South Africa Launches Electronic Government Bond Trading
- Nine primary dealers signed up as liquidity providers for the platform
- Trading platform has gone live today, 29 August 2018
- MTS has over 30 years experience in electronic fixed income markets
— MTS Markets (@MTSMarkets) August 29, 2018
MTS, the electronic bond trading platform that is part of London Stock Exchange Group, and the Johannesburg Stock Exchange (JSE), South Africa’s leading financial markets operator, today announce reaching an agreement to open South Africa’s first electronic government bonds trading platform powered by MTS. The move seeks to enable global access to, and enhance transparency in, the South African government bond market, offering access to deep pools of secondary market liquidity. This relationship is a first for MTS in African sovereign bond markets.
Nine primary dealers have already announced that they have signed up as liquidity providers for the platform including Absa Bank, Citibank, HSBC, and JP Morgan*.
MTS has been operating electronic fixed income markets for 30 years, developing technological expertise in both government and corporate debt market operations. MTS has been selected by the JSE after a competitive procurement process to provide technology, operational services and monitoring of primary dealers obligations for the new market. The new market will be operated and managed by the JSE in South Africa in accordance with local regulations. The new platform has gone live today, 29 August 2018.
Angelo Proni, Head of New Markets at MTS, said:
“Over the past 30 years MTS has built unrivalled experience and expertise across 20 fixed income markets in Europe. A key element of MTS’s strategy for the future is taking that experience to an international level and helping more markets access the benefits of electronic trading. We are delighted to announce this new relationship, which is a first for MTS in African sovereign debt markets.”
Donna Nemer, Director of Capital Markets, Johannesburg Stock Exchange, 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.”
Mr Mondli Gungubele, Deputy Minister of Finance, said:
“It has been a long seven years from the time when the electronic trading platform was conceptualised. 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.”
Source: London Stock Exchange Group
The priority should be to ensure continuity of cross-border services and avoid market fragmentation.
The order book was the largest for a sovereign green transaction.
RBC Capital Markets paid more than $800,000 to resolve charges that it engaged in unfair dealing in munis.
Electronification of the municipal bond market also presents a large opportunity.
The success of Northbound trading showed electronic execution is way forward for the bond market.