Heads of stock markets in East Africa and other securities market players had a meeting in Nanyuki last week. Among the many things discussed there was the primary issue of interlinking all the securities markets in the region. But how do this happen and how does it even affect that Kenyan or Tanzanian in the remote areas of these countries?
If you are not into the stock market, you may not immediately reap the benefits of this new move. However, as a potential investor, you need to know what is in there for you from this whole integration thing.
The interlinking of the securities market simply widens the playing field for investors in the East African countries. It enables you as the Kenyan investor to trade in shares of say Ugandan companies easily without undergoing so much bureaucratic procedures. This is made possible through an information sharing system that will avail real-time information from across the board to investors for quick decision making.
As an investor you stand to gain from this move by casting your net wider. With enough capital outlay, you shall be in a position to diversify your investments and distribute your risks across the countries. This will therefore be cushioning you from market shocks in any one of the countries; since you will be able to make gains in other markets when your local counters are flattening and vice versa.
With more stock brokers in the game, service delivery is also expected to shoot up. The increased competition will force the stock brokers to be more professional in their dealings and maintain high levels of transparency; in order to attract more clients, or even maintain the existing ones. This comes as plus to you the investor as you benefit from the high quality services to be offered.
For the stock brokers, they too have a reason to smile. The interlinked markets will also be widening their playing field and exposing them to a larger pool of clientele. This then translates to higher incomes from the commissions charged.
The stock brokers also stand to benefit from the enlarged employment field since they won’t be restricted to any one country in the East Africa region. The procedure of unifying the stock brokerage practice in East Africa is underway. Once completed, the stock brokers` geographical mobility will have been enhanced to a greater extent, accompanied by improved competence among the stock brokers themselves.
The interlinking procedure may be expensive in its initial stages, but the benefits in the long run stand out to challenge those costs which they overshadow.