Do you know that as a Nigerian, you can now buy shares of exchange-listed securities on the Johannesburg Stock exchange seamlessly from Nigeria with the commencement of the cross-border trading on the African Exchanges Linkage Project (AELP)?
The AELP Trading Link went live on 18 November following a beta testing period. The system is being deployed in partnership with DirectFN Ltd.
The AELP is a flagship project of the African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB) to facilitate cross-border trading of securities in Africa. The interconnectivity platform enables the trading of exchange-listed securities across 7 participating securities exchanges across 14 African countries and select broker firms.
AELP will improve the depth and liquidity of Africa’s capital markets and foster investment flows among the participating Exchanges by enabling:
- Cross-border securities trading using an order-routing system (AELP Link technology platform) to channel orders between Stockbrokers on participating Exchanges
- A Stockbroker sponsors the trade on the host Exchange
- Custody and settlement will be on the host Exchange according to its market rules and practice. Sponsoring broker and local custodian will be involved.
The seven Exchanges participating in Phase 1 of the AELP are: Bourse Regionale des Valeurs Mobilieres (BRVM), Bourse de Casablanca, The Egyptian Exchange (EGX), Johannesburg Stock Exchange (JSE), Nairobi Securities Exchange (NSE), Nigerian Exchange Limited (NGX), and Stock Exchange of Mauritius (SEM). The 14 African countries are Morocco, Egypt, Nigeria, Kenya, Mauritius, South Africa and the West Africa Economic and Monetary Union, which comprises Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
In the first phase of the project, 33 Stockbrokers connected as at go-live. In Nigeria, they are FBNQuest Securities Limited; Stanbic IBTC Stockbrokers Limited; Chapel Hill Denham; Cardinal Stone Securities Ltd; Cordros Securities Limited; and RMB Stockbrokers.
A ceremonial launch of Phase 1 and demonstration of live cross-border trades took place alongside the 2022 ASEA Annual General Meeting & Annual Conference on 7th December 2022 at 9:00am GMT in Abidjan, Cote d’Ivoire.
Edoh Kossi Amenounve, ASEA’s President, said, “With AELP, we are entering a new era of African capital markets where all our members will gradually transact cross-border trades from one African securities exchange to another. This project represents a great opportunity for investors and issuers across the continent.”
The African Development Bank’s Manager for Capital Markets Development, Mr. Ahmed Attout, said: ‘It is our pleasure to partner with ASEA through this process culminating in the operationalization of the African Exchanges Linkage Project Link Trading Platform. The AELP is a transformational project that aligns with the African Development Bank’s High 5 priorities, especially “Industrialize Africa” and “Integrate Africa.” It is also in tandem with the African Continental Free Trade Agreement’s objective of establishing a liberalized market to aid the movement of capital, facilitate investments and deepen the continent’s economic integration.
Future phases of the project may include automated cross-border payment systems, participation of additional ASEA member Exchanges and their respective brokers and additional brokers from the current participating Exchanges after the pilot phase. Botswana Stock Exchange (BSE) and Ghana Stock Exchange (GSE) will kick off Phase 2 of the AELP with technical connectivity to the Link expected to commence in 2023.
