2023
The Role of Capital Market in Driving Economic Growth
12:08am Johannesburg Stock Exchange
The XV BRICS Summit presented an opportunity for the programme to acknowledge the role of institutions such as stock exchanges in BRICS countries in advancing the economies of their respective countries and working together to foster stronger bilateral ties through business collaboration and knowledge sharing. As a side event to the BRICS Summit, the Gauteng Growth and Development Agency (GGDA), together with the Johannesburg Stock Exchange, the BRICS Business Council hosted a market opening event on the 23rd of August.
In her keynote address, the Gauteng MEC for Economic Development, Tasneem Motara, said: “The BRICS nations, with their diverse economies and shared aspirations, have transformed the global economic narrative in the past few decades. As we stand on the cusp of new financial frontiers, it is vital that our capital markets, with their vast potential and dynamism, play a pivotal role in driving sustainable economic growth”.
Following the MEC’s blowing of the Kudu horn to signal the opening of the markets, a panel convened to showcase and celebrate the role of stock exchanges and financial institutions as the "engine room" of their economies. The panel topic, “The role of capital markets in driving sustainable economic growth”, aligns with the work done by the BRICS Business Council Financial Services working group.
The panel included Langa Manqele, Head of Equities and Equity Derivatives, Johannesburg Stock Exchange; Rami Eldokany, Chairperson, Egypt Stock Exchange; Leslie Maasdorp, Vice-President and Chief Financial Officer, New Development Bank; and Saki Zamxaka, Acting Group CEO, Gauteng Growth and Development Agency.
In his opening remarks, Leslie Maasdorp expressed how he sees the development of capital markets as a critical role for the New Development Bank. He also detailed the bank's plans to roll out BRICS-denominated bonds and financial instruments to drive economic growth in the BRICS region as well as for future members.
With businesses seen as critical drivers of the economy, access to capital featured prominently in the morning’s discussion.
"If you're going to have growth, capital is going to be one of the variables linked to it. In the developing economies, we know access to capital has been an issue and how diverse that access to capital is,” said Saki Zamxaka. Referring to South Africa, he said, “We have deep capital markets, but when you look at who has access to them, it's still maybe the top 40 companies; that's really what we want to change. We want to scale up the small and medium companies.
Ramy Eldokany shared insights on the capital markets in driving small and medium enterprise development in the Middle East, whilst Langa Manqele said that while the JSE was still focused on capital formation for listed companies, it has evolved and established a business unit to offer assistance to unlisted entities to gain access to capital.
“Our role as an exchange is to organise capital and make sure that we match investors and entrepreneurs, and we have aggressively pushed into the private market space because we feel that it's an exchange that there is value that we can add. We bring credibility. We bring governance that investors are looking for, which is a safe harbour for them. We are organising the market so that whenever capital is needed, we will continue to drive our focus in that space,” he stated.
As MEC Tasneem Motara expressed, we hope the deliberations and insights from the discussion will pave the way for more resilient and robust capital markets, driving growth across our nations.