EASEA endorses regional index for capital markets

EAST AFRICA: THE East African Securities Exchange Association (EASEA) has agreed to implement the EAC Regional Index, which is set to officially launch on April 2 this year.

The regional index is designed to pave the way for the launch of a regional structured exchange-traded fund (ETF), positioning East Africa’s capital markets as a key gateway for investments across the continent.

EASEA Chairman and CEO of the Uganda Securities Exchange, Mr Paul Bwiso, stated that the index will track market performance using specific criteria developed by regional technical teams.

“It will showcase the top five companies from each market, based on market capitalisation. As companies grow and evolve, new firms will be added.

“The index will spotlight East Africa’s financial markets at a regional level while providing both local and international investors with a benchmark for market performance,” he added during EASEA’s Annual General Meeting (AGM) at the Dar es Salaam Stock Exchange (DSE) headquarters on Friday.

EASEA is the umbrella body for stock exchanges and securities central depositories in Kenya, Tanzania, Rwanda, Uganda, Somalia, Burundi and Ethiopia.

Its primary goal is to accelerate investment and capital market growth in East Africa, ensuring efficient capital mobilisation to support regional economies.

The EAC market index will feature the top 20 listed companies in the region, representing 85 per cent of the total equity market capitalisation.

Five new exchanges have joined EASEA as members namely the Somali Stock Exchange, Burundi Securities Exchange, CSD Rwanda, Ethiopia Securities Exchange and the National Securities Exchange of Somalia.

Mr Bwiso highlighted that the index will offer valuable insights into macroeconomic indicators like inflation and foreign exchange trends.

Dar es Salaam Stock Exchange CEO, Mr Peter Nalitolela, noted EASEA’s focus on identifying opportunities in the Environmental, Social and Governance (ESG) sector and creating a unified framework for sustainable investments.

He emphasised the goal of harmonising investment regulations to simplify crossborder investments, including developing a system for investors to use a single account across multiple EAC countries.

Nairobi Stock Exchange CEO, Mr Frank Lloyd Mwiti, called for expanded East African capital markets to create more investment opportunities.

While Rwandan Stock Exchange CEO, Mr Pierre Célestin Rwabukumba, stressed the initiative’s role in uniting stakeholders for a more efficient and sustainable investment ecosystem.