Kenya, Ghana link stock exchanges
Kenya and Ghana have linked their respective stock/securities exchange allowing the cross-trading of equities and bonds from the pair of jurisdictions.
The linkage of the Nairobi Securities Exchange (NSE) and the Ghana Stock Exchange (GSE) has been midwifed by SecondSTAX, a fintech that seeks to interlink African Capital Markets.
Through a portal managed by the fintech, institutional investors from the pair of countries will be able to buy or sell securities from either party with long-term plans set to see the inclusion of retail investors.
NSE Chief Executive Officer Geoffrey Odundo has welcomed the linkage which he expects to increase market liquidity and trading opportunities as well as options to investors in Kenya and Ghana.
“This linkages are good as they will create a bigger market in Africa and will allow cross border trading. Investors in Ghana who want to trade in Kenya will have a straight through process,” he said.
Stock brokerage firm Krestel Capital has been chosen to support trade orders from the Kenyan side.
The new linkage comes ahead of the implementation of the Africa Exchanges Linkages Project (AELP) which is set to go live on December 7.
The linkage program is set to bring together notable exchanges on the continent including the NSE, Johannesburg Stock Exchange (JSE), Nigerian Stock Exchange, Stock Exchange of Mauritius, Egyptian Exchange and the Casablanca Stock Exchange.
The program also features the Bourse Regionale des Valeurs Mobilieres which brings together exchanges in Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo.
The project is a joint initiative of the African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB).
Meanwhile, neighbouring Rwanda, Uganda and Tanzania are set to link their stock exchanges in a World Bank funded project which will see the three operate a single market.
According to Odundo, the creation of multiple stock exchanges is a positive for African Capital Markets as he views different linkages as complimentary rather than competitors.
“The more the linkages, the deeper markets and options we are creating for investors,” he added.
The linkage of Kenya and Ghana stock exchanges brings together bourses with a combined market capitalization of Ksh.2.6 trillion (GHS 302 billion).
SecondSTAX is seeking to add more linkages to its platform over the short to medium term with plans for connecting Nigeria to the Ghana-Kenya link next.
“For us, we want to connect as many large Africa Capital Markets as possible. Nigeria is next after which we will be looking at Francophone West Africa, North Africa and Southern Africa,” said SecondSTAX founder and CEO Eugene Tawiah.
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