Africa’s leading stock exchanges are open for tra... | KPMG | ZA

Africa’s leading stock exchanges are open for trading, says KPMG

Africa’s leading stock exchanges are open for tra...

Despite growing interest and investment in Africa, the lack of complete and good quality information about the African stock markets is contributing to a continued hesitance by international public companies to list on Africa’s stock exchanges and for foreign investors to invest in domestic companies listed on African stock exchanges. KPMG’s “Listing in Africa” report, aims to provide comprehensive information about selected African markets and stock exchanges thereby providing international public companies, foreign investors and fund managers and private equity investors who are invested in Africa with valuable insights into listing and investing in securities across key markets in Africa, namely, Botswana, Kenya, Mauritius, Namibia, Nigeria, South Africa, Zambia and Zimbabwe.


Head of M&A and Capital Advisory

KPMG in South Africa


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When considering a stock exchange, some of the main considerations by potential issuers include, inter alia:


  • Availability of domestic capital and debt funding in the country of choice
    Nigeria, for example, has one of the largest pools of investment capital in Africa, with approximately five million registered capital market investors. In addition, the Nigerian Stock Exchange services the largest economy in sub-Saharan Africa;
  • Liquidity of the listed securities on the exchange of choice
    Liquidity is generally low on the African stock exchanges. For the twelve months to the date of publication of KPMG’s ”Listing in Africa” report, the JSE Limited was found to be the most liquid of the African stock exchanges with a liquidity of approximately 26%, followed by the Nairobi Stock Exchange at 13% and the Nigerian Stock Exchange at 11%;
  • The initial and an ongoing regulatory and corporate governance requirements on the exchange of choice and whether the company will need to change its existing policies and procedures in this regard
    Regulatory and corporate governance requirements need to offer appropriate investor protections while not discouraging listings by being excessively onerous. The amendments to the JSE Listings Requirements which are effective from 30 September 2014, provide for a more balanced approach to regulation and corporate governance for companies listed on the Alternative Exchange of the JSE which is more appropriate for small to mid-sized companies;
  • Exchange control requirements and local shareholder spread and ownership requirements in the target country
    Exchange control requirements are particularly relevant in Namibia, South Africa and Zimbabwe and local shareholder spread and ownership requirements are particularly relevant in Botswana, Kenya, South Africa and Zimbabwe. Zambia has implemented several incentives to promote the rapid development of the Zambian capital markets including the dropping of exchange controls and restrictions on shareholding levels and foreign ownership; and
  • Tax incentives available in the target country
    This is particularly relevant in Botswana, Kenya, Mauritius, Nigeria and Zambia. Foreign investors in Mauritius, for instance, benefit from numerous incentives, where revenue on the sale of shares can be freely repatriated, there is no withholding tax on dividends and there is not tax on capital gains.


There are a number of African regulatory structures that work well. For example, the Botswana Stock Exchange has a strong regulatory framework that ensures markets run efficiently and the capital markets continuously perform well due to strong and consistent political governance, sound national economic management and social stability.

The Nairobi Stock Exchange was voted as the most innovative stock exchange in Africa in 2013.

The Zambian securities market has been designated as a “unified” market and virtually all trading is conducted through the stock exchange which has a number of benefits including enhanced liquidity and market depth.

Something along these lines may be beneficial in South Africa in light of the Financial Services Board’s recent directive and guideline in terms of which all companies that facilitate over-the-counter trading in their shares are required to register themselves as an exchange

© 2017 KPMG Services (Pty) Limited, a South Africa private company and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.

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