The World Federation of Exchanges and African Securities Exchanges Association sign deal to improve African capital market

The World Federation of Exchanges, WFE, the global industry group for exchanges and CCPs, has signed a memorandum of understanding (MOU) with the African Securities Exchanges Association (ASEA), aimed at supporting the development of the wider African capital market.

The MOU seeks to support the development of market infrastructures in Africa and, through them, the development of the wider African capital market ecosystem and to enable African market infrastructures to develop best practices based on global standards, while remaining appropriate to the needs of the region and nation in which they operate.

The WFE and ASEA have pledged to collaborate in developing and implementing programmes and projects, including finding ways to increase the amount of data published by the region, that deliver these two overarching objectives.

“The WFE’s market development mandate has always been a key pillar of the federation, but this agreement crystallises our vision to support members in specific regions with targeted activity,” said Nandini Sukumar, CEO, WFE.

ASEA is an association of 28 securities exchanges in Africa; its exchanges are home to approximately 1,100 listed companies with a total equity market capitalisation of $1.5 trillion. ASEA’s main objective is to unlock the potential of African capital markets, and enhance the development and global competitiveness of member exchanges.

Established in 1961, the WFE is the global industry association for exchanges and clearing houses. Headquartered in London, it represents over 200 market infrastructure providers, including standalone CCPs that are not part of exchange groups.

Of its members, 36.8% are in Asia-Pacific, 42.6% in EMEA and 20.6% in the Americas. WFE exchanges are home to nearly 45,000 listed companies, and the market capitalisation of these entities is over $82.5 trillion; around $81.8 trillion (EOB) in trading annually passes through the infrastructures WFE members safeguard (at end 2017).

Seven African exchanges (out of a total of 70 WFE members) are full members of the WFE (Bourse de Casablanca, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, Nigerian Stock Exchange, Stock Exchange of Mauritius and Tunis Stock Exchange) and a further five African exchanges are affiliates. Overall, there are over 35 securities exchanges operating in Africa at different levels of maturity.

Nandini Sukumar, Chief Executive Officer, WFE said: “The WFE is delighted to announce this ground-breaking MOU with ASEA.

The WFE’s market development mandate has always been a key pillar of the federation, but this agreement crystallises our vision to support members in specific regions with targeted activity

. We believe that exchanges in Africa will benefit from this focused approach, be it through our technical expertise, capacity building programme, or broader market development assistance to help them meet international standards and best practice. We look forward to engaging more deeply on the topics that matter to African market infrastructures, and further growing our knowledge and relationships in this vibrant continent.”

Commenting on the MOU, the former President of ASEA and Chief Executive Officer of the Nigerian Stock Exchange (NSE), Oscar N. Onyema said: “ASEA and the WFE will work in tandem to promote quality market standards, advocate for enabling policies, and support the growth of member exchanges. As such, this partnership will inspire and support African exchanges to unlock greater levels of competitiveness through information sharing and the adoption of best practices. At the same time, we also expect that the partnership will offer WFE members a unique perspective on capital market issues and provide stakeholders in the global capital market with new prospects in the world’s ‘next frontier of growth’. We welcome this opportunity to enhance our value proposition to ASEA members’ and we encourage members of both associations to take advantage of emerging opportunities.”

NSE became a full member of the WFE in 2014.

Speaking at the MOU signing ceremony, Karim Hajji, Chief Executive Officer of Bourse de Casablanca and incoming President of ASEA said: “Together with my fellow Executive Committee Members, we are very keen on implementing the agreed activities of our partnership with the WFE, and translating them into tangible results for the benefit of the two institutions.”

Bourse de Casablanca became a full member of the WFE in 2010.

The WFE’s priorities and work streams include ongoing work on SMEs, FinTech, cyber resilience, CCP resilience, financial literacy, and sustainability.

The WFE has a dedicated Emerging Markets Working Group which has focused on finding solutions for issues such as liquidity, enhancing retail participation, and attracting international investors.

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