Demand soars for Ethiopia’s debut $1bn Eurobond, yields 6.625%

Ethiopia saw soaring demand yesterday (4 Dec) for its debut $1 billion Eurobond, after a quick investor roadshow. Total demand was $2.6bn and the yield on the 10-year bond was settled at a relatively low 6.625%, at the lower end of the 6.625%-6.75% price guidance.
According to this report in the Financial Times: “The debut sees one of the biggest, most closed — and, some observers say, most promising — African nations joining a number of other countries in the region that have issued similar bonds in the past 5 years. Africa has become a magnet for pension funds, insurers and sovereign wealth funds seeking higher-yielding assets.”
A Bloomberg report cites Standard Bank Group that African governments such as Ghana, Kenya, Senegal and Ivory Coast and corporates issued a record $15bn of Eurobonds this year as they try to benefit from investor appetite for higher returns before the US Federal Reserve raises interest rates expected next year. The bank says they raised $13bn in 2013. Sovereign issuers accounted for 71%.
It quotes Nick Samara, an Africa-focused banker at Citigroup in London, saying ““Pricing at a 6-handle is very attractive” for the country, similar to Zambia.

The move jumps ahead of the earlier schedule suggested in this report.

Ethiopia needs $50bn over 5 years

The FT quotes Kevin Daly, senior portfolio manager at Aberdeen Asset Management, that the bond’s yield “is decent value for the deal given the limited knowledge and different nature of the Ethiopian economy and the challenges it faces compared to these countries”. Bloomberg says he said Ethiopia made a strong case for infrastructure development and financing needs at investor meetings, “which suggests they will be looking to come back to the market in near term.”.
According to Bloomberg, Finance Minister Sufian Ahmed said on 7 Oct that Ethiopia will probably need to invest about $50bn over the next 5 years, of which $10bn to $15bn may come from foreign investors. Most will be used to develop sugarcane plantations, a 6,000-megawatt hydropower dam on a tributary of the Nile River and the country’s railway network.

Grand Ethiopian Renaissance Dam (credit: www.water-technology.net)

Grand Ethiopian Renaissance Dam (credit: www.water-technology.net)

Claudia Calich, emerging market bond fund manager at M&G told the FT that Ethiopia was one of the region’s weaker credits: “I am concerned over lack of transparency and levels of SOE [state owned enterprise] debt.” Mark Bohlund, senior economist for sub-Saharan Africa at consultants IHS, said investors were attracted to Ethiopia on the back of “strong economic growth prospects and limited external indebtedness”. He added: “We wish to highlight that there are still non-negligible risks to repayment.”

Fast 9% growth, limited foreign reserves

Deutsche Bank and JPMorgan were the lead managers for the bond and Lazard advised the Federal Government of Ethiopia.
The bond includes new clauses recently promoted by organisations such as the International Capital Markets Association and dubbed “anti-vulture” clauses. They aim to make it more difficult for investors to hold out against restructuring plans if the country defaults on its debt, as happened recently with Argentina.
Ethiopia first credit ratings came in May, as reported here. Moody’s Investors Service rates it a non-investment grade B1 with a stable outlook, while Standard & Poor’s and Fitch Ratings awarded B, one grade lower.
Ethiopia has some of the fastest growth rates in Africa, around 9%, according to the International Monetary Fund. According to Reuters, the IMF said in a September report that the risk of Ethiopia facing external and public “debt distress” remained low but said it was on the “cusp of a transition to moderate” risk. It estimated public debt at 44.7% of GDP in fiscal 2013/14. Ethiopia’s foreign reserves covered only 2.2 months of imports in 2013/14 and capacity to increase this remains under pressure due to limited capacity to increase exports and foreign investment.

African debt warning

According to the African Development Bank’s Making Finance Work for Africa website (www.mfw4a.org), a few weeks ago the IMF warned African States against rushing to issue Eurobonds, saying they may face exchange-rate risks and problems repaying debts. African governments facing falling levels of foreign aid are on a borrowing spree to pay for new roads, power stations and other infrastructure, prompting concern this could raise debt levels and undermine growth.
“It comes with some risks,” the director of the IMF’s African Department, Antoinette Sayeh, told Reuters. “Whereas what it costs the countries to issue these bonds can often look lower than what they would pay on domestic borrowing… the real cost in the final analysis will also depend on the evolution of exchange rates in the course of the life of the bond issuance.”
Kenya’s debut $2bn Eurobond had launched at 6.875% in June but fallen to 5.90% when it issued a new tranche in late November, indicating that investors did not share the IMF’s concerns. Kenya’s 10-year bond was trading at 5.88% on 4 Dec and Kenya has a much higher average gross domestic product (GDP) per capita and much better advanced African capital market and securities exchange than Ethiopia. The bond prospectus listed Ethiopia’s GDP per capita at $631.50 in fiscal 2013/4.

