AfDB and stock exchanges group ASEA sign MoU for capital markets projects

Africa’s leading financial institution, the African Development Bank (AfDB), is pairing with the African Securities Exchanges Association (ASEA) to deepen and connect Africa’s financial markets. The partnership aims to help mobilize more resources to drive growth.
The two will work on projects of mutual interest such as developing financial-markets infrastructure, introducing new products, improving market liquidity and participation, information-sharing and capacity-building. AfDB and ASEA signed a 5-year memorandum of understanding on 11 July. This provides “a collaborative framework for harmonizing and coordinating the efforts”, according to an AfDB press release.
The Bank and ASEA have already started successfully collaborating on the African Exchanges Linkage Project, which they co-initiated to improve liquidity and foster greater investments and trading across markets. This aims to link key regional markets and has proposed Casablanca, Johannesburg, Nairobi and Nigerian stock exchanges as regional hubs, according to project documents.

AfDB and ASEA Executive Committee delegation. (From left to right) Stefan Nalletamby (Vice-President for infrastructure, regional integration and private sector, AfDB), Geoffrey Odundo (CEO of Nairobi Securities Exchange), Oscar Onyema OON (CEO of Nigerian Stock Exchange), Akinwumi A. Adesina (President of AfDB), Karim Hajji (CEO of Casablanca Stock Exchange), Edoh Kossi Amenounve (CEO of BRVM) Photo: AfDB

AfDB and ASEA Executive Committee delegation. (From left to right) Stefan Nalletamby (Vice-President for infrastructure, regional integration and private sector AfDB), Geoffrey Odundo (CEO of Nairobi Securities Exchange), Oscar Onyema OON (CEO of Nigerian Stock Exchange), Akinwumi A. Adesina (President of AfDB), Karim Hajji (CEO of Casablanca Stock Exchange), Edoh Kossi Amenounve (CEO of BRVM) Photo: AfDB

AfDB President, Akinwumi A. Adesina says deepening and integrating Africa’s financial markets to mobilize domestic resources to fund African economies is very important to deliver the Bank’s “High 5s” priorities: Light up and Power Africa, Feed Africa, Industrialize Africa, Integrate Africa and Improve the Quality of Life of Africans (all part of the bank’s 2030 agenda for attaining the global Sustainable Development Goals – SDGs).
He says there are huge pools of capital available in sovereign-wealth, pensions and insurance funds and these can be used for developing Africa through appropriate intermediation and capital-markets products. He called for “increased mobilization of domestic pools of savings and support for small and medium enterprises (SMEs), as they constitute the bulk of Africa’s private sector.”
Adesina pointed to the bank’s progress in financial markets development through issuing and listing local-currency bonds in Uganda, Nigeria and South Africa. The bank has also created African Financial Markets Initiative (AFMI) to support domestic bond markets through the African Financial Markets Database. The bank will soon launch an African Domestic Bond Fund building on the success of the AFDB Bloomberg® African Bond Index, which started in February 2015 to combine the Bloomberg South Africa, Egypt, Nigeria and Kenya local-currency sovereign indices and was expanded in October 2015 by Botswana and Namibia..
ASEA President, Oscar N. Onyema, CEO of the Nigerian Stock Exchange, says the MoU will frame projects focused on the development of exchanges, deepening the stock markets and ultimately fueling African economic growth.

Korea Exchange success story with SMEs

This article summarizes a talk by Honghee Shin, Executive Director of Korea Exchange, at the World Exchanges Congress in March 2016, which highlighted the KRX experience and lessons to be learned.
Building an exchange environment for small and medium-size enterprises and hi-tech companies to raise capital on a securities exchange requires strategic coordination and support by many different government agencies. The Korean Exchange (KRX) has grown to be the world’s third biggest stock exchange for listing and trading SMEs by creating a virtuous cycle in each stage of growth generates cash-flows which in turn fuel other stages.

The original Korea Stock Exchange was set up in 1956 and KRX evolved in 2005 to offer comprehensive front-to-end services. It has KSD (depository) as a 70% owned-subsidiary and also owns 76% of >koscom, a technology subsidiary. It offers a full range of products, trading and market data, as well as the central counterparty (CCP) and it is a self-regulatory organization performing its own market surveillance.

In 2015, KRX had 1,961 listed companies, 8th highest in the world, and traded $1,929 billion of securities, achieving the 10th highest level globally, according to World Federation of Exchanges. The main board is called KOSPI market and it has a futures and options market that was rated 12th in the world.

koreaSMEs160719_diagramvirtuouscycle

It has two boards for SMEs:
• KOSDAQ was launched in 1996, and provides funds for well-established SMEs and “technology-savvy” area including information technology (IT), bio technology (BT) and cultural technology (CT).
• KONEX was launched in 2013 exclusively for SMEs and start-up companies to support their early-stage financing and development through the capital market.

