- Agreement is to help accelerate the integration of Africa’s capital markets
The African Securities Exchanges Association (ASEA) has signed a memorandum of understanding with SecondSTAX, a technology company that is building solutions to enhance intra-Africa capital and investment flows, to support the success of the African Exchanges Linkage Project (AELP) which aims to integrate all exchanges across the continent and to facilitate seamless cross-border trading of securities.
Driving The News
SecondSTAX will provide technical and operational support to ensure the successful delivery of AELP, which is the flagship project of the African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB) to enable the free movement of institutional investments between participating exchanges and licensed investment firms across Africa.
The agreement will include access to SecondSTAX’s KYC portal to streamline the necessary first step for investors to book trades in other markets outside their domiciled region and the SecondSTAX Liquidity Providers Portal which aggregates licensed foreign exchange providers across multiple markets including Pan-African Payment and Settlement System (PAPSS), effectively along with tools to measure (in real-time) the speed to deliver each transaction versus the rates of each transaction (per liquidity provider).
Why This Matters
Despite having some of the best-performing stocks and bonds globally, Africa’s exchanges are largely inaccessible to investors outside the jurisdictions where they are domiciled.
Over the last decade, African capital markets have experienced tremendous growth, with more than $17 billion raised from 215 IPOs (Initial Public Offerings) and $70 billion raised from FOs (Follow-on Offerings).
In addition, more than $246 billion has been raised in debt capital markets, with equity indices peaking at more than 50 percent growth across major regional exchanges.
However, the siloed nature of these exchanges as well as insufficient data on the risk profiles of assets has led to limited access to capital for markets and limited access to high-growth assets for investors.
What They’re Saying
Commenting on the agreement, Thapelo Tsheole, President of ASEA, said “A major priority for us is to improve the efficiency and liquidity of Africa’s securities exchanges and this partnership with SecondSTAX will enable us to do that. We are looking forward to working closely with their team and leveraging their technical capabilities and solutions to drive our common goal of enhancing capital inflows into Africa as a means of driving more economic growth across the continent.”
Eugene Tawiah, CEO and co-founder of SecondSTAX said “ASEA’s objectives with AELP align perfectly with what we are trying to achieve as a company, so this partnership makes a lot of sense for us. We have a lot of confidence in the solutions that we have built, and we are excited to play a key role in the success of the project and drive more growth and efficiency in Africa’s capital markets.”
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