Regional stock markets to interconnect

Regional stock exchanges’ central depositories will be interconnected, officials at the Rwanda Stock Exchange (RSE) have said, adding that work on the project had already started. Though RSE and other regional stock exchanges have individual depositories, these depositories have not been interlinked.The four governments, Rwanda, Uganda, Tanzania and Kenya signed a memorandum of understanding last month to kick-start the interconnection process of the central depositories.“Our systems are not yet synchronised, and the only proof of ownership of cross-listed companies’ shares is the share certificate. We are working on an inter-depository transfer mechanism, where a shareholder will have his or her shares moved from any stock market with ease,” explained Celestin Rwabukumba, the RSE co-ordinator.He noted that the trading of shares of cross-listed firms on regional stock markets would then be expected to take four days from the current two months, once the electronic settlement of transactions is implemented. A central depository system refers to electronic software that converts physical paper certificates of shares or other debt and derivatives representing ownership of securities. “The central bank will work with the regional depositories once the entire technical infrastructure is in place. This will allow depositories the transfer of securities without physical certificates,” Rwabukumba said.Kenya Commercial Bank and Nation Media Group are the only cross-listed firms on the RSE with Uchumi Supermarket having contacted the bourse this month.