$1.4bn petroleum pipeline proposed for Ethiopia

Private companies have proposed to the Ethiopian and Djibouti governments a $1.4 billion pipeline to bring petroleum to a distribution centre in Awash, Ethiopia. It would take two years to complete.
The companies which made the proposal 6 months ago are Black Rhino Group, owned by private equity firm Blackstone, and MOGS (Mining, Oil & Gas Services), owned by Royal Bafokeng Holdings, a South African investment group, according to this report in Addis Fortune newspaper.
Ethiopian Petroleum Supply Enterprise (EPSE) plans to import 2.9 million tonnes of fuel this year and last year this was 2.6m tonnes. Some of the fuel comes from Sudan.
They are proposing to build 550 kilometres of pipeline, carrying oil directly from the vessels at the port to a storage facility in Awash, from where it would be distributed by trucks from Awash to the rest of the country, including Addis Abeba. According to the report, the Djibouti government has told Black Rhino and MOGS that the current port infrastructure is not big enough to meet Ethiopia’s long-term needs with Ethiopia’s demand for refined fuels growing 10% a year.
The pipeline would bypass the congested port and road. The report quotes Demelash Alamaw, assistant to chief executive at EPSE, that it is inefficient to use fuel trucking fuel up from the coast. The project is expected to reduce the supply problem caused by truck shortages, as well as reduce the cost of transport.
Brian Herlihy, CEO and founder of Black Rhino, presented the proposal on 21 Nov at a meeting on “Powering Africa: Ethiopia Meeting,” at Radisson Blu Hotel, Addis Abeba, organized by UK-based company Energy Net Ltd.
He said the Ethiopian Government is studying the proposal and Djibouti is happy. If the Ethiopian Government gives a green light to the project the company will proceed to study the environmental and engineering condition of the construction,
Fortune reports that officials at the Ministry of Water, Irrigation & Energy (MoWIE), confirmed that the proposal had been submitted and they would look at it before deciding to discuss it further with other stakeholders, such as the Ministry of Finance & Economic Development (MoFED), the Ministry of Foreign Affairs (MoFA), and Ministry of Transport (MoT).

4 priorities from new head of African stock exchanges

Nairobi Securities Exchange (credit: Diana Ngila, Nation Media Group)

Nairobi Securities Exchange (credit: Diana Ngila, Nation Media Group)

The new President of the African Securities Exchanges Association (ASEA) put forward 4 strategic objectives for the member bourses. Oscar Onyema, CEO of the Nigerian Stock Exchange, was elected President after outstanding leadership by Sunil Benimadhu, Chief Executive of the Stock Exchange of Mauritius.
According to a news report in Nigeria’s This Day, Onyema said the vision is to support the effective mobilization of capital for economic development. The new executive committee to lead African securities exchanges will focus on
• Strengthen ASEA’s governance, financial and reporting framework
• Promote the sustainable development of African capital markets
• Facilitate an increase in market access at the regional level, and promote cross-listing among African exchanges
• Align the goals of African capital markets with those of the African Development Bank (AfDB).
Onyema said: “I am honoured to be elected president of ASEA which is the largest platform for Africa’s stock, futures and options exchanges. I would like to thank the outgoing Executive Committee led by Mr. Benimadhu for their stewardship of the Association over the last two years, and I look forward to working with ASEA members, our global counterparts and regulators to contribute to the association’s rich legacy, as well as to promoting our markets in a broad range of areas”.
He was elected this week at the Executive Committee meeting of ASEA after its 18th annual general meeting held in Diani, Kenya.

