The AELP project, jointly initiated by the Bank and the African Securities Exchanges Association (ASEA), has the main objective of increasing intra-African investment flows through linking African Stock Exchanges. EGX joined the Project last month as one of seven stock exchanges that will be linked in AELP’s first phase.
Mohamed Farid Saleh, EGX Executive Chairman, said that the main objective of the African Exchanges Linkage Project (AELP) is to increase intra-trade amongst African stock exchanges and markets, following the completion of all requirements for the launch of an electronic platform to link all brokerage firms in securities, In the African continent, the most important of which is simplification of all procedures of trading and investment.
He added “Meetings held on 2 days with the AFDB mission in Cairo was crucial to speed up the process of preparing a comprehensive study on key determinants of activating the initiative and starting the discussions between stock exchanges and brokerage firms”.
He added that the linkage process will be conducted in accordance with studies to match the best models and mechanisms used internationally to link financial markets and brokerage firms, clarifying that the stock market management is currently communicating with brokerage firms to inform them of the initiative and how to take part in it as they are an important element in it and discuss how to maximize their benefits and how to create value chain for the securities industry.
Farid added, “The platform will increase the amount of securities offered for investment and provide a variety of investment options for all investors in African stock exchanges. This project is consistent with EGX’s objective to enhance the demand side by increasing number of investors along with improving products to improve the trading environment”.
Emmanuel Diarra, Bank Manager for Capital Markets Development Division said the integration of African financial systems is an essential part of the Bank’s Regional Integration Strategy. The Bank supports the EGX and other Exchanges by playing the role of a catalyst and providing the platform for broader collaborative engagements among financial sector stakeholders.
Together, the seven Stock Exchanges, which include the Nairobi Securities Exchange, Nigerian Stock Exchange, Johannesburg Stock Exchange, Stock Exchange of Mauritius, Casablanca Stock Exchange, and Bourse Régionale des Valeurs Mobilières (for the West African Economic and Monetary Union), represent more than 90% of Africa’s stock markets capitalization.
The African Development Bank Country Manager for Egypt, Malinne Blomberg, highlighted the importance of Egypt’s involvement in the African financial integration initiative, which aligns with the theme of the Bank’s 2019 Annual Meetings, which this year is focusing on regional Integration.
During the two-day mission (17-18 March), the Bank delegation also met other key stakeholders including the Central Bank of Egypt, the Ministry of Finance, MISR for Central Clearing, Depository & Registry (MCDR), the Egyptian Capital Markets Association, Egyptian Investment Managers Association, CFA Society Egypt and the Egyptian Society of Technical Analysts.
The AELP is supported by a Grant from the Korea-Africa Economic Cooperation (KOAFEC) Trust Fund. Other African Stock Exchanges will be included in later phases of the project.