African stock exchanges may merge into integrated regional pan-African markets if African financial market leaders have their way. This was one of the main topics at the annual African Stock Exchange Association's three-day annual meeting that started in Johannesburg yesterday.

Delegates felt that integration would increase the visibility of African stocks and markets, create expansion in trading volumes (through economies of scale), and provide an enabling environment for companies to raise funding at a cheaper cost than borrowing.

It (integration) would make sense; this would solve the problem of the breadth and depth of products, and service the huge demand for investment in Africa, said Mauritius Stock Exchange CEO Sunil Benimadhu. But despite his acknowledgement of the benefits of integration, Benimadhu said that creating one exchange was not the best solution.

He said that Africa should first look at building up infrastructure in local markets, as the cost of communication from one regional pan-African exchange to another would make it nearly impossible to integrate these markets.

By developing efficient information systems, a preliminary process of harmonisation would enable better communication and sharing of information between various stock markets.

The African Stock Exchanges Association has adopted harmonised listing requirements to facilitate cross-border listing among the exchanges on the continent. But leaders such as Nigeria's President Olusegun Obasanjo believe that integration is the best way to create interest in Africa.

Lusaka Stock Exchange CEO Joe Chikolwa said that integration was the way forward. Echoing this sentiment was Namibian Stock Exchange CEO, John Mandy, who cited the relationship between his exchange and the JSE as an example of a successful partnership.

Nigeria