Financial software specialist Global Markets Exchange Group International (GMEX) is to partner with newly-established private company ALT Xchange Ltd (ALTX Uganda) in establishing a securities and derivatives market, initially in Uganda, to service the East African region.
ALTX Uganda will be a wholly-owned subsidiary of the Mauritius-based ALTX Africa Group, which will be fully incorporated this month. ALTX said that it also intends to develop a pan African footprint, providing a set of additional operating exchanges to facilitate both trading and clearing across the continent.
The board of the Capital Markets Authority (CMA) of Uganda recently approved ALTX Uganda’s application to operate an exchange in Uganda. ALTX also plans to set-up a Pan-African clearinghouse and settlement infrastructure in conjunction with local and international partners.
Under a partnership agreement between ALTX and GMEX subsidiary GMEX Technologies, ALTX will use GMEX’s ForumMatch exchange trading platform, ForumDetect market surveillance system and ForumTrader workstation.
The exchange, initially focussing on Ugandan securities (cash equities and bonds), is expected to go live in Q414. Subsequently it plans to introduce other asset classes, including financial derivatives and commodities, as well as incorporating other African regions. GMEX is also providing ALTX with exchange business and operations expertise.
As part of the agreement, GMEX will also set up a London-based routing hub to interconnect with ALTX to help facilitate trading liquidity into Africa. GMEX will also operate the ALTX representative office in London to aid business development.
The partners noted that the securities sector in East Africa is growing steadily and experiencing deep change as a result of goals set by the East African Community (EAC) common market protocol to create a common market in East Africa. ALTX seeks to take advantage of this protocol to enable further growth in the region.
Liberalisation of the pensions sector in the region has led to an exponential increase in the number of pension fund managers who are open to a wider range of investment avenues. The East African region is also looking to carry out major housing and infrastructure developments, which require long-term funds. The interest rate structure related to such opportunities can be beneficially modified using derivatives available through ALTX leveraging GMEX’s expertise in this space.
“We have the privilege to lead the process of interconnecting Africa’s markets, to open them up to global liquidity and to deliver market opportunities with best-in-class technology provided by GMEX,” said Joseph Kitamirike, chief executive officer (CEO) and co-founder of ALTX. Our partnership is one we believe could potentially enhance Africa’s economic growth trajectory by easing the flow of capital and increasing the variety of tradable securities and derivatives on offer.
“This is an exciting partnership with ALTX. The international financial community will have optimised distribution and access to not only the Ugandan capital market but subsequently to other key parts of East Africa and beyond,” added Hirander Misra, CEO and co-founder of GMEX Group.
“The partnership also provides ALTX with the infrastructure and business expertise to become the most technically advanced market in Africa, which will help support economic growth across the region.”
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