CAPITAL MARKET: CMAC to employ electronic trading this year

Electronic trading will make the market more efficient and easily accessible The Rwanda Capital Market Advisory Council (CMAC) is set to start a computer based trading mechanism in the second quarter of 2009, a top official has revealed. Robert Mathu, the CMAC Executive Director said that the electronic platform will help eliminate human errors whereas increasing the speed of transaction. “This would make the market more efficient and easily accessible,” he said. Electronic trading will replace the manual transaction where stockbrokers have bidding on the counter. This means that the trading of securities will not be conducted face to face among the traders but instead online. CMAC management said that the advancement in security trading was set to be established in the first quarter of this year but it has been postponed due to the uncertainty in global financial markets caused by the credit crunch. Since the volume of business is still low, the platform is expected not to grace the market at once. It will be done in phases depending on the volume of business. The low volumes have been attributed to the lack of the products on the market, forcing most companies to withdraw from issuing shares for sale for fear of registering losses. Mathu however said that CMAC’s priority is not the electronic trading but to have as many products on the market as possible. Meanwhile, there is also a regional initiative to harmonise the electronic trading having been established in Tanzania and Kenya. Uganda is also moving towards the same platform expected to facilitate cross-boarder listing in the region. Ends