From 25-26November 2019, over three hundred capital markets participants converged in Kasane in Botswana to attend the 23rd Annual General Meeting and Conference of the African Securities Exchanges Association (ASEA) hosted by Botswana Stock Exchange (BSE). As the gateway to the Chobe National Park, Kasane is uniquely located near the beautiful Victoria Falls in Zimbabwe, Livingstone in Zambia, and Namibia’s Caprivi Strip.
This year’s conference was held under the theme of ‘Building Resilient African Capital Markets’, highlighting the need for the African capital market ecosystem to adopt best practices and create suitable, progressive platforms that cater for the needs of issuers, investors, and general market participants. The conference is the flagship event of ASEA, which boasts 25 vibrant member exchanges serving 32 African economies.
“We play an increasingly important role as the BSE in the region and the continent, and it was befitting for us to host the ASEA Conference and reiterate our commitment to driving the development of African capital markets,” highlighted the CEO of the BSE Mr. Tsheole, also a member of the ASEA Executive Committee where he chairs the ASEA Market Development Working Group, and the Chairman of the Committee of SADC Stock Exchanges (CoSSE). Tsheole added. “As a steadily growing stock exchange, we perceived this as an opportunity to continue to promote the visibility of the domestic capital market to the global securities industry, over and above showcasing and positioning Botswana as a preferred investment destination,” he added.
The conference was officially opened by His Excellency, the President of the Republic of Botswana, Dr. Mokgweetsi Eric Masisi. Dr. Masisi’s remarks underscored the importance of capital markets as crucial links between the real economy and the financial economy, allowing the African continent to realise positive outcomes such as improved products and services, as well as mobilisation of capital for broader improvement of livelihoods. “Like many countries around the world, Botswana is committed to creating a conducive environment for capital markets through policies and support for businesses, including the enactment of legislation that supports the efficiency and independence of the stock exchange, and through the issuance of government securities to facilitate capital formation and institutional development,” Dr. Masisi emphasised.
The President of ASEA, Mr. Karim Hajji, also CEO of the Casablanca Stock Exchange, talked about how securities exchanges stand a better chance of being more impactful to the real economy by garnering support from government. Mr Hajji went on to outline some of the accomplishments of the Association over the course of the year, notably the commencement of the African Exchanges Linkages Project, the signing of the MoU with the Chartered Financial Analyst (CFA) Institute and the subsequent publication of a research brief focusing on African capital markets, as well as studies conducted by the various ASEA working groups on pertinent issues and strategic priorities of ASEA.
“It was befitting for us to host the ASEA Conference and reiterate our commitment to driving the development of African capital markets.”
-Thapelo Tsheole, CEO, BSE
Giving an overview of the proceedings, Mr. Tsheole indicated that the conference agenda was deliberately designed to speak to Africa-specific issues and solutions, whilst drawing lessons and experiences from the international capital markets ecosystem. “The heterogeneity of the patrons, the calibre of the speakers from all parts of the world, and the depth of the discussions bear testament to this. African stock exchanges make just over 2% of global stock exchanges’ market capitalisation, but their importance to the continental economy and their integration with the global economy has increased phenomenally over the past two decades. As an illustration, the majority of ASEA members now use robust world-class market infrastructures and technology used in London and in New York. These investments have drawn an increasing number of participants to the stock markets, both domestic and international, who support sustainable development of our economies,” Tsheole added.
Speakers across different panels and presentations shed light and exchanged experiences on various attributes in respect of building resilient African capital markets. The World Bank representative, Mr. Xavier Furtado, emphasised the building blocks of viable capital markets such as suitable regulatory regimes that allow for innovation, low and stable inflation, sustainable fiscal management which contribute to lower costs of capital, a supportive legal framework that underpins enforcement of financial contracts, suitable financial market infrastructures that facilitate the trading, clearing, settlement and recording of financial transactions, as well as the extension of the government yield curve through increased issuances of government paper of varying maturities.
The CEO of the World Federation of Exchanges (WFE), Ms. Nandini Sukumar, participated in a panel discussion focusing on the evolution of the role of stock exchanges. Ms. Sukumar mentioned that frontier markets have the benefit of becoming flexible capital raising platforms that also serve as liquid trading venues, and bring a unique value proposition that encompass aspects of inclusiveness and collaboration between the various stakeholders and between the exchanges themselves.
Throughout the conference more thematic panel discussions and presentations were held encompassing Small-Medium Enterprise (SME) financing through capital markets, the value of market infrastructure, and the rise of alternative assets in African capital markets, among others. The discussion on opportunities in green bond financing in Africa was a particular highlight, as African exchanges continue to embrace sustainability both in corporate practices as well as in product development by incorporating Environmental, Social and Governance (ESG) issues into their listing frameworks. The key takeaway from the discussion was how green bonds can accelerate urban and infrastructure development and how certain African exchanges have pioneered the listing of green bonds, thus providing impetus and lessons for others to start the process.
Commenting on the success of the conference, Mr. Tsheole concluded: “The conference was a massive success with its diverse business, cultural and tourism offerings, was well attended by the international capital market fraternity, and the feedback has been impressive too. In my view, this is evidence that we have functional business and working relationships with the global community as African stock exchanges, and also among ourselves as ASEA Member Exchanges. The support we received as BSE from our stakeholders in Botswana was also phenomenal. We are in the third year of our five-year strategy that aims to position the BSE as a world-class securities exchange, and we are pleased and humbled for the ASEA Executive Committee and our stakeholders to have trusted us with this important responsibility.”
The Reserve Bank of Malawi (RBM) has implemented Automated Trading System (ATS) for Malawi Stock Exchange which is linked to its Central Securities Deposits (CSD), which keeps details of the securities unlike in the past when trading and recording of securities was all manual.
Also present was CAMA Executive Director John Kapito and Boby from National Bank Kabambe mpasises that a cashless society is possible The delegates
This was disclosed by RBM Governor Madalitso Kabambe on Wednesday during a conference at Sun ‘n’ Sand in Mangochi where RBM gathered digital financial service stakeholders to appraise them on its drive to to accelerate the shift from paper based payments instruments, such as cash and cheques to electronic based services.
Kabambe said the CSD is linked to the world-class national payments system called the Malawi Interbank Transfers and Settlement system (MITASS) to cater for settlement of the securities market.
MITASS is linked all commercial banks through which all transactions; high or low value, are processed in real time and designated time intervals.
“All these systems shall at some stage be linked to regional systems such as SADC-RTGS for SADC and REPSS for COMESA,” Kabambe said.
“In a bid to ensure efficiency and effectiveness of the payments systems, the Reserve Bank of Malawi issued the Interoperability Directive in 2017 under the Payment Systems Act of 2016 which ensures that individuals have access to any ATM and point of sale devices through the National Switch (Natswitch) other than be restricted to payment channels provided by their respective banks.
“The regulatory framework is also focusing on consumer protection issues so that users of payment services, be it individuals or business entities, get value for money.
“In addition, the Reserve Bank of Malawi issued the E-money Regulations in June 2019 to among others, provide a regulatory framework for provision of e-money services in the country.
“This Regulation is expected to improve the safety and efficiency of e-money services by providing minimum technical and operational requirements and also minimum standards on customer protection and protection of customer funds which is key for building confidence in digital financial services.”
He added that to increase consumer convenience and experience, Government has gazetted the Regulations on Deployment and Usage of Electonic Payment Channels by all licensed businesses in the country.Close
“Under this Regulation, some sections of the business community will be required to have at least one or more digital payment channels so that customers that are willing to pay electronically should not be inconvenienced.
“As a result of all these tremendous improvements in the payments architecture and the enabling legal and regulatory framework, Malawi has seen the number of bank accounts more than doubling within one year from 1.3 million in January 2018 to 2.6 million as at end of December.
“The number of subscribers on the non-bank mobile money platforms has also increased from 3.6 million in 2016 to 7.0 million as at end of June 2019.
“Likewise, the volume of non-bank mobile money transactions has also risen exponentially from 87.3 billion in 2016 to 122.3 million as at end June 2019 with a corresponding in crease in transaction value from K303.8 billion in 2016 to K710.1 billion as at end June 2019.
“Overall, transactions processed in all digital financial platforms increased by 104.8 percent in volume from 105.4 million in 2016 to 215.9 million in 2018 while the corresponding value increased by 173.5 percent from K1.24 trillion in 2016 to K3.4 trillion in 2018.”
Shareholders of Seed Co International Limited can now receive their dividend payments below US$10 through the C-Trade platform as a way to enhance ease of transacting and cut costs.
However, Seed Co International shareholders with dividends above US$10 have an option to have their dividends deposited in their C-Trade accounts or to provide local US$ FCA Nostro Investment account details or local RTGS account in order to receive their dividend. The initiative comes as efforts to address challenges related to payment of small dividend amounts below US$10.
“Seed Co International Limited shareholders are advised that due to operational challenges related to payment of dividends below USD10, Seed Co International Limited hereby gives shareholders an option to receive their dividends through the C-TRADE platform,” said Escrow Group, head sales and marketing Eliah Sarayi.
C-TRADE is a mobile and online platform for the trading of securities on Zimbabwe’s capital markets and allows access to full trading functionalities for the Financial Securities Exchange Limited (FINSEC) and the Zimbabwe Stock Exchange (ZSE).
Last year Zimbabwe launched the C-Trade, which effectively opened capital markets to all and enhance financial inclusion.Escrow Systems, a subsidiary of Escrow Group, provided the technology that enables mobile share trading. According to Escrow, C-Trade enables investors an opportunity to accumulate small dividends and participate on ZSE and Finsec anywhere at any time as well as access to shareholder portfolio information.
Mr Sarayi added receiving dividend payment via C-Trade enables investors to accumulate their funds on the platform which they can later convert to local currency for withdrawal. Investors also have an option to accumulate the funds on the platform and purchase more shares, for other counters as well. “Moving small amounts like US$10 and less is a challenge in itself. But if the funds are deposited into a C-Trade account, it is an advantage. You can let that money accumulate for later withdrawal. “This can also be an investment strategy within the C-Trade, you can purchase more shares, not only Seed Co shares in this case but it is an opportunity to diversify your portfolio,” said Mr Sarayi.
Shareholders are therefore required to have the C-Trade mobile application on their devices in order to open and activate accounts giving them access to their C–Trade portfolio, view foreign currency dividend, buy shares or convert the money to local currency for withdrawals. Last year, the seed manufacturer unbundled 71 percent of Seed-Co International, which was represented by 242 million ordinary shares. On completion of transaction, Seed Co Limited retained 26 percent stake in Seed Co International. Seed Co International then listed on the Botswana Stock Exchange (BSE).
Enacy Mapakame Business Reporter
JSE Limited, the operator of the Johannesburg Stock Exchange (JSE), Africa’s largest, multi-asset class stock exchange, has agreed to acquire Link Market Services South Africa (Pty) Ltd (Link SA), the second largest share registry business in South Africa (with 6 of the top 40 listed companies as clients), subject to all required approvals, for a cash amount of R224,5m.
JSE Limited will acquire a 74.85% shareholding in Link SA with Link SA’s Black Economic Empowerment (BEE) shareholder retaining the remaining 25.15% and the Link SA CEO, Iqbal Haniff, remaining as CEO of the company.
The acquisition will see Link SA being merged into the JSE Limited structure and operated independently under a newly formed business stream, subject to all required approvals. This proposed acquisition comes after many engagements with the JSE’s listed companies’ which have expressed a desire to drive synergies and consolidate how they service their shareholders through a one-stop-shop.
The proposed transaction is revenue accretive with an expected contribution of up to 6% of Group revenue, while exceeding the Group’s return on investment hurdles. This demonstrates that even in tougher economic times there are opportunities where the JSE can make a difference to its clients by thinking creatively and working hard to deliver that difference. This also presents opportunities for both listed and unlisted companies to use these services.
Through Link SA, the JSE intends to introduce end-to-end products and services to JSE listed companies, making it easier for them to communicate and understand their shareholder base. These services include shareholder register maintenance, corporate actions, shareholder analytics, managing BEE share schemes, electronic communication and voting, and training and educating shareholders. The transaction will enable the JSE to diversify revenue and extend the services it already offers listed companies through its Company Services team, which includes training, investor relations support and listed company annual, and interim results presentations hosting and meeting support.
JSE CEO, Nicky Newton-King say’s “We are continuously having conversations with our clients on how we can better meet their needs and add value. The JSE is well placed to engage in order to fill a crucial gap in the market and to collaborate with our listed companies to educate and look after their shareholders end-to-end. We look forward to this transaction strengthening our relationships with our listed clients and helping to build a stronger and more engaged shareholder base for our issuers which is so important for real inclusive growth in our country.”
John McMurtrie, Link Group Managing Director, says “Link SA has established itself as a leading share registry in the South African market and we strongly believe the partnership with the JSE will add value to the business. Link SA will remain a key member of the Global Share Alliance and we look forward to continuing our relationship with the business and with the JSE in the future.”
Written by JSE