24th African Stock Exchange Conference: when will interconnection be expected?

The ASEA conference saw 500 participants. Beyond the technicality of the debates, the integration of stock exchange platforms was approached but at the margin. For the most part, this 24th edition of the Annual Conference of the Association of African Stock Exchanges (ASEA) was a success.

Organized under the theme “Financial markets, essential engines of the emergence of Africa”, this edition, hosted by the Casablanca Stock Exchange, was a platform for debate and discussion.

The speeches of the plenary session confirm the driving role of African capital markets in the economic recovery of the continent.

During the opening session, the Minister of Economy and Finance, the President of the Moroccan Capital Market Authority, the President of the African Stock Exchange Association (ASEA) and the Chairman of the Board of Directors of the Casablanca Stock Exchange as well as its Managing Director, were all unanimous on the relevance of the theme chosen for this 24th conference.

In view of the current economic context, the salient role that African stock markets should play in the economic recovery of the continent no longer needs to be demonstrated. The conference program thus attempted to answer the question of how.

The inventory shows that in Africa, “the post-Covid-19 recovery requires the mobilization of significant funds of 252 billion dollars”, according to a statement by Macky Sall, President of Senegal, during the 76th session of the UN General Assembly. An observation that emerged during this plenary session as a fact that will have to be faced, in particular by mobilizing the capital markets. Morocco, host country of this conference, was exemplary since it has already noted the important and priority role of the Casablanca Stock Exchange as presented in the New Development Model.

“Revitalizing the Casablanca Stock Exchange will be the first step in making Morocco emerge as the region’s leading financial center. Whether it is to face the challenges of development or the imperatives of recovery following the current Covid-19 crisis, the capital markets will play a major role in Morocco’s New Development Model. In particular, the development of the Casablanca Stock Exchange will be crucial for the development of these markets… ”. Extract from the New Development Model (NMD).

This is how the purpose of the conference was to answer various questions. How capital markets can accelerate the post-Covid economic recovery, finance the continent’s governments and infrastructure, help public enterprises finance their development and diversify their sources of finance as well as raise the capital necessary for the development of SMEs, by search for opportunities for expansion and job creation.

The emergence of African stock markets at the center of the debate of the six panels scheduled in the conference

The first panel devoted to how to prepare the ground to accelerate the development of financial markets in Africa and moderated by the international financial expert Christopher Charlier, had the participation of renowned speakers of Finance like Mohamed Farid Saleh, the president of the Egyptian Stock Exchange. As explained by Nandini Sukumar, President of the World Federation of Exchanges, this panel identified the crucial role of governments in working with the stock market to create the right environment for companies to go public.

The Financing of Governments, Public Enterprises and Infrastructures of the continent is the theme which was debated during the 2nd panel. The latter was moderated by Richard Eckrich, Investment Officer at SFI for the Middle East and Africa region and saw the participation of several African and international experts including Michael Wagner from Oliver Wyman, Olumide Bolumole from the Niger Stock Exchange and Opuiyo Oforiokuma of the Africa50 Fund for the acceleration of infrastructures. The panel highlighted the importance of the financing of Companies and Public Establishments by African stock exchanges. Indeed, the particular challenge in Africa is to obtain the necessary height, depth, variety and liquidity. Stock exchanges could be a way for government companies to raise capital by going public.

The 3rd panel focused on “Anticipating the future of disruptive technologies: key trends and implementation challenges in the financial market sector”. Moderated by Selloua Chakri, Managing Director of SCL Advisory Limited, this panel put new technologies at the center of the debate and placed them as a lever for the development of African stock markets. Indeed, it is about taking a first step by investing in a proof of concept, by experimenting with new technologies, by partnering with good suppliers. It is necessary to adapt to new technologies which are catalysts. Otherwise, it could prevent any organization from moving forward.

The fourth panel was on ‘How the African Economy Got Cool: The Rise of an Asset Class’. Moderated by Charles Robertson, Chief World Economist and Head of Macro Strategy at Renaissance Capital, this panel reviewed the development of African capital markets and their potential. Thus, over the past decade, growth rates in many African countries have been very high, making African markets and African trade tremendous opportunities.