The ratio of market capitalization compared to GDP is higher at KOSDAQ in Korea than any other major SME markets in Asia. In global terms it ranks third among world SME markets for market capitalization and daily trading volume and 4th with 1,061 listed companies. Technology has been the main driver of the market – IT, BT and CT companies made up 68% of the market in 2015, up from 63% in 2005. In particular, biotech has grown its share 4 times and forms 17% of the total market.

KONEX had 24 companies in the third quarter of 2013, but increased that 5 times to 128 listed companies by the end of 2015. Market capitalization is up 8x, and daily average trading value is up 4x over the period. It offers a fast-track “ladder system” which 14 companies have scaled to transfer from KONEX to KOSDAQ.

Much of the success of the exchange can be attributed to the coordinated efforts of Government, the exchange and other stakeholders.

koreaSMEs160719_diagramstakeholders

Key supports from Government include:
1. Tax incentives
– Corporate tax exemption for investing in newly-listed shares(within 2 years)
2. De-regulation for M&A
– Between KONEX and unlisted stocks
– Relieving corporate governance structure
– Waiver of obligation on appointment of external director and full-time auditor
3. Eased accounting standard application
– Exemption of K-IFRS accounting standard.

Concessions offered by KRX are:
1. Relaxation of Listing Requirements
– Lightened listing requirements for corporations with 20% of total investment from angel investors and venture capital
2. Modified disclosure obligation
– Reduction of timely-disclosure
– Exemption of quarter and semi-annual reports
– Mitigation of obligation to submit registration of securities
3. Minimum deposit requirement for investors adjusted from $300,000 to $100,000.

The exchange brings together companies from diversified industries, with a convergence of the high-tech companies that are the driving force of the economy. There is a solid investor base, including active retail investors with ample liquidity, and the exchange offers them a new way to find investment opportunities. The KRX itself offers relaxed listing requirements and less disclosure and maintenance costs. Government offers supportive policies towards gradual de-regulation as well as tax incentives and benefits.

The 2 Korean boards, KOSDAQ and KONEX play a critical role in a virtuous circle of growth and investment. Typically venture capital (VC), angel investors and government (through policies as well as funds) invests into start-up companies. These grow to list on KONEX, where professional investors tend to invest in what re now start-up SME companies, and VC investors can take some funds out to re-invest into fresh start-ups. As the company grows further, it can more to KOSDAQ where often non-professional investors may be interested in what have evolved into established SMEs, and the VCs can take more funds to reinvest into the earlier growth stages. The virtuous circle means that each stage adds momentum to the other stages, fuelling further growth – for the diagram see above.

Dar Stock Exchange shares double on first day of listing in hectic trading

Trading has been fast and furious in the shares of Dar es Salaam Stock Exchange PLC, which self-listed at 9am on 12 July. The first day of trading saw the shares listed at TZS 500 each and soaring as high as TZS 1,000 after hitting TZS 800 in the first 20 minutes. They closed at TZS 935. Turnover was 201 deals out of all the 248 deals for the day, according to the DSE daily report and TZS 794.8 million ($363,750) worth of shares were traded (out of TZS 817.9m traded for all counters).
DSE continued scorching up its own trading boards today (13 July), climbing further to TZS 1,100 and then ending at TZS 1,000 in 289 deals (out of 356 total) for a total value traded of TZS 1.1 billion (out of daily traded value of TZS 1.25bn).
Huge interest had already been seen in the initial public offer (IPO) of shares which ran from 16 May and closed on 3 June. Total bids were TZS 35.8 billion ($16.4 million), or 4.8 times the offered amount of TZS 7.5bn ($3.4m). This follows its demutualization in 2015. The Capital Markets and Securities Authority (CMSA) approved that DSE could augment its “green shoe” option from 10% (i.e. TZS 750m) to 35% or TZS 2.6m). That means the DSE raised TZS 10.1m in total.
IPO applications for up to 10,000 shares (TZS 5m) got their application in full, the full 3% allocation was given to staff, and those who applied for more than 10,000 shares received shares pro rata and a refund.
Government is planning pressure to encourage more listings. Speaking at yesterday’s launch, Finance and Planning Minister Philip Mpango said Government would start with encouragement for privatized companies to list, but it could consider a new law and regulations: “If the mutual talks fail, then the Government will push them to offload some of their shares at the DSE” (as reported in Daily News).
Listed companies that were previous privatizations such as Tanzania Breweries, Tanzania Cigarette Company, National Microfinance Bank, CRDB Bank, Simba Cement, Twiga Cement and TOL Gases are among Tanzania’s 15 largest taxpayers and rated as top-quality employers. Mpango said listing would encourage transparency and good corporate governance, making tax administration easier while enabling citizens to participate in economic activities.

