Integration of Stock Exchanges In Progress

CITY & BUSINESS GUIDE has learnt that very soon cross-border listing in the West African sub-region will gain grounds as discussion for the integration of stock exchanges in the sub-region has reached an advanced stage.

ECOBANK Transnational Incorporated (ETI) is already listed on the Ghana Stock Exchange (GSE), the Nigerian Stock Exchange (NSE) and other exchanges in the sub-region.

The plan, which is short of outright merger, will enable investors and dealers to trade in the exchanges of the countries involved in the project.

According to the General Manager of the GSE, Frank Adu, an integrated West African stock market will present Ghanaian investors with a much bigger market because cross-border listings will be seen as the market for the West African sub-region.

“The bigger platform would present investors with a wider perspective of investment opportunities. I think Ghanaians stand to benefit more from an integrated West African market,” he explained.

To him, the recent power crisis in Nigeria, Ghana, and Benin should be seen as a good opportunity to build the stock markets in these countries.

Stakeholders in the three stock exchanges have been attending several workshops aimed at finding ways to harmonize the trading platform, and rules and regulations governing trading in shares on the respective markets.

They believe that the creation of a single stock market will allow the stock exchanges to grow and to become competitive on the global market.

In addition, it will provide investors and companies with a large market within which to raise capitals.

The West Africa Monetary Institute (WAMI) has also been working on the integration of the Ghana and Nigeria Stock Exchanges as a first step to the integration of capital markets of member countries of the West Africa Monetary Zone, which is expected to adopt a single currency by 2009.

The integration involves the exchanges of Nigeria, Ghana and the Abidjan-based Bourse, Regionale des Valeurs Mobilieres (BRVM) that serves the eight Francophone countries in the sub-region.

It is being spearheaded by Ghana and Nigerian Stock Exchanges where Frank Adu, General Manager of the Ghana Stock Exchange and Ndi Okereke-Onyiuke, Director General of the Nigeria Stock Exchange are the lead officials.

The integration of the exchanges in West Africa, according to the players, will enable the exchanges to become bigger, strong and robust as well as help with the competing of funds from foreign and local investors.

When actualized, investors will be exposed to stocks that are traded on the Nigeria Stock Exchange, the Ghana Stock Exchange, and the Cote d'Ivoire Stock Exchange.

On how investors can use the integrated platform, the Director General of NSE said if an investor is trading in Cote d'Ivoire, he is trading in 10 countries put together in addition to the three major stock exchanges in the whole of West Africa.

“So we will be able to attract and sustain the confidence of investors if we integrate,” she added.

“We are not merging, as there is a difference between merger and integration. We are only integrating now with the quotation of the Ecobank Transnational Incorporated (ETI). As it is, if you want to buy ETI you don't have to fly to Ghana, Nigeria, or the Ivory Coast. You can access and execute that stock wherever you are on any of the three markets,” she noted.

By Charles Nixon Yeboah