Exchanges and regional integration
According to this press release from Nairobi Securities Exchange, William Ruto Deputy President of Kenya opened the ASEA flagship conference: “Well-established capital markets can help African countries lessen vulnerability of their economies to external shocks, by locally marshalling funds through instruments such as bonds and reducing currency and duration mismatches.
“The exchanges have continued to foster regional integration by allowing cross-border capital raising initiatives such as public offers, bond issues and cross-listing of stocks”. He encouraged Kenyans to keep saving and to do this using the capital markets.
Benimadhu, the out-going ASEA president, welcomed the new president and committee members: “We look forward to ASEA’s continuing progress as it seeks to enhance the global competitiveness of member exchanges”.

Open up, urges investor
Allan Thomson, managing director of Dreadnought Capital, based in Johannesburg, South Africa, was reported in Kenya’s Daily Nation that opening up the markets to foreign investors would bring in much needed capital and training for the local markets: “I have respect for regulators in Africa and what they are trying to do. But it is worrying. African capital markets suffer from too much protectionism and stringent rules. The fact is that protected and inaccessible markets remain small.”
He added that membership at most capital markets was expensive, which kept away potential investors: “I once approached a securities exchange in Africa and was told to pay $1 million to become a member yet they were only five. I suggest a zero membership fee because investors bring in skills and capital,” he added.

Diani, Kenya (credit www.planetwindsurfholidays.com)

Diani, Kenya (credit www.planetwindsurfholidays.com)

9 reasons Africa tops investment agendas

Here are 9 reasons why Africa is topping long-term investors’ agenda. According to press releases Eddy Njoroge, Chairman of the Nairobi Securities Exchange, told this week’s African Securities Exchanges Association conference in Kenya they are:
1. Recent research by economists indicates that 9 of the 20 fastest-growing economies are in Africa.
2. A recent report by Deloitte states that Africa’s economy will grow from $1.1 trillion to $3.9trn in the next 5 years.
3. The value of exports from Africa has risen from $170 billion in the late 90’s to $800bn last year. Africa is the only continent to have a trade surplus with China which would probably explain why several Chinese firms are setting up shop on the continent.
4. According to the African Development Bank, Foreign Direct Investment (FDI) into African economies will reach a record $80bn this year, with most of the money being directed to countries without natural resources but which nevertheless present attractive opportunities in other diverse sectors.
5. Today, Africa is the second most populous continent on earth with a current estimated population of 1.12bn. The Washington-based Population Research Bureau estimates that this population would more than double to 2.4 bn by 2050, with sub-Saharan Africa making up a headcount of 2.2bn.
6. Currently, the African middle class is estimated at 123 million with a projected rise to 1.1bn by 2060. Investor and philanthropist George Soros has termed this demographic shift as “the world’s fastest growing middle class.”
7. Infrastructure has played key part in Africa’s recent economic transformation and will need to play an even greater role if the continent’s development targets are to be realised. Africa’s largest infrastructure deficit is to be found in the power sector. The 48 countries of Sub-Saharan Africa less South Africa (with a combined population of about 780m people) generate roughly the same amount of power as Norway (with a population of 5m).
8. It is estimated that Africa’s infrastructural investment requirement will be $38bn per year and a further $37bn for operations and maintenance- an overall price tag of $75bn per annum. This translates into some 12% of Africa’s GDP. There is currently a funding gap of US$35bn per year.
Njoroge said Africa’s securities exchanges are key: “The conference gives us the opportunity to tell our own success stories; the story of an Africa that is on the rise and how we, the capital market practitioners, can transform a potential into a reality while ensuring that at all times, the fruits of economic success are widely shared across the population… Strengthening stock exchanges to support our capital-markets ecosystem will fuel economic growth. The Nairobi Securities Exchange will continue to work together with other stock exchanges strengthening Kenya’s position as East Africa’s financial services hub.”

Nigerian Stock Exchange signs links to London SE Group

Paternoster Square with London Stock Exchange at right (credit: Wikipedia)

Paternoster Square with London Stock Exchange at right (credit: Wikipedia)

