REGIONAL INTEGRATION OF STOCK EXCHANGES IN AFRICA

Although stock markets contribute to economic development, the advances in technology, globalisation, stiff competition, institutionalisation of capital markets, and their traditional nature as self-regulatory, controlled and governed by members or governments threaten their well-being. Elsewhere, e...

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Bibliographic Details
Published in:African review of money, finance, and banking finance, and banking, 2006-01, p.97-122
Main Author: Onyuma, Samuel O.
Format: Magazinearticle
Language:English
Subjects:
Capital markets
Countries
Economic regulation
Equivalent annual costs
Financial investments
Globalization
Investors
Political integration
Stock exchanges
Stock markets
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Summary:Although stock markets contribute to economic development, the advances in technology, globalisation, stiff competition, institutionalisation of capital markets, and their traditional nature as self-regulatory, controlled and governed by members or governments threaten their well-being. Elsewhere, exchanges are demutualizing and integrating with others domestically or across borders. African stock exchanges cannot ignore these developments. This article discusses the implications of globalisation to stock markets, benefits and impediments to stock market integration, and suggests how to promote integration of stock markets. It argues that becoming cost-efficient, transparent, widely accountable, and contributively to regional integration, African exchanges must first adapt to global standards, improve their governance practices before thinking of regional integration. Harmonizing listing, trading and settlement systems and rules, and adopting a single currency are crucial as developing mutual commitment and other ties bonding cooperating exchanges. Successful integration requires meticulous planning and execution, political determination and economic rationale. Further progress in developing domestic exchanges must precede any move to integrate. Creating a single African stock market is a complex undertaking thus domestic exchanges should consider forming closer cooperation through cross-border listing and information and technology sharing. From these regional alliances, continental integration could then be considered.
ISSN:1124-3163