Local companies seeking to raise capital in markets across West African countries will now have access to a deeper pool of capital as the West African Securities Market (WASM) goes live by 2015, BusinessDay has learnt.
With this development, companies and investors in Nigeria can through a licensed issuing house or broker dealer, raise money for trade in stocks on the Ghana Stock Exchange, Cote D’Ivoire (Bourse Regionale des Valeurs Mobilieres) as well as other stock exchanges across West African countries such as Sierra Leone and vice-versa.
As at 2013, 190 listed companies on the Nigerian Stock Exchange were valued at 82 billion dollars; 34 companies on the Ghana Stock Exchange (GSE) were valued at 26billion dollars; while 72 companies on the BRVM (Cote D’Ivoire) which is a market for eight Francophone West African countries, were valued at 12 billion dollars. The Sierra Leone Stock Exchange has one company.
Also when fully integrated, local companies in Nigeria can elect to raise money across West African markets or trade their shares via this new market which comes alive next year.
Collectively, about 297 operating companies listed on stock exchanges across West African countries were valued at 120billion dollars.
The take-off of the West African Securities Market is in the phase-three of ongoing West Africa Capital Markets Integration programme which allows cross-border quotation and securities trading across the region.
Trading time in this new market will be harmonised for only six hours of per day; and the market will allow securities trading to be done in the local currencies of member countries, and their local languages.
The idea of this new market is driven by the West African Capital Markets Integration Council (WACMIC) chaired by Oscar Onyema, CEO Nigerian Stock Exchange (NSE) which has set April 2014 to start the process of the market integration.
The process for integrating the region’s capital market started in 2010 with the signing of a Memorandum of Understanding (MoU) by the stock exchanges and the regulatory authorities in the region to deepen cooperation, promote mutual assistance, and facilitate the exchange of information and consultation among West African countries.
WACMIC which was inaugurated as the governing body for the integration of West African capital markets comprises of chief executives of the West African region’s Securities and Exchange Commissions, and securities exchanges.
Speaking at the sensitisation workshop which held respectively in Lagos and Abuja, the Ayo Adeseun, chairman senate committee on capital market said the senate supports integration of regional capital markets.
Adeseun, who was represented by Habiba Mohammed, urged the market integration council to “fast-track the process”.
“By end of 2015, there would be a fully integrated West African Securities market. Investors in countries without exchanges can assess West African Securities Market through qualified licensed brokers in countries that have exchanges. Broker dealers that are not qualified will use sponsored assess to link the market”, Onyema said.
Accordingly, he said that in the first stage of this market integration process various stock exchanges are funding themselves, but noted that “the second stage which requires technology integration means WACMIC will source for fund across the region. There will be integrated trading platform and common passports”.
David Tetteh of Ghana Stock Exchange (GSE) who is also a member of the Depository, Trading, Clearing and Settlement (DTCS) sub-committee said they have resolved to have across the region, harmonised trading hours (9am to 3pm), while price movement in all the markets will be plus or minus 10 percent.
He said that on securities clearing and settlement time, the regional committed adopted T+3 for equities and T+2 for fixed income.
Tetteh said: “On different issues, some jurisdictions are ahead or behind, but with the integration, we will all adjust. The committee has set an ambitious target of full dematerialisation by December 31, 2015”
Suleyman Ndanusa, chairman, board of Securities and Exchange Commission (SEC) said that as the world becomes global with technology, market integration encourages more companies to list.
“As investors are provided the opportunities to raise capital across the continent, it also offers opportunities to have sub national shareholders”, Ndanusa said, adding that “the reality is that the region stands better by integrating its markets than remaining in asylum”.
In pursuance of this laudable objective of market integration, technical committee meetings have been held in Cote D’Ivoire, Ghana and Nigeria to develop the required technical framework for the trading and settlement infrastructure as well as the legal framework necessary for seamless integration.
By: IHEANYI NWACHUKWU
