AFRICAN EXCHANGES. Issue 4 December A Newsletter 0f AFRICAN EXCHANGES

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1 AFRICAN Issue 4 December 2015 EXCHANGES A Newsletter 0f AFRICAN EXCHANGES

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3 Content ASEA CONFERENCE 5 EXPERT OPINION 8 EXPERT OPINION 15 MEMBERS NEWS 29 STATISTICS 44 INDEX CHARTS 62 MEMBERS CONTACTS 67 I 2015 I Issue 3 3

4 Welcome Note 2015 has been a tough year on the markets and we are glad to see the year come to a close. However, it was a good year for the Association as it welcomed three new Members. SWIFT and the African Development Bank joined as Observer Members, and FMDQ Securities Exchange joined as a full Member. EDITOR Fanon Mwenda fmwenda@nse.co.ke PUBLISHED BY: African Securities Exchanges Association Website: Telephone: The just concluded 19th ASEA Conference was held in November hosted by the JSE. The Conference was attended by industry players drawn from across the globe. The JSE was a very gracious host and the delegates had productive deliberations. The event was organized impeccably and it was very well received by the delegates. The Rwanda Stock Exchange was announced as the host of the 20th ASEA Conference next year. We are all looking forward to the event and for the opportunity to visit the land of a thousand hills. We wish you all a very Merry Christmas and a prosperous new year. Editor Fanon Mwenda fmwenda@nse.co.ke ASEA Secretariat DESIGN & LAYOUT: Kichimbi Brand Solution kichimbibrand@gmail.com Tel: ADVERTISING: Fanon Mwenda ASEA Secretariat fmwenda@nse.co.ke SEND YOUR FEEDBACK TO: ASEA SECRETARIAT Exchange Building, 55 Westlands Road P.O. Box Nairobi Website: Telephone: fmwenda@nse.co.ke All rights reserved. Reproduction in whole or in part without written permission of the editor is strictly prohibited. The greatest care has been taken in compiling this Newsletter publication. However, no responsibility can be accepted by the publishers or compilers for accuracy of the information presented. africaexchanges African Securities Exchanges Association 4 I 2015 I Issue 3

5 ASEA CONFERENCE ASEA CONFERENCE REFLECTS STRENGTH OF CONTINENT S CAPITAL MARKETS The African Securities Exchanges Association (ASEA) a premier association of 25 securities exchanges from across the continent, held the 19th annual conference in Johannesburg from November 2015 which was hosted by the Johannesburg Stock Exchange (JSE). The conference was attended by close to 200 people from 27 countries across the continent and globe including representatives from Côte d Ivoire, Nigeria, Mauritius, Kenya, United Arab Emirates, the US, UK and Sri Lanka. The theme of the conference, Africa Evermore: Growth for sustainability embodied the potential, growth, and stability of Africa s capital markets. The Conference is important as it features high level discussions covering themes that are relevant to our capital markets and opportunities to network with leading industry players from across the continent, said Oscar Onyema, the President of ASEA. The conference garnered positive feedback from delegates: The theme of this year s conference was well in tune with the current trends in Africa. If this year s momentum can be maintained and enhanced, then ASEA is heading to great heights. That was an amazing and excellent conference, many thanks for all the hard work to pull it together. It was very high standard particularly the very focused level of the agenda and the panellists, African Exchange I 2015 I Issue 4 5

6 ASEA CONFERENCE which meant that every session was riveting and very interesting, with a lot of good learning and debate, also continuing in the coffee breaks. Not to mention the amazing hospitality of the JSE and the excellent organization throughout. Congratulations to the JSE for the magnificent ASEA conference we had during the last three days. It was pleasure meeting and working with the JSE on ASEA You indeed demonstrated a high degree of professional work in making the event as a successful one. (sponsor) JSE Chief Executive Officer Nicky Newton-King says that the packed two-day programme provided delegates with an in-depth understanding of the strength resulting from the integration of Africa s security exchanges. Those who operate in the regulated market need to know that we are part of the global financial markets, she said. We are already beginning to see this for example in East Africa, where they are driving significant regional connectivity. Delegates also had the opportunity to explore how to attract Sovereign Wealth Fund (SWF) investors and examine how they see Africa s Exchanges. A number of ASEA s member countries have already launched SWFs, including Angola, Ghana, and Nigeria. SWFs invest surplus revenues and can be an effective fiscal stabilisation mechanism, enabling governments to access liquid assets, and channel investment into specific projects like infrastructure development. The ASEA conference was a good platform to share knowledge and experiences so as to build depth and sophistication of African markets across the continent that will allow linkages to develop over time. Capital markets have been the key drivers of Africa s economic transformation and continue to play a central role in the continent s growth story. Amongst some of the topics discussed looked at the Role of the Exchange as a Corporate Citizen. Increasingly, investment decisions are being driven by considerations of risk, impact, and sustainability that are far wider than just financial returns. ASEA assists in promoting and educating members and stakeholders on the importance of socially responsible investments and the need to pay attention to environmental, social, and governance (ESG) issues. 6 African Exchange I 2015 I Issue 4

7 EXPERT OPINION GLOBAL TRENDS ACROSS CAPITAL MARKETS AND IMPLICATIONS FOR THE AFRICAN EXCHANGE SPACE Author: Paul Calvey, Principal, Oliver Wyman Capital markets are facing structural changes with actors expanding their presence across the value chain Expansion of market participants across value chain VALUE CHAIN Client Coverage Execution ACTORS Sell-side Exchanges CCPs (I)CSDs Custodians Data & technology providers & other 3 rd parties Commissions 4 6 Risk premiums Financing Clearing 4 Securities services Settlement Custody Collateral management 3 5 Post trade data and analytics 2 1 Buy-side 7 Overview of key changes 1. Sell-side building out front to back capabilities in push for vertical integration 2. Market infrastructure providers expanding into data, analytics and technology 3. CSD s expanding into collateral management solutions 4. Custodians looking to build out for front-to-back capability 5. Custodians adding collateral management servicing 6. Development of execution venues by data / technology providers 7. Buy-side taking greater role in own clearing Core model Emerging model African Exchange I 2015 I Issue 4 7

8 EXPERT OPINION These changes to the value chain will have knock-on effects for the mix and preponderance of risk across providers Changing risk profile for capital markets providers Buy side Sell side Exchanges CCPs (I)CSDs Custodians Data & technology providers & 3 rd parties Market-wide (aggregate impact) OPERATIONAL RISK Increasing operational risk at market infrastructures Operational risk increasing CREDIT RISK LIQUIDITY RISK Sell side de-risking across all risk types Growth in liquidity and credit risk at CCPs, (I)CSDs and Custodians MARKET RISK Buy-side changing the composition of credit and liquidity risk while increasing market risk Shifting credit and liquidity risk Comments We see 3 major risk trends occurring: 1. De-risking from the sellside in response to regulation 2. System wide increase in operational risk due to increasing flow, use of technology, interdependency and complexity 3. Increased liquidity and credit risk placed upon CCPs and CSDs as a result of growing volumes and services Key for players will be to ensure appropriate risk management expertise to monitor, control and mitigate any increased risk they face Actors suitability to perform different roles varies, and in many cases adaptation will be needed to succeed Assessment of current suitability of providers Factors for success VALUE CHAIN Client Coverage Execution Commissions Risk premiums Financing Sell-side Market infrastructure ACTORS Exchanges & IDBs CCPs (I)CSDs Custodians Data & technology providers & other 3 rd parties Buy-side Across the capital markets industry we believe traditional success factors will be replaced by a different set of characteristics: Cost efficiency Technology (being either an excellent user or developer) Ecosystem relationships Clearing Securities services Settlement Custody Exchanges will need to adapt in order to provide additional service offerings across the value chain Collateral management Data/analytics/technology Core model Emerging model Oliver Wyman Able to enter with minimal adjustments to business Adjustments to business needed to enter Major adjustments to business needed to enter 7 8 African Exchange I 2015 I Issue 4

9 EXPERT OPINION We see 5 key areas for the African exchange space to focus on Theme Details 1 Partnerships and alliances for expansion and capabilities Exchanges globally are establishing various types of arrangements with peers to support their growth and expansion Drive common standards across markets Investor connectivity across markets Supporting SME / growth companies access to finance Launching new data products / cross listing with other exchanges Harmonizing standards between African markets can support investors access & drive liquidity on exchanges Exchanges can broaden their investor base through establishing connectivity arrangements between African markets / link to international markets (e.g. HKEX > Shanghai Connect) Significant number of SMEs and growth companies across Africa that require access to finance, exchanges can play a greater role in supporting this Opportunities to launch new data products such as indices to capture investor appetite and cross list to access new investors Partnerships and alliances 1 We are seeing an increasing number of partnerships and alliances aimed at geographical / IT / product expansion Exchange partnership framework Partnership examples (non-comprehensive) Merger/ majority stake Integrated technology platform/ back-office Integrated marketplace Numerous domestic market consolidations ICE (NYSE) Nasdaq OMX CME-NYMEX Depth of partnership Minority stake Joint venture Alliance MoUs Knowledge/ resource sharing Technology platform co-development/ sharing Technology platform outsourcing New exchange set-up Clearing infrastructure sharing Joint product development Crosslisting/ liquidity pooling DBAG-SGX (collectively 10% stake in BSE) TSE-SGX CME-Bursa Malaysia Eurex ASEAN Exchanges SGX-CME (Euro-dollar) KRX-Bursa Malaysia (bond platform) Deutsche Borse- SGX (indices) Exploratory Cost-driven Revenue-driven Source: Oliver Wyman analysis Aimed benefits African Exchange I 2015 I Issue 4 9

10 EXPERT OPINION Partnerships and alliances 1 Emerging market exchanges typically partner with tech providers or international exchanges for capabilities / market access Emerging / developed market deals or partnerships Non-exhaustive examples Turkey BIST D.Borse Knowledge Sharing / Transfer Agreement BIST Egypt Indices / market data sharing Qatar QE - NYSE Euronext Strategic agreement and knowledge transfer Korea Korean Sec. Dep - Euroclear Strategic partnership Mexico MexDer CME: Revenue enhancement for developed market and increased liquidity for emerging market Egypt EGX NYSE Liffe: EGX30 index futures contract on NYSE Liffe London Dubai Dubai Bourse (DIFX) OMX / Nasdaq Strategic agreement India NSE - NYSE Multi Commodity Exch. of India NYSE Euronext Delhi Stock Exchange LSE BSE D.Borse Revenue enhancement for developed market Brazil BM&F CME: Gain capabilities and new technology South Africa JSE FTSE: Indices development Malaysia B.Malaysia CME Cross-listing Agreement Singapore SGX D. Borse Cross-listing Agreement Source: Oliver Wyman research Harmonization of standards 2 Establishing common standards and rules across African markets could support greater investor access and liquidity Trading rules Listing rules Disclosure requirements Trading hours Securities taxation rules Data standards Common drive would be required across ASEA and local regulators 10 African Exchange I 2015 I Issue 4

11 Expansion of investor connectivity across markets 3 ASEAN Trading Link showcases a promising way to collectively advance capital markets in a region EXPERT OPINION ASEAN members and Trading Link participants Content of agreed exchanges integration Myanmar Laos ASEAN Exchanges is a collaboration of 7 exchanges: Malaysia, Vietnam (2 exchanges), Indonesia, Philippines, Thailand and Singapore Thailand Cambodia Vietnam Phillippines Aims to promote the growth of the ASEAN capital market and bring more ASEAN investment opportunities to investors Brunei Malaysia Singapore Indonesia Key: ASEAN Trading Link in use Promotes the development of ASEAN as an asset class, e.g. through a joint ASEAN stars index ASEAN Trading Link, a B2B electronic network for cross-border trading & order routing, marked the first key milestone for ASEAN Exchanges ASEAN Trading Link enables brokers of participating exchanges to directly trade shares on other participating exchanges ASEAN Trading Link agreement signed ASEAN member without participation in ASEAN Trading Link Expansion of investor connectivity across markets 3 Venues continue to seek expansion of their investor base through inter-region connectivity Pan-European market with common order book Honk Kong Shanghai connect CHINA Euronext was the first to pursue a common market approach Created a single order book across France, Netherlands, Belgium, and Portugal Involved significant alignment of regulations in each country Volume uplift of 10-20% across all markets once complete Attempt to allow more western investment in China through access from Hong Kong Purely aimed at allowing investors access to a wider range of stocks Bridge opened in Q and has seen a positive uptick in volumes Additional connectivity being set up with Shenzhen and addition of other products (commodities, bonds, etc.) Potential opportunity for African exchanges to connect across markets African Exchange I 2015 I Issue 4 11

