Stakeholders Optimistic Of Achieving An Integrated African Capital Market Ecosystem Through AELP

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Thursday, November 04, 2021 / 3:34 PM / Ottoabasi Abasiekong for WebTV / Header Image Credit: Proshare

 

Stakeholders expressed optimism over the possibilities of achieving an integrated African capital market ecosystem, through the instrumentality of the African Exchange Linkage Project, AELP.

 

This was part of the key takeaways from the maiden Proshare Online Trading Webinar which discussed the theme "Online Trading beyond Nigeria: The Case for a Unified Exchange".

 

It was an opportunity for the Nigerian financial and capital market ecosystem to explore the opportunities for interconnectivity across the region, that enable seamless trading.


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Keynote speaker Lina Tonui the Project Manager, Africa Exchange Linkage Project said the AELP highlighted the following as challenges facing African markets; insufficient liquidity, lack of a diverse investor base, limited investment products & securities offering, and regulatory blockages and lack of harmonization.

 

She described the AELP as a project of the African Securities Exchange Association and the African Development Bank, that  seeks to address the aforementioned challenges through the integration of African markets.

 

This according to her will unlock opportunities through Bonds, ETFs, REITs and Derivatives and improve the depth and liquidity in African Capital Markets.

 

She said "The key target is to mobilize Africa's long-term savings and retail investors to finance development across the continent by opening cross-border flows of capital and improving the investment climate".

 

The MD/CEO of NASD Plc Mr. Bola Ajomale in his presentation said data and analytics will continue driving the markets, stressing the need for the whole ecosystem to find creative ways to deploy and find alpha returns.

 

He noted that the NASD has a robust and dynamic platform that is up-to-date with the latest technology and integrated with the financial market infrastructure of the CSCS. He added that it can be accessed through mobile and web applications.


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Bola Ajomale welcomed the initiative of AELP and stressed the fact that trading platforms are now resident on phones, while integration with the right technology for markets is overdue.

 

Mr. Abiola Razaq the Head, Corporate Strategy representing the MD/CEO of the Central Securities and Clearing Systems Plc, informed stakeholders that the CSCS is focused on ensuring the safety of capital market operations and enhancing liquidity by deepening local investor participation in the  market.

 

He said the CSCS  is ready to support the AELP initiative which is novel for the African markets and will go a long way in addressing the  fragmentation of the financial market infrastructures and catalyze the integration of markets in the region.

 

Razaq noted that the CSCS is currently not fully integrated into the Nigerian capital market ecosystem unlike the United Kingdom, that has an integrated market infrastructure.

 

Mr. Emmanuel Ogunji the Chief Financial Officer, e-Tranzact international in his presentation said the evolution of technology has transformed market operations. He noted that the introduction of new and more user-friendly payment channels has enabled trading operations across the market ecosystem.

 

Speaking further the CFO of e-Tranzact was highlighted the fact that emerging technologies like Blockchain, AI & Robo-Advisors and Big Data will shape the future of financial and capital market activities.

 

Tumi Sekoni the MD, FMDQ Securities Limited in her contribution to the discourse acknowledged the fact that technology has transformed the financial market in the last 3 decades. She said the integration between primary and secondary trading is executed through electronic trading.

 

Sekoni said electronification of the fixed income market has evolved over the years, and one of the earliest development was the EMTS in Europe. She added that the rise of electronic trading has led to the involvement of new market makers who are proprietary trading funds, PTFs.


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She listed the following as initiatives that has been launched in Nigeria to boost the growth of the fixed income market, which are; FMDQ & Bloomberg E-Bond market and surveillance system, FMDQ Client trading and support system and FMDQ Proprietary Market System Integration with CBN Settlement system.

 

The market leader reassured stakeholders that FMDQ will work to deepen the electronification of the fixed income market, that will make it attractive to the retail investors.

 

Oluwafunto Olasemo , the Vice President, Financial Markets, AFEX Commodities Exchange in her brief presentation said the commodities market is still at its nascent stage. She added that AFEX has provided a seamless transaction system through its mobile apps.

 

Chief Customer Experience Officer, CFS West Africa Mr. Rolu Adeola called for the development of trading engines and platforms in the market that are customer-centric, unified, smooth and provide for continuous interactions in the system.

 

Giving some insights from the forthcoming 7th edition of the Online Trading report, Director of Research, Mr. Saheed Kiaribe noted that 68% of investors expect capital appreciation, while 20% are focused on dividend. Also while 62% invest for the long term, while 38% expect returns.

 

He also added that in terms of online trading the equities market  accounts for 69% of activities in the entire ecosystem.


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