The Nigerian Stock Exchange (NSE) this week (18 Nov) signed a capital markets agreement with the London Stock Exchange Group (LSEG) to support African companies seeking dual listings in London and Lagos. It follows implementation earlier in 2014 of a new settlement process between the UK and Nigeria which significantly boosts the efficiency of listing and trading of ordinary shares of Nigerian companies listed in London and those of UK companies on the Nigerian market.
A top LSEG executive said it shows the global investment community is rushing to be part of the Nigerian story.
The agreement was signed by Oscar Onyema, CEO of the NSE, and Nikhil Rathi, Head of International Development, LSEG. Also present was Sir Roger Gifford, Country Head for the European Bank SEB, former Lord Mayor of London, and Co-Chairman of the UK Government’s Nigeria Emerging Capital Markets Task Force and Nigerian co-chair Aigboje Aig-Imoukhede, President of NSE.
Gifford said, according to the press release: “This is exactly the sort of ambitious project the ECMT Nigeria was launched to support. Nigeria is without doubt one of the most promising opportunities for capital markets development worldwide.
“An effective, transparent and well-governed capital market – across all asset classes – has the capacity to catalyse a nation’s quest for growth and development. In particular, functioning markets for corporate equity and debt reduce the dependence on bank capital and make investment securities available to a broader range of investors: institutional, private and international. This agreement will build on existing strong commercial and economic ties between the UK and Nigeria to our mutual benefit. ”
Mot of the previous dual-listings have listed on London’s AIM market although the milestone April dual-listing of Seplat (see below) saw Seplat head for the main market.
Onyema said: “Today’s agreement is another major step towards our goal of ensuring that all companies that have substantial operations in Nigeria are accessible to both Nigerian and international investors. In addition, we will be ensuring that our leading companies achieve the global profile and international institutional investment they deserve.”
The 9 Nigerian or Nigeria-focussed companies quoted on LSE have a collective market capitalisation of $14.2bn and include 6 oil & gas explorers and 3 major Nigerian banks.
The press release also quoted Rathi: “The agreement signed today is a reflection of the global investment community’s strong desire to be a part of the Nigeria story. As the world’s most international exchange, LSEG looks forward to building on the success of existing dual listings in Nigeria and London and partnering with the NSE to showcase the rapid developments in Nigerian capital markets and the Nigerian economy.”

Seplat dual-listing helping Nigeria bourse towards N1 trillion

Indigenous oil company Seplat was the first to make use of the linkages in April, when it raised $500 million in an Initial Public Offer (IPO) on both exchanges. Euromoney reported it was the first dual-listing and largest IPO from southern Africa since Dangote Cement in 2010. The London end was advised by BNP Paribas, Standard Bank, Citi and RBC Capital Markets, the Nigerian listing by Renaissance Securities and Stanbic IBTC.

The IPO added N28 billion ($161m) to the NSE market capitalization. The bourse aims to reach N1 trillion ($5.7 billion) by 2016 with oil and gas firms a key target.

Euromoney quoted Dolapo Oni, energy research analyst at Ecobank: “To list on the main board in London, Seplat required international accounting standards and the highest levels of corporate governance and transparency, which it has aimed for from its inception in 2009. Many other Nigerian companies are still not comfortable with disclosing this much information to the public and thus are not good enough to list on the main board.”

Miguel Azevedo, head of investment banking Africa at Citi, added: “It also represents the return of the sector to the London market, which hasn’t had a significant oil and gas listing since the financial crisis. Seplat really creates a new benchmark for international companies coming to the market.”

UK pushes emerging capital markets

UK Chancellor George Osborne announced the Emerging Capital Markets Taskforce on 9 April. It aims to unlock new opportunities for the UK financial services sector by helping to open and deepen capital markets in emerging economies through innovative collaboration between Government and private sector. This is part of the strategic public-private sector Financial Services Trade and Investment Board (FSTIB) launched in 2013 and chaired by HM Treasury. More details can be found via the FTSIB website.

London Stock Exchange offering to Africa

According to the London Stock Exchange, the listings of companies focussed on sub-Saharan Africa total 115 companies:
• 26 companies on the Main Market
• 3 Global Depository Receipt (GDR) listings on the Main Market
• 2 GDR listings on the Professional Securities Market (PSM)
• 84 companies quoted on AIM, the growth market
The LSE headquarters are in London and it has significant operations in Italy, France, North America and Sri Lanka and employs approximately 2,800 people.