12 EXPERT OPINION Supporting growth companies / SMEs 4 Exchanges can play a more prominent roles in supporting SME / growth companies access to finance Year since launch Investors SMEs / growth companies Professional service providers 1 st year Founding stage Development stage Pre IPO platform to provide a supportive ecosystem to SMEs development Access to investors Access to support services Years 2-5 Established stage Investors Access to new growth companies Companies Increase in business Services Mature company SME segment on the exchange IPO readiness 5 years + IPO Investors Raise funds Invest Companies Services Supporting growth companies / SMEs 4 A pan-regional market could achieve the critical mass of listings and liquidity that national platforms struggle to attain Pan regional SME platform (e.g. MENA) Perspectives A pan-regional SME exchange allows SMEs from many countries to list on a platform: More easily achieve the critical mass of listings and liquidity that national platforms struggle to Bring cross-border investment flows Investors are provided with a wider and more diverse set of companies to invest in To succeed this would require work to overcome challenges created by national differences: E.g. different currencies, tax regimes and listing and disclosure requirements The integration of European Union countries has made this more viable and led to Alternext / Enternext being established in Europe However, first attempts at pan-regional exchanges are also being made in the Middle East and Africa and there is an opportunity to drive a pan-african platform 12 African Exchange I 2015 I Issue 4

13 Indices / cross listing 5 EXPERT OPINION Exchanges are setting up new indices to attract investor flows as well as cross listing with peer exchanges Example indices set up Cross listing 1 2 Composite Index Composite of stocks between exchanges Provides investors with different risk exposures E.g. Greece and Turkey 30 Partnership with a global indices provider Partnership with global indices providers Examples: JSE and FTSE Shariah Top 40 FTSE Bursa Malaysia KLCI FTSE/ASEAN Index Exchanges are cross listing stocks on each others platforms in order to gain access to new investor groups Enables expansion of international footprint Investors benefit from additional companies to invest in and gain international exposure Companies benefit from broader global investor base A number of examples exist globally including between some African exchanges: Developing strong capital markets across Africa will lead to benefits for multiple stakeholders Key components of advanced capital markets entail benefits for different stakeholders Exchanges Balanced investor base Enabling and sound regulatory regime Breadth and depth of asset classes CAPITAL MARKET Integrated and comprehensive market infrastructure Diverse and active issuers Tiered market structure Revenue uplift Capability and product offering extension Enhanced liquidity Issuers Access to new financing options Potentially lower capital costs Access to a wider set of investors Investors Access to new investment opportunities Ability to diversify through new asset classes Increased transparency of market opportunities Regulators Strengthened regulatory scrutiny raises investor confidence Leveraging combined know-how through increased collaboration between national regulators 17 African Exchange I 2015 I Issue 4 13

14 EXPERT OPINION TOWARDS BETTER CAPITAL MARKETS SOLUTIONS FOR SME FINANCING AUTHORS Daniela Peterhoff Partner John Romeo, Partner Paul Calvey, Principal Small and medium enterprises (SMEs) businesses with fewer than 250 employees play a critical role in global economic development. They are the engines of innovation and new job creation. Yet SMEs find it difficult to obtain financing. Given their small size, SMEs have tended to rely on bank lending. However, following the global financial crisis, this source of financing has become increasingly expensive and therefore difficult to access. This threatens to suppress the growth of SMEs and economic development. SMEs can bypass traditional bank lending by instead issuing equity and debt securities in the capital markets. The fixed costs make this more difficult for SMEs than for larger firms, but not impossible. Given the importance of SMEs to national prosperity, it is essential that stakeholders work together to develop new capital market based mechanisms to support SMEs. This Oliver Wyman Perspective proposes some innovative solutions to enable better access to financing: f f f f f f f f Information platforms and support services via exchanges A pan-regional SME market place Virtual bulletin boards across exchanges Government supported SME platforms Hybrid models linking banks and exchanges SME mutual guarantee networks Retail orientated solutions, such as crowd funding High-end institutional solutions We also take a closer look at the economic importance of SMEs, the financing market and the strengths and weaknesses of current capital market mechanisms. Looking forward, we outline recommendations that will be imperative to the future growth of SMEs. 14 African Exchange I 2015 I Issue 4

15 EXPERT OPINION PART ONE: SME FINANCING TODAY 1. SME MARKET CONTEXT AND IMPORTANCE SMEs account for nine out of ten businesses globally. They provide more than 60% of overall employment world-wide and roughly 80% of jobs in the developed world. SMEs contribute approximately 50% of global Gross Value Added (GVA), and an even larger percentage in developed countries. Exhibit 1: GVA and employment contribution of SMEs Total world Total G-20 Total G-8 Total EU-27 Total OECD Total non-oecd Total BRIC GVA 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Employment 100% Source ACCA, Small Business: A Global Agenda, 2010 SMEs require financing throughout their development lifecycle from seed capital during start up, through to growth investment in their development stage. However, they face significant challenges in accessing finance, thus limiting their ability to rise above SME status and stifling their economic growth. 70% of SMEs do not use formal lending facilities, while another 15% are underfinanced from such sources. The total unmet demand for credit by all formal and informal SMEs is estimated to total $3.5 TN (equivalent to 30% of all formal SME credit outstanding). The International Finance Corporation (IFC) estimates the formal SME credit gap to be $1.5 TN globally 1 a third of it in high-income Organization for Economic Co-operation and Development (OECD) states and two thirds in emerging markets and developing countries. Restricted access to finance was cited by SMEs worldwide as their greatest constraint on growth. 2 1 IFC Enterprise Finance Gap Database IFC, AFME, Oliver Wyman analysis African Exchange I 2015 I Issue 4 15

16 EXPERT OPINION Exhibit 2: Credit gap of unserved and underserved SMEs % OF SMES >70% 60%-70% 50%-60% 40%-50% <40% No data Source IFC, Enterprise Finance Gap Database, 2010/2011; Oliver Wyman estimates Exhibit 3: Formal SMEs globally % BREAKDOWN AND TOTAL # OF SMES MMs Europe and Central Asia 59-72% East Asia and the Pacific 72-88% Latin America and the Caribbean 35-43% South Asia 29-35% 36-44% % 22-27% Total 4-5% 17-21% 56-69% Middle East and North Africa Sub-Saharan Africa 27-33% 53-65% 1% 5-6% 19-23% 7-9% 15-18% Medium Small Very Small Firms (Approximately 65-70% of formal SMEs in the world) Source IFC, Closing the Credit Gap for Formal and Informal Micro, Small, and Medium Enterprises, Formal SMEs defined as registered entities The global financial crisis has left its mark on SMEs as banks and regulators have applied more cautious risk management and credit underwriting processes, most obviously, through the application of Basel III. This has pushed the quantity of SME lending down and the price up. A comparison of the average cost of loans in Europe shows the widening gap between lending to SMEs and to large firms. 16 African Exchange I 2015 I Issue 4 Copyright 2014 Oliver Wyman

17 EXPERT OPINION Exhibit 4: Cost of new loans in Europe by ticket size 2012, BPS bps < 1 MM 0 Jan 07 Jan 08 Jan 09 Jan 10 Jan 11 Dec 12 > 1 MM Source ECB, ECB SME funding survey 2012, Oliver Wyman analysis (Averaged across tenor; Spread calculated as corporate loan interest rates minus base Euro area base rate) Governments can help to improve the flow of capital to SMEs not by lending to them directly but by ensuring that the institutional environment is conducive to SME lending. Specifically, the wider use of capital market-based solutions can help bring the private and public sectors together to realize broader economic and social benefits of lending to an SME. 2. CAPITAL MARKET FINANCING SOLUTIONS FOR SMEs SMEs have been forced to alter their funding mix as the cost of finance has risen while economic conditions have remained poor. SMEs predominantly use short-term funding options including overdrafts, lines of credit and bank loans. Such sources can be valuable in the start-up stage but they do not provide the long-term financing required as companies mature or seek growth. African Exchange I 2015 I Issue 4 17

18 EXPERT OPINION Exhibit 5: SME financing sources in Europe % OF SMES USING EACH SOURCE, % 40% 30% 20% 10% 0% Overdrafts and credit lines Bank loans Trade credits Leasing, hire purchasing Equity Debt issuance Source ECB, ECB SME funding survey 2012, Oliver Wyman analysis Capital markets are the obvious alternative to bank lending. However, raising capital by issuing equity or debt securities involves high average transaction costs, onerous listing requirements and complex legal and regulatory frameworks. For these reasons, it has typically been the preserve of large firms. In 2013, from a sample surveyed (see Exhibit 5), only 5% of SMEs in Europe issued tradable equity and 2% issued debt. Nevertheless, we believe that up to 20% of SME funding could be sourced from the capital markets. Capital markets solutions available to SMEs can be divided into three broad categories ( platform is used below as a general term encompassing exchange-like trading mechanisms). Exhibit 6: Categorization of existing capital market based mechanisms 3 SME EQUITY PLATFORMS TYPICAL SME SIZE Medium sized SMEs (e.g FTEs 3 ) TYPICAL SME LIFECYCLE STAGE Established/ mature companies RELATIVE COST OF FINANCE TIME TO RAISE FINANCE High High High SOURCE OF LONG TERM FINANCE SME DEBT PLATFORMS Medium sized SMEs (e.g FTEs) Established/ mature companies High Medium High ALTERNATIVE LISTING VENUES (WITHOUT TRADING) Smaller sized SMEs (e.g. <150 FTEs) Developing/ established companies Low Low Low 18 African Exchange I 2015 I Issue 4

19 A. SME EQUITY PLATFORMS EXPERT OPINION SME-focused equity platforms have been established across the globe, offering an alternative to main listing boards on national stock exchanges. Equity platforms provide SMEs with the opportunity to IPO once they have become well-established. In most markets the SME platform acts as a second-tier listing alternative to the main stock exchange. Such platforms are characterized by lower listing requirements and costs to list than the main board, helping to make it a viable solution for SMEs seeking finance. SME equity platforms are best suited to the largest SMEs (i.e. the medium segment) given the initial cost and ongoing listing requirements most platforms demand. Several platforms around the world have proved successful: the Alternate Investment Market (London), TSX Venture (Canada), HK GEM (Hong Kong), Mothers (Japan), Alternext (Europe) and AltX (South Africa). Each of these markets has grown rapidly and maintained a sizeable number of listings. Given the observed costs of setting up such platforms, IPOs are required for launch with a critical mass of listings in place after five years 4. Exhibit 7: Cost of listing on an SME platform: assuming 1x market cap: turnover and 50% float $K 200 ~200 K NPV of costs associated with remaining listed: ~100 K K legal fees % overheads Assuming 3 yrs accountancy retainers total 6 K 50 Assumed 5-10 K per quarter 0 Nominated Advisor Overhead Underwriting Accountancy Legal Total IPO Total Remaining listed Assuming max of 25 K or 2% of funding raised Source Oliver Wyman analysis based on reviewing the listing cost on SME equity platforms However, there are still obstacles to SME equity platforms becoming widely used. The cost for companies to list ($ K) and remain listed on a platform ($ K per annum) is high. In addition, because most SME issuances are small, many institutional investors are reluctant to buy and trade them. This reduces downstream liquidity, with SME exchanges typically having about 30% the liquidity of main markets. Investors have also been deterred from playing an active role on many SME platforms by their complex legal and regulatory frameworks. For example, some equity platforms failed African Exchange I 2015 I Issue 4 19

