1

www.jse.co.za

Copyright© JSE Limited 2009

www.jse.co.za

The African Investment ChallengeSiobhan ClearyJSE: Strategy and Public Policy

2

www.jse.co.zawww.jse.co.za

Continental overview

3

www.jse.co.zawww.jse.co.za

What do we mean by “Africa”?

Enormous disparities in:• Size

– $200m to $852 280m

• Trading hours– 1 hour 3 x per week– 8 hours 5 x per week

• Trading systems– Fully electronic vs floor-based

• Products offered– Equities only to full spectrum

4

www.jse.co.zawww.jse.co.za

Exchange market capitalisation

65%

12%

4%

4%

4%3%

2% 1%1% 1% 1% 1% 0% 0% 0% JSE (South Africa) NSX (Namibia)

EGX BSE

Casablanca Bourse (Morocco) NSE (Nigeria)

GSE (Ghana) NSE (Kenya)

BVMT (Tunisia) SEM

DSE (Tanzania) BRVM

USE (Uganda) ZSE

LuSE

Data as at April 2012

5

www.jse.co.zawww.jse.co.za

JSE (South Africa)

EGX

NSE (Nigeria)

SEM

Casablanca Bourse (Morocco)

ZSE

BRVM

NSE (Kenya)

BVMT (Tunisia)

BSE

GSE (Ghana)

LuSE

NSX (Namibia)

DSE (Tanzania)

USE (Uganda)

0 50 100 150 200 250 300 350 400 450

No of listed companies

JSE (South Africa)

BVMT (Tunisia)

NSE (Nigeria)

Casablanca Bourse

(Morocco)

BRVM

BSE

DSE (Tanzania)

NSX (Namibia)

0% 5% 10% 15% 20% 25% 30% 35% 40%

Market liquidity

Data as at April 2012

Size and liquidity matter

6

www.jse.co.zawww.jse.co.za

Africa in context

0 500 1 000 1 500 2 000 2 500 3 000 3 500 4 000 4 5000%

50%

100%

150%

200%

250%

# of Listed Companies

Liqui

dity

TMX Group

NYSE Euronext

NASDAQ OMX

LSE Group

Tokyo SE Group

ASX

Shenzhen SE

NSE In-dia

Hong Kong Exch

Shanghai SED-Borse

Singapore Exch

BM&F Bov

JSE

Egypt

7

www.jse.co.zawww.jse.co.za

Regional initiatives

BRVM– 8 member countries in West Africa

• Benin, Burkina Faso, Cote d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, Togo

– One exchange in Abidjan, Cote d’Ivoire

EAC– 5 member countries

• Burundi, Kenya, Tanzania, Uganda, Rwanda

– Cross listings – mainly Kenyan

CoSSE– 10 members

• Botswana , Malawi, Mauritius, Mozambique, Namibia, Swaziland, South Africa, Tanzania, Zambia, Zimbabwe

– Harmonisation of listings requirements

8

www.jse.co.zawww.jse.co.za

Challenges of investing in Africa

• Lack of information• Restricted trading times• Markets relatively small and illiquid • Lack of automation – trading and settlement

9

www.jse.co.zawww.jse.co.za

Growing African capital markets

• Macroeconomic stability • Banking sector development• Institutional quality • Supportive legal/regulatory framework• Automation • Regulation and supervision• Cost issues• Financial market education