The ongoing project to link Nairobi Securities Exchange (NSE) with six other top bourses in Africa will provide a much-needed boost for cross-border trading.
The participating stock exchanges have a market capitalisation of about Sh132.5 trillion ($1.21 trillion).
Participating countries must ensure that they settle for a secure platform that will protect the integrity of trading.
Currently, one can trade across the border but the process is cumbersome since it involves appointing a broker in the other country and routing of orders must happen in that particular country.
If well handled, the project can stimulate intra-African flows and cut on foreign investor dominance that often haunts African bourses when foreigners decide to exit. The NSE, which is facing an initial public offerings (IPOs) drought, can also ride on this project to attract cross listings and give companies a larger platform for capital raising.
The project is also expected to boost liquidity in African capital markets by allowing key securities exchanges to access and redistribute domestic capital for economic development.
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