THE development of African stock exchanges to accommodate the growing demand for capital received a boost on Tuesday with the appointment of South Africa’s software company Securities and Trading Technology (STT) to provide the Dar es Salaam Stock Exchange with integrated trading, clearing and settlement technology.
With liquidity a problem on most African exchanges, the development of new exchanges across Africa is beginning to take off, and South Africa’s expertise is increasingly being called on to facilitate the growth.
A total of 25 companies have so far raised capital and listed their securities on the Tanzanian exchange — 12 companies through issuance of shares and 13 through corporate bonds.
Several government bonds are already listed on the exchange and the aim is to deepen the market significantly.
Former JSE director Allan Thomson, who is involved in setting up the Bond and Derivatives Exchange of Zambia, the Nairobi Securities Exchange’s derivatives exchange for the East African region and a third exchange, which cannot be named yet, on Tuesday called the Tanzania development "a very good move".
While not directly involved with the Tanzania exchange, Mr Thomson is working with STT in a consortium to rival South Africa’s authorised central securities depository, Strate.
"Things are happening in Africa quickly now," said Mr Thomson, who recently benefited from the signing of Kenya’s Capital Markets Amendment Bill, which approved his launch of the Nairobi Securities Exchange’s derivatives ex-change. "We are delighted to partner with STT in our endeavour to transform our exchange into being a focus for enterprises and government long-term fundraising and a vibrant platform for value and liquidity creation to investors," said Dar es Salaam Stock Exchange CEO Moremi Marwa.
"It will facilitate our transformation intent and improve the exchange’s risk management capabilities," he said.
The bourse started its operations in 1998 and has total market capitalisation of $11bn, with listed bonds worth more than $2bn. The number of investors is about 185,000.
Its key objectives are to facilitate privatisation and enable business enterprises and government bodies to raise funds for expansion and "for economic welfare improvement of the community", he said.
Tanzania is a dynamic and fast-developing market, STT MD Michelle Janke said on Tuesday. "We look forward to working with the exchange to upgrade their technology."
