Stock Exchanges News
- Dar es Salaam Africa’s top stock exchange to 31 Jan 7 February 2015
Tanzania’s Dar es Salaam Stock Exchange topped the performance list for the 12 months to 31 January for USD investors, according to the data collected by Ryan Hoover’s excellent Investing in Africa website. It managed a 27% climb, including 3.8% in January. That beat the S&P 500 index which managed a strong 11.9%, despite increasing worries of pending bear markets and falling back to 30 Jan, although it has since gained.
Other African bourses which beat the S&P included Uganda Securities Exchange (up 18.3%), South Africa’s JSE (up 17.1%), Nairobi Securities Exchange (16.1%) and Namibian Stock Exchange (up 15%).
Hardly surprisingly, two of the worst performers were hit by the crashing oil price, including heavy falls in the currency compared to the soaraway USD. Nigeria was down 36.9% including 16.6% in January and Ghana down 32.1% including 8.3% in January. Weakness in the euro no doubt contributed to the poor performance of the BRVM, as the CFA currency is linked to the euro.
This picture, created by website AfricanBusinessCentral gives “volume”, which is normally defined as the number of shares traded, although I could not find the source data for this infographic so we welcome any clarifications. Better indications of exchange liquidity are often the value of shares traded and the number of transactions.
- JSE number of equity trades up 19% in 2014, scores daily records 19 January 2015
South Africa’s Johannesburg Stock Exchange (JSE) saw the number of equity trades soar 19% for the year 2014, compared to 2013. It also broke records for the highest daily value traded on 18 Dec when R53.7 billion ($4.6bn) worth of equities traded, and it hit the highest number of daily trades was 395,969 trades on 16 Oct.
There were a total of 24 new listings for the year, which added R86bn in market capitalization, including a record 8 new listings in December. In the same month, the value of trades reached a monthly record of R345.5bn, a 45% increase compared to trading in Dec 2013. In 2014, the net inflow from foreigner investors was R13.4bn.
The JSE Equity Derivatives Market, which provides traders and private investors with a platform for trading futures, exchange-traded CFDs (contracts for difference), options and other derivative instruments, saw value traded up 18% to R6 trillion. This was largely driven by the JSE flagship equity derivative futures products, index futures and single-stock futures (SSFs), which both increased by 19%.
Growth for 2015
Donna Oosthuyse, Director Capital Markets at the JSE, comments in a press release (not yet available at www.jse.co.za): “Going into 2015, a key focus for us will be to sustain these positive growth levels for the Equity and Equity Derivatives Markets. For the Equity Market our priority will be to ensure that the JSE remains an attractive venue for participation in the capital markets. For the Equity Derivatives Markets, our key focus will be to remain responsive to the needs of the market by offering investors with innovative products that provide global exposure and an ability to weather the prevailing economic environment.”
Looking back on a busy year and particularly December, she said: “The JSE Equity Market is the bedrock of the exchange and we are pleased with the performance of this segment of the market for the year, driven mainly by renewed positive US economic sentiment and a rapid decline in oil prices.
“The performance of the Equity Derivatives Market is also pleasing as it signals to the improving appetite of local and foreign investors to participate in this segment of our capital markets.”
Oosthuyse added that foreign participation in index futures had increased compared to 2013, from 31% to 37%: “This is a promising development as any increase in foreign participation can only breed more liquidity and galvanize our status as a first world exchange.”
The Johannesburg Stock Exchange has operated as a market place for trading financial products for 125 years and is one of the top 20 exchanges in the world in terms of market capitalization. It offers a fully electronic, efficient, secure market with world class regulation, trading and clearing systems, settlement assurance and risk management. It is a member of the World Federation of Exchanges (WFE).
- “Jeff” Otieno Odundo new head for Nairobi Securities Exchange 9 January 2015
Geoffrey “Jeff” Otieno Odundo will be the Chief Executive of the Nairobi Securities Exchange (NSE), effective from 1 March 2015. The announcement was made yesterday (8 Jan) by the NSE Board of Directors.
Mr. Odundo is an accomplished investment banker with 22 years of experience in the financial sector experience including 16 years in the capital markets in various senior roles in asset management, corporate finance and stock broking, according to a press statement.
Mr. Odundo has been Managing Director and CEO of Kingdom Securities Limited from June 2009. According to the statement: “During his tenure at Kingdom Securities Limited he has overseen the growth of the firm to become one of the leading trading participants of the NSE and has been instrumental in key listings on the NSE as well as other corporate finance transactions.”