20 EXPERT OPINION on account of loose listing and de-listing regimes that led to a lack of confidence from investors utilizing the platform. B. SME DEBT PLATFORMS Given the low interest rates seen in most developed markets, issuing debt securities has become a better option than equity IPOs. In Europe there has been an increase in small bond issuances of less than 10 MM. As with equity platforms, issuing debt securities is better suited to the more mature and larger SMEs. Spain has recently set up MARF, an alternate fixed income platform, which aims to ease access to the market for both issuers and investors. NYSE Euronext has recently announced plans to promote the issuance of corporate bonds by SMEs via its Alternext capital markets platform. And several regional stock exchanges in Germany have successfully launched SME debt platforms in recent years. Over 50 SMEs have raised close to 2.7 BN via the SME bond market platforms established individually by the Düsseldorf, Frankfurt, Hamburg-Hannover, Munich and Stuttgart exchanges. Yet the vast majority of SMEs still do not use debt market platforms to raise funds. In 2013, less than 2% of SMEs in Europe used debt capital markets for financing (see Exhibit 5). C. ALTERNATE LISTING VENUES (WITHOUT TRADING) Platforms have emerged that allow non-banks to lend directly to corporates and individuals. Such venues are suitable for SMEs in their early development stage and most support the smaller SMEs: i.e. companies with fewer than 100 Full Time Employees (FTEs). These loan matching platforms facilitate the lending process between borrowers and investors through peer to peer (P2P), peer to business (P2B), investor to peer (B2P) or investor to business (B2B) transactions. They provide borrowers with access to a broader base of lenders, while providing lenders with opportunities for higher yield and diversification. There are four basic business models for these loan matching platforms: Pure match model: Platform enables direct contact between investors and borrowers: e.g. Deal Market, FinPoint Marketplace model: Lenders fund borrowers at defined interest rates: e.g. Lending Club Auction model: Lenders bid on loans. Successful bidders are lenders with lowest offered rates: e.g. Funding Circle Crowd-funding: Investors fund start up projects in return for an unlisted equity share: e.g. Kickstarter and Indiegogo Investors can be wary of using such platforms because limited screening of SMEs can lead to some poor quality companies being listed. To attract investors, these platforms should specify minimum criteria for companies to join a platform and form a committee to review applications. 20 African Exchange I 2015 I Issue 4

21 3. BENEFITS OF SUCCESSFUL CAPITAL MARKET SOLUTIONS FOR SMES EXPERT OPINION Despite the challenges faced by the current platforms, vibrant SME capital markets promise benefits for many stakeholders. Brokers and advisors SMEs Public Retail investors SME Capital Market solutions Institutional investors Exchanges Capital Market regulators SME development programmes Issuing equity and debt securities can provide SMEs with the stable, long-term financing that bank lending typically does not. Because these securities are tradable, their prices provide information about the performance and value of the SMEs concerned. This transparency, combined with the ease of exit created by tradable equity and debt, makes SMEs more attractive investments for venture capitalists (VCs). And it creates a discipline on SMEs management, improving their internal governance and external communications. SME securities give investors access to a broader and more diverse set of investment opportunities within a regulated and transparent environment. And exchanges earn new revenue streams by intermediating SMEs and investors, while helping to increase the number of companies that subsequently graduate to their main exchange board. By encouraging more SMEs to start up and to expand, SME capital markets stimulate economic growth and job creation. Based on our analysis, successful SME capital markets can add up to % uplift in the contribution of SMEs to overall GDP each year, while supporting the creation of hundreds of thousands of new jobs globally. African Exchange I 2015 I Issue 4 21

22 EXPERT OPINION PART TWO: TOWARDS BETTER CAPITAL MARKETS SOLUTIONS FOR SME FINANCING The IFC estimates the SME financing gap to be $1.5 TN. 5 We believe that capital marketbased solutions could provide 5-10% of this shortfall i.e. between $75 BN and $150 BN. To do so, barriers to their use must be lowered. In this part of the report we recommend a number of measures that we believe will help to achieve this. Exhibit 8: Impact range of the proposed solutions Banks Government supported SME platforms Hybrid models linking banks and exchanges Exchanges Pan regional SME market place SMEs Institutional investors Retail investors SME business mutual guarantee networks Virtual bulletin board Information platforms/ support services from exchanges High-end institutional solutions Retail-oriented solutions SME equity platforms SME debt platforms Alternative listing venues 1. INFORMATION PLATFORM AND SUPPORT SERVICES FROM EXCHANGES Exchanges can do more for SMEs than providing a venue for the trading of their securities. They can also connect SMEs to different types of investors (such as angel investors, VC and private equity) and help them gain access to ancillary professional services. These services could include stakeholder coordination and management, due diligence and prospectus writing, investment case development, IPO roadshow support and financial PR and marketing services. The exchange can also connect companies to professional services such as accountants and legal advisors. This would prove valuable not only to the SMEs but, by increasing the quality of their financial reporting, would be valuable to investors considering SMEs. A major gap for investors at present is the limited amount of information on SMEs; more is required to make informed investment decisions. Exchanges can help to supplement this gap by either directly providing research and company information, or connecting investors to such sources of data through an online platform. 22 African Exchange I 2015 I Issue 4

23 EXPERT OPINION Exchanges can also help to attract investors to their platform by providing greater pipeline information on upcoming IPO s. This would help to build interest in SMEs that are planning to list and allow investors to plan ahead on investment opportunities. 2. PAN-REGIONAL SME MARKET PLACE A pan-regional SME exchange allows SMEs from many countries to list on a platform that covers multiple jurisdictions. This platform would be focused on supporting SMEs in the later stages of their development as they look to raise investment for growth. A pan-regional market would more easily achieve the critical mass of listings and liquidity that national platforms have historically struggled to attain. A pan-regional market would also bring cross-border investment flows, benefiting SMEs in countries with less developed investment industries and helping to promote economic growth. Investors are provided with a wider and more diverse set of companies to invest in. By increasing liquidity, such a panregional platform would also increase ease-of-exit prospects for SME investors and thereby encourage them to make initial investments. Incumbent exchanges in each country can benefit by creating a virtual window to the panregional platform. This could increase liquidity flowing to the domestic exchange, and allow the exchange to move illiquid small cap stocks from its main board onto the platform. However, a pan-regional framework would require considerable work to overcome challenges created by national differences, including different currencies, tax regimes, listing and disclosure requirements, anti-fraud and post-trade rules and, in some cases, restrictions on foreign ownership. The integration of European Union countries makes these difficulties easiest to overcome in Europe. Not surprisingly, the first example of a panregional platform is Europe s Alternext. However, first attempts at pan-regional exchanges are also being made in the Middle East and Africa. 3. VIRTUAL BULLETIN BOARDS ACROSS EXCHANGES A virtual bulletin board can be created by connecting SME exchanges in a number of countries through a single virtual venue. Such venues use the platforms and operations of existing exchanges, making them significantly easier, faster and cheaper to set up than physical exchanges. Running and maintenance costs are also lower. Because the cost of listing on a virtual board is significantly lower than on traditional exchanges, smaller firms can more easily gain access to equity or debt funding. And because they are international in scope, virtual boards give SMEs access to a wider range and greater number of potential investors. On the flip side, virtual boards give institutional and retail investors access to a wider spectrum of companies than purely national SME markets do. African Exchange I 2015 I Issue 4 23

24 EXPERT OPINION As with pan-regional SME exchanges, virtual bulletin boards require a sound (cross-border) legal setting. And they must account for operational differences between their member markets when being established. 4. GOVERNMENT SUPPORTED SME PLATFORMS Governments can help SMEs access capital markets funding in several ways A. IPO TASK FORCE The number of SME IPOs has fallen significantly in recent years. To help turn this around, governments can establish an IPO taskforce to provide direction and support to SMEs. The task force can lobby on behalf of SMEs and help to remove barriers to SMEs finding financing solutions. The US IPO taskforce has made a number of recommendations to promote SME listings, including improved availability of information and greater transparency for investors, investor tax incentives for buying and holding IPO shares, and education of issuers about how to succeed in the new capital markets environment. A similar IPO taskforce has now been set up in Europe led by the Federation of European Securities Exchanges (FESE), European Private Equity & Venture Capital Association (EVCA) and European Issuers (EI). Exhibit 9: Number of IPOs in the US NUMBER OF IPOs 1,000 Pre-1999 Average: 547 IPOs/Year Post-1999 Average: 192 IPOs/Year Deal size $50 MM YEAR YTD Deal size < $50 MM Source IPO Task Force, Rebuilding the IPO On-Ramp, 2011 B. FINANCIAL MEASURES Governments can create favorable financial terms for SMEs. Such measures include capital gains tax relief for entrepreneurs when selling small business equity stakes, tax deductions for small business equity, and stamp duty exemption for the shares of SMEs. Reducing the 24 African Exchange I 2015 I Issue 4

25 EXPERT OPINION cost of regulatory compliance costs is critical for encouraging SMEs into the capital markets. This cost is cited as a major deterrent for companies considering an IPO in Europe. 6 C. CENTRALIZED SME RATING DATABASE A centralized SME rating and information database, either on a national or pan-regional level, would increase the transparency of SME investments. Information could be collected by various government bodies (e.g. Companies House) and then analyzed by a third party company using standardized risk methodologies. If made available via a website, it would allow investors to quickly analyze and benchmark potential investments. D. ADVISORY SERVICES Dedicated advisory services can educate SMEs about every phase of development, from investment-environment reforms and building management skills, through to opportunities for accessing capital markets funding. This will help new and growing SMEs overcome their lack of experience and knowledge in these areas. 5. HYBRID MODELS LINKING BANKS AND EXCHANGES Banks and exchanges are currently operating independently in the SME segment, with the former providing lending and the latter capital market solutions. A hybrid model for SMEs, linking expertise and financing solutions together, would increase market information and transparency for issuers and investors, particularly in countries where bank finance remains dominant. SME credit brokerage is an example of such a hybrid model. SMEs would gain support in financing and wider access to credit via brokerage firms. Investors would benefit from increased information about SMEs provided by the brokers. Such hybrid models should be cost-efficient to set-up and run because they can piggy-back on banks current financing platforms and technologies. 6. SME BUSINESS MUTUAL GUARANTEE NETWORKS A mutual guarantee network for SMEs aims at enabling participants to access credit by granting a collective guarantee for loans issued to their members. In turn, members take part directly or indirectly in the formation of the equity and the management of the scheme. African Exchange I 2015 I Issue 4 25

26 EXPERT OPINION SME Membership fee Advice, information exchange MUTUAL GUARANTEE NETWORK Bank loan BANK Loan guarantee Members often have a limited capacity to access traditional bank loans because they are under-collateralized, have a limited credit history or, perhaps, lack the expertise needed to produce sophisticated financial statements. It is therefore important for the mutual guarantee network to set up a rigorous peer review process to control default risks. Since members are companies of similar size and background, the analysis process can be enriched by the SMEs knowledge of products, technological developments and local competition. Mutual guarantee networks can be used not only to secure financing on more attractive terms than would be received by stand-alone borrowers, but to receive peer advice and build suitable financial structures. And if mutual guarantee networks operate pan-regionally or cross-sector, they provide an effective way to diversify exposures and reduce risk. Successful nation-wide SME business mutual guarantee networks include Spain s Sociedades de Garantía Recíproca and Portugal s Sociedade de Investimento. In Italy, a large number of SME business mutual guarantee networks (Confidi) operate at a local level, typically in industrial areas that are characterized by clustering of highly specialized and interconnected SMEs. 7. RETAIL-ORIENTED SOLUTIONS Retail-oriented solutions connect SMEs directly with a wide investor base. They take three main forms: Reward: The funds are used to start up a project. Investors receive no financial return on their donation but are compensated by a reward, such as the SME s product. In addition to providing financing, this model can serve to attract new retail customers to SME businesses Lending: Investors lend small sums of money to SMEs. By bypassing banks, investors achieve higher yields while SMEs usually receive cheaper funding or better terms Equity: Retail investors exchange money for a small stake in an SME This kind of financing requires little infrastructure. A simple online platform is sufficient, which is quick and cheap to set up and maintain. Such platforms already exist, including Deal Market and FinPoint in Europe. SMEs will need to provide information about their business plans and legal documentation for investors to gauge their earnings potential. 26 African Exchange I 2015 I Issue 4