Minister of Finance and Planning Philip Mpango (source rai.co.tz)

Minister of Finance and Planning Philip Mpango (source rai.co.tz)


DSE CEO Moremi Marwa said more than 400 state-owned enterprises (SOEs) had been privatised in the last 20 years, but only 7 listed on the bourse: “It is advisable that future privatizations are conducted through the capital market.”
Nasama Massinda, CEO of CMSA, said they were very pleased by Government’s move to force telecom companies to list 25% of shares at the DSE. “We believe this is the right thing as we want Tanzanians to own shares of these companies… the trend is that some of the firms are allocating shares to one or two ‘mwananchi’. We want them to sell their shares to the public. And the good thing is that these shares are not given for free since local investors would buy them.” She added that the Mining Act also requires that mining firms with special mining licences should sell part of their shares to citizens through DSE.

Investors who want to buy or sell shares can contact the DSE stockbrokers (licensed dealing members) or trade on the DSE’s mobile phone trading platform by dialling *150*36# and selecting “DSE Shares” from the list.

daressalaamse_new logoJan2016

Dar es Salaam Stock Exchange IPO nearly 5x oversubscribed

Total bids for the initial public offer (IPO) of shares in the Dar es Salaam Stock Exchange PLC were TZS35.8 billion ($16.4 million). This is 4.8 times the offered amount of TZS7.5bn ($3.4m) in the IPO which ran from 16 May until 3 June. Next steps include the DSE to refund excess bids after exercising its “green shoe” option, which allows up to 10% extra, and then to self-list on 12 July on its own Main Investment Market Segment under the ticker “DSE”.
According to the DSE announcement: “The planned self-listing is in line with the global trend and practice for exchanges, and is aimed at achieving good corporate governance practices, efficiency and effectiveness of the DSE and further strengthen its strategic and operational practices.” The DSE said in its prospectus it planned to use IPO proceeds to enhance its core-operating system, introduce new products and services and for “strategic and operational purposes”.

Moremi Marwa of DSE and UK Secretary of State for International Development open trading on the London Stock Exchange. Credit: London Stock Exchange

2014: Moremi Marwa of DSE and UK Secretary of State for International Development open trading on the London Stock Exchange. Photo: London Stock Exchange


DSE management are doing an excellent job and there is great potential for the exchange to keep serving the supply of long-term risk capital to one of Africa’s fastest-growing economies. It is sticking closely to its offer timetable and has announced results on time on 16 June. Next is to credit accounts with shares at the central securities depository (CSD) on 24 June and process the refund cheques on 30 June before the self-listing and trading of fully-paid DSE shares on 12 July.
The receiving bank for the DSE offer, as with many Tanzanian IPOs, was local leader CRDB. The lead transaction manager is Orbit Securities Company Limited which said interest was very strong. During the IPO the shares could also be bought using Tanzania’s MAXMALIPO payment gateway or by dialling *150*36# on a Tanzanian mobile phone.
According to an earlier statement by CEO Moremi Marwa: “Over the past few years the DSE has achieved significant milestones, notably:
• Compounded annual growth rate of 110% since 2010 for market capitalization to TZS21trn by 30 March 2016
• Compounded annual growth rate of 56% since 2010 for liquidity to an aggregate average turnover of over TZS800bn per annum
• Introduction of the Enterprise Growth Market (EGM) segment and the increase of listings of both equity and bonds
• Introduction of mobile trading on the DSE trading, depository and settlement platform
• Increased financial independence sustainability and profitability.
As at 30 March 2016 the Exchange had 23 listed equities and 3 outstanding corporate bonds. There are also Government bonds, worth about TZS 4.6trn listed on the exchange, making the DSE the second largest exchange in the East African region.”
According to the prospectus, 3% of shares were reserved for DSE employees and 15% for a capital markets development fund.
Previously DSE was a mutual company limited by guarantee with no shareholders and no capital. The 20 institutions that acted as guarantors – including 8 of the 11 stockbroking firms currently trading – agreed to be issued with 1 share each with nominal value TZS400 by 29 June 2015. It was part of the process as the bourse restructured and changed from Dar es Salaam Stock Exchange Ltd to the Dar es Salaam Stock Exchange Public Ltd Company (Plc).
Among recent changes at the dynamic exchange are
• Migration to the new efficient automated trading system and central depository system (2013), supplied by South Africa’s STT (Securities and Trading Technology system)
• Reduction of settlement cycle from 5 days to 3 days for equities and 3 days to 1 day for bonds in line with international standards (2013)
• The Capital Markets & Securities Authority (CMSA) put in place the enabling regulatory framework and licensed the NOMADs to create a framework for a new Enterprise Growth Market segment of the DSE which was launched in 2013. Since the five companies have listed on the EGM
• Interlinking the exchange’s central depository system to the national payment system (2014)
• Deployment of ATS on the wide area network and start of remote trading by brokers (2014)
• Introduction of the regulatory framework and subsequent use of mobile phone technology in IPOs (equity and debt) and secondary trading (August 2015)
• Limits on foreign investment were recently lifted. There is also increasingly close cooperation in the exciting East African region, including installation of an interconnectivity hub for routing trading order between the exchanges.
New products which the CMSA and DSE are developing include real-estate investment trust (REIT), futures and derivatives, exchange-traded funds (ETFs), closed end collective investment schemes and municipal bonds.
Your author was honoured to be team leader of the CAPMEX/Wiener Börse AG team that wrote the demutualization strategy.

