III. STOCK MARKET DEVELOPMENT IN SUB SAHARAN AFRICA:TRENDS AND CHARACTERISTICS
III. STOCK MARKET DEVELOPMENT IN SUB SAHARAN AFRICA:TRENDS AND CHARACTERISTICS
1990s. Prior to 1989, there were just five stock markets in sub-Saharan Africa and three in
North Africa. Today there are 19 stock exchanges ranging from starts ups like Uganda and
Mozambique stock exchanges to the Nigeria and Johannesburg stock exchanges.2 With the
exception of South Africa, most African stock markets doubled their market capitalization
between 1992 and 2002. Total market capitalization for African markets increased from
US$113,423 million to US$ 244,672 million between 1992 and 2002.
The rapid development of stock markets in Africa does not mean that even the most
advanced African stock markets are mature. In most of these stock markets, trading occurs in
only a few stocks which account for a considerable part of the total market capitalization.
Beyond these actively traded shares, there are serious informational and disclosure
deficiencies for other stocks. Further, supervision by regulatory authorities is often far from
adequate. The less developed of the stock markets suffer from a far wider range of such
deficits.
Indicators of stock market development (Table 1) show that African markets are small with
few listed companies and low market capitalization. Egypt, Nigeria, South Africa and
Zimbabwe are the exceptions with listed companies of 792, 207, 403 and 79 respectively.
The average number of listed companies on sub-Saharan African markets excluding South
Africa is 39 compared with 113, with the inclusion of Egypt and South Africa. Market
capitalization as a percentage of GDP is as low as 1.4 in Uganda. The Johannesburg
Securities Exchange in South Africa has about 90 percent of the combined market
capitalization of the entire continent. Excluding South Africa and Zimbabwe the average
market capitalization is about 27 percent of GDP. This is in contrast with other emerging
markets like Malaysia with a capitalization ratio of about 161 percent.
African stock markets suffer from the problem of low liquidity. Liquidity as measured by the
turnover ratio is as low as 0.02 percent in Swaziland compared with about 29 percent in
Mexico. Low liquidity means that it will be harder to support a local market with its own
trading system, market analysis, brokers, and the like because the business volume would
simply be too low.
Despite the problems of small size and low liquidity, African stock markets continue to
perform remarkably well in terms of return on investment. The Ghana Stock Exchange was
adjudged as the world’s best-performing market at end of 2004 with a year return of
144 percent in US dollar terms compared with 30 percent return by Morgan Stanley Capital
International Global Index (Databank Group, 2004). Within the continent itself five other
bourses—Uganda, Kenya, Egypt, Mauritius and Nigeria apart from Ghana—were amongst
the best performers in the year.
Institutional and infrastructural indicators in selected African stock markets are shown in
Table 2. In all, eleven indicators (existence of a market regulator, a governing law, nature of
clearing and settlement, settlement cycle, existence of an international custodian, foreign
participation, exchange control, nature of trading systems, existence of a central depository,
number of trading days, and accounting and auditing reporting system) are considered.
IMF Working Paper
African Department
Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges
Prepared by Charles Amo Yartey and Charles Komla Adjasi
August 2007
III STOCK MARKET DEVELOPMENT IN SUB SAHARAN AFRICATRENDS AND CHARACTERISTICS - To learn more about this author, visit International Monetary Fund's Website.
Like this article? Share it with your friends
There has been a considerable development in the African capital markets since the early
1990s. Prior to 1989, there were just five stock markets in sub-Saharan Africa and three in
North Africa. Today there are 19 stock exchanges ranging from starts ups like Uganda and
Mozambique stock exchanges to the Nigeria and Johannesburg stock exchanges.2 With the
exception of South Africa, most African stock markets doubled their market capitalization
between 1992 and 2002. Total market capitalization for African markets increased from
US$113,423 million to US$ 244,672 million between 1992 and 2002.
The rapid development of stock markets in Africa does not mean that even the most
advanced African stock markets are mature. In most of these stock markets, trading occurs in
only a few stocks which account for a considerable part of the total market capitalization.
Beyond these actively traded shares, there are serious informational and disclosure
deficiencies for other stocks. Further, supervision by regulatory authorities is often far from
adequate. The less developed of the stock markets suffer from a far wider range of such
deficits.
Indicators of stock market development (Table 1) show that African markets are small with
few listed companies and low market capitalization. Egypt, Nigeria, South Africa and
Zimbabwe are the exceptions with listed companies of 792, 207, 403 and 79 respectively.
The average number of listed companies on sub-Saharan African markets excluding South
Africa is 39 compared with 113, with the inclusion of Egypt and South Africa. Market
capitalization as a percentage of GDP is as low as 1.4 in Uganda. The Johannesburg
Securities Exchange in South Africa has about 90 percent of the combined market
capitalization of the entire continent. Excluding South Africa and Zimbabwe the average
market capitalization is about 27 percent of GDP. This is in contrast with other emerging
markets like Malaysia with a capitalization ratio of about 161 percent.
