CEM REPORT | Nigerian Exchange (NGX) and other African Exchanges under the African Securities Exchanges Association (ASEA) has made progress towards integrating the African capital markets by facilitating cross-border trading and free movement of investments in the continent.
As published by African Markets, the ASEA President Dr. Edoh Kossi Amenounve said “The facilitation of cross-border trading will open up the markets to a diverse portfolio and investment opportunities. Brokers and investors will be able to access a variety of asset classes available in their markets of interest. Increased and regular cross-border trading is expected to enhance liquidity in the AELP Exchanges”.
The African Exchanges Linkage Project (AELP) is a flagship project of ASEA and the African Development Bank (AfDB) aimed at facilitating cross-border trading among seven participating Exchanges and select broker firms.
In July 2021, ASEA signed a contract with DirectFN Ltd for the design and implementation of the AELP Link trading system in the seven markets.
The Exchanges participating in Phase1 of the AELP are: Bourse Régionale des Valeurs Mobilières (BRVM, integrating eight West African countries), Casablanca Stock Exchange (CSE), The Egyptian Exchange (EGX), Johannesburg Stock Exchange (JSE), Nairobi Securities Exchange (NSE), The Nigerian Exchange (NGX) and Stock Exchange of Mauritius (SEM).
According to African Market, cross-border trading has increased in the past three years as shown by African Funds Flow statistics measuring trade transactions between the seven Exchanges. The AELP aims to automate the trading process and enable brokers to access information and see the market depth and liquidity of the participating markets.
The linkage will happen through two main processes where Exchanges will be connected to the live market data Link, enabling traders to see live order-books across the markets, thereafter brokers will be interfaced with the system for order placement and execution.