Lead image for Why Wall Street Africa is Becoming an ETF Issuer.
After building The Kenyan Wall Street, Hisa, and Bullish Africa, becoming an ETF issuer is the next, logical step for Wall Street Africa. It is where media, data and distribution meet product. Writes Erick Asuma, Co-founder and CEO of Wall Street Africa Inc.
Last year I stood on the trading floor of the New York Stock Exchange for the first time and did something every visitor does: I looked up at the numbers running across the tickers and tried to make sense of the scale. I returned again this year, and the second visit sharpened rather than dulled that first impression.
On an average day, the US market trades over a trillion dollars. Here at home, the Nairobi Securities Exchange trades a very tiny fraction of that, some days just a few million dollars. The exact figure moves, but the order of magnitude doesn't: our market is a rounding error next to New York's, by turnover.
But it isn't the number that stayed with me.
What stayed with me is this: despite that gap, our markets have, over long stretches, delivered better returns than many of the world's deepest exchanges. African markets don't have a liquidity problem because they are bad markets. They have a liquidity problem because it is an access problem. Too few instruments, too few ways in, and too much of the investment decision resting on picking a single stock correctly.
That is the gap Wall Street Africa is stepping into.
Why an issuer, and why now
Wall Street Africa is built on the idea that African capital markets are underserved not by capital, but by information and access.