South African multi-asset trading venue Johannesburg Stock Exchange, (JSE) will extend its listing of agricultural commodity derivatives under a new partnership with Pan-European exchange Euronext. The move signifies the steps developed exchanges are taking as they explore new growth opportunities in the African region.
Euronext reported that it has signed a license agreement with Africa’s most liquid stock exchange. Under the details outlined in a press release the two firms will cooperate in promoting agricultural derivatives products. The JSE will list Milling Wheat, giving domestic users access to the popular contract.
Nicholas Kennedy, head of commodities business development at Euronext, commented in a press release, “Euronext is delighted to be able to offer its global benchmark wheat contract to the Johannesburg Stock Exchange under its own branding. This agreement fits within our larger strategy of broadening our reach in a selective manner with targeted partners. In this particular case, it further strengthens our high quality franchise through greater visibility while providing JSE with the opportunity to offer a broader range of products to its clients looking to hedge their volatility in the wheat agricultural area.”
The JSE is one the largest commodity derivatives exchanges among the emerging markets. South Africa, a commodity-based economy, offers users a range of commodities including: metals, softs and agricultural commodities. The JSE will initially list the Euronext Milling Wheat contract. However, the flexible agreement can be extended to include its contracts for rapeseed and corn.
Chris Sturgess, director of commodities & key client management at the JSE, said, “The JSE is pleased to make available to its clients Euronext’s benchmark Milling Wheat contract. This will give local market participants easy access to the European wheat market, adding a wider choice of trading opportunities where participants already access South African and North American wheat markets. The South African exchange looks forward to the growth of the strategic relationship with Euronext through which we are jointly able to offer a wider range of products across our client base.”
Africa is one of the fastest growing economic regions. According to the the IMF it is expected to grow by 5.75% in 2015. The continent is believed to be entering an era of change with strong GDP growth and foreign direct investment supporting future projects.
Euronext joins fellow European exchange Deutsche Borse in the region. In October last year, the firm signed an agreement to support technological developments at Mauritius-based African Stock Exchange.