By BUSINESS DAILY

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Fintech start-up SecondSTAX has added the Nigeria stock exchange to its platform, giving investors in Kenya a chance to invest directly in the Ksh7 trillion ($47.04 billion) market.

The Ghana-based firm launched in the Kenya market last November, signing up local stockbroker Kestrel Capital and Ghanaian Intermediary Databank.

SecondSTAX Chief Executive Officer Eugene Tawiah told the Business Daily that in Nigeria, the startup has inked a deal with financial services firm Afrinvest as its first broker in West Africa’s biggest economy.

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The SecondSTAX platform allows institutional clients to trade directly through its online portal, but all trades are routed through the registered stockbrokers.

“The equities trading workflow across Ghana, Kenya and Nigeria is fully supported. Fixed income trading will be available early next year,” said Mr Tawiah.

While investments at the Nairobi Securities Exchange (NSE) remain within easy reach of Kenyan investors, many are wary of putting capital into other African markets due to uncertainty over risk and cost of moving capital.

This has meant that while African exchanges have grown significantly in terms of listings and products in the past two decades, cross border trading across the continent has remained largely muted, owing also to a lack of a common infrastructure to facilitate trades and settlement.

The African Securities Exchanges Association (Asea) and the African Development Bank (AfDB) have recently taken steps to hasten the integration of these markets by launching the African Exchanges Linkage Project (AELP).

The AELP, which went live in November 2022 with an initial seven members who include the NSE, is an order-routing system to channel transactions between stockbrokers on participating exchanges.

In June, SecondSTAX signed a memorandum of understanding with AELP to provide the project with technical and operational support as it rolls out fully across its 25 member exchanges, with the agreement also offering access to the SecondSTAX research portal by Asea members, investors, and investment firms.

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“We are in consultations with Asea to expand into all their jurisdictions starting with those already included in the AELP Phase 1 launch,” said Mr Tawiah.

The agreement also includes access to SecondSTAX’s know-your-customer (KYC) portal to reduce the risk around investors making first time trades in other markets outside their domiciled region.

The ASEA members will also get access to the SecondSTAX liquidity providers portal, which lists licensed foreign exchange providers across multiple markets, including those under the Pan-African Payment and Settlement System (Papps).

The Africa links offer hope to markets such as the NSE that have seen a dip in fortunes due to reduced trading, and also set up the possibility of cross-border capital raising ventures, such as regional IPOs and bonds.