Source Dar es Salaam Stock Exchange

Source Dar es Salaam Stock Exchange

JSE switches to T+3 on 11 July

The Johannesburg Stock Exchange is switching to a shorter T+3 settlement cycle for the equity market from 11 July. It will reduce risk and add an estimated R50 billion ($3.3bn) of cash into circulation. Currently it is still working on T+5.

Last week the JSE announced that the final market-testing phase of the project has been successfully completed and the transition to a new post-trade dynamic will go ahead as planned. In the equity market, “T+3” is an abbreviation and means that ownership of equities is delivered in exchange for cleared payment in 4 days from the date of the trade. The current T+5 means this post-trade settlement cycle happens within 6 days. International best practice settlement standards are usually T+3 to allow time for international funds transfers to reach the target account in time for settlement. Many African securities exchanges are already on T+3 and some, such as Egyptian Exchange, are faster.

JSE Executive Director Dr Leila Fourie said: “South Africa must ensure that it remains as attractive as possible for foreign inflows of capital, and settlement assurance is vital for us to retain and keep attracting investment from outside of the country. Global investors need to be assured that, if they trade on our market, their trades will settle seamlessly. Currently, 37% of equity trades are held by non-residents with approximately 30% trading on a daily basis.

JSE celebrates 20 years since closing its trading floor on 7 June (photo Claudelle von Eck)

JSE celebrates 20 years since closing its trading floor on 7 June (photo Claudelle von Eck)


“A further benefit of a shorter settlement cycle is that it dramatically reduces the amount of unsettled trades at any given point. So, in the event of a market default, the number of unsettled trades that we have to unwind is reduced significantly. This reduces potential losses between trading parties, and enhances investor protection during the process.”

“The move to a shorter settlement cycle will catapult the country and the JSE to compete confidently among global equity markets, making it a matter of major importance for SA Inc. It will result in additional benefits to the market such as cash being released earlier in the settlement cycle, increasing the funds in circulation. Based on the average value traded per day of R25bn, this will create a release of R50bn into circulation.”

The entire market and all participants are affected, including listed companies, traders, investors, clearing and back-office participants, the central depository Strate, the JSE and all regulators. The JSE is leading the move in close collaboration with the South African Reserve Bank, National Treasury, Financial Services Board and numerous other stakeholders to ensure system and process readiness ahead of the move.

South Africa’s rate for failed trades has been close to zero over the past 15 years. The new, shorter settlement cycle will increase the number of trades that roll and do not settle on time. The JSE expects that between 5% and 10% might roll in the new environment, but aims to maintain a target of less than 5%. Fourie says: “We are working with participants to minimize this percentage by improving the availability of securities for lending and borrowing activity and also by actively encouraging behaviour changes where required.”

The JSE has requested that listed companies avoid corporate actions between 4 and 18 July in order to reduce complexity during the cutover week. The JSE thanks all participants, both local and abroad, “for their tremendous support in making market testing a great success”, according to the announcement.

Private Equity Africa award winners 2016

What a night – the gala dinner of the Private Equity Africa 2016 awards. It is the 5th year of these awards and all the “great and good” of Africa’s private equity fund managers (general partners/GPs), investors (limited partners/LPs) and service providers gathered at The Langham hotel in London to celebrate how their industry is growing in size and sophistication. A full day conference (I was honoured to be MC) charted the changes with sessions on new structures for private equity funds, the rise of stock exchange IPOs as exits, specialized agriculture, healthcare and other funds, the changing valuation premium on Africa’s businesses post the currency crises.. and many more topics for 2016.

Congratulations to the winners of the 2016 Private Equity Africa Awards. The final award winners were selected by an independent panel of judges and recommendations from the London Business School Institute of Private Equity nomination team.

OUTSTANDING LEADERSHIP AWARD
Honourable Okey Enelamah, founder of African Capital Alliance and now Minister for Industry, Trade & Investment, Government of Nigeria. The award was presented by Right Honourable Baroness Lynda Chalker of Wallasey who also made a speech. It is awarded based on voting by leading industry investors.

Okechukwu Enelamah, Minister of Trade & Investment (photo: Guardian Nigeria)

Okechukwu Enelamah, Minister of Trade & Investment (photo: Guardian Nigeria)

HOUSE AWARDS
HOUSE OF THE YEAR
Sub-Saharan Africa House of the Year: Helios Investment Partners
North Africa House of the Year: Abraaj
Francophone Africa House of the Year: Adenia
West Africa House of the Year: Synergy Capital Managers

SPECIAL RECOGNITION: HOUSES
The event also recognised investors that had delivered exceptional transactions during 2014 that do not fall into the main award categories.
Credit Investor: Investec Asset Management
Mid Cap Investor: Development Partners International (DPI)
SSA Fund of the Year, awarded in partnership with Financial Services Promotion Agency (FSPA): Helios Investment Partners for Helios III
Pan-Africa Exits: Actis
Outstanding First-Time GP: Verod Capital

DEAL AWARDS
EXIT OF THE YEAR
Large Cap Exit of the Year: Helios Investment Partners for Equity Bank
Mid Cap Exit of the Year: AfricInvest for UAP Holdings
Small Cap Exit of the Year: Adenia for Newpack

DEAL OF THE YEAR
Mid Cap Deal of the Year: Amethis for Novamed
Small Cap Deal of the Year: Databank for Norish

SPECIAL RECOGNITION: DEALS
The event also recognised deals that had delivered exceptional transactions during 2015 that do not fall into the main award categories, are had not comparable contenders.

Debt Deal: XSML for Médecins de nuit
Infrastructure Deal: African Infrastructure Investment Managers (AIIM) for Azura Power
Large Cap Deal: Abraaj for North Africa Hospital Holdings Group
Frontier Deal – Morocco: TPG-Satya for Ecoles Yassamine
Frontier Deal – Côte d’Ivoire: Duet for SAPLED
Frontier Deal – Uganda: 8 Miles for Orient Bank

PORTFOLIO AWARDS
PORTFOLIO COMPANY OF THE YEAR
Development Impact: Emerging Capital Partners for CIPREL
Social Impact: Fanisi for Haltons
Innovation: Adenia for Syrse
Improvement: Mediterrania Capital Partners for CashPlus

ADVISOR AWARDS
ADVISORS OF THE YEAR
Overall Legal Advisor (Deals & Funds): Clifford Chance
Funds Legal Advisor: King & Wood Mallesons
Deals Legal Advisor: Webber Wentzel
Single Deal Advisor of the Year: Linklaters for NSIA
Single Fund Advisor of the Year: O’Melveny & Myers for Helios III

SPECIAL RECOGNITION: ADVISORS
Advisor of the Year – Fund Administration: Trident Fund Services

SPECIAL RECOGNITIONS: ADVISORS
The event also recognised advisors that had delivered exceptional transactions during 2015 that do not fall into the main award categories.
Mid-Cap Advisor: Dentons
Local Legal Advisor: Anjarwalla & Khanna
Regional Legal Advisor: Freshfields Bruckhaus Deringer
Corporate Finance Advisor: Intercontinental Trust

The hard-working awards judges were:
Vivina Berla, Co-Managing Partner, Sarona Asset Management
Daniel Broby, Director CeFRI, University of Strathclyde
Matthew Craig-Greene, Founder, Craig-Greene & Co
Arnaud de Cremiers, Partner, Adams Street Partners
Mark Flanagan, Assoc. Partner, Aon Hewitt
Mark Florman, ex-CEO, British Private Equity & Venture Capital Association
Jean-Luc Koffi Vovor, Founder, Kusuntu
Peter Maila, Investment Director, CDC
Tom Minney, CEO, African Growth
Rory Ord, Executive, RisCura
Charles Rose, Chairman, Hainsford Renewable Energy
Daniel Schoneveld, Principal, Hamilton Lane
Hervé Schricke, President, AFIC Africa
Dushy Sivanithy, Portfolio Director, CDC
Arjette van den Berg, Independent Private Equity Advisor
Erika van der Merwe, CEO, SAVCA
Gail Mwamba, Editor, Private Equity Africa (Awards Chair)

The advisors were Adeola Dosunmu, Head of Research, Private Equity Africa (Awards Director); Mark Artivor, Independent Private Equity Advisor; Alfonso Campo, Reporter, Private Equity Africa and Joe Walsh, Reporter, Private Equity Africa.

Tech will drive African IPOs

Telecoms, e-commerce and technology will be the driving force behind many of Africa’s coming initial public share offers (IPOs) as the continent’s telecom, media and technology (TMT) sector continues to grow fast. Ben Nice, editor of specialist news provider TMT Finance, says in a press release: “Despite global volatility, regional macroeconomic uncertainty, and a rout on commodity prices, recent forecasts are predicting that the next 12 months could see a rebound with IPOs set to reach their highest levels in Africa since 2010, and several TMT companies looking likely to float in 2016 and 2017.

Africa Internet Group (AIG) – which runs the Jumia ecommerce brand – just raised a further EUR75 million ($84m) from Orange, in addition to the recent EUR300m ($338m) from investors including Goldman Sachs, MTN and Rocket Internet. The company is the first real African tech unicorn and we understand that it will be targeting an IPO (initial public offer) by 2017, and is also on the hunt for a new CFO. Orange Egypt (formerly Mobinil) is also preparing to list shares in Cairo to fund US$3.2bn investment into infrastructure, and IHS Towers, the Lagos-based mobile tower operator, is also expected to float over the next 12 to 24 months.”

Other African tech which may bring IPOs in the near and medium term include: Dark Fibre Africa of South Africa, Nigerian payment services provider InterSwitch, Africa’s largest independent fibre operator Liquid Telecom, and South African media company Primedia. According to a previous news story, Interswitch may scoop the prize (and publicity) as Africa’s first tech unicorn, as it is working on a London and Lagos IPO for Q2-Q4 and could be worth at or close to $1bn.

AIG, which was founded in 2012 and now operates in 23 countries with 71 companies, is said to be planning an IPO by 2017. Jumia e-commerce is present in 11 countries and linked to online and mobile consumer services such as Kaymu (shopping), hellofood (food delivery), Jovago (hotel booking) and classified ads Vendito (general merchandise), Lamudi (real estate), Everjobs (jobs) and Carmudi (vehicles).

Orange Egypt, rebranded from Mobinil in March, is preparing an IPO for the Egyptian Exchange, with an offering of up to 20% of the shares. It has 33.4m customers and is Egypt’s second biggest operator after Vodafone. In March it announced Orange intended to invest EGP2.5bn ($281.5m) into upgrading networks and services.

IHS Towers, based in Lagos and owner of over 23,300 mobile phone towers in Nigeria, Cameroon, Côte d’Ivoire, Zambia and Rwanda, is expected to float shares within 12-24 months. In December, chief executive and founder Issam Darwish said it would be “the biggest IPO ever in Africa”.

Next week on 14 June, over 200 industry and finance executives, including African telecom CEOs, private equity investors and leading international bankers and advisers, are meeting in London to talk investments at the 7th annual TMT Finance & Investment Africa 2016 conference. Sessions include: Africa telecom leadership; TMT M&A; broadband investment; mobile towers; raising finance for Africa TMT; datacentres Africa; private equity Africa; mobile money and M-Commerce; and digital Africa. Speakers include leaders from Millicom, Google, IHS, Helios, Eaton Towers, Avanti Communications, BNP Paribas, Citi, UBS, Standard Bank, IFC, the World Bank, TransferTo, Icolo, Bima, Dentons and Hardiman Telecommunications.

Tech wizards to IPO (from www.africainternetgroup.com)

Tech wizards to IPO (from www.africainternetgroup.com)

The winners – Africa’s top banks and bankers of 2016

Cameroon is a big winner at this year’s African Banker Awards, the 10th edition. The winners were announced yesterday (25th May) in Lusaka. Morocco’s Attijariwafa Bank, active in 20 countries, wins the prestigious Bank of the Year Award and GT Bank CEO Segun Agbaje is recognized as Africa’s Banker of the Year for his leadership of the Nigerian banking giant, one of Africa’s most profitable banks.

