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The Somalia Stock Exchange: Somalia to Enter New Phase in Its History

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Abdirashid-Duale
Abdirashid Duale, CEO of Dahabshiil Group
Last month the Somalia Stock Exchange Investment Corporation (SSE) signed a Memorandum of Understanding with the Nairobi Securities Exchange (NSE) to begin the process of establishing Somalia’s first ever stock exchange. As CEO of the leading financial provider, Dahabshiil, as well as a member of the Somali business community, I welcome this development. Somalis are rightly proud of their tradition of trade and commerce. Many are adept at investing in global markets, and shares of large Somali companies are already traded in a thriving informal market. Remittances from the global diaspora, which are part of Dahabshiil’s core business, have played an essential role in the growth of the private sector.Abdirashid-Duale
Dahabshiil, which is one of Africa’s largest money transfer operators, has seen remittances to the Somali territories rise by about 20 per cent in recent months. To the savvy investor, the Somali territories present many attractive opportunities – something often overlooked by international investors. Livestock, money transfer, telecoms and energy have all flourished despite the trials of the last twenty years. A formal, active stock exchange would give more firms access to equity finance, and would better mobilise foreign and domestic capital for long term business growth.
As an ultimate goal, therefore, few would doubt the economic benefits of a functioning market for securities. The challenge will be to create the conditions in which it is most likely to deliver those benefits. Sound political, legal and financial infrastructures are needed. It is true that the past year has seen significant gains – the overall security situation has greatly improved and a new government has been elected in the capital of Somalia, Mogadishu.
The surge in foreign assistance from countries such as Turkey is an encouraging vote of confidence, both in the viability of the private sector and in the long run prospects for stability.
The benefits of a stock market depend in large part on its liquidity. More buyers and sellers means lower risks associated with long payback periods because investors can easily sell their holdings. Liquid stock markets can therefore boost investment in more ambitious and profitable long term ventures, helping to put the economy on a more stable footing. Due to demand from companies seeking listing, a formalised stock market also offers new growth opportunities to law, accountancy and consultancy firms. This in turn strengthens the overall credibility of the financial system as a whole. But for capital markets to realise their full potential as catalysts for efficiency and growth, they must be expanded and standardised. The establishment of an official exchange is clearly an important step in this process, and Dahabshiil welcomes this development.
As global markets became progressively deregulated and internationalised, African countries sought to keep pace. Before 1989 there were only eight stock exchanges in Africa – today there are 29. Market capitalisation has grown rapidly, but in most cases the majority of it is accounted for by just a few large companies, and is still very low in relation to GDP. Particularly within the East African Community (EAC), this and poor liquidity have been significant drags on stock market development. Due to the high costs involved in listing and issuing securities, large firms have often reaped the rewards while smaller firms have been shut out.
Policymakers are therefore striving to find ways to distribute the benefits more widely throughout the private sector. Most initiatives to that end have been based around greater automation and harmonisation of market infrastructure to encourage higher trade volumes and cross-border transactions. In East Africa (and in particular the EAC) the Nairobi Stock Exchange – by far the largest and most established bourse in the region – has played a central role in guiding the Community’s smaller exchanges in the direction of greater integration and liberalisation.
Although Somalia is not an EAC member, Dahabshiil believes there are good reasons to be optimistic about the NSE’s commitment to this project. Kenya is home to a large Somali diaspora that is actively engaged in business, and the commercial ties between Kenyans and Somalis are very strong.
Other regions have also pushed ahead with integration. Based in Abidjan, Ivory Coast, the Bourse Régionale des ValeursMobilières (BRVM) is a regional stock exchange that serves eight West African countries. Trading on the BRVM is fully computerised using satellite links to transmit brokers’ orders and quotes to the central site.
In the South, the nine national bourses of the South African Development Community (SADC) have been working towards better interconnectivity between trading systems as well as greater alignment with global standards of clearing and settlement.
These are the kinds of reforms that will attract foreign portfolio investment to the African marketplace, injecting fresh capital and increasing liquidity. In the case of the Somalia Stock Exchange, Dahabshiil is encouraged by early assurances that it will be open to all investors, local and international, and will serve as a bridge between Somalis and the rest of the world.
Remittance income from the diaspora has been the lifeline that has sustained the Somali territories through two decades of upheaval. It has kept many households out of poverty and has made possible the vigorous business growth that has kept the economy afloat.
There is no doubt that an efficient market for shares could open the way to more investment. But we must not get ahead of ourselves. Experience tells us that besides a mature banking system, macroeconomic stability and institutional quality are vital preconditions for the successful nurturing of capital markets. Stable interest rates, democratic accountability, a functioning bureaucracy, law and order – all these are fundamentals without which the enterprise will inevitably be compromised.
It is Dahabshiil’s firm belief that we will, at some point, see the advantages of well-developed financial markets being enjoyed by a wide range of firms and investors in the Somali territories. For businesses currently reliant on loans, new options for external finance will be indispensable. For investors, a greater choice of products will enable them to make decisions that better suit their risk profiles. Both the quantity and quality of investment will be enhanced. The boost to growth and development could be pivotal, but first there is some groundwork to do.
Abdirashid Duale is CEO of Dahabshiil, the largest remittance company in the Horn of Africa and one of its largest private employers. For further information please visit www.dahabshiil.com.

