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Promoting financial education information as a basis for the development of the Capital Market: Challenges of doing more and better

Heriwalter Domingos

Economist

O desenvolvimento do mercado de capitais em Angola constitui um caminho incontornável para o fortalecimento do sistema financeiro Angolano. Sistema este assente no modelo de supervisão tripartido, com um supervisor bancário, seguros e a nível do mercado de valores mobiliários.

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The classification of this model is carried out according to the financial service that is provided by each supervised entity, since, since in this model, each segment has its own supervisory body, each having supervisory powers at the level of prudential and behavioral (Marques, 2008).

Capital markets play an important role in liberalizing and improving the financial system. In addition, they serve as a means to diversify risk for the wealthy as well as for investors. (Pardy, 1992).

The first objective approaches to the capital market in Angola in Angola originate on September 10, 1997, with the creation of the Capital Markets and Stock Exchange. Twenty three years later, several milestones were reached and the results prove to be unsustainable to affirm that “there is no capital market in Angola”.

Currently, the capital market in Angola has eight (8) Collective Investment Undertakings Management Companies, around twenty two (22) Undertakings for Collective Investment, twenty three (23) entities recognized as Experts Appraisers of Real Estate for Undertakings for Collective Investment , one (1), Certification Body for Real Estate Appraisers; nine (9) entities recognized as External Auditors, four (4) Securities Brokers, and a Regulated Markets Management Company which is BODIVA and which currently has 27 Members.

From the point of view of the amounts involved in accordance with the Annual Reports published by BODIVA, after analyzing the data, it can be said that in its markets from 2015 to the first half of 2020, there was a growth of about 523.44 %, by having
thus, until the month of June, an amount of AOA 627.14 billion was verified.

Regarding the amount in custody, since the opening of CEVAMA until the first semester of 2020, there was an increase of 487.76%, thus standing at around AOA 4.45 billion.

Other interesting aspects about CEVAMA also have to do with the integration of Investment Funds' Units and their admission to trading on the Securities Transactions Registration Market, requested by the respective Collective Investment Undertakings Management Companies (BFA Gestão de Activos and BAIGEST, SA).

In line with the integration of the aforementioned funds, from the opening of CEVAMA until the first half of 2020, the ordinary shares of Banco YETU S.A, BAI Micro Finanças, S.A and Banco Prestigio were also integrated. In addition to following the dynamics of the amount in custody and of the securities included in CEVAMA, there is a notable increase in the number of custody accounts opened, in this sense if in 2016 the market had only 238 individual registration accounts opened at CEVAMA, until the first half of 2020, CEVAMA reached 12,703 individual registration accounts.

Regarding the total assets involving the Collective Investment Undertakings Management Companies, according to the Quarterly Securities Market Report published by CMC, until the first half of 2020, it amounted to around AOA 189.06 and a number of 4714 participants from Collective Investment Schemes. Also in line with the Collective Investment Scheme industry, Investment Companies stand out, which in the same period total assets amounted to AOA 134, 74 billion.

Regarding the stock market, it is considered as the maximum spectrum of the capital market, so due to the requirement of a level of information and a modus operandi of its participants that must obey the best internationally recognized practices, its implementation must be well articulated by the competent authorities. In this context, it is necessary to reiterate that the non-existence of the stock market in Angola does not mean the absence of a capital market, this is because a market must always be analyzed before any more technical approach as a system, which means that it must be formed by interdependent elements in order to form the organized whole. In this context, the absence of a market segment should not make existing segments non-existent, as the particularities and stages of development of each economy should always be an important aspect when determining the level of depth of the market.

As shown above, the results show a frank growth of the capital market in Angola, obviously the results should not be exhausted only in the numbers, but in the need for maintaining the resilience and consistency of growth by the main players.

Intrinsically aligned to the results, actions to promote the market have been developed by the Capital Market Commission in accordance with the terms of Article 5 of Presidential Decree 54/13 of 6 June - Organic Statute and its 2017-2022 Action Strategy, actions these that only in the period of 2019 according to its Annual Report of Activities and Accounts for that period, were highlighted:

1. World Investor Week, promoted by IOSCO, with emphasis on the Investor Fair (in the two mediatecas in Luanda, with around 2,500 visitors), exhibition of educational microfilms at TPA, Radio and Television programs, as well as the publication of an opinion article in Jornal Mercado;

2. Point-by-Point CMC Program, with support from the Ministry of Territory Administration (MAT), which aimed to provide potential issuers and investors in different regions of Angola with greater clarification on alternative forms of financing via the securities market and provides guidance them on best practices;

3. Capital Markets Forum 2019 (III Edition), with the objective of stimulating the debate among the players of the financial system, with the theme “Capital Markets: Capitalizing on the Economy 4.0”, where the fintechs, the technological disruption in the sector financial and capitalization of economy 4.0 were highlighted;

4. Specific financial education project aimed at the commercial and financial areas of banks, on the fundamentals and dynamics of the capital market, providing greater control over the best practices and instruments available for trading;

5. Specific financial education project aimed at company employees, as potential investors, with the main objective of instructing participants and informing them about essential concepts and issues that allow them to make decisions about investments based on the Capital Market;

6. Specific financial education project that includes lectures, guided visits to the CMC, viewing and analyzing films about the financial system aimed at high school students, whose objective is to disseminate essential knowledge about financial education and the Capital Market;

7. “Fundamental Notions of Securities Law” - 1 edition was held with the objective of making known the legal and regulatory framework applicable to the stock market, as well as understanding the importance of information duties for the market and the associated sanctioning regime non-compliance with the aforementioned duties and, also, the applicable criminal and transgressive regimes; (iv) “Financial and Capital Markets” - 1 edition was held in partnership with NOVA / ABS with the main objective of providing general knowledge about the securities market and its dynamics, highlighting its role in economic and social development countries.

In addition to CMC and without discouraging its attribution in terms of promotion, the main market stakeholders such as BODIVA and its Members are following the trend of the Supervisory Body in the field of financial education, for example in the case of BODIVA, made available in its website the real-time order book, information that is very relevant to the market, thus allowing investors to follow the trend of orders and to be able to better instruct their investment intentions to BODIVA Members. Another aspect that has been observed today is that BODIVA has contributed to the distribution of information about its markets and other information that may be of interest to investors through social networks (Facebook and Instagram).

Despite everything mentioned, there is still a lot of space for the institutions that are part of the Capital Market in Angola to be able to do more and better. In this context, there are several challenges that, due to the spectrum of the Angolan economy, only three are highlighted:

1. Decomplex approaches to the functioning of the capital market and its products;

2. Improve competitiveness in terms of the dissemination of information about the market;

3. Increased promotion of savings culture.

In addition, when mentioning that there is room for more and better, joint responsibility must always be analyzed, that is, it is not enough just the work of the institutions mentioned above, but also the recipients of information and financial education actions must be proactive in the search for information and knowledge. , thus adopting best practices in order to improve their levels of financial education and their knowledge of the functioning of the capital market.

It is also important to highlight the notion of the process and the different phases that it must obey, although the rationale should always be to do more and better in order to make up for lost time, because the challenge of financial education is not an isolated challenge. be joint and not exclusive, that is, other countries in the region have also been working to make their population more financially inclusive.

In this context, due to the transversality of financial inclusion, praxis demonstrates that almost all of the countries that have been successful at this level, counted on the creation of an entity responsible for the articulation between the different supervisory bodies. In the case of Angola, it is no different and this responsibility is the responsibility of the National Financial Stability Council (CNEF) which, according to Presidential Decree nº 92 / 19- Financial System Development Project (2018-2022), has one of the challenges financial inclusion.