Swaziland: Government pressing to add depth and liquidity to stock market

Apr 12, 2017

The nation is in the process of reorganizing the stock market in a bid to trigger greater efficiencies

Amid growth concern confronting Swaziland, the minister of finance Dlamini Martin disclosed that the nation is in the process of reorganizing the stock market in a bid to trigger greater efficiencies. Given the critical role the financial system plays in stimulating growth, Dlamini while speaking at the 38th Biannual Meeting of the Committee of Insurance, Securities and Non-Bank Financial Authorities (CISNA) said "the Swaziland Stock Exchange (SSX) has been moved from the Financial Services Regulatory Authority (FSRA) premises to its new offices. It is also in the process of installing a state of the art Automated Trading System." Legislation is also being amended to provide innovative practices and the development of capital markets. Listing requirement are being harmonized with those of the other exchanges in the region. All these changes aim at bringing added depth and liquidity to the stock market. The financial system predominately serves to direct funds from those who have surplus funds to those who have shortage of funds, either by direct, market-based financing or by indirect, bank-based finance. "However, we have realized that we cannot just avail funding. Swaziland like most Africa's financial systems is heavily bank-based, contrary to the structure and size of the bank and non-bank sectors. The capital markets are relatively small, illiquid and not well-developed. This handicaps the supply of equity for the emergence and growth of innovative firms," he said. The country's stock exchange has only seven listings and edges at E2.5 billion. The country's financial sector makes up to 3.8 per cent of the gross domestic product (GDP).