A DELEGATION from the Southern African Development Community (Sadc) was in Zimbabwe to discuss the linking of operations between the regional stock exchanges with Johannesburg and adopt elect
ronic trading. Unlike its South African counterpart the Zimbabwe Stock Exchange (ZSE) currently uses a floor trading system, which will be abolished once the depository one is established.
ZSE chief executive officer Emmanuel Munyukwi represented Zimbabwe at the meetings.
Last year Munyukwi said the link was meant to attract capital inflows into Zimbabwe in particular and the Sadc in general.
He said the agreement was reached in principle with South Africa but no time frame had been set.
Botswana has, however, already cried foul, claiming Johannesburg wanted to dominate the stock exchange world to boost its own trading volumes and revenues.
“The planned deal with South Africa is still on and we are waiting for the documentation,” Munyukwi said. “They are simply putting together what was discussed at the meeting we held on the issue and the documentation is expected sometime soon.”
The Botswana Stock Exchange (BSE) had accused the Johannesburg Stock Exchange (JSE) of trying to force regional exchanges into a South African-dominated bourse to boost its own trading volumes and revenues.
“The JSE is attempting to apply pressure on the smaller Southern African Development Community exchanges into accepting an unreasonable proposal, which will allow the JSE to siphon off order flow from the smaller… exchanges in an effort to boost their own trading volumes and revenue,” the BSE said in a statement then.
“This proposal will reduce the number of issuers and investors on Sadc stock exchanges, diminish trading volumes and most certainly lead to capital flight towards Johannesburg.”
The exchange plan would allow poorer countries access to Johannesburg’s trading system, which it shares with the London Stock Exchange.
Members of Sadc harmonised their listing requirements in 1998.
Munyukwi had said it was unfair for Botswana to write off the plan because they had not attended the meeting that discussed the arrangements.
“Botswana did not attend the meeting where we discussed the electronic trading issues,” he said. “Ghana also attended but it was almost like an observer.”
JSE deputy chief executive officer Nicky Newton-King has said the bourse was in talks with markets in Ghana, Namibia, Zimbabwe and Zambia for trading stocks from around the continent on its platform.
But the BSE said it believed only Namibia, Zambia and Zimbabwe out of the other Sadc exchanges had considered the proposal.
The BSE proposed instead creating cooperation among Sadc exchanges, which would allow each bourse to follow its own path of development while working to harmonise regional capital markets.
“The BSE is not prepared to trade its decade-long exceptional performance and ability to operate markets that are fair and equitable for a subservient role in a JSE-dominated market,” it said.
The 14-member Sadc states are: Angola, Botswana, the Democratic Republic of Congo, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe.