African Alliance Securities has abandoned plans to open in Mauritius this year

African Alliance Securities, the brokerage with offices in 10 countries on the continent, has abandoned plans to open in Mauritius this year because of low- trading volumes, Chief Executive Officer Patrick O’Flaherty said.

African Alliance Securities, which is based in Johannesburg, already has a trading license in Mauritius and the office would have been a “small start up operation with three or four people,” O’Flaherty said.

“Mauritius I’ve put on hold for now, I don’t think the current liquidity in the market is suitable to sustain a stock broking business,” O’Flaherty said in an interview from Johannesburg on July 19. “If you look at some of the smaller African markets they have been really impacted by the global financial crisis and they really haven’t recovered.”

The total value of transactions on the exchange fell 23 percent between the first-half of 2007 and the same period this year to 5.1 billion Mauritian rupees ($181 million), according to central bank data. Mauritius Commercial Bank (MCB) is the largest company on the 38-member Stock Exchange of Mauritius by market value.

The Indian Ocean island nation’s exchange is sub-Saharan Africa’s fourth-biggest after those inSouth Africa, Nigeria and Kenya.

Turnover on the Mauritian Stock Exchange in Port Louis was $817,000 yesterday, according toRenaissance Capital. That compares with $9 million in Nigeria, $6.2 million in Kenya and $2.5 million in Zimbabwe.

“By no means are we saying that Mauritius is no longer on our radar, we’re just saying we’re deferring our entry into Mauritius until sometime as we believe the market can sustain an operation there,” he said. “I would rather focus management time on our existing markets and more specifically getting Nigeria up and running.”

African Alliance Securities was issued a license last year to operate in Nigeria and will appoint a CEO within “the next few weeks” to head its Lagos office, which is expected to be “up and running” by year-end in Africa’s largest oil producer, said O’Flaherty.

The brokerage has offices in South Africa, Swaziland, Botswana, Namibia, Zambia, Malawi, Kenya, Uganda, Rwanda and Ghana.

“Nigeria is probably the most significant market outside of South Africa when you’re talking sub-Saharan Africa. So we believe that’s a market where you can make a very significant case for a business,” said O’Flaherty. “We have a long term view that African financial markets will be exponentially bigger than they are now in five to 10 years.”