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U.S. inauguration turns poet Amanda Gorman into best seller

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U.S. inauguration turns poet Amanda Gorman into best seller 1

WASHINGTON (Thomson Reuters Foundation) – The president’s poet woke up a superstar on Thursday, after a powerful reading at the U.S. inauguration catapulted 22-year-old Amanda Gorman to the top of Amazon’s best-seller list.

Hours after Gorman’s electric performance at the swearing-in of President Joe Biden and Vice President Kamala Harris, her two books – neither out yet – topped Amazon.com’s sales list.

“I AM ON THE FLOOR MY BOOKS ARE #1 & #2 ON AMAZON AFTER 1 DAY!” Gorman, a Los Angeles resident, wrote on Twitter.

Gorman’s debut poetry collection ‘The Hill We Climb’ won top spot in the online retail giant’s sale charts, closely followed by her upcoming ‘Change Sings: A Children’s Anthem’.

While poetry’s popularity is on the up, it remains a niche market and the overnight adulation clearly caught Gorman short.

“Thank you so much to everyone for supporting me and my words. As Yeats put it: ‘For words alone are certain good: Sing, then’.”

Gorman, the youngest poet in U.S. history to mark the transition of presidential power, offered a hopeful vision for a deeply divided country in Wednesday’s rendition.

“Being American is more than a pride we inherit. It’s the past we step into and how we repair it,” Gorman said on the steps of the U.S. Capitol two weeks after a mob laid siege and following a year of global protests for racial justice.

“We will not march back to what was. We move to what shall be, a country that is bruised, but whole. Benevolent, but bold. Fierce and free.”

The performance stirred instant acclaim, with praise from across the country and political spectrum, from the Republican-backing Lincoln Project to former President Barack Obama.

“Wasn’t @TheAmandaGorman’s poem just stunning? She’s promised to run for president in 2036 and I for one can’t wait,” tweeted former presidential candidate Hillary Clinton.

A graduate of Harvard University, Gorman says she overcame a speech impediment in her youth and became the first U.S. National Youth Poet Laureate in 2017.

She has now joined the ranks of august inaugural poets such as Robert Frost and Maya Angelou.

Her social media reach boomed, with her tens of thousands of followers ballooning into a Twitter fan base of a million-plus.

“I have never been prouder to see another young woman rise! Brava Brava, @TheAmandaGorman! Maya Angelou is cheering—and so am I,” tweeted TV host Oprah Winfrey.

Gorman’s books are both due out in September.

Third on Amazon’s best selling list was another picture book linked to politics and projecting hope: ‘Ambitious Girl’ by Vice-President Kamala Harris’ niece, Meena Harris.

(Reporting by Umberto Bacchi @UmbertoBacchi, Editing by Lyndsay Griffiths. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers the lives of people around the world who struggle to live freely or fairly. Visit http://news.trust.org)

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Why brands harnessing the power of digital are winning in this evolving business landscape

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Why brands harnessing the power of digital are winning in this evolving business landscape 2

By Justin Pike, Founder and Chairman, MYPINPAD

Delivery of intuitive, secure, personalised, and frictionless user experiences has long been table stakes in digital commerce, well before the era of COVID-19. As businesses harness the revolutionary power of digital technologies, they have pursued large-scale change to adapt to evolving consumer preferences (some more successfully than others, but that’s a blog for another day). Digital transformation is a term we hear repeatedly, and it looks different for each organisation, but essentially, it’s about utilising technology and data to digitise, automate, innovate and improve processes and the customer experience across the entire business.

As I said, this was already well underway but then came 2020 and no industry escaped the disruption of the coronavirus outbreak, which has had an indelible impact on businesses performance, operations, and revenue. Regardless of whether the impact of COVID has been very positive or very challenging, it has forced organisations globally to re-evaluate and re-orient strategies to adapt.

As lockdowns and pandemic-related restrictions continue to change daily life, this raises the question of how we can balance a dramatic shift to digital and the benefits it brings, while ensuring business continuity and innovation both during and post-COVID, and protecting everyone against fraud?

