Eric Ombok Nairobi
SOUTH Africa, Nigeria and Kenya are planning to cross-list more exchange traded funds (ETF) on their stock markets to boost the liquidity of the securities, according to the JSE.
“We reached out to East Africa and West Africa,” Tamsin Freemantle, a business development manager at the JSE, said last week. The bourse was “working closely with those markets to develop this cross listing”, she said.
African exchanges are looking to increase co-operation as companies from Botswana to Nigeria list their shares on other bourses.
The JSE, with a market value of R10.7 trillion, has rallied 8.9 percent this year in the best performance after Botswana among 14 sub-Saharan exchanges tracked by Bloomberg.
Nigeria’s main index has fallen 0.6 percent, while the Nairobi all share measure is up 3 percent.
“There is a clear need for them to join forces to respond to the need of African companies to raise funds on a pan-African basis,” Boris Martor, a Paris-based partner and Africa expert at law firm Eversheds, said yesterday. “Entrepreneurs, companies and funds are going from a regional to a continental approach.”
In 2011, Absa Capital, a unit of Barclays Africa, listed its NewGold ETF on the Nigerian Stock Exchange. The West African nation now has four ETFs, while the JSE has 45, according to Freemantle.
Investor interest
Donald Ouma, the head of market product and development, said the Nairobi Securities Exchange was awaiting regulatory approval to offer the asset class.
“Once we have the ETF framework, we will be ready to have the gold and platinum ETFs by Absa cross-listed in Nairobi,” Ouma said last week. He did not say whether other funds would be considered
.
Calls made to Oscar Onyema, the chief executive of the Nigerian bourse, did not connect on Friday. The JSE is sub-Saharan Africa’s biggest exchange by market value followed by Namibia, Nigeria and Kenya.
“In order to grow your markets you need more investors and in order to have more investors you need more things for them to invest in,” Freemantle said. “We need to actually step up and make sure we get that investor interest .” – Bloomberg