Malawi’s New Commodity Exchange Goes Live with Full E-Trading Capabilities

AHL Commodities Exchange Ltd. (AHCX) Africa’s latest addition to its growing list of derivatives exchanges has started live trading in commodity contracts. The new exchange, based in Malawi, will use technology for complete front to back trade execution supplied by Nepal based InterContinental Systems (ICS).

Malawi, an agriculture based economy has a total GDP of $14.25 billion (according to the World Bank), one-third of its GDP and 90% of export revenues are attributed to the agriculture sector. The exchange will initially launch a range of products to allow farmers and corporates to hedge risk, products include: Ground Nuts, Maize, Soya beans, Pigeon Peas and Rice, the exchange has 26 members.

ERD Matabwa, Chairman of the Board at AHCX, spoke about the new launch, he said in the official briefing: "AHCX selected ICS after a thorough and extensive bid review of many vendors on the market from countries India, South Africa, Ethiopia etc. ICS demonstrated its capability to deliver the solution to our utmost satisfaction. ICS was able to provide the exchange, software systems required by AHCX as an integrated package without any problems and as per agreed schedule.. We believe that this project will be a candidate for innovation awards within the commodity exchange industry. The new technology platform in terms of integration and simplicity is an important foundation of AHCX future growth plans."

ICS will support the exchange in a range of services including:

• Electronic Warehouse and Collateral Management System

• Client and Membership Management System

• Quality Grading and Certification

• Trading Operations System

• Risk Management and Surveillance system

• Clearing and Settlement System

• Market Information System

ICS has been providing technology solutions to several exchanges including the Nepal Derivatives Exchange, the firms CEO, Santosh Pradhan, commented about the partnership with the exchange, he said: "Our selection by AHCX fully illustrates the breadth of ICSs' capabilities with the provision of exchange, trading, and risk management technology. Our systems are flexible enough to be used independently, or in this case, integrated into one comprehensive exchange ecosystem. This opportunity demonstrates the pedigree of the ICS technology stack and, combined with our work in 2009 for the Nepal Derivative Exchange, demonstrates the growth potential in our business as a technology provider to exchanges."

Africa is an exciting market for financial services firms, the region as a whole crossed the $2 trillion GDP mark this year and as countries in the continent develop their infrastructure, with the rise in internet usage, literacy and economy; it is set to be an alternative market for firms looking for investors. The key markets for Forex and CFD trading are; South Africa, Egypt, Nigeria and Kenya.