AFX: African Stock (Securities) Exchanges Live
Africa is a region of immense economic potential only hindered by unstable political regimes, weak public institutions, and lackluster policy enactments. However, recent years have seen big strides in these areas raising a positive outlook for the continent. After experiencing its slowest growth in a period of over two decades in 2016, the African economy is expected to rebound at an accelerated pace on the back of significant improvements in monetary policies and increased investments in infrastructure. Issuance of sovereign bonds on many international capital markets further attests to the global positive sentiment toward the region.
A stock exchange, typically representing a country's capital market, provides a market where securities are traded under regulated procedures. It not only channels funds into the economy, but also provides investors with returns on investments in the form of dividends. The exchange fulfills its main function of raising capital for listed companies by re-channeling cash resources into productive economic activity, thus building the economy while enhancing job opportunities and wealth creation. This platform attempts to make accessible relevant market information on publicly traded companies across the various stock exchanges in Africa.
The Ghana Stock Exchange (GSE), incorporated in 1989, is the sole secondary capital market in the country. It is governed by a nine-member council consisting of independent members and representatives from dealing members and listed companies. The GSE also operates the Ghana Alternative Market which is aimed at small and medium-sized enterprises. Since its inception, the GSE has undergone several reforms to improve liquidity, enhance efficiency, and attract more investors. The Foreign Exchange Act of 2006 (Act 723), for example, eliminated regulatory limits that affected foreign and non-resident investors allowing free foreign exchange remitability for the original capital plus all capital gains and related earnings, however, subject to an 8% withholding tax which is also the final tax on dividends. This tax applies to all investors, both resident and non-resident. Capital gains on listed securities are, however, exempt from tax.
The JSE (officially, JSE Limited) had its origin in 1887 when Benjamin Minors Wollan proposed to a meeting of the Exchange and Chambers Company board and members that a stock exchange should be established. On November 8, Wollan founded the Johannesburg Exchange & Chambers Company by providing a facility to conduct trading. By January 1890, listings had expanded to more than 300 companies. Fast forward to 2001, the JSE struck an agreement with the London Stock Exchange to enable cross-dealing between the two exchange and run LSE's trading system on the JSE. In April 2014, the JSE re-branded as a modern African marketplace that connects investors to growth opportunities, not only in South Africa, but across the globe.
The Nairobi Securities Exchange (NSE), which was constituted in 1954 as a voluntary association of stockbrokers and registered under the Societies Act, is today a leading African Exchange. The Exchange is based in Nairobi, the capital of Kenya, and has had a pivotal role in the process of economic development in the country. Dealing in both fixed and variable income securities, the NSE has triggered the reallocation of financial resources from dormant to active agents, helping local and international companies access cost-effective capital. Being innovative and diverse, the Exchange has become partners with several international organizations. The NSE is a member of the World Federation of Exchange, and a founding member of the African Securities Exchanges Association and the East African Securities Exchanges Association. The NSE is also a member of the Association of Futures Market and a partner exchange in the UN-led SSE initiative.
The Nigerian Stock Exchange (NGX) was founded on September 15, 1960 and commenced trading in June the following year. It is regulated by the Securities and Exchange Commission of Nigeria and licensed under the Investments and Securities Act. Since the deregulation of the Nigerian capital market in 1993, and the subsequent institution of investor protection policies, NGX has seen significant growth. In fact, the All-Share Index, which was launched in 1984 with a base value of 100, reached a peak of 66,371.20 in March 2008. NGX is a founding member of the African Securities Exchanges Association and also a member of World Federation of Exchanges, International Organization of Securities Commissions, and the SSE Initiative.
History of the Zimbabwe Stock Exchange (ZSE) dates back to 1896 when Cecil Rhodes founded the first exchange in Bulawayo. However, the ZSE's true antecedent is the one founded in 1946 by Alfred Mulock Bentley; and after the Zimbabwe Stock Exchange Act was passed into law in 1976, the modern-day ZSE came into being. In 1993, certain regulations were repealed to allow foreign participation on the exchange though limited by a maximum holding of 15% individually or 49% collectively in any listed company. Today, the ZSE operates under the oversight of the Securities and Exchange Commission of Zimbabwe (SECZ) which in 2009 established an investor protection fund to provide compensation to whoever suffers losses as a direct consequence of malpractice on the part of a market player or in the event of insolvency. The SECZ, as a statutory body, also determines the level of capitalization required for members of the Exchange.