Monday, March 14, 2011

March is East African Exchange month!

I am in London where an African Securities Conference run by Securities Africa is currently on. It is primarily an event for institutional investors to meet with exchange executives and an opportunity to showcase the African Stock Exchange Association (ASEA). I am not in London to attend this auspicious event, however. Instead, I am trying to save my thesis which is stagnating in a sea of academic red-tape and out-of-sight,out-of-mindness. My pain and anguish does have its rewards.

I am staying in my old diggs on Bow Rd, across from the Bow Rd tube. There is a nifty Tesco Express nearby so I am enjoying some affordable South African, Shiraz and the sounds of East London. The Mile End library of Queen Mary has been completely modernized and is a joy to sit and work in even when it is swarmed with undergraduates. Maybe secretly I delay finishing my PhD so I can make these little trips......not likely. If and when they start paying attention to me at QM, I will finish and come back and attend the theatre instead of visiting the LIBRARY!!!

This Securities Africa conference has allowed the new ASEA Presdient, Sunil Benimadhu, to announce a new (hopefully realised) direction for ASEA as an organisation to promote African exchanges and also inform investors....and researchers....about member African Exchanges. Sunil is the CEO of the Stock Exchange of Mauritius and seems to have a positive vision about what ASEA can do for exchanges.

He suggests that ASEA do the following:
  • provide a pan-African (member) stock exchange index to serve as a benchmark
  • revamp the ASEA webiste so it is up to date and actual informs!
  • serve as a mouthpiece for African exchanges in cluding African governments and regional bodies such as the AU, World Bank

Let's hope all of the above happens and these guys from Mauritius are the ones to get it done!!

Nairobi Stock Exchange

The NSE has purchased a Broker Back Office system worth $880k (USD) from Chella Software of India, which will allow the CMA and the NSE to offer online trading that can also be monitored. This goes a long way to resolving the Nyaga-like broker problem that plagued the NSE in 2008 and forced the closure of several brokers who had fraudulent back-office dealings. (see this blogs very first post) The back office is the heart of any brokerage firm because it clears trades and ensures that funds pass smoothly from client to broke and vice versa. Without a credible back office no broker and no Exchange has the integrity needed to cultivate investor confidence. The CMA-Kenya also established an anti-fraud unit. I need to look at that and will write a separate blog post on it later.

Additionally, the NSE claims that its online trading will draw funds from the Kenyan diaspora and from tech-savy Kenyan youth with discretionary funds. This is huge and a move in the right direction. Online trading is what facilitated a massive increase in retail share ownership in the US. This is not always a good thing if the technology and trading do not also come with instructions. The NSE will also have to provide loads of EDUCATION for these new investors so that the stream continues and does not wither and die on the vine due to terrible miscalculations all of which are aviodable with a little instruction on investment 101's.

Uganda Securities Exchange

Also in March, the USE announced that trading will be exteded to 5 days a week from 3. This baby step is also huge. Order flow should become more continuous if brokers can place them each day rather than every other day. The USE has only 14 listed companies but cross-lists on the NSE as well. This is a positive move, not as mometous as online trading but significant nonetheless. Much like the USE, this move is friendly and measured.

Me likey!!

I am so jazzed to paying attention to this space again. It was wrong to ignore it for so long! I enjoy being back in London. This city is World class and dare-I-say-it, so much nicer than New York. (shocking!!)

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