African Banker Awards have become the pre-eminent ceremony recognising excellence in African banking. They are held on the fringes of the annual meetings of the African Development Bank. Your editor is proud to be among the judges and can comment on the excellence of the many submissions from great banks all over Africa.

For the first time, two Cameroonians feature among the laureates: Alamine Ousmane Mey wins Minister of Finance category or his contribution to socio-economic development in his country. Leading banker and economist Paul Fokam, President of the Afriland First Group, is awarded the Lifetime Achievement Award; he is a serial entrepreneur, a renowned economist and his bank is one of the more important institutions in Central Africa. Cameroon scored a hat trick as Lazard’s credit-enhanced currency swap won the award for “Deal of the Year – Debt”.

Other winners include South Africa’s Daniel Matjila, CEO of South Africa’s Public Investment Corporation, a fund with $139bn funds under management. He was awarded the African Banker Icon, recognising the significant investments by the fund into African corporations and the lead role he has played in driving investment from South Africa into the continent.

The African Central Bank Governor of the Year accolade was given to Kenya’s Patrick Njoroge. Kenya’s central bank, largely unknown a year ago, has managed to navigate a tough economic climate and Patrick has been credited with cleaning up the banking sector in his country.

Speaking at the exclusive Gala Dinner at the Intercontinental Hotel attended by over 400 financiers, business leaders, and influential personalities and policy makers, Omar Ben Yedder, Group Publisher of African Banker magazine, which hosts the awards in partnership with BusinessInAfricaEvents said: “It has definitely been a defining decade in banking in Africa. We have recognised true leaders tonight who are playing a critical role in the socio-economic development of the continent.

“Finance remains a key component of development, be it in terms of financing massive infrastructure projects that today are being wholly financed by consortia of African banks, or SME financing. It’s happening because of strong, bold and visionary leadership. I have been privileged to honour some truly exceptional individuals who have left an indelible mark on the industry over the years.

“We are very grateful to our High Patron, the AfDB, for their unwavering support in this initiative and our thanks also go to our sponsors: MasterCard, Ecobank, Nedbank, African Guarantee Fund, PTA Bank, CRDB Bank, Arton Capital and Qatar Airways for partnering with us and enabling us to reward outstanding achievements, commend best practices and celebrate excellence in African banking”.

This year’s judging panel was made up of Koosum Kalyan, Chairman of EdgoMerap Pty Ltd; Zemedeneh Negatu,Managing Partner of Ernst & Young Ethiopia; Tom Minney, Chief Executive of African Growth Partners; Alain le Noir, CEO of Finances Sans Frontières; Christopher Hartland-Peel, Principal at Hartland-Peel Africa Equity Research and Kanika Saigal, Deputy Editor of African Banker Magazine.

THE 2016 AFRICAN BANKER AWARD WINNERS

  • Bank of the Year: Attijariwafa Bank (Morocco)
  • Banker of the Year: Segun Agbaje – GTBank (Nigeria)
  • Minister of Finance of the Year: Alamine Ousmane Mey (Cameroon)
  • Central Bank Governor of the Year: Patrick Njoroge (Kenya)
  • African Banker Icon: Daniel Matjila, CEO PIC (South Africa)
  • Lifetime Achievement Award: Paul Fokam, Founder Afriland First Bank (Cameroon)
  • Investment Bank of the Year: Rand Merchant Bank (South Africa)
  • Award for Financial Inclusion: Ecobank (Togo)
  • Best Retail Bank: BCI (Mozambique)
  • Socially Responsible Bank of the Year: Commercial International Bank (Egypt)
  • Innovation in Banking: Guaranty Trust Bank (Nigeria)
  • Deal of the Year – Equity: Naspers $2.5bn Accelerated Equity Offering (Citi)
  • Deal of the Year – Debt: Cameroon’s Currency Swap (Lazard)
  • Infrastructure Deal of the Year: Azura – Edo IPP (Fieldstone; Rand Merchant Bank; Standard Bank; IFC)
  • Best Regional Bank in North Africa: Commercial International Bank (Egypt)
  • Best Regional Bank in West Africa: Banque Atlantique (Côte d’Ivoire)
  • Best Regional Bank in Central Africa: BGFI (Gabon)
  • Best Regional Bank in East Africa: CRDB Bank (Tanzania)
  • Best Regional Bank in Southern Africa: MCB (Mauritius)

For more on the African Banker Awards, please visit: http://ic-events.net/.