londonstockexchange_logo
In its press release about a link-up with the Nigerian Stock Exchange, the London bourse says it offers partner securities exchanges and investors a broad range of international equity, bond and derivatives markets, including London Stock Exchange; Borsa Italiana; MTS, Europe’s leading fixed-income market; and the pan-European equities platform, Turquoise. Through its markets, the Group offers international business, and investors, unrivalled access to Europe’s capital markets.
Increasingly important are the post-trade and risk-management services including CC&G, the Rome headquartered central counterparty clearing house (CCP) and Monte Titoli, the significant European settlement business, selected as a first wave participant in the T2S (TARGET2-Securities) European settlement engine that aims to offer centralized delivery-versus-payment. The Group is also a majority owner of LCH.Clearnet, the leading multi-asset global CCP.
LSEG offers its customers an extensive range of real-time and reference data products, including SEDOL, UnaVista, Proquote and RNS. It owns FTSE which calculates thousands of unique indices that measure and benchmark markets and asset classes in more than 80 countries around the world. African exchanges have recently been taking strong interest in FTSE products that will help their visibility and data flows.
By purchasing Sri Lanka’s MillenniumIT trading, surveillance and post trade technology some years ago, the LSEG established itself as a leading developer of high performance trading platforms and capital markets software. According to the LSE press release over 40 other organizations and exchanges around the world use the Group’s technology, although smaller African such as the Dar es Salaam Stock Exchange are switching to other systems as reported on this blog, as Millennium IT’s focus changes.

Ethiopia’s $865m rail finance part of $15bn rail projects

China rolling stock for Ethiopia (photo from: www.tigraionline.com)

China rolling stock for Ethiopia (photo from: www.tigraionline.com)

The Ethiopian Government recently closed a $865 million financing package to fund part of the development of the country’s giant new railway infrastructure. One banker on the deal was reported by Reuters as saying: “This is a huge financing for Ethiopia, it is the first commercial deal of this size we have seen. Banks have a growing appetite for the Ethiopian market and we expect to see more deals like this.”

ERC is busy with 8 railway routes stretching 5,060 km, at a cost of $2m-$3m per kilometre. This includes rebuilding the Addis Ababa-Djibouti railway and lines heading north and south-west. A 36.5km mass transit railway is also being built in the capital, Addis Abeba.

The latest financing is split between a $450m commercial loan for 7 years, which includes a syndicate of lenders from Europe, Africa, the Middle East and the US, and pays 375 basis points over Libor. There is also a $415m 13-year loan backed by the Swedish Export Credit Guarantee Board (EKN) with Eksport Kredit Fonden (EKF) and Swiss Export Risk Insurance (SERV) export-credit agencies also included. The financing will be used to build the Awash-Weldia/Hara Gebeya Railway Project, one of the key railway corridors that will form part of the national railway network and connect northern and central parts of Ethiopia.

Turkey’s global rail company

Parastatal Ethiopian Railways Corporation (ERC) is undertaking the project construction, which will be built in the next 3 years. Turkey’s Yapi Merkezi Insaat ve Sanayi AS is the appointed contractor on the project and will design and construct the 389km railway line starting north east of Awash and going north through Kombolcha to Weldia under a 3-year $1.7bn project signed with ERC in Dec 2012. It will connect with the Addis Abeba-Djibouti line being built and with the Woldia/Hara Gebeya-Semera-Dicheto-Elidar project which will connect northern Ethiopia with Tajourah port in Djibouti, according to this report.

Credit Suisse acted as co-ordinating commercial facility arranger and export credit agency facility lead arranger. Some of the loans have already been disbursed. In addition, Deutsche Bank was the mandated lead arrangers for the EKF financing ($181m), ING Bank for the EKN financing ($83m) and KfW IPEX-Bank for SERV backed facilities ($151m).

In addition, Turk Eximbank provided a parallel financing of $300 million for the Turkish goods and services under the same project. Yapi Merkezi is a leading transportation infrastructure company and built the Dubai Metro Project, Casablanca tramline and Ankara-Konya high-speed rail line.

The financing has also been arranged under the OECD Common Approaches for Officially-Supported Export Credits and Environmental and Social Due Diligence which commit OECD countries to taking environmental and social impacts into account when granting officially supported export credits.

China’s $3bn finance to reach Djibouti

Export-Import Bank of China has pledged loans totalling $3bn to support Chinese railway construction companies on the 756km line from Addis to Djibouti, according to this in-depth overview of Ethiopian and Chinese relations. It runs parallel to the abandoned Imperial Railway Company of Ethiopia track built between 1894 and 1917. China will also provide most of the rolling stock, including locomotives worth millions, according to this story in Financial Times.