Digital is an essential survival tool, and even more so in a COVID world

No one could have predicted the dramatic digital pivot that has taken place over this year. Indeed, within weeks of the COVID outbreak cash usage in the UK dropped by around 50%. Digital solutions including delivery applications, contactless payments, mobile commerce, online and mobile banking have become essential components of a touchless customer experience in the era of social distancing. It’s no longer just about an enhanced and superior customer experience, it’s also about health, safety and survival.

In store, businesses have benefited from contactless payments enabling faster throughput and reduced need for consumers to touch payment terminals (therefore requiring greater cleaning, which degrades the hardware much faster). Mastercard reported a 40% increase in contactless payments – including tap-to-pay and mobile pay – during the first quarter of the year as the global pandemic worsened. Digital has also become an essential sales channel for many B2C brands. Where brick and mortar stores have been required to close, digital commerce enables continuity of customer relationships and revenue. This channel also provides brands with rich customer data, which can be used to enhance and personalise the customer experience and typically results in greater levels of engagement and uplifts in revenue.

Industry forecasts estimate that worldwide spending on the technologies and services enabling digital transformation will reach GBP 1.8 trillion in 2023 – a clear indication that the process represents a long-term investment and a global commitment to digital-first strategy. The key point here is that digital brings significant benefits, and regardless of COVID, is here to stay.

The challenges that rapid digital transformation brings to businesses

Justin Pike

Justin Pike

Regardless of whether businesses are operating in developed or less-developed economies, these times of crisis have levelled the playing field in the sense that all businesses are facing similar issues. Access to products and supplies, maintaining customer relationships, accelerating sales for some and declining sales for others, health and hygiene are just a few of the unique challenges brought about by COVID.

Many businesses in physical environments have had to swiftly implement changes to significantly reduce safety risks for staff and customers, such as contactless payments, mobile ordering and delivery options. But with these changes come a host of other benefits of digitisation, such as faster transactions, and reduced human error at the point-of-sale.

The reliance on technology, however, can also expose organisations and consumers to certain vulnerabilities. In particular, the risks of fraud and cybercrime have dramatically increased since the onset of the pandemic as scammers have taken advantage of digital technologies to target both businesses and individuals.

As a McKinsey report illustrates, new levels of sophistication in the activities of fraudsters have placed more pressure on companies that have been previously slow to go digital, bringing “into sharp relief how vulnerable companies really are”, and damaging the financial health of small and large businesses. In fact, the Bottomline 2020 Business Payments Barometer reveals that only one in 10 small businesses across the UK report recovering more than 50% of losses due to fraud.

But take these stats with a grain of salt. While it is important to be aware of the risks and challenges this new business landscape brings, it’s equally as important to have a lens firmly across your own business, industry and audience, and to identify the changes you can make internally to mitigate risk as well as improve your customer experience. Where can you make some quick wins? Do you have the right skillsets internally to achieve what you need to achieve? What technology is out there that will enable your business goals? There are tech companies like MYPINPAD that are making huge strides in software development, which will transform businesses globally.

A digital world post-COVID

Almost a year in, the line between business success and failure remains fragile. However, an ongoing transition towards greater digitisation will be the difference between survival and the alternative.

There is a wide range of initiatives businesses can implement to weather this storm. If we look at the space MYPINPAD operates within, secure digital consumer authentication is crucial to the ongoing success and security of not only financial products but also identification and verification across a range of different industry verticals. Shifting the authentication of consumers securely onto mobile devices enables businesses to completely reshape their customer experiences. By bringing together a more seamless, frictionless customer experience, accessibility, privacy, security and access to consumer data, businesses are able to drive digital transformation across day-to-day activities.

Against this backdrop, software with stronger security standards continue to play an ever more vital role in supporting society, protecting consumers and businesses from the increase in risks that rapid digitisation brings. Already, merchants can deploy PIN on Mobile technology from companies like MYPINPAD, onto their smart devices to speed up the digitisation process many are now tackling.

Essentially, opening up universal payments and authentication methods that feel familiar, for both online and face-to-face transactions, will be key to opening up a world of possibilities when it comes to redefining how businesses engage with consumers.

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Brexit responsible for food supply problems in Northern Ireland, Ireland says

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Brexit responsible for food supply problems in Northern Ireland, Ireland says 3

LONDON (Reuters) – Food supply problems in Northern Ireland are due to Brexit because there are now a certain amount of checks on goods going between Britain and Northern Ireland, Irish Foreign Minister Simon Coveney said.

British ministers have sought to play down the disruption of Brexit in recent days.

“The supermarket shelves were full before Christmas and there are some issues now in terms of supply chains and so that’s clearly a Brexit issue,” Coveney told ITV.

The Northern Irish protocol means there are “a certain amount of checks on goods coming from GB into Northern Ireland and that involves some disruption,” he said.

(Reporting by Guy Faulconbridge; Editing by Tom Hogue)

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