JSE Ltd., the Johannesburg-based operator of Africa’s largest bond and stock exchanges, will urge policy makers on the continent to link their bourses electronically to boost trading volumes.
“We’ve been trying for 15 years and haven’t made enough progress,” JSE Deputy Chief Executive Officer Nicky Newton-King said in an interview today in Dar es Salaam, Tanzania, where she is attending the World Economic Forum for Africa. “Policy makers will be in the meeting on redesigning capital markets tomorrow -- we want committed action.”
Johannesburg’s stock exchange last year started the African Board to lure companies outside South Africa, setting fees at levels that will only cover its costs. Talks with exchanges in Botswana, Kenya, Nigeria, Botswana, Ghana, Namibia, Zambia and Zimbabwe to combine have failed to result in agreement, with bourses citing concerns that the JSE would take business away from smaller exchanges, JSE CEO Russell Loubser said last year.
“Redesigning Africa’s capital markets is the most important thing,” Newton-King said on the WEF conference. “It’s about linking exchanges. We need a harmonization of standards across the market. People aren’t going to trade in a market unless we’ve sorted this first thing out.”
The market value of companies traded on the Johannesburg exchange is $408 billion, more than 10 times the $40 billion of sub-Saharan Africa’s second-biggest market, Nigeria, according to Bloomberg data. The JSE’s African Board has attracted listings by Namibia’s Trustco Group Holdings Ltd. and Botswana’s Wilderness Holdings Ltd. with more expected this year, Newton- King said, without being more specific.
The JSE will focus on growing its interest-rate derivatives market after buying the Bond Exchange of South Africa to compensate for a decline in bond issues, she said.
Trading volumes on the company’s stock market are “picking up,” Newton-King said. “An increase in volumes is good for our bottom line. But we’ve got lots of expenses this year.”