From 25-26 November 2019, over three hundred capital markets participants converged in Kasane in Botswana to attend the 23rd Annual General Meeting and Conference of the African Securities Exchanges Association (ASEA) hosted by Botswana Stock Exchange (BSE). As the gateway to the Chobe National Park, Kasane is uniquely located near the beautiful Victoria Falls in Zimbabwe, Livingstone in Zambia, and Namibia’s Caprivi Strip.
This year’s conference was held under the theme of ‘Building Resilient African Capital Markets’, highlighting the need for the African capital market ecosystem to adopt best practices and create suitable, progressive platforms that cater for the needs of issuers, investors, and general market participants. The conference is the flagship event of ASEA, which boasts 25 vibrant member exchanges serving 32 African economies.
“We play an increasingly important role as the BSE in the region and the continent, and it was befitting for us to host the ASEA Conference and reiterate our commitment to driving the development of African capital markets,” highlighted the CEO of the BSE Mr. Tsheole, also a member of the ASEA Executive Committee where he chairs the ASEA Market Development Working Group, and the Chairman of the Committee of SADC Stock Exchanges (CoSSE). Tsheole added. “As a steadily growing stock exchange, we perceived this as an opportunity to continue to promote the visibility of the domestic capital market to the global securities industry, over and above showcasing and positioning Botswana as a preferred investment destination,” he added.
The conference was officially opened by His Excellency, the President of the Republic of Botswana, Dr. Mokgweetsi Eric Masisi. Dr. Masisi’s remarks underscored the importance of capital markets as crucial links between the real economy and the financial economy, allowing the African continent to realise positive outcomes such as improved products and services, as well as mobilisation of capital for broader improvement of livelihoods. “Like many countries around the world, Botswana is committed to creating a conducive environment for capital markets through policies and support for businesses, including the enactment of legislation that supports the efficiency and independence of the stock exchange, and through the issuance of government securities to facilitate capital formation and institutional development,” Dr. Masisi emphasised.
The President of ASEA, Mr. Karim Hajji, also CEO of the Casablanca Stock Exchange, talked about how securities exchanges stand a better chance of being more impactful to the real economy by garnering support from government. Mr Hajji went on to outline some of the accomplishments of the Association over the course of the year, notably the commencement of the African Exchanges Linkages Project, the signing of the MoU with the Chartered Financial Analyst (CFA) Institute and the subsequent publication of a research brief focusing on African capital markets, as well as studies conducted by the various ASEA working groups on pertinent issues and strategic priorities of ASEA.
Giving an overview of the proceedings, Mr. Tsheole indicated that the conference agenda was deliberately designed to speak to Africa-specific issues and solutions, whilst drawing lessons and experiences from the international capital markets ecosystem. “The heterogeneity of the patrons, the calibre of the speakers from all parts of the world, and the depth of the discussions bear testament to this. African stock exchanges make just over 2% of global stock exchanges' market capitalisation, but their importance to the continental economy and their integration with the global economy has increased phenomenally over the past two decades. As an illustration, the majority of ASEA members now use robust world-class market infrastructures and technology used in London and in New York. These investments have drawn an increasing number of participants to the stock markets, both domestic and international, who support sustainable development of our economies,” Tsheole added.
Speakers across different panels and presentations shed light and exchanged experiences on various attributes in respect of building resilient African capital markets. The World Bank representative, Mr. Xavier Furtado, emphasised the building blocks of viable capital markets such as suitable regulatory regimes that allow for innovation, low and stable inflation, sustainable fiscal management which contribute to lower costs of capital, a supportive legal framework that underpins enforcement of financial contracts, suitable financial market infrastructures that facilitate the trading, clearing, settlement and recording of financial transactions, as well as the extension of the government yield curve through increased issuances of government paper of varying maturities.
The CEO of the World Federation of Exchanges (WFE), Ms. Nandini Sukumar, participated in a panel discussion focusing on the evolution of the role of stock exchanges. Ms. Sukumar mentioned that frontier markets have the benefit of becoming flexible capital raising platforms that also serve as liquid trading venues, and bring a unique value proposition that encompass aspects of inclusiveness and collaboration between the various stakeholders and between the exchanges themselves.
Throughout the conference more thematic panel discussions and presentations were held encompassing Small-Medium Enterprise (SME) financing through capital markets, the value of market infrastructure, and the rise of alternative assets in African capital markets, among others. The discussion on opportunities in green bond financing in Africa was a particular highlight, as African exchanges continue to embrace sustainability both in corporate practices as well as in product development by incorporating Environmental, Social and Governance (ESG) issues into their listing frameworks. The key takeaway from the discussion was how green bonds can accelerate urban and infrastructure development and how certain African exchanges have pioneered the listing of green bonds, thus providing impetus and lessons for others to start the process.
Commenting on the success of the conference, Mr. Tsheole concluded: “The conference was a massive success with its diverse business, cultural and tourism offerings, was well attended by the international capital market fraternity, and the feedback has been impressive too. In my view, this is evidence that we have functional business and working relationships with the global community as African stock exchanges, and also among ourselves as ASEA Member Exchanges. The support we received as BSE from our stakeholders in Botswana was also phenomenal. We are in the third year of our five-year strategy that aims to position the BSE as a world-class securities exchange, and we are pleased and humbled for the ASEA Executive Committee and our stakeholders to have trusted us with this important responsibility.”