According to a report in Business Daily NSE chairman Eddy Njoroge said the investment banker was appointed after a thorough vetting process: “The board together with KPMG considered numerous applications from various applicants of the highest standards”. He said Mr. Odundo’s leadership skills, experience and wealth of knowledge would be instrumental in driving the NSE’s strategic plan.
Capital FM quoted Mr Odundo as saying: “I am very confident that the future of the NSE as a key driver of Kenya’s economy is very bright as we deepen the current products and diversify into new product offering.”
He takes over from Peter Mwangi who left in November after serving two 3-year terms as CEO and became CEO of Old Mutual Kenya. Mr Njoroge also thanked Andrew Wachira, the Head of Compliance and Legal, who has been the Acting Chief Executive for the transition.
Odundo has served as a Non-Executive Director of the NSE representing Trading Participants from March 2012. During this time, he has been the Chairman of the NSE Technology Committee and has also been a member of the NSE Finance and Manpower Committee and the NSE Listings and Admissions Committee.
Before moving to Kingdom Securities he was instrumental in setting up Co-op trust Investment Services and Co-op Consultancy Services Limited. Other roles include as a Director and Secretary of the Kenya Association of Stockbrokers and Investment Banks (KASIB), “a role in which he was instrumental in improving the service delivery and standards on the operations of Capital Markets intermediaries.” According to the statement.
Qualifications include a Bachelors of Arts Degree in Mathematics and Economics from Egerton University in Kenya (main campus Njoro near Nakuru) and a Masters in Strategic Management from the United States International University (Nairobi). He is married with 3 children and enjoys soccer, golf and Formula One. He is also a dedicated member of the St. Paul’s University Chapel Lectors Group and founder of Ame Foundation to support the less fortunate.
- Rwanda Stock Exchange closer to Nasdaq X-stream automated trading 5 January 2015
Rwanda Stock Exchange (RSE) says it is getting closer to introducing an Automated Trading System using trading technology from Nasdaq OMX. It will also link its trading infrastructure to the Central Securities Depository (CSD) and Real Time Gross Settlement System (RTGS) at the National Bank of Rwanda.
In March 2014, there was a report in The East African that the RSE was aiming to use the Nasdaq X-stream system installed at the East African Exchange (EAX) regional commodity market. The latest news from the East African Securities Exchanges Association EASEA press communiqué (available here) from the 24th meeting in Rwanda on 26-27 November was: “The RSE is in the final stages of automation of its trading system”.
Nasdaq describes X-stream as “a flexible, out-of-the-box solution trading multiple asset classes simultaneously on a single platform” on its website. It says X-stream is “the world’s most widely deployed matching technology” among market operators and is deployed in over 30 exchanges globally.
According to the March story in The East African: “John Rwangombwa, the governor of the National Bank of Rwanda, told Rwanda Today that though electronic trading had been delayed due to the heavy financial outlay required, RSE and EAX are now in advanced stages of sharing the NASDAQ system. .. We have been working on our side as a central bank to link the central securities depository. In the course of this year —in three or four months — automatic trading will be up and running.”
The report added: “While trade volumes on the RSE have been steadily increasing, its current manual trading platform makes it uncompetitive in particular among offshore investors.”
The RSE also reported that the bond market is becoming more “vibrant”, with quarterly issues by the Government of Rwanda. This was after work by a team made up of Capital Market Authority (CMA), Rwanda Stock Exchange (RSE), Central Bank of Rwanda and the Ministry of Finance and Economic Planning.
East African Exchange
The EAX was launched on 3 July 2014 by His Excellency President Uhuru Kenyatta of Kenya. It had been established by Tony O. Elumelu, CON, of Heirs Holdings, Nicolas Berggruen of Berggruen Holdings, Dr. Jendayi Frazer of 50 Ventures and Rwandan investment company Ngali Holdings. Acccording to a press release: “the EAX is a commodity exchange that aims to increase regional market efficiency and give the growing population, particularly smallholder farmers, better access to commercial markets.
“EAX will use NASDAQ’s OMX X-Stream trading platform for electronic trading and warehouse receipts so farmers can deposit their produce into EAX certified warehouses and access its services.
“At the formal launch, Mr. Elumelu said: ‘The EAX showcases our desire to identify far reaching investment opportunities, while ensuring that most of the value-adding aspects of Africa’s resource wealth stay on our continent. Africa must move toward greater self-sufficiency with private investment and strategic partnerships, just as we have done at EAX through our partnership with NASDAQ.’