The 5th panel focused on the Financing of SMEs through the market and saw the participation of the Managing Director of the Nairobi Stock Exchange, Geoffrey O. Odundo, of the Vice-president of the Botswana Stock Exchange, Thapelo Tsheole, of Shanthi Divakaran from the World Bank and Nasser Seddiqi, Director of Financial Operations and Markets at AMMC. In this panel, it was a question of developing and promoting alternative sources of financing for SMEs in order to preserve their growth potential. Precisely, the role of the capital market is to complement existing solutions and provide appropriate financing for this category of companies which occupies a major place in most economies, especially in emerging markets and developing countries.

The last panel, held under the theme ‘Who’s Afraid of Impact Investing?’, Was moderated by Shameela Soobramoney, Director of Sustainability at the Johannesburg Stock Exchange with the participation of, among others, Neil Gregory of IFC, Karim El Hnot from Société Générale Maroc and Rachid El Achhab from CDG Capital Gestion. This panel shed light on the importance of sustainable investing. The latter, which constitutes a real innovative investment philosophy, presents more than ever an opportunity to mobilize the public and private sources of financing necessary for sustainable and inclusive growth in Africa.

Important reports presented at this conference

In parallel with the panels, presentations on specific themes were made by experts from various backgrounds. The presentation by Mr. Mounssif Aderkaoui, at the head of the Department of Financial Studies and Forecasts of the Ministry of the Economy and Finance, focused on ‘Africa facing the test of climate change: What are the funding issues and challenges? During his presentation, Mr. Aderkaoui first gave an overview of the impacts and challenges of financing, following climate change in Africa. He then returned in detail to the situation of green financing in Africa, its characteristics and its evolution. Finally, he offered recommendations on how Africa can improve its access to green finance. Among its recommendations: the involvement of the local financial system and the integration of green budgets into national, local and municipal development and planning programs.

In addition, three ASEA committee reports were on the agenda. One focused on disruptive technologies and was presented by Mohamed SAAD, CEO of the Casablanca Stock Exchange. The other focused on Sustainability and was presented by Ahmed Rushdy of the Egyptian Stock Exchange. That’s not all. A presentation on the integration of African capital markets was made by Lina Tonui, Head of the African Stock Exchange Liaison Project (AELP).

During the first day, the report on the work of the “Disruptive Technologies” Group made it possible to report the results of a study conducted around the use as well as the potential and added value that these technologies offer for African stock markets. Thus, 72% of respondents expect, following the use of disruptive technologies, a direct impact on revenues, opportunities and cost management.

The report on sustainable finance was produced following a questionnaire administered to African stock exchanges, members of ASEA, and focused on four pillars. The impact of internal assessment, sustainability reports, introduction of sustainable indices in markets and promotion of green finance products as well as market education and gender equality were the four main thrusts. of this study. It turns out that only 6 African stock exchanges have a sustainability index, namely the Casablanca, Egypt, Johannesburg, Cape Verde, Mauritius and Nigeria stock exchanges.

In addition, the connection of African stock exchanges has multiple advantages. The most impactful lies in the fact that the connection of 7 African stock exchanges and 14 countries of the continent with more than 1400 billion dollars of capitalization makes it possible to have a rich offer in products and a wide access to African companies.

This 24th conference was also an opportunity for the World Bank and IFC to present their very informative report on: “Public Enterprises in Emerging and Developing Economies – Lessons Learned from 30 Years of Success and Failure”. This report was produced, on the initiative of the Casablanca Stock Exchange and ASEA, after analyzing the listing of companies in emerging and developing economies, and in particular the successful case of Morocco.

General satisfaction marked the end of the work of the 24th ASEA conference

At the closing session on November 25, Dr Amenounve, President of ASEA, delivered a speech in which he recalled the importance of the role of African authorities and regulators in developing the continent’s capital market. He also highlighted the possibilities offered by scholarships to finance state investments. Dr Félix Edoh Kossi Amenounve, also recalled that Africa is a market for SMEs par excellence, for which it will be necessary to adapt the offers in order to encourage their financing by African stock exchanges.

This conference demonstrated, through its plenary, its panels and its reports, how the stock market is a formidable tool in the service of economic recovery and sustainable economic growth. Whether through new introductions or fundraising for companies already listed, for private companies or for public ones, for large companies as for SMEs, the Stock Exchange is thus and unequivocally an effective means of financing, particularly in this context of economic recovery.

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