OXFORD BUSINESS GROUP
In collaboration with
oxfordbusinessgroup.com
July 2022
Foreword
Félix Edoh Kossi Amenounve, President, ASEA; and CEO, BRVM
Although less volatile than international markets, African markets mirrored the global downward trend on stock exchanges during the early months of the Covid-19 pandemic, with the extent of the impact depending on the exposure of leading sectors. The situation improved in 2021 owing to the vaccination rollout and the gradual lifting of containment measures. Indeed, a general upward trend took hold from late 2020 and almost all African exchanges closed 2021 in the green.
The key actors of African financial markets showed remarkable resilience during the period of turbulence and transformation. When individual investors shifted their focus from equities to bonds and the pandemic led to exits by several major foreign investors, the shocks were relatively offset by the intervention of local institutional investors. At the same time, stock exchanges and brokers have kept pace with the rapid development of new technologies to prevent bottlenecks in financial market operations, offering companies and investors more of their products and services online, faster and at a lower cost.
It is now time to address the challenges of facilitating economic transformation on the continent through the capital markets. For the most part, African stock exchanges remain modest in size and liquidity, and therefore their contribution to economic development continues
to be marginal. There is a need to encourage enthusiasm for African securities and address the lack of depth in the market to support major operations; we must supply stock exchanges with more listed companies and boost demand for securities by developing institutional savings mechanisms and mobilising citizens' savings through concerted efforts at enhancing financial literacy. In addition, integrating African stock exchanges will greatly improve liquidity and depth.
The African Exchanges Linkage Project, jointly piloted by the African Development Bank and ASEA, aims to connect stock exchanges on a continental scale after a pilot phase with seven major exchanges. This project complements the strong momentum behind the African Continental Free Trade Area and builds on significant pan-African trade and investment initiatives. This will contribute to more dynamic capital markets with benefits for investors, issuers and the overall financial system via greater competition and innovation, the harmonisation of regulations and standards, and increased capital circulation.
In this report OBG, in collaboration with ASEA, highlights the key trends and opportunities that have emerged in the financial sector, and showcases how key market actors rose to the challenge of supporting economies, investors and companies through the pandemic.
OBG African Stock Exchanges Focus Report
July 2022
OXFORD BUSINESS GROUP
Content Guide
OBG African Stock Exchanges Focus Report
July 2022
OXFORD BUSINESS GROUP