“Nicolas Berggruen said: ‘EAX is complementing the EAC’s goal of regional economic integration, and putting in place a world-class exchange to create a globally competitive market for Africa’s commodities.’ EAX’s goal is to facilitate trade across all five East African Community member states. EAX is wholly owned by Africa Exchange Holdings, Ltd. (AFEX). EAX in Rwanda is additionally owned by local investment company Ngali Holdings.”
According to an earlier story on AFEX and its plans in Nigeria, Jendayi Frazer was key in U.S.-Africa policy for nearly 10 years and U.S. Assistant Secretary of State for African Affairs (2005-2009). Nicholas Berggruen has a charitable trust which funds the investment arm to take “a long-term, patient capital value-oriented approach”.
A story written in New York Times in March 2014 described “A commodity exchange, with its dozen terminals and state-of-the-art software provided by Nasdaq, held its first six auctions over the past year — a fledgling venture, but the kind that helps explain how a nation with no oil, natural gas or other major natural resources has managed to grow at such a rapid clip in recent years.
For 2104 photos of the Rwanda Stock Exchange and the East African Exchange see the New York Times website here.
- Nairobi securities exchange prepares for derivatives market launch 30 December 2014
The Nairobi Securities Exchange is pushing ahead with plans to launch a derivatives market, including preparing product and contract specifications, and public education and stakeholder engagement meetings.
This follows the news on 19 Dec that the Capital Markets Authority granted NSE a provisional licence to set up and operate a derivatives exchange and approved the NSE’s Derivatives Exchange Rules and related documentation.
According to a press release put out by the NSE, acting Chief Executive Andrew Wachira said: “The NSE will now establish a globally competitive derivatives exchange that will enable spot and futures trading of multi-asset classes including equities, currency, interest rate products as well as varied forms of agricultural commodities contracts. The exchange has invested in the development of the derivatives market to ensure that it will meet global standards including mechanisms for trading, clearing and settlement of the instruments traded.”
NSE’s derivatives market is modelled on the derivatives market at the Johannesburg Stock Exchange (JSE), which offers trading in futures and options on equities, bonds, indices, interest rates, currencies and commodities.
The latest move is in line with the strategic plan of the NSE. According to a report on Bloomberg earlier this year in February this envisages market capitalization soaring fourfold to KES 7.2 trillion ($79 billion) by 2023 from KES1.85 trillion.
NSE Chairman Eddy Njoroge noted in the press release: “Derivatives are among the most affordable and convenient means companies can cushion themselves against interest-rate fluctuations, exchange-rate volatility and commodity prices. Derivatives also boost liquidity in the underlying assets. The establishment of a derivatives market is a step towards growing the NSE brand and shareholder value and is also in line with Kenya’s Vision 2030 of deepening our Capital Markets and making Nairobi the financial services hub of East Africa.”
According to Bloomberg, a system for trading derivatives has already been installed. The law to allow creation of the futures market was passed in Dec 2013 and rules were submitted for approval by mid-February.
“Derivatives” get their name because their value is derived from another asset class such as a share, a physical commodity or an index. The JSE was ranked the 6th largest exchange by the number of single stock futures traded and 9th by the number of currency derivatives traded in 2012 in the World Federation of Exchanges Annual Derivatives Market Survey, according to the press release.
- 4 priorities from new head of African stock exchanges 28 November 2014
The new President of the African Securities Exchanges Association (ASEA) put forward 4 strategic objectives for the member bourses. Oscar Onyema, CEO of the Nigerian Stock Exchange, was elected President after outstanding leadership by Sunil Benimadhu, Chief Executive of the Stock Exchange of Mauritius.
According to a news report in Nigeria’s This Day, Onyema said the vision is to support the effective mobilization of capital for economic development. The new executive committee to lead African securities exchanges will focus on
• Strengthen ASEA’s governance, financial and reporting framework
• Promote the sustainable development of African capital markets
• Facilitate an increase in market access at the regional level, and promote cross-listing among African exchanges
• Align the goals of African capital markets with those of the African Development Bank (AfDB).
Onyema said: “I am honoured to be elected president of ASEA which is the largest platform for Africa’s stock, futures and options exchanges. I would like to thank the outgoing Executive Committee led by Mr. Benimadhu for their stewardship of the Association over the last two years, and I look forward to working with ASEA members, our global counterparts and regulators to contribute to the association’s rich legacy, as well as to promoting our markets in a broad range of areas”.
He was elected this week at the Executive Committee meeting of ASEA after its 18th annual general meeting held in Diani, Kenya.
