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Nigeria, S’Africa, Kenya plan ETF cross-listings

By on May 19, 2015

South Africa, Nigeria and Kenya are planning to cross-list more exchange-traded funds on their stock markets to boost liquidity of the securities, according to the Johannesburg Stock Exchange.

“We reached out to East Africa and West Africa,” the Business Development Manager of the South African bourse, Tamsin Freemantle, told Bloomberg in an interview in the Kenyan capital, Nairobi.

The JSE is “working closely with those markets to develop this cross listing,” she said.

African exchanges are looking to increase cooperation as companies from Botswana to Nigeria list their shares on other bourses. The JSE, with a market value of 10.7 trillion rand ($902bn), has rallied 8.9 per cent this year in the best performance after Botswana among 14 sub-Saharan exchanges tracked by Bloomberg. Nigeria’s main index has dropped 0.6 per cent, while the Nairobi all-share measure is up three per cent.

In 2011, Johannesburg-based Absa Capital, a unit of Barclays Africa Group Limited, 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.

The Nairobi Securities Exchange was awaiting a regulatory approval to offer the asset class, said the Head of Market Product and Development, Donald Ouma.

“Once we have the ETF framework, we will be ready to have the gold and platinum ETFs by Absa cross-listed in Nairobi,” he said. He didn’t say whether other funds would be considered.

Calls made to Oscar Onyema, CEO of the Nigerian bourse, didn’t connect on May 15. 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.”

 

 

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