Namibia calls for integration of regional stock exchanges

THE Finance Ministry has called for Southern African Development Community (SADC) countries to integrate their bond and share markets.

Finance Deputy Permanent Secretary Shihaleni Ndjaba, reading a speech on behalf of Minister Saara Kuugongelwa-Amadhila, told SADC stock exchange heads in Windhoek last week that African capital markets “tend to be narrow, thin and fragmented”. “Few listings and low market capitalisation characterise the smaller markets,” he said.The stock exchange executives were meeting at a forum hosted by the Namibian Stock Exchange (NSX).The relatively small capital market in Namibia has been cited by economists as one of the handicaps that allows at least 60 per cent of local savings are invested elsewhere.Two ways to change the poor performance of African capital markets were to develop domestic market opportunities and expand markets beyond national borders, Ndjaba said.He said stock exchanges were uniquely placed to understand the practical day-to-day problems of trans-border markets and what needs to be done to make them run more smoothly.He also said that regulators of these markets need “operational independence” for international capital markets to work.”Jurisdictions that deny regulators independence will restrict trans-border listings of securities and access to capital,” he said.But there were problems that hindered the development of cross-border stock exchanges.These included foreign exchange restrictions, and differences in financial reporting and disclosure standards for companies.Some markets may also lack adequate supervisory authorities, Ndjaba said.He said SADC states would have to agree on “broad regulatory and supervisory principles”.He added that should regional stock exchange integration become a reality it “should alleviate most regional concerns about the availability of and access to capital”.”Few listings and low market capitalisation characterise the smaller markets,” he said. The stock exchange executives were meeting at a forum hosted by the Namibian Stock Exchange (NSX). The relatively small capital market in Namibia has been cited by economists as one of the handicaps that allows at least 60 per cent of local savings are invested elsewhere. Two ways to change the poor performance of African capital markets were to develop domestic market opportunities and expand markets beyond national borders, Ndjaba said. He said stock exchanges were uniquely placed to understand the practical day-to-day problems of trans-border markets and what needs to be done to make them run more smoothly. He also said that regulators of these markets need “operational independence” for international capital markets to work. “Jurisdictions that deny regulators independence will restrict trans-border listings of securities and access to capital,” he said. But there were problems that hindered the development of cross-border stock exchanges. These included foreign exchange restrictions, and differences in financial reporting and disclosure standards for companies. Some markets may also lack adequate supervisory authorities, Ndjaba said. He said SADC states would have to agree on “broad regulatory and supervisory principles”. He added that should regional stock exchange integration become a reality it “should alleviate most regional concerns about the availability of and access to capital”.

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