27 Retail-oriented solutions are a cheap form of financing for businesses, with platforms only charging small service fees. It usually costs less than $100 to list an opportunity on the platform. They have proven to be one of the fastest forms of financing for SMEs, with money being transferred as soon as the deal is made, contrasting favorably with the slow bank lending and exchange listing processes. EXPERT OPINION 8. HIGH-END INSTITUTIONAL SOLUTIONS Institutional solutions are platforms aimed at private equity firms, VCs, angel investors, and family offices looking to invest in SMEs through equity or debt financing. These platforms usually provide services to match investors with the companies that best meet their investment criteria and provide detailed information and data on the respective businesses. Safe exit opportunities for such investors are crucial in such a solution. NASDAQ Private Market is an example of a new type of platform that allows for the trading of shares in companies that have yet to issue stock to the public. This enables SMEs to obtain early stage investment alongside building relationships with investors that can support later IPO issuance. The platform is targeted primarily at institutional investors or retail investors that access through brokers. Institutional alternative financing solutions are similar to retail platforms in the sense that they provide a large transparent market place for SME financing in addition to traditional channels such as banks and exchanges. CONCLUSION SMEs contribute 49% of global private sector output and 63% of employment world-wide. Given this substantial economic and social contribution, the widening funding gap for SMEs ($1.5 TN in the formal economy) poses a threat to economic growth around the world. It is critical to the economic prospects of many nations that SMEs are provided with the financial support they need. Government bodies and other interested parties must create the right environment for the provision of private capital to SMEs. The wider use of capital markets can help bring the private and public sectors together and support SMEs access to financing. We believe the set of capital markets solutions outlined in this paper can contribute to closing the SME financing gap (by 5-10%), increasing SMEs contribution to GDP by up to % per annum and creating hundreds of thousands of jobs globally. However, this requires multiple parties beyond the traditional SME-bank relationship. It is imperative that the private and public sectors work together to improve SMEs access to financing and realize the wider economic and social benefits of lending to an SME. African Exchange I 2015 I Issue 4 27

28 Oliver Wyman is a global leader in management consulting that combines deep industry knowledge with specialised expertise in strategy, operations, risk management, and organisation transformation. For more information please contact the marketing department by at info-fs@oliverwyman.com or by phone at one of the following locations: EMEA AMERICAS ASIA PACIFIC Copyright 2014 Oliver Wyman All rights reserved. This report may not be reproduced or redistributed, in whole or in part, without the written permission of Oliver Wyman and Oliver Wyman accepts no liability whatsoever for the actions of third parties in this respect. The information and opinions in this report were prepared by Oliver Wyman. This report is not investment advice and should not be relied on for such advice or as a substitute for consultation with professional accountants, tax, legal or financial advisors. Oliver Wyman has made every effort to use reliable, up-to-date and comprehensive information and analysis, but all information is provided without warranty of any kind, express or implied. Oliver Wyman disclaims any responsibility to update the information or conclusions in this report. Oliver Wyman accepts no liability for any loss arising from any action taken or refrained from as a result of information contained in this report or any reports or sources of information referred 28 African Exchange I 2015 I Issue 4 to herein, or for any consequential, special or similar damages even if advised of the possibility of such damages. The report is not an offer to buy or sell securities or a solicitation of an offer to buy or sell securities. This report may not be sold without the written consent of Oliver Wyman.

29 MEMBERS NEWS African Exchange I 2015 I Issue 4 29

30 NEWS CASABLANCA STOCK EXCHANGE Signature of a memorandum of understanding on the opening-up of the Casablanca Stock Exchange capital 25 November 2015 Signing ceremony of the memorandum of understanding between the State, the market authority CDVM, the current shareholders of the Stock Exchange (brokerage firms), the future shareholders (Banks, Insurance firms, CDG (Caisse de Dépôt et de Gestion) and Casablanca Finance City Authority that set down the scheme for the openingup of the Stock Exchange share capital. Champions de la Bourse Launched 30 African Exchange I 2015 I Issue 4

31 NEWS 24 November 2015 The launch of the second edition of the inter-school competition "Champions de la Bourse", a game run by Casablanca Stock Exchange simulating the management of an equity portfolio valued at 1 million MAD. This game ran from 24 November to 23 December 2015 and involves 24 business schools and universities. Top CSR Performers Awarded 24 November 2015 The Casablanca Stock Exchange organized with Vigeo the 2015 s awards ceremony of the "Top Performers in Social Responsibility of listed companies in the Casablanca Stock Exchange. CSE Extends Partnerships to bolster Public Financial Education Efforts 4 November 2015 The Casablanca Stock Exchange reiterates its social commitment to improve the education of young people in rural areas and extended its partnership with the Académie Régionale d Education et de Formation du Grand Casablanca and Al Jisr Association. African Exchange I 2015 I Issue 4 31

32 NEWS Renewed Certification of the IT Systems of the Casablanca Stock Exchange September 2015 The Casablanca Stock Exchange had its ISO certification for the security of its IT systems renewed. This certification is the result of the policy of stepping up the governance, reliability and performance of its Information Security Management System (ISMS) in order to bring it into line with best international standards. The ISO standard identifies the requirements for setting up the ISMS, to outline the security measures to be applied to ensure the protection of a company s sensitive assets within a defined scope. THE EGYPTIAN EXCHANGE EGX Hosts Sustainability Conference The Egyptian Exchange (EGX) hosted its first Sustainability Conference with the participation of a large number of the business community leaders, experts and executives to discuss ways to launch initiatives to enhanced the degree of the sustainable development adoption in the business community. The conference also witnessed high-level of governmental participation. The opening speeches were delivered by Mr. Ashraf Salman, Minister of Investment, Dr. Ghada Waly, Minister of Social Solidarity and Mr. Sherif Samy, Chairman of the Egyptian Financial Supervisory Authority (EFSA). The head the UN women program in Egypt, and the advisor to the World Federation of Exchanges (WFE) also participated during the conference sessions. The conference reviewed the successful initiatives carried out by the Egyptian private sector in sustainable development and their impact on the company s performance and on society as a whole. 32 African Exchange I 2015 I Issue 4

33 NEWS EGX Signs the United Nations' Climate Initiative and Forms EGX Sustainability Advisory Committee December 2, 2015 In an effort to support sustainable development, enhance transparency and be compatible with international standards, the EGX signed the "United Nations (U.N.) initiative to work for the climate" that comes in the framework of the U.N. Convention on Climate Change. The Financial Initiative of the U.N. program for environment UNEP-Finance Initiative, and the Initiative of Principles for Responsible Investment- PRI, and a number of other initiatives and investors concerned with the climate change are already in place to endorse these efforts. Dr. Mohammad Omran said that the Sustainability Advisory Committee will provide the necessary advice on this important issue, to ensure the availability of responsible investment and sustainable financing. All market participants will be presented in the Committee for the purpose of improving the capital market working conditions and promote good governance and social and environmental responsibility which are the three pillars of sustainability. The World Bank Recognizes the EGX for Protection of Minority Rights In a move that reflects the role of the growing capital market in the economy, the World Bank and the International Finance Corporation announced in a report on the business climate in Egypt that the good capital market policies were the most important drivers in improving Egypt s business climate and praised the EGX Protection of Minority Rights Procedures. EGX Holds a Workshop with Chamber of Information Technology and Telecommunication (CIT) The Chamber of Information Technology and Telecommunication (CIT) organized a workshop in cooperation with EGX with the participation of a large number of IT and Telecommunication companies with the goal to raise the business community awareness about the funding opportunities offered by Egyptian Exchange (EGX) plan aiming to introduce the benefits of listing in both of NILEX (for Medium and Small Companies) and the main market (EGX) facilitate local and foreign investors for the companies, whether they are small, medium or large-sized companies. Through the event many issues were discussed such as the growth opportunities offered through listing, either by capital increases or by issuing bonds, and the other advantages such as pricing the company s value, the possibility to enter new partners to its ownership so to increase the volume of its business and therefore its profitability. The participants also heard the success stories of some companies who were already listed. FMDQ OTC SECURITIES EXCHANGE FMDQ hosts the 2015 Nigerian Debt Capital Markets Workshop With a focus strategy outlined in its Vision 2020 document and supported by the 7-Point Agenda, Nigeria has the potential to become one of the twenty (20) largest economies in the world by the year The role of the capital markets to driving the actualisation of the nation s development agenda cannot be over emphasised, taking into African Exchange I 2015 I Issue 4 33

34 NEWS consideration the ability of the markets to pool and mobilise both local and foreign capital towards financing economic growth and development. Consequently, FMDQ OTC Securities Exchange (FMDQ), in line with its commitment to lead the revolution in the Nigerian debt capital markets (DCM), organised a Nigerian Debt Capital Markets Workshop in collaboration with the International Finance Corporation (IFC) and supported by the Securities and Exchange Commission, Nigeria (SEC). The 2-day Workshop, themed The Nigerian Debt Capital Markets Towards a Brighter Future, aims to be a catalyst to stimulate the growth of the Nigerian DCM by diagnosing the issues hindering the empowerment of the markets and propounding practical and implementable remedies to the issues. The Nigerian DCM has grown quite significantly over the last ten (10) years, and the options presented by the issuance of debt securities cannot be stressed enough as regards the resultant opportunities for stimulating economic growth and development of the nation. The well-attended Workshop highlighted the role and impact of the DCM - to the government, regulators, issuers, investors, market operators, and economy as a whole providing a high-level forum for stakeholders of the Nigerian DCM, including subject-matter experts from global model markets to interact and deliberate within focus groups, with a view to bridging the developmental gaps and fostering sustainable growth in the Nigerian DCM. The Workshop focused on pertinent issues (ranging from interest rates, infrastructure (power, transportation, housing) development, education and health, wealth and employment creation, through to individual prosperity) impacting on the development of any nation and in particular, Nigeria, via the DCM. Resolutions to these issues and their successful implementation have the potential to positively impact every sphere of a nation, from the government echelons all the way to the citizen levels. Following on from the Workshop, FMDQ and SEC, in collaboration with the Federal Government and other market regulators (The Debt Management Office, Nigeria, The National Pension Commission, The National Insurance Commission etc.), will champion the identified DCM-focused initiatives which will impact the real sectors of the Nigerian economy serving to promote Nigeria s vision of becoming one of the top twenty (20) economies in the world by the next decade the Nigerian DCM Roadmap. FMDQ, as an OTC securities exchange with a primary focus on the debt markets is uniquely positioned with a viable and efficient platform for the articulated initiatives including but not limited to instituted infrastructures to provide global competitiveness & depth, liquidity and transparency in the Nigerian DCM - in readiness for the imminent revolution in the markets and ultimately the Nigerian economy. For further info, see FMDQ Positions to Quote Private Companies Bonds FMDQ OTC Securities Exchange ( FMDQ ), in its unwavering commitment to support efforts to galvanise the development of the Nigerian economy, is establishing the building blocks to redefine access to long-term debt capital for private companies and ventures in Nigeria. FMDQ is promoting the market structure that will facilitate the injection of credibility and transparency to the quotation of private companies bonds that, by law, can only be issued through private placements. Some of the Nigerian, significantly important, private companies in oil & gas, power, telecommunications, manufacturing and infrastructure require long-term funding. Currently, their long-term funds are structured as loans and funded by banks thereby putting their balance sheets under significant risk management, liquidity and capital adequacy pressures. Going forward, regulatory standards would limit the banks appetite in such long-term assets. It is therefore imperative that the financial market is repositioned to drive such loans to be structured as securities i.e. bonds that can be sold to investors. FMDQ therefore intends to establish the requisite market governance over these private companies bonds as part of its investor protection standards in making the Nigerian debt capital market globally competitive to attract pension funds and foreign capital. FMDQ ensures regulatory oversight over the activities and business conduct of its diverse Members, with a view to promoting market credibility and protecting investors interests. As a market organiser of the Nigerian fixed income and currency (FIC) markets, FMDQ provides a platform on which all secondary market trading activities for debt securities can be executed, presenting a unique opportunity for current and likely inefficiencies hindering the development of certain areas of a fledgling debt capital market (DCM) like Nigeria s to be addressed. 34 African Exchange I 2015 I Issue 4

