South Africa, Kenya, Nigeria Plan More ETF Cross-Listings

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South Africa, Nigeria and Kenya are planning to cross-list more exchange-traded funds on their stock markets to boost liquidity of the securities, according to the Johannesburg Stock Exchange.

“We reached out to East Africa and West Africa,” Tamsin Freemantle, business development manager of the South African bourse, said in an interview May 14 in the Kenyan capital, Nairobi. The JSE is “working closely with those markets to develop this cross listing,” she said.

African exchanges are looking to increase cooperation as companies from Botswana to Nigeria list their shares on other bourses. The JSE, with a market value of 10.7 trillion rand ($902 billion), has rallied 8.9 percent this year in the best performance after Botswana among 14 sub-Saharan exchanges tracked by Bloomberg. Nigeria’s main index has dropped 0.6 percent, while the Nairobi all-share measure is up 3 percent.

“There is a clear need for them to join forces to respond to the need of African companies to raise funds on a pan-African basis,” Boris Martor, Paris-based partner and Africa expert at law firm Eversheds LLP, said Monday by e-mail. “Entrepreneurs, companies and funds are going from a regional to a continental approach.”

In 2011, Johannesburg-based Absa Capital, a unit of Barclays Africa Group Ltd., listed its NewGold ETF on the Nigerian Stock Exchange. The West African nation now has four ETFs, while the JSE has 45, according to Freemantle. The Nairobi Securities Exchange is awaiting regulatory approval to offer the asset class, said Donald Ouma, head of market product and development.

Investor Interest

“Once we have the ETF framework, we will be ready to have the gold and platinum ETFs by Absa cross-listed in Nairobi,” he said by phone on May 15. He didn’t say whether other funds would be considered.

Calls made to Oscar Onyema, chief executive officer of the Nigerian bourse, didn’t connect on May 15. The JSE is sub-Saharan Africa’s biggest exchange by market value followed by Namibia, Nigeria and Kenya.

“In order to grow your markets you need more investors and in order to have more investors you need more things for them to invest in,” Freemantle said. “We need to actually step up and make sure we get that investor interest.”

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