The London Stock Exchange (LSE) announced today that its electronic bond trading platform, MTS, and the Johannesburg Stock Exchange (JSE) have opened South Africa’s first electronic government bonds trading platform.
The new platform, which went live today, seeks to enable global access and enhance transparency in the South African government bond market. Powered by MTS, the platform has already attracted nine primary dealers, with the likes of Absa Bank, Citibank, HSBC, and JPMorgan signing up as liquidity providers, the statement says.
MTS has been operating electronic fixed income markets for three decades. However, this is the first relationship of its kind in the African sovereign bond markets for the platform. According to the statement, MTS was selected by JSE following a competitive procurement process. In South Africa, JSE will operate and manage the new market. This will be done in accordance with local regulations.
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Seven years of hard work pays off
Commenting on the new platform, Donna Nemer, Director of Capital Markets for JSE, said: “The launch of the ETP, for government bonds will undoubtedly position South Africa’s capital market infrastructure as being amongst the most sophisticated in global Capital Markets. The benefits of a more sophisticated market infrastructure benefits issuers, investors and further positions South Africa as an attractive investment destination.
This launch of the Bond ETP it also was an important element of South Africa’s commitment to Capital Markets reforms at the G-20 group of nations. The culmination of the intensive efforts of a multitude of stakeholders including our technology provider MTS, our nine Primary Dealers, the World Bank as project consultant, the South African Reserve Bank; and Central Securities Depository Participants (CSDPs) has really paid off and this is a proud moment for our country.”
The Deputy Minister of Finance, Mr Mondli Gungubele, added that the project has been in the works for seven years: “Its launch today is a testament to what can be achieved when government and the private sector work together to achieve a common purpose.
The use of electronic trading platforms has shown notable positive effects in the secondary markets including: improved liquidity through price discovery; reduced transaction costs and greater competition; increased transparency, and; lower trading costs.”