35 NEWS The Nigerian market for bonds of private companies is undeveloped and currently not under any market governance, implying the absence of an oversight and proper governance on the activities in that space. Consequently, FMDQ, in its capacity as an over-the-counter (OTC) securities exchange as well as a self-regulatory organisation, is fulfilling its responsibility and has taken up the challenge of tackling the attendant inadequacies evident in any unregulated market by developing Quotation Rules for bonds issued by private companies ( Private Companies Bonds Quotation Rules ) with the aim of providing adequate governance over the registration, quotation and trading of bonds of private companies on FMDQ, thereby potentially serving as the benchmark for how this market is regulated in Nigeria as a whole. Trading of debts of private companies, either as securities or straight loans, is not novel to the Dealing Members (i.e. banks) of FMDQ. The Private Companies Bonds Quotation Rules will outline the regulatory framework to govern the quotation of private companies bonds on FMDQ, providing also for post-quotation compliance requirements which include a quarterly Compliance Report in respect of the private companies bonds securities quoted on the platform. Worthy of mention is the existing secondary market trading of debt securities issued by large and credible private companies in Nigeria by FMDQ Dealing Members, therefore the quotation of such debts on FMDQ will formalise the current arrangement, bringing, among other benefits typical of an FMDQ quotations service, the expedient visibility to the securities, consequently providing numerous benefits to the issuers, investors, Dealing Members, regulators etc. and ultimately deepening the market for debt securities of corporates in Nigeria and improving the Nigerian financial market as a whole. Benefits of the FMDQ quotations service include inter alia, secondary market trading liquidity, unique and global visibility, high-level transparency, price formation and competitive pricing, credible benchmark pricing for appropriate portfolio valuation, improved market credibility and continuous information disclosure, enabling issuers build a strong corporate image in the capital market, laying the foundation for sustainable financing. As evident from the aforementioned new initiative of FMDQ and even all the other initiatives embarked upon, the OTC Exchange recognises the inherent possibilities for growth and development in Nigeria's financial market, maintains an unwavering resolve and focuses its efforts to lead the revolution in the Nigerian DCM. Most recent of these efforts were displayed in the just concluded Nigerian Debt Capital Markets Workshop organised by FMDQ, in collaboration with the International Finance Corporation (IFC) and supported by the Securities and Exchange Commission (SEC), Nigeria, on October 27 28, The 2-day Workshop, themed The Nigerian Debt Capital Markets Towards a Brighter Future, was designed to be a catalyst to stimulate the growth of the Nigerian DCM by diagnosing the issues hindering the empowerment of the markets and propounding practical and implementable remedies to the issues. In line with the OTC Exchange s agenda to stimulate the Nigerian DCM and upgrade the markets to international standards, the Workshop focused on identifying and proposing solutions to pertinent issues affecting the Nigerian DCM, ranging from infrastructure development (power, transportation, housing), social welfare (education, health, wealth and employment creation), through to individual prosperity, amongst others. By highlighting the role and impact of the DCM to the government, regulators, issuers, investors, market operators, and economy as a whole, FMDQ, with a mission to empower the financial markets to be innovative and credible, in support of the Nigerian economy, presented an accountable advocacy platform, through the provision of a highlevel forum for stakeholders of the Nigerian DCM, as well as subject-matter experts from global model markets, to interact within focus groups, with a view to providing actionable solutions towards bridging the developmental gaps and fostering sustainable growth in the Nigerian DCM. In order to promote Nigeria s vision of becoming one of the top twenty (20) economies in the world by the next decade, FMDQ, in collaboration with financial market regulators, including SEC, Central Bank of Nigeria (CBN), National Pension Commission (PenCom), National Insurance Commission (NAICOM), FSS 2020 and other key DCM participants will oversee the implementation of the resolutions identified during the Workshop, with the aim of impacting the real sectors of the Nigerian economy in the immediate to medium-term. With over N110.0 billion corporate and mortgage bonds, in addition to circa N4.8 trillion Federal Government of Nigeria bonds, listed on its platform, FMDQ remains resolute to promoting an efficient, transparent and wellregulated bond market, which will attract and retain investors (domestic and foreign). The OTC Exchange s ongoing initiatives, such as the quotation of private companies bonds and the introduction of Fixed Income Specialists to African Exchange I 2015 I Issue 4 35

36 NEWS provide secondary market liquidity to these issues, amongst others, will contribute immensely to the growth of the domestic bond market thus providing issuers the opportunity to meet their long-term funding needs even as the Nigerian DCM become aligned with global standards. FMDQ Hosts Pioneer Listing of the Nigeria Mortgage Refinance Company PLC Bond FMDQ recorded yet another milestone achievement in the development of the Nigerian debt capital market as it listed the Nigeria Mortgage Refinance Company PLC (NMRC) N8,000,000,000 Series 1, 15-Year 14.9% Fixed Rate Bond under a N140,000,000, Medium-Term Note Programme (the NMRC Bond) on its platform. To which end, FMDQ played host to the issuer and the Registration Member (Listings)/sponsor of the bond on FMDQ to a prestigious Listing Ceremony in commemoration of this landmark event. Highlights of the Ceremony, included the signing of the FMDQ Bond Listings Register, presentation of the FMDQ Listing Certificate, unveiling of the FMDQ Listing Scroll, presentation of the FMDQ Listing Plaque, and the autographing of the FMDQ Bond Listing Wall. The issuance of this bond by NMRC and subsequent listing on FMDQ, mark essential steps towards development of not only the corporate bond market in Nigeria, but also the Nigerian housing market through the creation of long term funding for mortgage financing. Listing of NMRC bonds on FMDQ will help create liquidity for these instruments, price formation for the issuance of new bonds, price discovery for investors in these securities and foster market transparency. FMDQ will provide the necessary secondary market platform for the bonds to thrive and by extension ensuring success of the Nigerian primary and secondary mortgage markets. Accordingly, the successful completion of the bond issuance and the investor interest generated by the issue underscores the confidence reposed in the underlying principle and operational model of the NMRC. The market has bought into NMRC s objective of intermediating long term funds from the capital market to the development of the mortgage industry and ultimately bridging Nigeria s housing deficit by providing affordable housing finance. NMRC is committed to transmitting the full benefit of the pricing efficiency achieved in its funding cost to home borrowers through the participating primary mortgage lenders, thereby driving activities that will deepen the mortgage market. FMDQ, in partnership with NMRC and other key stakeholders will engage in relevant initiatives and campaigns to educate the market on mortgage-related debt instruments, like Mortgage-Backed Securities, Real Estate Investment Trusts, Sukuk, among others, in readiness for the ensuing housing revolution the Nigerian market is positioned to experience. The securities exchange shall provide continuous information disclosure on bonds listed on the platform to include price/value data and detailed issuers /issue information to stakeholders via the Listings & Quotations page on FMDQ website. The NMRC Bond shall be included on the FMDQ-Bloomberg E-Bond Trading System (E-Bond) and also on the FMDQ website, providing issuers, investors, dealers, regulators and the general public with the relevant information for improved price discovery and transparency. JOHANNESBURG STOCK EXCHANGE LIMITED Jse announces dates for reduced settlement cycle November 18, African Exchange I 2015 I Issue 4

37 NEWS The JSE has announced that the market will implement the third and final phase of its move to a T+3 settlement cycle in the middle of Implementation, to take place between 25 June and 23 July 2016, is in line with initial projections that the project would be going live between May and July The successful implementation of Phase 3 will conclude one of the most ambitious initiatives undertaken by the exchange, and will bolster the credibility of South Africa as an investment destination by bringing the market even closer to international best practice in the settlement space, says JSE Director of Post-Trade and Information Services Leila Fourie. Phase 1 and Phase 2 of the project, implemented in July 2013 and October 2014, have already introduced significant efficiencies to the current settlement process, and have established a solid foundation for the move to a shorter settlement cycle. The JSE currently has a strong post-trade base across all markets and aims to provide world-class services. T+3 is just one of the initiatives that the JSE is implementing to achieve this. The exact implementation date will be confirmed once we have done further testing, says Fourie. JSE Launches New FTSE/JSE Responsible Investment Index Series October 12, Today, the Johannesburg Stock Exchange, Africa s leading exchange, launched its new index series, the FTSE/JSE Responsible Investment Index Series, in partnership with FTSE Russell. The new index series replaces the JSE s SRI Index and reflects the JSE s commitment to advancing corporate sustainability practices. The FTSE/JSE Responsible Investment Index Series offers an objective methodology that further promotes the aims of stimulating greater transparency by corporates on environmental, social and governance (ESG) considerations, and enabling investors to integrate these considerations into investment and stewardship. As part of the evolution of the JSE s work through the SRI Index, the JSE has adopted the FTSE ESG Ratings methodology. The companies eligible for the FTSE/JSE Responsible Investment Indices are those that are constituents of the FTSE/JSE Shareholder Weighted All Share Index and are also listed in the FTSE All World Index. Inclusion in the FTSE/JSE Responsible Investment Indices is determined in accordance with the FTSE/JSE Responsible Investment Index Series Ground Rules. The new FTSE/JSE Responsible Investment Index Series comprises the following: The FTSE/JSE Responsible Investment Index Is a market-cap weighted index calculated on an edn-of-day basis Comprises all eligible companies that achieve a FTSE ESG rating of 2.0 or above 61 listed entities have qualifed for the first iteration of the Index The FTSE/JSE Responsible Investment Top 30 Index Is an equally weighted index calculated on a real-time basis Comprises the Top 30 companies ranked by FTSE ESG Rating The index will be reviewed twice a year in June and December, using the ESG Rating as at the last trading day in May and November respectively. Research for the ESG Ratings occurs annually. Corli Le Roux, Head of Sustainability at the JSE, says Today s launch indicates a firm commitment by both the JSE and FTSE Russell to advance responsible investment and builds on the JSE s decade-long experience in helping companies integrate the principles of the triple bottom line and good corporate governance into their business practices. Since launching the JSE Socially Responsible Investment Index and becoming the first emerging market and first stock exchange to form an SRI Index in 2004, the JSE has continued to assess developments locally and internationally to ensure that the evolution of its approach to sustainability meets the needs of its clients and the dynamics of the sustainability imperative. Following ongoing reviews of the SRI Index aims and strategy, the exchange decided to pursue an ESG collaboration with the FTSE Group, who already calculates the FTSE/JSE Africa Index Series and who is a world leader in the creation and management of index solutions. For the JSE, the partnership was a strategic decision to align its measurement of ESG factors with international best practice. Collaborating with FTSE Russell on expanding our efforts in sustainability offers a number of synergies and benefits for both organisations and our clients, and was thus a logical opportunity for us to pursue, concludes Le Roux. With the new FTSE/JSE Responsible Investment Index Series, JSE listed companies have the opportunity to be assessed and rated alongside over 3,000 companies from across the globe against best practice ESG practices and performance metrics. The assessment process only considers publically available information. David Harris, Head of ESG, FTSE Russell, says Investors in companies listed on JSE now have a suite of new indexes and supporting data, based on FTSE Russell s new global ESG methodology, to integrate ESG into their investment and stewardship decisions. South African listed companies are ranked top for ESG performance in Emerging Markets due African Exchange I 2015 I Issue 4 37

38 NEWS to their relatively high quality of ESG practices and reporting. JSE has championed and encouraged sustainability reporting for many years, making it the ideal partner for FTSE Russell to develop innovative ESG products for this market. THE NAIROBI SECURITIES EXCHANGE Nairobi Securities Exchange Launches the REIT Market As Stanlib Kenya Announces The First I-REIT Public Offer October 22, 2015 The Nairobi Securities Exchange officially launched the Real Estate Investment Trust (REITs) Market at a ceremony that also marked the opening of the STANLIB Fahari I-REIT public offer. An I-REIT is a collective investment vehicle that allows investors to pool capital, which is then invested in a portfolio of selected properties for a return. Investors gain through capital appreciation and rental income, with the latter being distributed to unit-holders annually. Speaking during the launch, NSE Chief Executive Mr. Geoffrey Odundo congratulated STANLIB, saying The launch of the NSE Real Estate Investment Trust (REITs) and Kenya s first REIT, marks yet another revolutionary achievement in the history of our capital markets as Kenya becomes the third Exchange in Africa to launch this market. The launch of REITs further enhances financial inclusion in our capital markets as average investors will now be able to invest in large-scale commercial, residential and industrial properties, without requiring large sums of money. I urge other property owners and developers to follow in STANLIB s footsteps, raising funds to finance their developmental projects through our capital markets, he added. The STANLIB Fahari I-REIT public offer, which opened at 08h00 at a minimum subscription of Ksh20,000 (1,000 units) and a nominal value of Ksh20.00 each will close at 17h00 on November 12, this year. The offer will 2 then go through an allotment process with a subsequent listing of units on the Nairobi Securities Exchange (NSE). Commenting on the offer, Anton Borkum, STANLIB Fahari I-REIT CEO said: We are glad to introduce this landmark IPO, which is the first Kenya. We are offering both retail and institutional investors a stable income stream with long-term growth and capital appreciation through the STANLIB Fahari I-REIT. The STANLIB Fahari I-REIT will be listed on the NSE s Real Estate Trust Market Segment. Like any other listed security, its future value will be determined by market dynamics. This is expected to create liquidity, meaning unit-holders can sell their holdings or buy more. Open trading will also help in price discovery. Through a transparent and regulated environment, the STANLIB Fahari I-REIT, a first in the Kenyan listed market, will provide local and international investors with a diversified investment platform that offers the opportunity to invest in a new asset class. The STANLIB Fahari I-REIT will benefit from the underlying properties rental income and capital gains, giving investors exposure to a reliable and growing return profile in the long-term. The fund s rigorous and prudent investment criteria will ensure quality assets backed by a sustainable underlying rental income streams. The vehicle is backed by a dedicated specialist team with in-depth collective experience of over 100 years in the local market and in real estate on the African continent. The pioneering move by STANLIB comes 38 African Exchange I 2015 I Issue 4