India to add $300m

In June 2013, India’s Exim Bank approved a $300m loan at 1.75% interest to finance a link from Asaita (670km from Addis) to Djibouti’s planned port at Tajourah. Debo Tunka, deputy CEO and head of infrastructure development at ERC reportedly said: “The new line will be very important for Ethiopia because it will give us an access to a second port and boost economic activities in the country,” The credit will be released once feasibility studies are done and contractors are still to be appointed. Tajourah will have a dedicated terminal for shipments from Allana Potash which is developing a $642m potash in northeast Ethiopia, according to Bloomberg.

Tanzania’s $10bn China-funded port will start in 2015

China is to build a huge new port and special economic zone in Tanzania worth at least $10 billion. Construction is due to start on 1 July 2015 as the country bids to rival Kenya’s Mombasa as transport hub for East Africa and is also investing in road, railways and major developments in commercial capital Dar es Salaam, 60 kilometres south.

Last Sunday, 26 Oct, the construction agreement for the port and associated 22,000 acres zone was signed in Shenzhen, southern China, with Tanzanian President as witness. According to a statement from the Office of the President, reported on Reuters: “The Tanzanian Government signed a memorandum of understanding with two major international institutions … to develop the Bagamoyo economic zone”.

It was signed with
• China Merchant Holding International (CMHI, based in Hong Kong) which claims to be “the largest public port operator in China and… leading… in the global port industry”. and
• State General Reserve Fund (SGRF) of Oman, the sultanate’s biggest sovereign wealth fund.

An earlier report on website Aid Data said the agreements also covered CMHI building railway infrastructure leading up to the port and the economic zone. Initial financing was $500m in 2013, supplied by Export-Import Bank of China.

Dar es Salaam harbour. Photo: Tom Minney

Dar es Salaam harbour. Photo: Tom Minney

A framework agreement between Tanzania and the Chinese port operator had been signed when Chinese President Xi Jinping visited Tanzania in March 2013, the first country on his African tour soon after his inauguration.

An official said it had taken time to set a start date for building work because of other negotiations about infrastructure to link the port to national transport networks. Li Jianhong, executive chairman of CMHI, asked Tanzania’s Government at the signing of the contract to remove obstacles that have delayed implementation. President Kikwete said in the statement: “We will do everything possible to ensure that this project takes off because it will bring enormous economic benefits to the entire country,” according to Reuters.

Separately, Tanzania and China on 24 Oct signed deals with Chinese firms worth more than $1.7 bn, including one to build a satellite city to ease congestion in Dar es Salaam, deepening Beijing’s ties with east Africa. China is financing a $1.2 bn natural-gas pipeline that will run 532 km and in 2011 China’s Sichuan Hongda Co Ltd signed a $3bn deal with Tanzania to mine coal and iron ore. The new port is expected to handle 20 times more cargo than the existing port at Dar es Salaam, according to Aid Data website. It will act as a hub for raw materials coming in and out neighbouring landlocked countries, as well as bringing Chinese manufactured goods into the region, according to this earlier investigative report.

The report also said there were questions after the new port was pushed through Parliament by the ruling party with little debate. Apparently Dar es Salaam port is underused and with enough capacity until 2016-2020 depending on traffic. Other ports such as Tanga in the North and Mtwara in the South are dormant. Bagamoyo is a historic town.

The Bagamoyo agreements include large container and vehicle facilities, combined with smaller scale dry bulk and multi-purpose terminals at Mwambani Bay. It plans to handle more than 20m containers per year and also includes construction of a standard-gauge railway link to the central corridor railway at Ruvu Station and an extended link with the TAZARA railway. A highway to link the port to the Uhuru Highway that goes to Zambia will also be built.

China will have control of the port for 40 years. It provides access to 8 countries as Tanzania borders Mozambique, Malawi, Zambia, DR Congo, Burundi, Rwanda, Uganda and Kenya, with cargo uptake as far as South Sudan, The Comoro islands, Madagascar and the Seychelles. Journalist Shermax Ngahemera writes: “For China, the leading exporter in the world, it is an ideal site… China is widely involved in extraction industry in central Africa, especially in Zambia, the DR Congo and Angola. Cargo to and from those countries can therefore easily be diverted to Bagamoyo. In 2013 trade between Africa and China reached more than $200bn.”

