The Mozambique Stock Exchange (BVM) is working on implementing a new trading system that should simplify and speed up stock trading on the domestic market. The platform is expected to be operational by the end of the year, according to the institution’s chairman, Pedro Frederico Cossa, during a meeting with journalists in Maputo on Friday (6).
He explained that technological modernization is necessary to overcome the limitations of the current trading model. Today, many investors still rely on a relatively lengthy process to carry out transactions. “First, you go to the bank, to your branch, you arrive at the counter and place a purchase order, the counter sends the purchase order to the trading room, and in the trading room they enter it into the system,” he described.
According to Cossa, this circuit can create delays that ultimately affect the outcome of transactions. “This speed from the counter to the trading room means that the system has already closed or the price has already changed,” he explained.
With the new system, the expectation is that investors will be able to place buy and sell orders more directly and quickly, including via mobile phone. “With this trading system, people will be able to place their orders using their mobile phones,” he said.
In addition to facilitating access to the domestic market, the platform should also pave the way for greater integration with other financial markets. The BVM president explained that the system is being developed in conjunction with international partners, as stock exchanges need robust technological solutions that are compatible with global standards.
The technological modernization comes at a time when the institution is seeking to strengthen its integration into the international financial system. This year, BVM was admitted as an affiliate member of the World Federation of Exchanges, an organization that brings together some of the world’s leading financial markets.
“It was admitted this year, albeit as an affiliate member and not yet a full member, precisely because there are a number of requirements that we must meet,” explained Cossa.
Among these requirements is precisely the existence of a fully functional trading system integrated with securities settlement and registration infrastructures.
According to the manager, admission represents an important step forward for the national financial market. “In Africa, there are only six stock exchanges that are part of this federation. We worked hard to get the Federation to admit the Mozambique Stock Exchange,” he said.
“We need to educate people more about how the market works.”
Pedro Frederico Cossa, CEO of BVM
The international organization gave BVM a period of approximately three years to consolidate the conditions necessary to meet the required standards.
For the president of the stock exchange, the development of the capital market in the country also depends on the participation of different actors in the financial system. “The stock exchange does not exist on its own. It is an ecosystem. Everyone has to do their part,” he stressed.
Cossa also pointed out structural challenges that limit the growth of the national stock market, including low financial literacy and the resistance of some companies to go public.
As he explained, many Mozambican companies continue to operate with closed family structures. “Most companies are family-owned and still do not believe that they will grow more if they go public and expose the company to the public,” he said.
He argued that greater financial education could help change this reality and increase the number of investors in the country. “We have to educate people. They need to know that they cannot go it alone,” he said.
Despite the challenges, the manager believes that technological modernization and increased market participation could boost the development of the Mozambican stock exchange. “We believe that with these systems we will get there,” he concluded.
Source: Diário Económico
