Business and Economic News By Leo Odera Omolo.
ALL eyes will tomorrow {Friday} be trained on the sandy beaches of Mauritius a a new electronic exchange for a wide range of commodity derivatives such as metals and agricultural products gives live in that country.
Beginning this Friday, traders from across the world will have the opportunity to transact on the Global Board of Trade {GBOT} that is based in the island country that sits on the East-Coast of Indian Ocean.
Besides the derivatives of commodity, the launch will also pave the way trades in currency derivatives products.
Brokers in different locations in the world will be able to connect in real time through trading platform to carry out instructions of their clients to buy and sell in gold an silver, as well as currencies such as the Mauritian rupees, US dollars, South African rand, euro and pound sterling.
The exchange is expected to translate into economic benefits for Africa by creating a vibrant financial market system and attracting global investors and corporations, according to the chairman of GBOT Venkat Charry.
“It will provide an ideal platform to access the fast growing economies of the African region and also create new opportunities for Africa to trade with the global markets,” he said.
The firm’s vice chairman Jignesh Shah, says GBOT will present opportunities to the African population and global investors to take part in African growth.”It will create an ideal risk mitigation platform to cater to increasing levels of business activity and revolutionize the financial markets of Africa ,”he added.
Observers and analysts say those transacting business would be assured of better prices due to the lrge number of buyers and sellers at any given time.
The Chief Executive Officer of GBOT,Joseph Bosco, said that since the pricing on the platform is determined by the forces of demand and supply both parties will be assured of fair prices.
“Through GBOT, we will enable Africa decide the true value of its commodities in its own time rather than chasing other markets and their times.”
Though there are no East African brokers taking part, in the initial trading Mr Bosco said that there are several firms at different stages of application for the status of brokers. They are among 30 applications being processed.
“Once they become fully fledged members of the platform, we will introduce trading in Kenya and Uganda shillings, “he said.
Currently,there are about 15 brokers already signed up.They had to satisfy a raft of requirements that include a nmet worth of USD 100,000,knowledge of the market,as well as possession of an operational office with proper IT set up and clients. In addition to this, the brokers have to satisfy the regulator’s conditions for licensing a USD 25,000 admission fee and USD 4000 annual levy.
Mr Bosco says that establishing the GBOT involved setting up of f the state of the art system, drafting the rules to guide it, recruiting the brokers and bringing a group of experts from across the world to Mauritius to run it.
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leooderaomolo@yahoo.com