African bourses must link-up to meet investors demand: JSE



AGENCE FRANCE PRESSE

Published — Friday 7 December 2012

Last update 8 December 2012 12:49 am

| نسخة PDF Print News | A A

JOHANNESBURG: Africa's stock markets must better collaborate to make the most of historic levels of investor interest in the continent, the head of the Johannesburg Stock Exchange told AFP yesterday.
"The appetite for Africa is very very high," said Nicky Newton-King, making the case for better links between the continent's 24 bourses as a means of propelling Africa's recent and dramatic economic rise.
The International Monetary Fund forecasts the aggregate economy of sub-Saharan Africa will grow at around 5.7 percent next year, presenting a massive economic opportunity of the type the region has too often squandered.
"I think everybody is trying to find their way, to participate meaningfully in that rising," said Newton-King, who took over at the continent's largest exchange in January this year.
"All of us who are privileged enough to run exchanges, need to figure out that these waves of investor appetite aren't yours by right. Once they come you have to be able to ride them properly."
"We should not be taking this as business as usual, this is a business opportunity."
According to Newton-King one way to ride the wave of interest would be to make it easier to invest across Africa's borders and to improve liquidity in small markets — making a big enough pool that assets can be bought and sold quickly.
To that end the JSE is looking to ink deals with two other bourses in the region.
But for now, those deal will focus on improving the continent's financial plumbing — allowing cross and dual listings and easier order-routing — rather than the creating one pan-African exchange.
"I think it is far more about collaboration," she said.
"Were we not to have any exchanges on the continent I think we would have wanted to create a single exchange that would service multiple jurisdictions out of one legal base."
"That's the most efficient way to do it, but I'm a bit of a realist."
"Once you try to do cross border mergers and acquisitions, you run into much more trenchant issues of a regulatory nature, all of which stem from 'how do we protect the local investor?', 'how do we make sure the local market grows?"
Newton-King insists that allowing Kenyans to invest in joint-listed South African stock in shillings, or by allowing South Africans to more easily place orders for Nigerian stock, markets would attract more foreign investors.
"Really big trades are not going to go to illiquid markets."
"The average days trade on the JSE is more than the average annual trade on Kenya and Mauritius put together. There are amazing companies in both of those countries."
Despite political concerns about the erosion on sovereignty that could come with more integrated markets, Newton-King says South Africa's own experience demonstrates the benefits.
"When Anglo-American cross listed in London, the amount of trades in Anglo-American increased. South Africa's percentage of trade in Anglo-American decreased, but the decreased percentage was worth more."
"In those cases you have to think quite bravely."

What's happening around Saudi Arabia

JEDDAH: The Kingdom and Namibia have signed a protocol to establish diplomatic relations between them.According to SPA, the protocol was signed on Tuesday by Saudi Arabia’s Permanent Representative at the United Nations Abdullah Al-Mouallimi and his...
JEDDAH: Official reports reveal nationalization levels of medical and health workers in the Kingdom remain low, with Saudi nationals making up only 21.7 percent of physicians, 31.8 percent of nurses, and 67.4 percent of ancillary staff.According to t...
JEDDAH: The Saudi Food and Drugs Authority (SFDA) will begin receiving clearance applications for medicines and medical supplies, including drugs containing narcotic or psychotropic substances, for Haj missions or other government bodies on Saturday....
JEDDAH: Saudi importers of cattle said the Haj season this year will not see an increase in the price of livestock due to the stability of the local market and the available supply.There are also guarantees from exporting countries that required quan...
JEDDAH: At the upcoming elections the national identity card will be the only approved document used for identifying voters of both genders and allowing voters to exercise their electoral right, provided all statutory requirements are met.In a press...
JEDDAH: Education Minister Azzam Al-Dakhil has spoken of a new education policy which emphasizes the importance of harmonizing admission policies in universities with the needs of the labor market.Al-Dakhil made these remarks during a meeting with un...
JEDDAH: Local bottled water consumption during the summer, Umrah and Haj seasons this year will increase by 10 percent.“This translates into an annual growth rate of between 4 percent and 5 percent,” Rashed Bin-Zouma, a water industry expert, was qu...
RIYADH: Four Saudi secondary students including a young woman from the Eastern Province have received prestigious medals at the 47th International Chemistry Olympiad (IChO), which concluded in Azerbaijan last week.The winners of the four bronze medal...
JEDDAH: The UAE’s decision to lift fuel subsidies beginning in August has raised the possibility of other Gulf states following suit.Economists suggest a wide disparity of prices of gasoline in the Gulf countries will lead to more petrol smuggling op...
DAMMAM: The tourism industry in the Kingdom is witnessing great interest by authorities to develop the archaeological areas, promote their support services and create the best environment for tourism products, said businessman Abdul Mohsen Al-Hokair....
JEDDAH: The ongoing World Circus at north Obhur has brought smiles on the faces of orphans, with its show of acrobats featuring 20 performers and clowns.The orphans of Al-Rawdah district charitable organization said they found the circus entertaining...
RIYADH: The Nepalese ambassador to Saudi Arabia, Udayaraj Pandey, thanked the Kingdom on Thursday as he ends his four-year tour of duty in Saudi Arabia.Earlier in the day, he called on Riyadh Gov. Prince Faisal bin Bandar to pay him a courtesy call a...
RIYADH: Movies produced by young and amateur Saudi filmmakers will be shown on Saudi Television starting in the middle of next week.“The films will be shown daily to encourage young Saudi filmmakers,” said Abdulaziz Fahad Al-Eid, senior broadcaster a...
RIYADH: The King Abdul Aziz City for Science and Technology (KACST) signed a memorandum of understanding on Thursday with the Saudi Electricity Co. (SEC) and Taqnia Energy to launch the first standalone 50MW solar power station at Al-Aflaj.KACST also...
UN Secretary General Ban Ki-moon and Saudi Arabia’s permanent representative to the UN Abdullah Al- Muallami unveiled a beautifully framed old kiswa (covering) of the door of the Holy Kaaba at one of the newly refurbished halls of the world body. The...

Stay Connected

Facebook