Wednesday, November 5, 2008

African Alliance gets stockbroking licence in Malawi

The Malawi Stock Exchange (MSE) has given African Alliance Limited a nod to start trading as the fifth stockbroking firm on the local bourse.

This development means African Alliance Limited—a wholly-owned subsidiary of African Alliance Group of South Africa—will begin serving MSE investors this month.

African Alliance is a large investment banking group currently operating in Africa.

With this development, African Alliance will be the fifth brokerage firm participating in the country’s capital market. The others are Stockbrokers Malawi Limited (SML), FDH Stockbrokers Limited, Trust Securities and the new-kid-on-the block CDH Stockbrokers Limited which opened its doors to the public last month.

In an interview on the sidelines of TNM listing, Alliance Africa (Malawi) chief executive officer Armstrong Kamphoni said the firm applied for a stocbroking licence early this year and was happy to have been finally admitted by MSE to be a broker.

He said African Alliance, which is headquartered in South Africa, is a fully-fledged bank although in Malawi it will start trading as a stockbroker. He said apart from opening in Malawi, African Alliance has just received a licence in Ghana and will be rolling out in Egypt and North Africa.

"African Alliance firmly believes Malawi has a market for a new stockbroking firm. That is why we will start with a stocbroking business and from there we will see how we can help by developing new products on the financial market.

"As African Alliance, we will not only come to simply share the cake that is there but we will help grow the cake. African Alliance will bring in new experience. We will bring in more efficiency and in the process we should see more people participating in the stock market, so it may not be true that the market is saturated as the market will always correct itself," said Kamphoni, a former CEO for Stockbrokers Malawi Limited.

He said with too many players on the market there is a possibility of mergers to form a stronger force or some will fall out as a result, developments that signal good competition on the market.

Ceaser Pirs, head of operations at African Alliance Group, indicated also on Monday that with vast experience in the capital market in Africa, Malawians should expect to enjoy the difference from the new stockbroker.

"We believe that only a better company should offer the best service and, as people will see, African Alliance will give the best service to all our clients. We also feel in Malawi there is still room for development and as a stockbroker we will have a duty to come in and help in advising Malawians on how they can benefit the most from capital investments and how they can start to participate in stock trading," Pirs.

John Kamanga, the operations manager for the MSE, said investors should welcome another entrant to the stock brokerage industry adding that the growing market should be able to support an additional broker.

"This development is more than welcome as it increases the number of players and it will bring efficiency. The coming of African Alliance will open up innovation among the players. With more members on the market there will be stiff competition and all these players will need to bring in more innovations that can stimulate supply and demand," he said.

Stockbrokers on the market welcomed the development and said the local market is growing fast and needed more players to provided efficient services.

The MSE frequently sees more than US$100,000 worth of shares exchanging hands per week.