He dismisses claims that it could have military significance, quoting a senior retired Navy General pointing out that at 14metres it could not berth a submarine. He also quoted the African Development Bank which says transporting supplies in East Africa is more expensive than in any other region, due to inefficient operations at ports in the region, road checkpoints and border controls. Shipping to Tanzania is 25% more than shipping to the larger and more efficient ports in Southern Africa.

China built the TAZARA railway linking Tanzania and Zambia in the 1960s and 1970s.

There are more details on this blog.

Johannesburg Stock Exchange scores record with 395,969 equity trades in one day

Johannesburg Stock Exchange (credit: JSE)

Johannesburg Stock Exchange (credit: JSE)

The Johannesburg Stock Exchange (www.jse.co.za) equity market scored a record number of 395,969 securities trades on 16 October. The total value was just over R24.6 billion ($2.2 bn).

The previous record of one day’s trading on the JSE Equity Market was just under 300,000 trades on, but the average number of trades per day during 2014 is approximately 176,000 per day on the equity market.

Leanne Parsons: Director Trading and Market Services at the JSE, says in a press release that the JSE’s trading systems handled the large number of transactions without any difficulty: “Records like this show that the JSE continues to provide a stable, credible and world class trading platform as well as access to a very liquid market with deep pools of capital.”

The JSE offers a fully electronic, efficient and secure market and is the world’s best-regulated exchange. It has world-class trading and clearing systems, settlement assurance and risk management. It has been a marketplace for trading financial products for 125 years, connecting buyers and sellers in equity, derivative and debt markets and is in the world top 20 exchanges for market capitalisation and a member of the World Federation of Exchanges (WFE).

Total Senegal offers shares in IPO until 7 Nov for BRVM listing

BRVM in Abidjan (photo: AfricanCapitalMarketsNews.com)

BRVM in Abidjan (photo: AfricanCapitalMarketsNews.com)

Total Senegal is bringing the first initial public offer (IPO) of shares to the growing Abidjan-based Bourse Regionale des Valeurs Mobilieres (BRVM) since 2010, with shares on sale until November. Parent company Total Outre-Mer is selling 8.9% of the shares in the oil products company , in a share offer that began 8 Oct and closes 7 Nov.
Reuters quotes Odile Sene Kantoussan, chief executive of brokerage company CGF Bourse, based in Dakar, saying: “This operation … consists of the divestment of 290,000 shares held by Total Outre-Mer in Total Senegal’s capital..The shares will be listed on the (BRVM) alongside 22% of the capital representing the stake of minority shareholders, bringing the floating capital on the Bourse to 30.9%. ” The ordinary shares each cost XOF 12,000 (CFA franc) equivalent to USD 23.19, with a minimum subscription of 5 shares, according to this announcement by Compagnie de Gestion Financière (CGF Bourse), which is sponsoring broker and Société de Gestion Intermédiation (SGI) in a syndicate of 20 brokers placing the shares. Initial priority is giving to investors in Senegal before extending across the CFA zone. The shares have XOF 1,000 nominal value according to the information memorandum available here. The transaction value is XOF 3.48 billion ($6.7million).
Total has already listed its Ivory Coast subsidiary among the 37 companies listed on the BRVM which trades securities from 8 nations across the West African region.
According to another news report by Agence Ecofin, Gabriel Fal, Chairman of the BRVM and Edoh Kossi Amenounve, CEO, hosted a ceremony for the offering on 10 Oct. It reports that the BRVM’s market capitalization has soared past XOF6 trillion ($11bn) driven by demand for Sonatel – the previous Senegalese listing in 1998 – and capital increases by subsidiaries of Bank of Africa group.

Gabriel Fal, Chairman of the BRVM (photo: BRVM)

Gabriel Fal, Chairman of the BRVM (photo: BRVM)


In April Fal was reported to forecast other potential BRVM listings could include Ivorian banks, Banque Internationale pour l’Afrique de l’Ouest en Cote d’Ivoire and Societe Ivoirienne de Banque, 51% owned by Morocco’s Attijariwafa Bank, as well as Matforce, a Senegalese company which provides energy equipment, an insurance company based in Dakar and a Canadian gold mining company operating in Cote d’Ivoire.
After the sale and listing, Total Outre-Mer will own 23.1% and Total Africa Limited will own 46%.
See the CGF Bourse website for details on the share offer.