On the latest episode of Marketplace Africa, CNN International travelled to Kenya and Nigeria to learn more about Africa’s stock exchanges. With other financial centres, such as the London Stock Exchange, dominating the market CNN learns more about how Kenya’s is staying competitive.
Geoffrey Odundo, CEO of the Nairobi Securities Exchange (NSE) tells CNN about how global and local factors, outside the control of the stock market, have had a negative effect: “We’ve experienced, a really long lull. The last time we saw a large IPO was in 2008. Subsequent to that the only listing has been the exchange itself, listing itself in 2014. The external factors are especially the reeling effects of global financial crises in 2008. We had the challenges around the global commodity prices.”
However, Odundo believes technology can be beneficial to the Nairobi Securities Exchange. Speaking to CNN, he explains: “So the NSE is at the very front end of technology. We run a very automated platform. We invest in front-ends and solutions that provide better access to markets… I’d like to point out one of the key initiatives we did last year, was to introduce the first world mobile trading bond, mobile bond on your platform.”
Some major African companies including Vivo Energy and Zenith Bank are listed on the London Stock Exchange, however, others like Grit are listed on many, making local exchanges keen to collaborate. Odundo tells CNN’s Eleni Giokos: “Dual listings is there. We are going to be having one between Kenya and London next year and one thing I must tell you is that even the London Stock Exchange prefers the listing primary happening in the local market, with possibly another form of, the listing then taking off in a different form of security in international markets. I think that’s the collaboration we’re looking for, where they’re able to help local markets grow, as well as tap into international markets”
The CEO of the Nigerian Stock Exchange, Oscar Onyema, also spoke of the challenges stock exchanges face. He says: “If you think about the exchange world, where you cooperate on one hand and compete on the other hand… we’re daily competing for listings, both domestically and internationally. However, at the end of the day you want to properly service the client.”
Like Odundo, Onyema believes the use of technology can help the Nigerian Stock Exchange stay competitive: “We’ve recently launched our new market structure which incorporates things like an opening option and a closing option that is more in line with price discovery, and that plays well to domestic markets. The other thing that our technology allows us to do… for example, SMARTS which is a technology that allows you to do proper surveillance of the market and it has some level of artificial intelligence embedded in it. We’re looking to bring out for industrial revolution-type technologies to support some of the aspirations that we have… We’re working on big data analytics.”
Marketplace Africa is sponsored by Dangote Industries.