BRVM securities exchange strategy dialogue with US frontier funds

New York, May 12: Sixteen new listings, spurred by privatizations and private equity fund exits, are a key target for Africa’s top-performing securities exchange. The Bourse Régionale des Valeurs Mobilières (BRVM), headquartered in Abidjan, Côte d’Ivoire, is among the world’s most successful integrated regional exchanges, linking eight West African countries (Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo).

In New York this week, 30 US frontier investors, stockbrokers and market specialists joined Mr. Edoh Kossi Amenounve, CEO of BRVM, in a strategic dialogue. Suggestions from the Americans included lower stockbroker commissions, more listings, liquidity, and stepping up listed company reporting to international financial reporting standards (IFRS).

The BRVM has 36 listed bonds and 39 listed companies, and expects four new listings in 2016, following initial public offers (IPOs). In 2015, the BRVM Composite Index rose by 17.77% making it Africa’s top-performing equity index to foreign investors.

Amenounve says: “Most of the economies are not badly affected by the oil price. They are growing through regional linkages. We saw 6.6% GDP growth in our markets in 2015 and expect 7.2% this year. BRVM is different from other markets as our currency, the CFA franc, is pegged to the value of the euro. We offer yield, without the high volatility seen in other African markets.”

The value of trading on the BRVM exchange rose 48% in 2015. Amenounve says local participation is growing even faster: “More and more citizens are becoming shareholders, which is the best way for our people to take ownership of our growth drivers and means of production. In 2012 foreign investors made up 55% of the trading, but the local share had risen to 75% by 2015, of much bigger trading volumes. In 2011, domestic collective investment schemes managed XOF 30bn of assets, but by the end of 2015 that was XOF 600bn, a 20-fold increase.”

Amenounve is leading plans to integrate five West African markets – Nigeria, Ghana, BRVM, Cape Verde and Sierra Leone – by 2020 to form Africa’s second biggest exchange after Johannesburg, with 273 listed companies and 233 brokerage firms. He has been Chairman of the West African Capital Markets Integration Council (WACMIC) since March 2015 and explained the three-step plan for integration:
* Phase 1 is sponsored access for brokerage firms, which was launched in July 2015 and has seen several transactions between Ghana and Nigeria.
* Phase 2 will be a “common passport”, giving a regional stockbroker direct access to any market.
* Phase 3 will be to follow the Euronext model, with a single trading platform and a single order book for all the markets.

The BRVM is Africa’s sixth securities exchange by market capitalization ($12.8 billion for equities and $2.7 billion debt) in 2015. It represents an economic area of more than 100 million consumers, with fast, diversified growth. See more at: www.brvm.org.

The meeting was organized by AZ Media in New York and ourselves, African Growth Partners Ltd.

Edoh Kossi Amenounve, CEO of BRVM exchange

Edoh Kossi Amenounve, CEO of BRVM exchange

Mauritius is a trusted base for Africa funds

Highlights of African Financial Services Investment Conference (AFSIC 2016), held in London 5-6 May

Mauritius is the top base for private equity funds investing into Africa, says JP Harrop Head of Sales for private equity fund administrator Augentius: “Many of larger Africa-focused LPs (limited partners) insist on vehicles being Africa domiciled, its either Mauritius or South Africa.”

Sunil Benimadhu, Chief Executive of the Stock Exchange of Mauritius: “We are busy positioning ourself as an attractive capital-raising platform for focused Africa-oriented ventures. We are aligning our strategy, as vibrant international financial centre for Africa and other emerging regions.
“Also Mauritius as a jurisdiction has signed bilateral investment promotion and protection agreements (IPPAs) with number of countries in Africa and elsewhere, mitigating some of political risk. We already offers a wide value chain of services for investors
“We are now looking at addition value-add services to the international investor. We are positioning the Stock Exchange of Mauritius as an attractive capital-raising, trading and settlement platform for issuers. We have set up a multi-currency capital raising, listing, trading and settlement platform. We allow issuers looking at Africa and elsewhere to raise money internationally, structured in Mauritius, issued in any of 4 international currencies (USD, EUR, ZAR, GBP), trading and settlement can happen in any currencies, positioning ourselves as a risk-mitigation platform for exposure to African currency.
“Another innovation, we created a platform for listing and trading of depository receipts. So a Kenyan company listed on the Nairobi Securities Exchange can raise in KES, but it can use Mauritius platform to issue depository receipts to raise funds in USD.”

Paul Cunningham, Chief Financial officer of Helios Investment Partners
“The big advantage from an investor perspective is the strength of the rule of law and the idea that if you follow the legal process, the final court of appeal is UK Privy Council. Mauritius is tried and tested and gives investors a great degree of comfort that they are investing through good banks, fund administration, management companies and others.”