcrunch contributor Jake Bright (Twitter @JakeRBright, co-author of The Next Africa: An Emerging Continent Becomes a Global Powerhouse) reports that Interswitch CEO and founder Mitchell Elegbe told him no final decision has yet been made and they are also mulling the option of a trade sale.

Mitchell Elegbe CEO Interswitch (from www.naij.com)

Mitchell Elegbe CEO Interswitch (from www.naij.com)


Bright’s Techcrunch report also cites Eghosa Omoigui, Managing Partner of EchoVC, a Silicon Valley fund investing in African start-ups: “They’ve already selected the ibankers and will likely go public sometime between Q2 to Q4 at (or close to) a $1 billion dollar valuation–roughly two times revenues,”.
Bright points out that there are strong tech opportunities for ventures focused on digital commerce and payments, and cites research by Crunchbase that VC investors put $400m into African consumer goods, digital content and fintech-oriented startups. Helios and Adlevo Capital back ventures such as MallforAfrica (e-commerce) and Paga (payments).
Although Kenya has the spotlight still, because of the runaway success of Safaricom’s M-PESA product, which has 13m customers and generated $300m in revenues for Safaricom in 2014, consumers in Nigeria are projected to generate $75bn in e-commerce revenue by 2020. See this McKinsey report on future consumer spending trends in a youth-driven market.
Interswitch – motto “bills aren’t fun but payments solutions can be” – is still building digital finance market share in Nigeria and in 2014 bought Kenya’s Paynet and also has operations in Uganda, Tanzania and Gambia. The IPO could support plans to expand into more countries – Cameroon, Democratic Republic of Congo and Ghana were mentioned in an earlier Bloomberg article.
Elegbe, age 43 years, founded Interswitch in 2002.
Bloomberg reports that if this goes ahead, it will be one of the few private equity exits at a valuation of over $1 billion. It also cites Bain Capital’s $1.2bn exit from South African retailer Edcon’s private label store cars in 2012, sold to Barclays Absa unit. It says increasing use of e-commerce worldwide makes payments-processing industry a “structural growth market”.
The London Stock Exchange has more than 120 African listings.
In its 2010 press release, Helios described the company: InterSwitch provides shared, integrated message broker solutions for financial transactions, eCommerce, telecoms value-added services, eBilling, payment collections, 2 and also administers Verve, the leading card scheme in Nigeria. The Verve card, which is currently issued by 16 out of the 24 banks in Nigeria, is the first and only chip-and-pin card accepted across multiple payment channels including Automated Teller Machine (“ATMs”), Point of Sale (“POS”) terminals, online, mobile and at banks. InterSwitch has been at the forefront of the development and growth of the epayment sector in Nigeria which is evidenced by its unique position of being the only switching and processing company connected to all banks in the country as well as over 10,000 ATMs and 11,000 POS terminals. In addition, InterSwitch is the leading processor for Mastercard and the market leader in merchant acquiring/POS, a segment which is still emerging and has potential for tremendous growth in Nigeria. Babatunde Soyoye, Managing Partner and Co-founder of Helios added: “InterSwitch is a Nigerian success story having been led by a superb management team and benefiting from the foresight, innovation and support of its founding shareholders, and a supportive regulator in the Central Bank Nigeria.”

Global community heading to World Exchange Congress 22-23 March

Momentum building fast ahead of the key event for securities exchanges worldwide, the World Exchanges Congress, now in its 11th year and back in central London from 22-23 March.

This is the key gathering where more than 300 members of the global exchange community get together from all continents to share trends and to hear from experts and bourse leaders. Topics of interest in the fast-changing world of established and emerging trading venues regulated exchanges include “new customers, new revenues and new partnerships”.

For more information, check the website here.

The World Exchanges Congress was launched in London in 2005 and has been hosted in Istanbul, Madrid, Doha, Monaco, Dubai and Barcelona. CEOs from virtually every exchange and trading venue in the world have attended. In 2010, the event expanded to look at technology opportunities and challenges and there is strong participation from chief technology officers (CTOs) and other top executives with a focus on trends and innovations.

In 2016, the congress continues to be seen as the unofficial AGM of exchanges and it is the most significant date on every exchange executive’s diary. It gives bourse leaders the opportunity to harness the latest innovations, overcome their biggest challenges and be inspired to drive their organisations forward.

The gathering will focus on the most critical future trends affecting exchanges and changing the exchange landscape, including cyber-security, crowd-funding, bitcoin, big data, crypto-currency and post-trade automation. Core topics running through the programme are the growth of financial centres, market integrity and finding ways to succeed through innovation.

Confirmed speakers are CEOs and other leaders from securities exchanges and other trading venues around the world as well as from the World Federation of Exchanges. They will explain their successes and challenges driving into new partnerships and revenue opportunities including commodities, derivatives and FX, regional expansion, the trading landscape under Europe’s MiFID II directive, opportunities for automation, over-the counter (OTC) trading on exchanges, distributed ledger/block chains, attracting more listings, crowdfunding platforms, data and index revenues for exchanges, post-trade models, innovation pitches, latest developments in central clearing, cyber security and finding new customers and new partnerships.

The conference has a strong tradition of formal and informal networking. It continues to be the key place where exchanges come to meet their peers and colleagues, benchmark their organizations and share ideas. Interactive exchange-led roundtables in 2016 mean that this year’s event will be no different.

For more details and to book your attendance, please head to the conference website.

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