Zen calm prevails in Africa’s smallest bourse

MBABANE — Africa’s smallest stock exchange may well be the stuff that harried, burnt-out traders the world over dream of.

It’s a tiny room with a lone computer and the six companies and two government bonds in which the Swaziland Stock Exchange trades listed on a board. The stock exchange goes without business for weeks.Boxes of T-shirts and pamphlets touting the exchange line the wall.A brass bell rung to mark the start of trading has not resonated in weeks.The three brokers tracking trade in the tiny southern African mountain kingdom, surrounded by continental giant South Africa, used to gather every day at noon to monitor trade.They don’t any more.”Sometimes we go for a month without a trade and whenever there is a trade it is not normally of large volumes.Our average trading is between 10 000 and 20 000 rand a month,” said trade and information officer Gordon Bennett.Financial markets manager Sipho Dlamini said the brokers then decided to send orders by email and now stockbrokers only come in when there are matching orders.”Our operations are manual, we write things down, we still issue share certificates, we stamp things.Well-developed stock exchanges don’t do that.Share certificates can be lost, damaged or eaten by rats,” Dlamini said.The Swaziland Stock Exchange (SSX) was set up in 1999 by the government to raise capital, but a sluggish economy and a lack of legislation and regulation on securities and stocks have hampered growth.”A stock exchange is only as good as its country’s economy, and the Swaziland economy has been on a downward trend in the past five years,” said Dlamini.One of the challenges is Swaziland’s dependence on South Africa, as most Swazi companies are subsidiaries of South African firms which can easily raise capital through their head offices.South African banking giant Nedbank is listed on the bourse along with some Swazi companies whose interests range from sugar to real estate.The exchange is owned by the Swaziland government and regulated by the central bank.The bourse attracts mainly institutional investors and a handful of individuals.Most of the foreign investors are from South Africa.The Johannesburg Stock Exchange offered its listing requirements and trading platform free to bourses across southern Africa but the cost of linking up through cable to Africa’s largest stock is too high for the Swazi exchange.The style of governance in the kingdom, Africa’s last absolute monarchy, is a hindrance, experts say.Bennett said the most crippling challenge was the lack of securities legislation.”It has a lot of negative impact, people are not comfortable in an exchange that doesn’t have an act.We don’t have legal protection for investors of listed companies,” he said.A draft bill has been awaiting cabinet approval for a decade despite endless seminars and promises from the finance ministry.”Without the legislation there is no future,” said Bennett.Nampa-AFPThe stock exchange goes without business for weeks.Boxes of T-shirts and pamphlets touting the exchange line the wall.A brass bell rung to mark the start of trading has not resonated in weeks.The three brokers tracking trade in the tiny southern African mountain kingdom, surrounded by continental giant South Africa, used to gather every day at noon to monitor trade.They don’t any more.”Sometimes we go for a month without a trade and whenever there is a trade it is not normally of large volumes.Our average trading is between 10 000 and 20 000 rand a month,” said trade and information officer Gordon Bennett.Financial markets manager Sipho Dlamini said the brokers then decided to send orders by email and now stockbrokers only come in when there are matching orders.”Our operations are manual, we write things down, we still issue share certificates, we stamp things.Well-developed stock exchanges don’t do that.Share certificates can be lost, damaged or eaten by rats,” Dlamini said.The Swaziland Stock Exchange (SSX) was set up in 1999 by the government to raise capital, but a sluggish economy and a lack of legislation and regulation on securities and stocks have hampered growth.”A stock exchange is only as good as its country’s economy, and the Swaziland economy has been on a downward trend in the past five years,” said Dlamini.One of the challenges is Swaziland’s dependence on South Africa, as most Swazi companies are subsidiaries of South African firms which can easily raise capital through their head offices.South African banking giant Nedbank is listed on the bourse along with some Swazi companies whose interests range from sugar to real estate.The exchange is owned by the Swaziland government and regulated by the central bank.The bourse attracts mainly institutional investors and a handful of individuals.Most of the foreign investors are from South Africa.The Johannesburg Stock Exchange offered its listing requirements and trading platform free to bourses across southern Africa but the cost of linking up through cable to Africa’s largest stock is too high for the Swazi exchange.The style of governance in the kingdom, Africa’s last absolute monarchy, is a hindrance, experts say.Bennett said the most crippling challenge was the lack of securities legislation.”It has a lot of negative impact, people are not comfortable in an exchange that doesn’t have an act.We don’t have legal protection for investors of listed companies,” he said.A draft bill has been awaiting cabinet approval for a decade despite endless seminars and promises from the finance ministry.”Without the legislation there is no future,” said Bennett.Nampa-AFP