39 NEWS at a time when property as an asset class in Kenya is under-represented in the capital market. According to the 2015 Economic Survey, growth in real estate and property sector is set to continue, driven by demand for new office space and urban housing. 3 The survey notes that high demand for fixed assets, largely property, was a major contributor to a 5.3 per cent expansion in the Kenyan economy last year. Demand for access to quality commercial property in Kenya continues to grow. STANLIB has a footprint in 10 countries in Africa and manages over $46 billion in assets for both institutional and retail clients across Africa. The US has the world s most advanced REIT market in the world. Australia, France, Japan, Canada, the Netherlands, Singapore and Hong Kong also have active markets for an asset class whose returns averaged 18 per cent in In Africa, growth in this market has been limited by the absence of enabling legislation. South Africa has traded in REITs for the last 10 years, while Ghana has had access to REITs since 1994 and Nigeria James Muratha, STANLIB East Africa, Regional Director concludes: STANLIB Kenya is excited to be part of the constant evolution in the African capital markets and to empower investors. We are proud to be a contributor to the growth of the property sector and importantly, the economy. We welcome all investors as we launch this offer today, and we look forward to making Kenya s first I-REIT a success. The Nairobi Securities Exchange, Awards The 2015 NSE Investment Challenge October 2, 2015 The Nairobi Securities Exchange, awarded the 2015 NSE Investment Challenge winners at an award ceremony held at the EXchange on 55 Westlands Road. The Chief Guest at the Ceremony was Mr. James Mworia the Chief Executive Officer of Centum Investment Group. The financial literacy programme founded in partnership with Smart Youth Investment Limited and sponsored by NIC Securities and CPF Financial Services, targets to empower youth attending universities and other tertiary institutions countrywide with knowledge of investing and savings through an online simulation of trading. This year the challenge registered 13,480 participants, in over 240 institutions of higher learning countrywide. Each participant was given Ksh. 3 million virtual start-up capital to trade with using the NSE real time prices for a period of 3 months. This year s winners walked away with cash prizes worth Kshs.600, which they will use to re-invest in the bourse and begin their journey to financial freedom. The chief guest of the ceremony Mr. James Mworia, Chief Executive of Centum Investment, congratulated the winners of NSE Investment Challenge saying I congratulate all the NSE Investment Challenge participants and especially the winners of the 2015 NSE Investment Challenge; as you have all been equipped with knowledge to invest and secure your future. Speaking at the ceremony, Mr. Geoffrey Odundo, Chief Executive Nairobi Securities Exchange said; The youth constitute the majority of population in the world; in Kenya the age group 15 to 34 years represent approximately 35.39% of the population. This proportion of youth is expected to form the bulk of the population in the next years, it is therefore imperative for us to inculcate a saving and investment culture amongst our youth, safeguarding the future of our country. At NIC we believe in enhancing financial literacy among the youth. It is critical in ensuring we have a future generation that is financially savvy and can make informed choices that uplift their personal livelihoods, encourage entrepreneurship and innovation all with the goal of driving the economic development and prosperity of this country. said Ms. Catherine Karita, General Manager, NIC Securities while speaking at the ceremony. The vice-chairman of the Nairobi Securities Exchange, Mr. Bob Karina reiterated these remarks congratulating the participants saying, This year s participants increased by 1,884 up from 11,596 in 2014, a clear indicator of our youth s interest in learning about investing. The winning teams complied with the NSE Investment Challenge rules, weighing different investment option while successfully growing their portfolios by 38.43%. He added The NSE remains committed to championing the transformation of our youth, through development and implementation of programmes such as the Challenge. The NSE is looking to partner with other African Stock Exchanges such as the Johannesburg Stock Exchange (JSE), providing the winners of the Challenge with an opportunity to go for study tours to other Exchanges. The NSE Investment Challenge has to date, educated over 60,000 youth countrywide. Position 1. Mr. Ngugi Edwin and Mr. Changama Kinyua (Real Investors) of Maseno University won a prize of Kshs 250,000. Position 2. Mr. Rotich Kipkemei (Emkay Holdings) of Maseno University won a prize of Kshs 150,000. Position 3. Mr. Kelvin Kahugu D. (Karl Enterprise) of Kimathi University won a prize of Kshs 100,000. The 2015 NSE Investment Challenge reached 240 accredited, tertiary institutions across Kenya, educated 13,480 youth through investor forums and registered 8,904 participants in the 2015 Challenge. African Exchange I 2015 I Issue 4 39

40 NEWS The NSE Launches NSE25 Share Index October 2, 2015 In line with global best practice, the NSE Board recently approved the launch of a new index dubbed NSE 25 Share Index with effect from 2nd October 2015.The move is informed by the need to have a reference benchmark that can be used by Capital Markets players, as we gear to launch the NSE Derivatives Market. The Exchange currently has five market indices, that enable investors to measure the performance of the major industry segments of our Securities Market; the NSE 20 Share Index, NSE All share Index (NASI), FTSE NSE Kenya 15 Indices, FTSE NSE Kenya 25 Indices and the FTSE NSE KE Government Bond Index. The new NSE 25 Share Index has been designed and guided by industry best practices, with a view to provide the Exchange with opportunities to develop structured products in the equities and the upcoming derivative market; said Mr. Geoffrey Odundo, Chief Executive, of the NSE. The criteria used in selecting the companies for the NSE 25 Share Index are as follows: Shares must have their primary listing on the Nairobi Securities Exchange. A company must have a least 20% of its shares quoted on the NSE. A company must have been continuously quoted for a least 1 year. A company must have a minimum market capitalization of one billion Kenya Shillings, should ideally be a blue chip company, have a superior profitability and dividend record. Government of Kenya to issue first bond that will be offered exclusively via mobile September 28, 2015 The Treasury has announced plans to float the first-ever Government bond that will be offered exclusively via mobile phone, pointing to the growing relevance of mobile money solutions in the evolving payments space. The solution, known as M-AKiba, will be delivered via a number of Mobile Network Operators to continue a push to deepen access for retail bond trading, which was previously only accessible to commercial banks or traders. As part of this effort, the Treasury recently lowered the cost of Government bonds from Kshs. 50,000 to just Kshs. 3,000. Through the mobile-phone based M-AKiba solution, trades can reach an upper limit of Kshs. 140,000 per day until the bond offering period closes. Over 32 million Kenyans will have the potential to participate in a Kshs. 5 billion Government Infrastructure bond. This historical development is testament of our commitment to embrace innovation to democratize the uptake of government securities, said Henry Rotich, Cabinet Secretary, National Treasury. He said, Over the years, 98 percent uptake in government bonds has been by institutional investors, with only two percent going to individual investors- and this has left out many Kenyans from participating in raising funds for nation building. Previously, it took an average of two days to buy a government bond in a process that required customers to apply for a bond CDS Account, take forms to Central Bank of Kenya, and deposit funds with a broker. M-Akiba however makes the process instantaneous. This development signals the continuing transformation that mobile money can deliver to boost efficiency in Government revenue collection while providing more access for Kenyans. M-Akiba is yet another innovative application that will help more people save and invest, while make it faster for the government to raise funds, said Betty Mwangi, Director Financial Services, Safaricom. The M-Akiba bond is also aimed at enhancing the savings culture by Kenyans. Kenyan savings are at 11% of GDP while countries like Qatar are at 60%, while Rwanda and Uganda are at 22% each. Speaking at the launch, Nairobi Securities Exchange, Chairman, Mr. Eddy Njoroge said Our Bonds Market is currently dominated by foreign and local institutional investors with a retail participation of only 2 percent.the unveiling of the M-Akiba Treasury Bond is in line with the NSE s strategy of enhancing financial inclusion by driving retail investor s participation in our Bond Market at a low entry level of Kshs 3,000. Nairobi Securities Exchange, Chief Executive, Mr. Geoffrey Odundo reiterated these remarks by adding The launch of M-Akiba Bond marks the beginning of a new frontier in the evolution of the Capital Markets and Mobile Technology. M-Akiba underpins NSE s position as a world leader in innovation, while adding value to our shareholders and transforming the lives and livelihoods of Kenyans by encouraging a saving and investment culture. The nationwide participation of Kenyans in the bond shall enhance financial inclusion for millions of Kenyans that have hitherto not been able to participate in the fixed income market. Rose Mambo, the Chief Executive of the Central Depository and Settlement Corporation added that The upside potential of a product like M-Akiba and the impact it is likely to have on increasing the number of investors in the market is significant. We are excited at the opportunity that this product will give ordinary Kenyans to participate in the capital markets in an easy and affordable manner, in addition to giving them the ability to earn good returns on their savings. To invest in the upcoming Sh5 billion Save Money, Make Money, Build Kenya bond, potential customers will only need to have a valid ID, dial *889# and follow the prompts. Upon maturity of the bond, the principle amount and coupons (interest from the bond) will be paid through M-PESA. 40 African Exchange I 2015 I Issue 4

41 NEWS THE NIGERIAN STOCK EXCHANGE NSE, CSCS to commence post-trade allocation service December 1, 2015 The Nigerian Stock Exchange (NSE) and Central Securities Clearing System (CSCS) Plc. have concluded arrangements to commence post-trade allocation service to operators on the NSE by December 1, Addressing market participants at a forum in Lagos recently, the Operations Manager, Market Operations and Technology Division of the NSE, Mr. Ken Nwafor, assured participants during the engagement that in the overall interest of the market, rules guiding the post-trade allocation service, which is currently on the NSE website, will be made available not only to them, but also to the investing public via the website of CSCS and the print media. In addition, Mr. Joe Mekiliuwa, General Manager, Operations at CSCS Plc. Explained that the introduction of the Post-Trade Allocation service into the Nigerian capital market will significantly reduce error trades by brokers and improve quality of trade execution. The post-trade allocation service would create liquidity, improve trade settlement experience in the market and enable brokers to buy securities en-block thereby saving time of buying into separate accounts. This service will be available on a web-based platform, said Mekiliuwa. Mekiliuwa allayed fears that the process could lead to impartiality and allow for favoritisms during trade allocation. An agreement has been reached among brokers that the allocation of the purchased securities would be done at the discretion of the brokers based on fairness, equity and justice. When mandate to transact is received by the brokers, CSCS will ensure that the post allocation will be strictly between the custodians and the brokers. No interference whatsoever from our end besides providing the platform for the service, he added. In the event where any client is erroneously allocated more than the mandated volume, Mekiliuwa explained that the system will not automatically detect such errors. He however noted that if such is discovered on the day of allocation, CSCS would correct it without any applicable service charge. Service charge to correct error becomes applicable if it is discovered as from day T+1. The post-trade allocation concise process flow include amongst others allocation of pool account opened under the custodians, remote trading access to single account granted to brokering firms. Others include; purchase of stocks en-bloc or in tranches into the pool account via the remote trading window based on clients mandates on trade day by the brokers, and authorization by CSCS to redistribute all purchased securities to the target accounts domiciled with the custodians at the end of trade by brokers. In the event of a brokering firm purchasing above the mandated volume, custodians were advised to report to the NSE and CSCS, any brokerage firm who fails to comply with the stipulated rules for sanctions. The meeting which had participants from stockbroking firms, custodians, the NSE and CSCS Plc ended with the advice that the market should be at alert as phishing mails from hackers are on the increase. The Nigerian Stock Exchange Announces Financial Advisers For Demutualization October 13, 2015 The Nigerian Stock Exchange (NSE) is pleased to announce the appointment of the consortium of Rand Merchant Bank (RMB) and Chapel Hill Denham (CHD) as financial advisers on the proposed demutualization of the Exchange. Rand Merchant Bank (RMB) is the corporate and investment banking arm of FirstRand, one of Africa s largest listed financial services groups. Chapel Hill Denham is a leading Nigerian investment bank, providing financial advisory services to domestic and international corporations, institutions, governments and individual clients, investing in Africa. The NSE employed a very rigorous and extensive selection process, commencing with a Request for Proposal (RFP) process which began on March 11, 2014 inviting qualified financial consortia to submit expressions of interest (EOI). As part of the EOI, potential financial advisors (FAs) were required to express their interests as a consortium of one international and one Nigerian investment bank, where at least one party of the consortium had participated in the demutualization of a securities exchange as lead adviser. The qualifying consortia were sent the RFP and 13 proposals were received by deadline date. These proposals were reviewed extensively and scored (technical and financial considerations) by NSE. After a round of presentations, only three consortia progressed to the final stage which was aimed at picking the most competent consortium and extracting the best value for NSE. Commenting on the appointment, the Chief Executive Officer of NSE, Mr. Oscar N. Onyema, OON, said This appointment affirms our commitment to achieving the demutualization of the NSE in a African Exchange I 2015 I Issue 4 41