African stock markets suffer from the problem of low liquidity. Liquidity as measured by the
turnover ratio is as low as 0.02 percent in Swaziland compared with about 29 percent in
Mexico. Low liquidity means that it will be harder to support a local market with its own
trading system, market analysis, brokers, and the like because the business volume would
simply be too low.
Despite the problems of small size and low liquidity, African stock markets continue to
perform remarkably well in terms of return on investment. The Ghana Stock Exchange was
adjudged as the world’s best-performing market at end of 2004 with a year return of
144 percent in US dollar terms compared with 30 percent return by Morgan Stanley Capital
International Global Index (Databank Group, 2004). Within the continent itself five other
bourses—Uganda, Kenya, Egypt, Mauritius and Nigeria apart from Ghana—were amongst
the best performers in the year.
Institutional and infrastructural indicators in selected African stock markets are shown in
Table 2. In all, eleven indicators (existence of a market regulator, a governing law, nature of
clearing and settlement, settlement cycle, existence of an international custodian, foreign
participation, exchange control, nature of trading systems, existence of a central depository,
number of trading days, and accounting and auditing reporting system) are considered.
IMF Working Paper
African Department
Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges
Prepared by Charles Amo Yartey and Charles Komla Adjasi
August 2007
III STOCK MARKET DEVELOPMENT IN SUB SAHARAN AFRICATRENDS AND CHARACTERISTICS - To learn more about this author, visit International Monetary Fund's Website.
Like this article? Share it with your friends
 | |
 |
No article feedback found. |
| |
Leave Your Feedback |
 | |
| |||
John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
|||
Kim CastleWith nearly two decades in the advertising and design business, with clients like Domino's Pizza, General Motors, Direct TV, Pedigree, Wolfgang Puck, Higher Octave Music, Hollywood Celebrity Products, Disney, and Paramount, as well as thousands of entrepreneurs around the world define, structure, communicate, and position their business for greater profits, BrandU(R) co-creators Kim Castle and W. Vito Montone discovered that entrepreneurs could experience the same power that big brands command for a fraction of the cost with the world's only process-based results-drive Integral approach to business creation. BrandU(R) is helping entrepreneurs grow with the power of extreme clarity from idea...to brand...to market(TM) and helping one million entrepreneurs become successful and whole so that they can make a difference in the world. Are you one of them? If you want to experience clarity all the way to the bank(TM), get started now at http://www.brandu.com. - Visit Kim Castle's Website |
|||
Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
|||
John PowerJohn Power, founder of Biltmore Franchise Consulting, has extensive experience developing and marketing franchises and business opportunities. He has been in and around franchising for over twenty years. From 1980 through 1990 he conceptualized, organized, and developed the American Video Association. He grew AVA to 2,000 national members, before selling the company it 1990. It was later merged into another home video marketing company. From 2000 to 2005 he worked as a contract marketing and human resources consultant to several local and national companies. In 2005 Mr. Power began working as a franchise development consultant on a full-time basis. Since that time he has helped more than three dozen companies initiate and develop their franchising program. He notes that there are many companies interested in developing a franchise program, and who need his specialized assistance. Mr. Power is a “hands-on” franchise consultant. He said, “I am the ‘nuts and bolts’ person who tends to the details for my clients.” Mr. Power holds a B.S. degree with a major in Marketing. See: www.biltmorefranchise.com You may contact Mr. Power at: jpower@biltmorefranchise.co - Visit John Power's Website |
|||
David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
|||
Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
|||
|
To learn more about the Evan Elite Author Program please contact us. | |||
 | |
|  |
Subscribe to International's articles
 | |
|
|  |
 | |
|
| |
 | |||||||
|
 | ||
 |
||
 |
||
 |
||
|
| ||
 |
| Have you written articles that would be of value to entrepreneurs? Become an expert on our site by publishing them! Expose yourself to a wide audience, drive more traffic to your website and get more sales! Click Here for details. |
|
|
 |
| Modeling the Masters: Learn the true secrets behind Walt Disney's business success factors & grow your company! Video produced by Phanta Media |
|
|
 |
"Learn straight from Evan how you can Make a Full Time Income (And More) from a Website"
Click Here To Learn More |
|
|
|
|
Get advice & tips from famous business owners, new articles by entrepreneur experts, my latest website updates, & special sneak peaks at what's to come!
|
|
|
 Human Potential Institute Disciplines of Success Customer Focus Article Marketing Authentic Leadership |
|
 | ||
 |
Top 50 Diversion Blogs
Top Diversion Blogs of 2009 | |
 |
Top 50 Geek Business Blogs
Top 50 Geek Business Blogs | |
| ||
 | ||||
| ||||
|
| ||||
| ||||
|
|
|
|
|
||||||||||||
|
Email us your ideas on how to make our website more valuable! Thank you Sharon from Toronto Salsa Lessons / Classes for your suggestions to make the newsletter look like the website and profile younger entrepreneurs like Jennifer Lopez and Sean Combs!
|
|
|
