DAR ES SALAAM STOCK EXCHANGE SET FOR ELECTRONIC TRADING

Computing

The Dar es Salaam Stock Exchange (DSE) will go electronic as soon as the installation of the Automated Trading System (ATS) is complete.

According to Jonathan Njau, the chief executive of the project, which started mid this month, the installation is expected to be completed in the next three weeks, after which trials and training of the staff will commence. "As we speak, the contractor is on site working," said Njau.

The work includes installation of the automated system and the central depository system solutions the $1.5 million contract for which has been won by Sri Lankan firm Millennium Information Technology (MIT). MIT is the same firm that supplied both the ATS and central depository system for the Nairobi Stock Exchange and it is in the process of installing a similar one on the Uganda Securities Exchange. Tenders for installation of the facility were floated late last year by the Capital Markets and Securities Authority, the regulator of the capital markets in Tanzania.

In the tender description, the trading system is to be integrated with the Market Watch application software. It will include its support database management, operating system software, and integrating it to the Central Depository System at the Dar Stock Exchange. The current Cobol-based central depository system will be upgraded to a Windows-based environment. The payment settlement system for securities transactions and the government securities system for uploading bond transactions will also be installed.

Currently, trading is conducted at the DSE floor under the continuous open outcry trading system. The representatives of licensed dealing members converge at the trading floor and trade by shouting their orders to the board writer, who records the order. Trading is commenced and ended by the ringing of a bell.

Until recently, the Nairobi Stock Exchange, the most advanced bourse in East Africa, had been operating under the same open outcry auction trading system. The Nairobi's Stock Exchange's automated trading system was launched last month by President Mwai Kibaki. However, its central depository systems have been in existence since November 2004.

Chris Mwebesa, the NSE chief executive said in a statement that with the implementation of ATS, trading hours have increased from two to three - providing for an extra five trading hours per week. He said the new system permits almost real time transfer of trading information relating to index movements and price and volume movements of traded securities.

With the new system, current information will become readily available to a wider constituency of stakeholders, facilitating the decision-making process and lowering the risk of participating in the markets. "As such, the Exchange sees a situation where it will soon have an opportunity to enhance its revenue streams through information vending to our stakeholders," said Mr Mwebesa.

The East African