East African Securities Exchange Association (EASA) which brings together Kenya, Uganda, Tanzania and Rwanda stock exchanges have agreed on a technology platform to integrate trade in the region.
EASA chairman Chris Mwebesa said in a statement received here Monday that the exchanges could start trading through Smart-Order-Routing System, expected to involve the agents and clients by May next year.
Mwebesa who met CEOs of regional stock exchanges in Nairobi last week said the meeting made significant steps aimed at enhancing the cause of integration. The new system is expected to allow market players within the region to trade without altering market policies governing the individual markets.
"The system will allow for optimum operations within the markets, while maintaining the independence of the policies that govern trading in each stock exchange," said Mwebesa.
Integration of the capital markets will mean that investors can buy and sell securities in any East African stock market without restriction; participants in capital markets will freely offer their services throughout the region and those identical securities will trade at essentially the same price across markets after foreign exchange adjustments.
Mwebesa said the request for proposals would be ready in November with the project being implemented within three to six months thereafter.
Mwebesa said the system would be more efficient and unhindered by the foreign exchange regimes in individual countries.
He said the integration model would allow market participants in the EAC's exchanges to trade in the four markets of Kenya, Uganda, Tanzania and Rwanda.
The integration of the Exchanges, he added, would benefit the region through consolidation of market liquidity and increasing visibility of EAC' s capital markets to foreign investors, hence attracting capital inflows.
It would also offer single access point to capital and liquidity across the markets and make cross-border trading more efficient.
Mwebesa also said the stock market would undergo a major transformation with the launch of a Securities Industry Training Institute to be headquartered in Kampala, Uganda.
Already pilot programs have been rolled out in Kampala and Nairobi, with the Kigali and Dar-es-Salaam being next in line. The training programs are being supported by the International Finance Corporation, a subsidiary of the World Bank.
Initially the commitment of Tanzania to the proposed integration of the securities was in doubt.
The country had barred its citizens from participating in the Safaricom Initial Public Offering that was opened to the region members as local investors. It recently also barred foreigners (Kenyans and Ugandans) from one of its more promising offers in the life of the DSE.
"As a market we are actually voiceless in some decisions that are being made by the political class," said Jonathan Njau, CEO ofthe Dar-es-Salaam Stock Exchange.
Njau said policies put in place by the Tanzania government, had hindered nationals from EAC member states from participating in its initial public offers.
"We have written a letter to the governor to have some of the sepolicies reviewed and we hope he will act on them. Tentatively our definition for local investors remains citizens of the EAC," said Njau.
Source:Xinhua
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