ASEA and SecondSTAX sign MoU supporting the AELP integration
The African Securities Exchanges Association and SecondSTAX signed a memorandum of understanding on 26 June 2023 in support of the African Exchanges Linkage Project. It was signed by Thapelo Tsheole, President of ASEA, and Eugene Tawiah, SecondSTAX co-founder and chief executive.
Under the agreement, SecondSTAX provides technical and operational support towards the delivery of AELP.
What AELP is
The African Exchanges Linkage Project is the flagship initiative of ASEA and the African Development Bank. Its aim is to enable the free movement of institutional investment between participating exchanges and licensed investment firms across the continent — in effect, to make African markets reachable from one another rather than only from within.
ASEA represents 25 securities exchanges serving 37 African countries. That scale is what makes an association-level agreement different from an exchange-level one.
Why it is needed
Africa’s exchanges include some of the best-performing stocks and bonds globally, yet they remain largely inaccessible to investors outside the jurisdictions where those investors are domiciled.
The growth is not in question. Over the past decade African capital markets have raised more than $17 billion across 215 initial public offerings and a further $70 billion in follow-on offerings, alongside more than $246 billion in debt. Equity indices have at points exceeded 50 percent annual growth across major regional exchanges.
What limits the market is structural: exchanges operate in silos, and there is insufficient data on the risk profiles of assets. The result is less capital reaching markets that need it, and fewer high-growth assets reaching investors who want them.
What SecondSTAX contributes
The agreement gives ASEA members, investors and investment firms access to SecondSTAX’s infrastructure across the areas that make cross-border participation difficult — market research and data, order routing and execution, client onboarding, and access to licensed foreign exchange liquidity, including through the Pan-African Payment and Settlement System.
The common thread is removing manual operational overhead. Booking a trade on an exchange outside your own market has historically meant reconstructing a process that already exists at home.
What both sides 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,” said Thapelo Tsheole, President of ASEA. “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.”
“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,” said Eugene Tawiah, CEO and co-founder of SecondSTAX. “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.”