African Exchange Competition Is Emerging Rapidly…


From a curious amalgam of exchanges which have not made the world sit up and take notice, suddenly Africa is about to be fought over by various new entrants and the only longstanding viable entity, the Johannesburg Stock Exchange


It’s not that African exchanges don’t work. Although, to be fair they have not traditionally worked in a way which would have passed muster with western best practice. Indeed few analysts recall that when Russell Loubser entered office at the head of a JSE, he was in charge of an entity which was frankly dysfunctional for anybody with even the vaguest understanding of STP (straight through processing). Loubser has made the JSE the African powerhouse. In recent weeks, the JSE has changed tack and is seeking to attract new listings from other countries after a period hoping to merge with markets in other African nations. JSE has a 500lb gorilla position in RSA and Africa as a whole thanks to its currently closing acquisition of the Bond Exchange (BESA) which follows its very intelligent purchase of the derivatives SAFEX some years back.

True, there have been new markets elsewhere in recent years particularly in commodity markets but overall Africa is lagging the rest of the exchange world. Or to put it another way, Africa now provides an incredible opportunity and various players have not been slow to notice this! The Pan African Commodity Exchange project is now close to fruition and some other co-operative ventures have been attempting cross-border transactions for some time.

It is probably fair to say that Financial Technologies cannot hope to enjoy the same breakneck pace of growth in Africa which they have enjoyed in their native India but it is a foolish man who would bet against their being successful.

Nevertheless, this is only the very begining of an African awakening of the exchange marketplace. Colonial outpusts may remain but the exchange model is about to make a major impact on African commerce. The prospect for broader growth is a fascinating opportunity, as will be investing in the exchanges themselves…


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