Exchanges and regional integration
According to this press release from Nairobi Securities Exchange, William Ruto Deputy President of Kenya opened the ASEA flagship conference: “Well-established capital markets can help African countries lessen vulnerability of their economies to external shocks, by locally marshalling funds through instruments such as bonds and reducing currency and duration mismatches.
“The exchanges have continued to foster regional integration by allowing cross-border capital raising initiatives such as public offers, bond issues and cross-listing of stocks”. He encouraged Kenyans to keep saving and to do this using the capital markets.
Benimadhu, the out-going ASEA president, welcomed the new president and committee members: “We look forward to ASEA’s continuing progress as it seeks to enhance the global competitiveness of member exchanges”.
Open up, urges investor
Allan Thomson, managing director of Dreadnought Capital, based in Johannesburg, South Africa, was reported in Kenya’s Daily Nation that opening up the markets to foreign investors would bring in much needed capital and training for the local markets: “I have respect for regulators in Africa and what they are trying to do. But it is worrying. African capital markets suffer from too much protectionism and stringent rules. The fact is that protected and inaccessible markets remain small.”
He added that membership at most capital markets was expensive, which kept away potential investors: “I once approached a securities exchange in Africa and was told to pay $1 million to become a member yet they were only five. I suggest a zero membership fee because investors bring in skills and capital,” he added.
- 9 reasons Africa tops investment agendas 28 November 2014
Here are 9 reasons why Africa is topping long-term investors’ agenda. According to press releases Eddy Njoroge, Chairman of the Nairobi Securities Exchange, told this week’s African Securities Exchanges Association conference in Kenya they are:
1. Recent research by economists indicates that 9 of the 20 fastest-growing economies are in Africa.
2. A recent report by Deloitte states that Africa’s economy will grow from $1.1 trillion to $3.9trn in the next 5 years.
3. The value of exports from Africa has risen from $170 billion in the late 90’s to $800bn last year. Africa is the only continent to have a trade surplus with China which would probably explain why several Chinese firms are setting up shop on the continent.
4. According to the African Development Bank, Foreign Direct Investment (FDI) into African economies will reach a record $80bn this year, with most of the money being directed to countries without natural resources but which nevertheless present attractive opportunities in other diverse sectors.
5. Today, Africa is the second most populous continent on earth with a current estimated population of 1.12bn. The Washington-based Population Research Bureau estimates that this population would more than double to 2.4 bn by 2050, with sub-Saharan Africa making up a headcount of 2.2bn.
6. Currently, the African middle class is estimated at 123 million with a projected rise to 1.1bn by 2060. Investor and philanthropist George Soros has termed this demographic shift as “the world’s fastest growing middle class.”
7. Infrastructure has played key part in Africa’s recent economic transformation and will need to play an even greater role if the continent’s development targets are to be realised. Africa’s largest infrastructure deficit is to be found in the power sector. The 48 countries of Sub-Saharan Africa less South Africa (with a combined population of about 780m people) generate roughly the same amount of power as Norway (with a population of 5m).
8. It is estimated that Africa’s infrastructural investment requirement will be $38bn per year and a further $37bn for operations and maintenance- an overall price tag of $75bn per annum. This translates into some 12% of Africa’s GDP. There is currently a funding gap of US$35bn per year.
Njoroge said Africa’s securities exchanges are key: “The conference gives us the opportunity to tell our own success stories; the story of an Africa that is on the rise and how we, the capital market practitioners, can transform a potential into a reality while ensuring that at all times, the fruits of economic success are widely shared across the population… Strengthening stock exchanges to support our capital-markets ecosystem will fuel economic growth. The Nairobi Securities Exchange will continue to work together with other stock exchanges strengthening Kenya’s position as East Africa’s financial services hub.”
- London Stock Exchange offering to Africa 20 November 2014
According to the London Stock Exchange, the listings of companies focussed on sub-Saharan Africa total 115 companies:
• 26 companies on the Main Market
• 3 Global Depository Receipt (GDR) listings on the Main Market
• 2 GDR listings on the Professional Securities Market (PSM)
• 84 companies quoted on AIM, the growth market
The LSE headquarters are in London and it has significant operations in Italy, France, North America and Sri Lanka and employs approximately 2,800 people.
In its press release about a link-up with the Nigerian Stock Exchange, the London bourse says it offers partner securities exchanges and investors a broad range of international equity, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS, Europe’s leading fixed-income market; and the pan-European equities platform, Turquoise. Through its markets, the Group offers international business, and investors, unrivalled access to Europe’s capital markets.
