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A G E N T
B A N K S
I N
F R O N T I E R
MALAWI
The economy is growing but predominantly agricultural and
poorly diversified, infrastructure is limited and poverty is wide-
spread. Although the Malawian stock market has increased in
value in the last five years, it has also experienced net portfolio
disinvestment from abroad for each of the last six years. Nor
is the market large and liquid. Although the Malawi Stock Ex-
change has evolved since its origins in the mid-1990s as a trading
platform for Malawian government debt, the main board hosts
only 14 stocks and four debt issues. These are tracked by a hand-
ful of local brokers servicing a mixture of specialist firms as well
as global network managers.
Standard Bank
Standard Bank returned to Malawi in 2001, five years after
selling its historic franchise here, when it became the major-
ity shareholder in the then Commercial Bank of Malawi. The
South African bank is now the custodian of first choice in
Blantyre. The verdict of a small number of clients is effectively
unchanged. Respondents find it relatively easy to open and close
accounts but detect room for improvement in client service and
relationship management.
National Bank of Malawi
The National Bank of Malawi (NB) is the successor to the
Malawian franchises of Barclays Bank DCO (which exited the
country in 1982) and Standard Bank of South Africa (which
exited in 1996). It has an obvious opportunity to add securities
safekeeping to its correspondent banking relationships, and es-
pecially to those banks which see Standard Bank as a competitor.
NB has attracted a number of responses of that kind. The data
suggests the bank prices its services keenly, and is good at asset
servicing, but should work harder at relationships. NB listed on
the Malawi Stock Exchange at the turn of the century, but it is
majority-owned by Press Corporation, a listed public-private
holding company with a long and complicated relationship to
the Malawian state.
MAURITIUS
Mauritius is now a prosperous place, on course to become a
high-income economy within the next decade. Output has
grown steadily at an annual rate of getting on for 4% a year for
the last ten years, driven chiefly by a combination of tourism and
offshore finance. An increasingly less indulgent international
regulatory climate has forced the offshore finance industry to
expand beyond its established role as an entrepot for multina-
tional investment in India (the two countries amended their
double taxation treaty in 2016). Its leadership publicly supports
OECD measures such as the Common Reporting Standard (CRS)
and Base Erosion and Profit Shifting (BEPS) and is forging a new
identity for the island as a regional finance hub for Africa. The
Stock Exchange of Mauritius (SEM) is integral to this strate-
gy. It is one of seven African exchanges to support the African
Exchanges Linkage Project (AELP). SEM is also pursuing a
wider internationalisation strategy, with the aim of turning itself
into a multi-currency listing and trading venue for companies
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Spring 2019
M A R K E T S ]
drawn from all over the world. It seems to be working. The SEM
currently lists more than 200 securities. And despite the ines-
capable fluctuations for a market still acting as an entrepot for
capital flows, net portfolio investment from abroad has actually
increased over the last ten years.
Standard Chartered Bank
Standard Chartered gets the most responses in Port Louis. The
overall score is up on a year ago and, if the service area scores
(see page 80) are still mostly below the global benchmark, the
detail points to a narrower range of concerns around transpar-
ency, pricing and asset servicing, though there are also clear
demands for improvements in client service and relationship
management.
HSBC
The alternative provider in Mauritius received a small number
of responses. Though they were insufficient to warrant a rating,
the scores do confirm that clients see HSBC as an excellent
counterparty.
MOROCCO
By market capitalisation, the Casablanca Stock Exchange (CSE)
now lags only Johannesburg among its coevals in Africa. As the
Casablanca Finance City (CFC) grows, it will attract investors
and issuers to CSE. But the exchange is also looking to attract
investors more directly by boosting liquidity, through lighter
regulation of securities borrowing and lending and via the devel-
opment of a risk-reducing central counterparty clearing house
(CCP) and (eventually) a derivatives market. True, the CSE had
a difficult 2018 after a good couple of years. But this market may
be on the cusp of a more sustained lift-off for, if Mauritius has a
rival as the finance hub for Africa, it lies here. CFC, established
by the Moroccan government in 2010, has attracted dozens of
financial services businesses and their advisers not only through
fiscal incentives but by its promise of readier access to sub-Saha-
ran African markets.
BNP Paribas Securities Services
The French bank provides a local custody and clearing service