The African Securities Exchanges Association (ASEA) has signed a memorandum of understanding with SecondSTAX, a technology company that is building solutions to enhance intra-Africa capital and investment flows, to support the success of the African Exchanges Linkage Project (AELP), which aims to integrate all exchanges across the continent and to facilitate seamless cross-border trading of securities.

Thapelo Tsheole, President of ASEA, said: “A major priority for us is to improve the efficiency and liquidity of Africa’s securities exchanges and this partnership with SecondSTAX will enable us to do that. We are looking forward to working closely with their team and leveraging their technical capabilities and solutions to drive our common goal of enhancing capital inflows into Africa as a means of driving more economic growth across the continent.”

Africa’s exchanges are largely inaccessible to investors outside the jurisdictions where they are domiciled.

Over the last decade, African capital markets have experienced tremendous growth, with more than $17bn raised from 215 IPOs (Initial Public Offerings) and $70bn raised from FOs (Follow-on Offerings).

In addition, more than $246bn has been raised in debt capital markets, with equity indices peaking at more than 50% growth across major regional exchanges.

However, the siloed nature of these exchanges as well as insufficient data on the risk profiles of assets has led to limited access to capital for markets and limited access to high-growth assets for investors.   

SecondSTAX will provide technical and operational support to ensure the successful delivery of AELP, which is the flagship project of the African Securities Exchanges Association (ASEA) and the African Development Bank (AfDB) to enable the free movement of institutional investments between participating exchanges and licensed investment firms across Africa.

The agreement will also include access to SecondSTAX’s KYC portal to streamline the necessary first step for investors to book trades in other markets outside their domiciled region and the SecondSTAX Liquidity Providers Portal which aggregates licensed foreign exchange providers across multiple markets including Pan-African Payment and Settlement System (PAPSS), effectively along with tools to measure (in real-time) the speed to deliver each transaction versus the rates of each transaction (per liquidity provider).

The African Securities Exchanges Association (ASEA) includes 25 securities exchanges serving 37 African countries, working closely with member exchanges to unlock the potential of African capital markets and the economies they serve through training, capacity building, and providing an authoritative information portal on African public markets.

SecondSTAX will provide access to its Research Portal for ASEA members, investors, and investment firms across all jurisdictions, giving them a centralized and accessible database of reliable information to underpin investment decisions.

ASEA members and the institutional investor community will also have access to SecondSTAX’s Order and Execution Management System (OEMS), which provides automated straight-through processing, removing the need for additional manual operational overheads involved in accessing and executing orders across various capital markets in Africa.

Eugene Tawiah, CEO and co-founder of SecondSTAX, said: “ASEA’s objectives with AELP align perfectly with what we are trying to achieve as a company, so this partnership makes a lot of sense for us. We have a lot of confidence in the solutions that we have built, and we are excited to play a key role in the success of the project and drive more growth and efficiency in Africa’s capital markets.”