Increasingly important are the post-trade and risk-management services including CC&G, the Rome headquartered central counterparty clearing house (CCP) and Monte Titoli, the significant European settlement business, selected as a first wave participant in the T2S (TARGET2-Securities) European settlement engine that aims to offer centralized delivery-versus-payment. The Group is also a majority owner of LCH.Clearnet, the leading multi-asset global CCP.
LSEG offers its customers an extensive range of real-time and reference data products, including SEDOL, UnaVista, Proquote and RNS. It owns FTSE which calculates thousands of unique indices that measure and benchmark markets and asset classes in more than 80 countries around the world. African exchanges have recently been taking strong interest in FTSE products that will help their visibility and data flows.
By purchasing Sri Lanka’s MillenniumIT trading, surveillance and post trade technology some years ago, the LSEG established itself as a leading developer of high performance trading platforms and capital markets software. According to the LSE press release over 40 other organizations and exchanges around the world use the Group’s technology, although smaller African such as the Dar es Salaam Stock Exchange are switching to other systems as reported on this blog, as Millennium IT’s focus changes.
- Johannesburg Stock Exchange scores record with 395,969 equity trades in one day 19 October 2014
The Johannesburg Stock Exchange (www.jse.co.za) equity market scored a record number of 395,969 securities trades on 16 October. The total value was just over R24.6 billion ($2.2 bn).
The previous record of one day’s trading on the JSE Equity Market was just under 300,000 trades on, but the average number of trades per day during 2014 is approximately 176,000 per day on the equity market.
Leanne Parsons: Director Trading and Market Services at the JSE, says in a press release that the JSE’s trading systems handled the large number of transactions without any difficulty: “Records like this show that the JSE continues to provide a stable, credible and world class trading platform as well as access to a very liquid market with deep pools of capital.”
The JSE offers a fully electronic, efficient and secure market and is the world’s best-regulated exchange. It has world-class trading and clearing systems, settlement assurance and risk management. It has been a marketplace for trading financial products for 125 years, connecting buyers and sellers in equity, derivative and debt markets and is in the world top 20 exchanges for market capitalisation and a member of the World Federation of Exchanges (WFE).
- Total Senegal offers shares in IPO until 7 Nov for BRVM listing 13 October 2014
Total Senegal is bringing the first initial public offer (IPO) of shares to the growing Abidjan-based Bourse Regionale des Valeurs Mobilieres (BRVM) since 2010, with shares on sale until November. Parent company Total Outre-Mer is selling 8.9% of the shares in the oil products company , in a share offer that began 8 Oct and closes 7 Nov.
Reuters quotes Odile Sene Kantoussan, chief executive of brokerage company CGF Bourse, based in Dakar, saying: “This operation … consists of the divestment of 290,000 shares held by Total Outre-Mer in Total Senegal’s capital..The shares will be listed on the (BRVM) alongside 22% of the capital representing the stake of minority shareholders, bringing the floating capital on the Bourse to 30.9%. ” The ordinary shares each cost XOF 12,000 (CFA franc) equivalent to USD 23.19, with a minimum subscription of 5 shares, according to this announcement by Compagnie de Gestion Financière (CGF Bourse), which is sponsoring broker and Société de Gestion Intermédiation (SGI) in a syndicate of 20 brokers placing the shares. Initial priority is giving to investors in Senegal before extending across the CFA zone. The shares have XOF 1,000 nominal value according to the information memorandum available here. The transaction value is XOF 3.48 billion ($6.7million).
Total has already listed its Ivory Coast subsidiary among the 37 companies listed on the BRVM which trades securities from 8 nations across the West African region.
According to another news report by Agence Ecofin, Gabriel Fal, Chairman of the BRVM and Edoh Kossi Amenounve, CEO, hosted a ceremony for the offering on 10 Oct. It reports that the BRVM’s market capitalization has soared past XOF6 trillion ($11bn) driven by demand for Sonatel – the previous Senegalese listing in 1998 – and capital increases by subsidiaries of Bank of Africa group.
In April Fal was reported to forecast other potential BRVM listings could include Ivorian banks, Banque Internationale pour l’Afrique de l’Ouest en Cote d’Ivoire and Societe Ivoirienne de Banque, 51% owned by Morocco’s Attijariwafa Bank, as well as Matforce, a Senegalese company which provides energy equipment, an insurance company based in Dakar and a Canadian gold mining company operating in Cote d’Ivoire.
After the sale and listing, Total Outre-Mer will own 23.1% and Total Africa Limited will own 46%.
See the CGF Bourse website for details on the share offer.