Trade Automation and Performance of Securities Markets in East African Community, Within Member States
DOI:
https://doi.org/10.5281/zenodo.15835471Keywords:
Trade Automation, Market Securities, Performance, East African CommunityAbstract
The securities markets in the East African Community (EAC) have experienced persistent challenges in achieving optimal performance, characterized by low liquidity. Despite the adoption of trade automation to enhance trading processes, the performance of securities markets remains sub-optimal, with market participants reporting declining market capitalization and increased volatility. These challenges are aggravated by fragmented market structures, where each EAC market operates with unique inefficiencies, including limited access to real-time information and deviations from the efficient market hypothesis. While trade automation is expected to streamline operations and improve price discovery, its implementation in the EAC has produced mixed results, with some studies suggesting it exacerbates market instability. Utilizing a descriptive cross-sectional research design, secondary data were collected from the four established securities exchanges in the EAC for the period 2015 to 2024. The analysis employed regression technique to evaluate the relationships. The results indicated that trade automation had a statistically significant but negative effect on market performance, suggesting that increased automation significantly led to reduced market performance of securities in EAC. Based on the finding, the study recommends that trade automation initiatives should be carefully evaluated to ensure they align with the unique characteristics and maturity of EAC markets, balancing technological advancements with the structural and institutional needs of the region.
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Copyright (c) 2025 Charles Omwega Kunyoria, Duncan Elly Ochieng, Johnbosco Mutuku Kisimbii (Author)
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