42 NEWS methodical and transparent fashion. This step is pivotal to a professional and successful conversion of the Exchange from a member-owned mutual organization to shareholder-owned public limited liability company that aligns with global best practices. Mr. Onyema reiterated the commitment of the Exchange to ensuring that the interests of all members are protected in the demutualization exercise. We have implemented a number of initiatives to strengthen and improve governance at the Exchange. This demutualization process will contribute to the sustenance and enhancement of our governance. We are truly encouraged by the support from our stakeholders, particularly our Regulator, the Securities and Exchange Commission for creating the appropriate framework to accelerate the process that would engender a more open, transparent and credible Exchange. Commenting on the appointment, the CEO of RMB Nigeria and Regional Head for West Africa, Mr. Michael Larbie, said RMB is delighted to be assisting the NSE with the demutualization. We believe a demutualization will further strengthen the NSE s position as a leading exchange in Africa. We intend to leverage our deep advisory and structuring expertise and in-depth understanding of the Global Market Structure and Broker Dealer sector to support the process. Commenting on the appointment, CEO of Chapel Hill Denham said, Chapel Hill Denham is honored to have been selected by the Nigerian Stock Exchange on this most important engagement. We look forward to working with the exchange and all its stakeholders in delivering a successful outcome. SWIFT SWIFT to host Innotribe Startup Challenge for Africa SWIFT s annual African Regional Conference will take place May 2016 in Mauritius. For the second consecutive year, SWIFT will also host an African round of its financial technology Startup Challenge alongside the conference Johannesburg, 14 December 2015 SWIFT s African Regional Conference (ARC) 2016 will take place from May 2016 in Mauritius. ARC, now in its 23rd year, brings together policy makers, industry leaders and the broader financial community from across the African continent. Typically attracting up to 500 delegates from around 40 countries, ARC is a unique forum for networking, education, discussion and debate. Next year, for the second time, ARC will partner with Innotribe, SWIFT s innovation arm, to support the new technologies playing a big role in the future of the financial industry across the African continent whilst providing an opportunity for the local young FinTech companies to gain exposure on a global stage and benefit from expert mentoring.. The Startup Challenge introduces the world s brightest startups to highly qualified financial service experts, angel investors, venture capitalists, and global leading fintech and financial decision makers. In 2016, Innotribe will be looking for the best startups from across the continent and will use its network and alumni to help them to develop to the best of their potential. Sido Bestani, Head of Middle East & Africa, says: ARC is already a unique event for the financial industry. It brings together participants from across the continent in a very collaborative environment. Hosting the Innotribe Startup means that SWIFT Innotribe can help to support and nurture the new technologies that are going to play a big role in the future of the financial industry in Africa. In the 2015 competition, five of the 49 entrants in Cape Town were taken to Sibos in Singapore and benefited from fantastic exposure, mentoring and networking. It is an enriching experience for every company that enters. Since its inception in 2011, the Innotribe Startup Challenge has grown in popularity and success, with over 370 startups applying to the competition in This programme is now one of the leading global startup competitions and has connected the financial services industry with more than 650 FinTech startups around the world and reached over 4,000 audience members through showcases and networking events. In 2016, the Startup Challenge will focus on supporting emerging FinTech ecosystems, concentrating its efforts in Africa and Latin America. In addition to partnering with ARC to tap into the high potential of African startups, Innotribe will leverage a similar SWIFT regional event to harness the innovation happening on the ground in Latin America. Building on the great success from 2015, we are very excited to partner with the SWIFT Africa Regional Conference for the 2016 Challenge, says Fabian Vandenreydt, Global Head of 42 African Exchange I 2015 I Issue 4

43 NEWS Securities, Innotribe and the SWIFT Institute, SWIFT. Africa is a hotbed of FinTech activity with a lot of untapped ideas, resources and talent. We are eager to see what the 2016 applicants have to offer, and look forward to giving them that much needed exposure to financial institutions. Applications to the 2016 Startup Challenge will open in January 2016 with the successful applicants announced in April For more information about Innotribe and its Startup Challenge competition, please visit: ZIMBABWE STOCK EXCHANGE ZSE joins the Sustainable Stock Exchange Initiative On 7 December 2015, the ZSE joined the United Nation s Sustainable Stock Exchange Initiative as a Partner Exchange, becoming the 8th African Exchange to do so. Having been started in 2009, the Sustainable Stock Exchanges (SSE) initiative affords Exchanges a forum to learn from each other on how transparency can be achieved through collaborating with capital markets stakeholders on environmental, social and governance matters as well as foster sustainable investment. On joining the Sustainable Stock Exchange Initiative, the ZSE CEO, Mr. Alban D. Chirume, commented: The Zimbabwe Stock Exchange( ZSE ) is proud to be joining the Sustainable Stock Exchange Initiative ( SSEI ) on 7 December To us, the partnership is a statement of what our stock exchange believes in and a reinforcement of the transformation the ZSE is undergoing. Stakeholders are at the centre of ZSE s work and the SSEI is not only a natural fit in terms of our strategy, but makes sense as it promotes stakeholder dialogue which is necessary for building a sustainable capital market. ZSE hosts the Inaugural Debt Market Seminar The ZSE hosted a Debt Market Seminar on 9 September Amongst the speakers were the Botswana Stock Exchange Deputy CEO, Thapelo Tsheole (Guest of Honour), Thomson Reuters Fixed Income Manager for Africa, Ms Kholiswa Zondani and the CEO of the Securities and Exchange Commission of Zimbabwe, Mr Tafadzwa Chinamo. Attendees were from across the Zimbabwean capital markets. The seminar discussed the preparedness of the market for the revival of the regulated trading platform for fixed securities as well as learn from experiences from other African Markets. Euronext group joins the SSE Euronext Group comprising Euronext London, Euronext Brussels, Euronext Lisbon, Euronext Paris, Euronext Amsterdam has joined the Sustainable Stock Exchanges (SSE) initiative, along with six other exchanges: Zimbabwe Stock Exchange, Qatar Stock Exchange, Bolsas y Mercados Españoles, NEO Aequitas, National Stock Exchange of India, Casablanca Exchange. This brings the total number of stock exchanges to join the SSE this year to 30, making a grand total of 47. The African Securities Exchanges Association now has 8 member exchanges in the SSE: Johannesburg Stock Exchange, Nairobi Securities Exchange, Nigerian Stock Exchange, Egyptian Exchange, Casablanca Stock Exchange, Zimbabwe Stock Exchange, Stock Exchange of Mauritius, and Rwanda Stock Exchange. African Exchange I 2015 I Issue 4 43

44 44 African Exchange I 2015 I Issue 4 STATISTICS

45 BRVM SEPTEMBER OCTOBER NOVEMBER Total Value Traded $51,906, $58,036, $71,129, Equity Market Value Traded $51,492, $51,616, $71,009, Bond Market Value Traded $413, $6,420, $119, Others $0.00 $0.00 $0.00 Total Volume Traded 4,180,621 6,267,801 6,307,102 Equity Market Volume Traded 4,155, ,887, ,299, Bond Market Volume Traded 24, , , Others Total Number of Transactions 5,360 5,667 4,894 Equity Market Number of Transactions 5,276 5,578 4,848 Bond Market Number of Transactions Others Market Capitalization $12,562,323, $12,570,581, $12,156,150, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name BRVM-10 BRVM-10 BRVM-10 Main Index (Points) Gains in Main Index (%) 0.34% 0.82% % P/E Ratio Dividend Yield (%) 3.80% 3.53% 3.44% African Exchange I 2015 I Issue 4 45

46 BOLSA DE VALORES DE CABO VERDE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $25, $523, $1, Equity Market Value Traded $8, $20, $1, Bond Market Value Traded $17, $502, $0.00 Others $0.00 $0.00 $0.00 Total Volume Traded 1,979 51, Equity Market Volume Traded Bond Market Volume Traded 1, , Others Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $642,085, $619,223, $605,491, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name None None None Main Index (Points) Gains in Main Index (%) 0.00% 0.00% 0.00% P/E Ratio Dividend Yield (%) 0.00% 0.00% 0.00% 46 African Exchange I 2015 I Issue 4

47 BOURSE DE TUNIS SEPTEMBER OCTOBER NOVEMBER Total Value Traded $73,738, $109,640, $211,723, Equity Market Value Traded $54,301, $44,347, $168,897, Bond Market Value Traded $430, $3,934, $6,457, Others $ $19,006, $ $61,359, $ $36,368, Total Volume Traded 15,514,835 19,061,405 49,539,378 Equity Market Volume Traded 12,897, ,629, ,446, Bond Market Volume Traded 22, , , Others 2,594, ,408, ,906, Total Number of Transactions 29,722 30,611 32,765 Equity Market Number of Transactions 29,562 30,332 32,500 Bond Market Number of Transactions Others Market Capitalization $ $8,532,303, $8,092,449, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name TUNINDEX TUNINDEX TUNINDEX Main Index (Points) 5, , , Gains in Main Index (%) -3.90% -3.06% -3.18% P/E Ratio Dividend Yield (%) 3.80% 3.90% 3.90% African Exchange I 2015 I Issue 4 47

48 CASABLANCA STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $105,861, $142,088, $263,223, Equity Market Value Traded $105,861, $141,348, $174,767, Bond Market Value Traded $0.00 $740, $88,455, Others $0.00 $0.00 $0.00 Total Volume Traded 7,248,761 11,459,192 10,823,864 Equity Market Volume Traded 7,248, ,459, ,815, Bond Market Volume Traded , Others Total Number of Transactions 8,821 10,889 9,581 Equity Market Number of Transactions 8,821 10,888 9,572 Bond Market Number of Transactions Others Market Capitalization $47,078,252, $46,614,411, $45,499,021, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name MASI MASI MASI Main Index (Points) 9, , , Gains in Main Index (%) -2.48% -0.36% 0.13% P/E Ratio Dividend Yield (%) 0.00% 0.00% 0.00% 48 African Exchange I 2015 I Issue 4

49 EGYPTIAN STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $3,362,962, $2,341,855, $2,520,263, Equity Market Value Traded $946,423, $1,174,817, $1,312,325, Bond Market Value Traded $2,136,796, $1,020,431, $649,001, Others $279,741, $146,606, $558,936, Total Volume Traded 3,263,761,038 5,113,813,881 5,923,919,593 Equity Market Volume Traded 3,079,248, ,970,761, ,639,240, Bond Market Volume Traded 16,008, ,035, ,882, Others 168,504, ,016, ,796, Total Number of Transactions 328, , ,627 Equity Market Number of Transactions 326, , ,000 Bond Market Number of Transactions Others 2,111 2,349 2,500 Market Capitalization $58,050,004, $57,141,499, $53,427,748, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name EGX 30 EGX 30 EGX 30 Main Index (Points) 7, , , Gains in Main Index (%) 1.11% 2.39% % P/E Ratio Dividend Yield (%) 6.93% 7.01% 7.52% African Exchange I 2015 I Issue 4 49

50 GHANA STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $8,154, $4,182, $6,375, Equity Market Value Traded $8,154, $4,182, $6,375, Bond Market Value Traded $0.00 $0.00 $0.00 Others $0.00 $0.00 $0.00 Total Volume Traded 20,510,193 10,276,377 19,121,174 Equity Market Volume Traded 20,510, ,276, ,121, Bond Market Volume Traded Others Total Number of Transactions 2,117 3,284 2,220 Equity Market Number of Transactions 2,117 3,284 2,220 Bond Market Number of Transactions Others Market Capitalization $16, $16, $15, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name GSE Composite GSE Composite GSE Composite Main Index (Points) 2, , , Gains in Main Index (%) -6.74% -6.57% -1.95% P/E Ratio Dividend Yield (%) 5.23% 5.28% 5.40% 50 African Exchange I 2015 I Issue 4

51 JOHANNESBURG STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $265,601,151, $224,499,134, $205,827,469, Equity Market Value Traded $34,280,546, $32,704,792, $28,291,646, Bond Market Value Traded $156,067,304, $149,493,401, $141,998,910, Others $75,253,300, $42,300,940, $35,536,912, Total Volume Traded 6,728,282,548,253 6,266,828,811 7,661,046,815 Equity Market Volume Traded 6,628,527, ,247,403, ,652,254, Bond Market Volume Traded Others 99,755, ,424, ,792, Total Number of Transactions 6,253,487 5,670,880 5,268,008 Equity Market Number of Transactions 5,823,498 5,307,009 4,930,508 Bond Market Number of Transactions 7,277 38,842 38,044 Others 62,532, , ,456 Market Capitalization $827,326,548, $880,900,601, $817,985,394, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name FTSE/JSE All Share FTSE/JSE All Share FTSE/JSE All Share Main Index (Points) 55, , , Gains in Main Index (%) 0.23% 7.40% -4.06% P/E Ratio Dividend Yield (%) 3.03% 2.79% 2.91% African Exchange I 2015 I Issue 4 51

52 MALAWI STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $9,201, $556, $333, Equity Market Value Traded $9,201, $556, $333, Bond Market Value Traded $0.00 $0.00 $0.00 Others $0.00 $0.00 $0.00 Total Volume Traded 157,121,402 14,725,375 14,731,935 Equity Market Volume Traded 157,121, ,725, ,731, Bond Market Volume Traded Others Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $1,217,315, $1,170,111, $1,050,256, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name MASI MASI MASI Main Index (Points) 15, , , Gains in Main Index (%) 6.30% 3.00% -0.10% P/E Ratio Dividend Yield (%) 3.96% 3.97% 3.98% 52 African Exchange I 2015 I Issue 4

53 MOZAMBIQUE STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $61,704, $40,650, $26,293, Equity Market Value Traded $38, $231, $160, Bond Market Value Traded $11,019, $0.00 $20,697, Others $50,646, $40,419, $5,435, Total Volume Traded 25,276,247 17,262,155 14,417,802 Equity Market Volume Traded 10, , , Bond Market Volume Traded 4,419, ,367, Others 20,845, ,190, ,985, Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $1,303,693, $1,219,813, $930,160, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name (DCI) (DCI) (DCI) Main Index (Points) Gains in Main Index (%) 0.00% 0.00% 0.00% P/E Ratio Dividend Yield (%) 8.50% 8.50% 8.50% African Exchange I 2015 I Issue 4 53

54 NAIROBI SECURITIES EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $267,322, $468,285, $319,829, Equity Market Value Traded $136,908, $174,873, $128,907, Bond Market Value Traded $130,413, $293,412, $190,921, Others $0.00 $0.00 $0.00 Total Volume Traded 433,964, ,044, ,591,573 Equity Market Volume Traded 433,964, ,044, ,591, Bond Market Volume Traded Others Total Number of Transactions 31,013 28,372 27,306 Equity Market Number of Transactions 30,706 27,975 27,068 Bond Market Number of Transactions Others Market Capitalization $19,653,752, $18,929,502, $19,785,624, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name NSE 20 Share Index NSE 20 Share Index NSE 20 Share Index Main Index (Points) 4, , , Gains in Main Index (%) 0.07% -7.28% 3.80% P/E Ratio Dividend Yield (%) 3.41% 3.19% 3.09% 54 African Exchange I 2015 I Issue 4

55 NAMIBIA STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $96,659, $133,679, $117,469, Equity Market Value Traded $88,450, $122,411, $113,573, Bond Market Value Traded $356, $0.00 $1,736, Others $7,852, $11,268, $2,159, Total Volume Traded 36,432,341 23,664,408 52,499,593 Equity Market Volume Traded 30,438, ,566, ,640, Bond Market Volume Traded 5,000, ,000, Others 993, ,097, , Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $111,390,342, $118,879,500, $106,047,257, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name NSX Overall Index NSX Overall Index NSX Overall Index Main Index (Points) , Gains in Main Index (%) -7.40% 5.50% -6.71% P/E Ratio Dividend Yield (%) 0.00% 0.00% 0.00% African Exchange I 2015 I Issue 4 55

56 NIGERIA SECURITIES EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $326,488, $270,702, $323,521, Equity Market Value Traded $326,389, $270,455, $323,438, Bond Market Value Traded $55, $163, $65, Others $42, $83, $17, Total Volume Traded 6,963,153,111 4,967,574,438 6,167,725,025 Equity Market Volume Traded 6,963,114, ,965,828, ,167,650, Bond Market Volume Traded 11, , , Others 27, ,715, , Total Number of Transactions 76,181 62,143 60,256 Equity Market Number of Transactions 76,074 61,925 60,090 Bond Market Number of Transactions Others Market Capitalization $85,440,337, $83,732,565, $82,205,559, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name NSE All-Share Index NSE All-Share Index NSE All-Share Index Main Index (Points) 31, , , Gains in Main Index (%) 5.16% -6.53% -6.14% P/E Ratio Dividend Yield (%) 6.11% 5.96% 5.96% 56 African Exchange I 2015 I Issue 4

57 SEYCHELLES STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $2, $52, $329, Equity Market Value Traded $2, $52, $329, Bond Market Value Traded $0.00 $0.00 $0.00 Others $0.00 $0.00 $0.00 Total Volume Traded ,180 31,420 Equity Market Volume Traded , , Bond Market Volume Traded Others Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $39,427, $39,219, $39,544, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name Domestic Companies Index(DCI) Domestic Companies Index(DCI) Domestic Companies Index(DCI) Main Index (Points) Gains in Main Index (%) 0.00% 0.00% 0.00% P/E Ratio Dividend Yield (%) 0.00% 0.00% 0.00% African Exchange I 2015 I Issue 4 57

58 STOCK EXCHANGE OF MAURITIUS SEPTEMBER OCTOBER NOVEMBER Total Value Traded $34,883, $35,953, $20,331, Equity Market Value Traded $34,533, $35,073, $19,746, Bond Market Value Traded $357, $880, $585, Others $5, $0.00 $0.00 Total Volume Traded 181,985, ,426, ,275,606 Equity Market Volume Traded 181,945, ,371, ,251, Bond Market Volume Traded 39, , , Others Total Number of Transactions 5,866 5,898 4,029 Equity Market Number of Transactions 5,839 5,841 3,992 Bond Market Number of Transactions Others Market Capitalization $7,309,031, $7,095,249, $6,835,341, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name SEMDEX SEMDEX SEMDEX Main Index (Points) 1, , , Gains in Main Index (%) -1.05% -1.53% -3.25% P/E Ratio Dividend Yield (%) 3.50% 3.39% 3.71% 58 African Exchange I 2015 I Issue 4

59 SWAZILAND STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $ $32, $100,041, Equity Market Value Traded $ $32, $12, Bond Market Value Traded $0.00 $0.00 $100,028, Others $0.00 $0.00 $0.00 Total Volume Traded ,758 18,400 Equity Market Volume Traded , , Bond Market Volume Traded Others Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $188,089, $191,649, $183,909, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name All SHare Index All SHare Index All SHare Index Main Index (Points) Gains in Main Index (%) 0.30% 2.00% 2.00% P/E Ratio Dividend Yield (%) 0.00% 0.00% 0.00% African Exchange I 2015 I Issue 4 59

60 UGANDA STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $3,589, $4,182, $2,721, Equity Market Value Traded $3,589, $4,182, $2,721, Bond Market Value Traded $0.00 $0.00 $0.00 Others $0.00 $0.00 $0.00 Total Volume Traded 48,579,848 71,983,846 49,057,027 Equity Market Volume Traded 48,579, ,983, ,057, Bond Market Volume Traded Others Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $70,701, $69,948, $71,515, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name USE All SHare Index USE All SHare Index USE All SHare Index Main Index (Points) 1, , , Gains in Main Index (%) 5.50% -5.30% -3.50% P/E Ratio Dividend Yield (%) 0.00% 1.00% 0.00% 60 African Exchange I 2015 I Issue 4

61 ZIMBABWE STOCK EXCHANGE SEPTEMBER OCTOBER NOVEMBER Total Value Traded $17,964, $12,863, $8,947, Equity Market Value Traded $17,964, $12,863, $8,947, Bond Market Value Traded $0.00 $0.00 $0.00 Others $0.00 $0.00 $0.00 Total Volume Traded 105,629,225 63,758,858 91,421,651 Equity Market Volume Traded 105,629, ,758, ,421, Bond Market Volume Traded Others Total Number of Transactions Equity Market Number of Transactions Bond Market Number of Transactions Others Market Capitalization $3,444,530, $3,416,105, $3,141,684, Number of Listed Companies Number of Traded Companies Number of Trading Days Exchange Rate/US$ Main Index Name Industrials Industrials Industrials Main Index (Points) Gains in Main Index (%) 0.00% -0.80% % P/E Ratio Dividend Yield (%) 0.00% 0.00% 0.00% African Exchange I 2015 I Issue 4 61

62 62 African Exchange I 2015 I Issue 4 INDEX CHARTS

63 INDEX BOTSWANA DCI EGYPT EGX Zoom 1M 3M 6M 1Y 3Y Zoom 1M 3M 6M 1Y 3Y Botswana: DCI Egypt: EGX 30 Index Source INET BFA Source INET BFA GHANA GSE-CI KENYA NASI 2400 Zoom 1M 3M 6M 1Y 3Y Zoom 1M 3M 6M 1Y 3Y Ghana: GSE-CI Kenya: NASI Source INET BFA Source INET BFA African Exchange I 2015 I Issue 4 63

64 INDEX MALAWI MASI MAURITIUS SEMDEX Zoom 1M 3M 6M 1Y 3Y Zoom 1M 3M 6M 1Y 3Y Malawi: MASI Mauritius: SEMDEX Source INET BFA Source INET BFA NAMIBIA NSX OVERALL INDEX NIGERIA NSE ASI Zoom 1M 3M 6M 1Y 3Y Zoom 1M 3M 6M 1Y 3Y Namibia: NSX Overall Index Nigeria: NSE ASI Source INET BFA Source INET BFA 64 African Exchange I 2015 I Issue 4

65 INDEX RWANDA RSE ASI SOUTH AFRICA FTSEJSE AFRICA ASI Zoom 1M 3M 6M 1Y 3Y Zoom 1M 3M 6M 1Y 3Y Rwanda: RSE All Share Index South Africa: FTSE/JSE: Africa All Share Index Source INET BFA Source INET BFA SWAZILAND SZ INDEX TANZANIA DSEI Zoom 1M 3M 6M 1Y 3Y Zoom 1M 3M 6M 1Y 3Y Swaziland: SZ INDEX Tanzania: DSEI Source INET BFA Source INET BFA African Exchange I 2015 I Issue 4 65

66 INDEX TUNIS TUNINDEX WEST AFRICA BRVM COMPOSITE INDEX 5800 Zoom 1M 3M 6M 1Y 3Y 310 Zoom 1M 3M 6M 1Y 3Y Tunis: TUNINDEX West Africa: BRVM Composite Index Source INET BFA Source INET BFA ZAMBIA LASI ZIMBABWE ZWIND 6300 Zoom 1M 3M 6M 1Y 3Y 170 Zoom 1M 3M 6M 1Y 3Y Zambia: LASI 140 Zimbabwe: ZWIND Source INET BFA Source INET BFA 66 African Exchange I 2015 I Issue 4