BRVM investment open days – 14 March Johannesburg

BRVM in Abidjan (photo Tom Minney African Capital Markets News)

One of the world’s most successful regional stock exchanges, linking eight West African countries with a stable currency and fast growth, will come to South Africa to outline investment opportunities. The Bourse Régionale des Valeurs Mobilières (BRVM), headquartered in investment destination Côte d’Ivoire, will meet South African fund managers and market experts on March 14 at “BRVM Investment Days in Johannesburg”. This exclusive investor forum is part of a global 2018 BRVM roadshow.

Edoh Kossi Amenounve, CEO of the BRVM, will outline strategic developments on the exchange, including: investor-friendly trading and disclosure, working with London and Casablanca stock exchanges to boost growth companies in the region, and a board for mining companies after big discoveries in the region.

Other speakers are:
• Dominic Bruynseels, Regional CEO West Africa for Standard Bank, which sees the potential for growth in the West African Economic and Monetary Union (WAEMU) region and opened its first branch in Côte d’Ivoire in August 2017
• Samira Mensah, Associate Director of Standard & Poor’s Global Ratings, with an overview of banks in the region as well as fixed income and other securities
• Michael Barnes, Head of Sales and Trading at stockbroker African Alliance, one of the leading South African stockbrokers for trading on the BRVM exchange.

The speakers will share insights on the economies – the IMF forecasts growth at 6.5% or 6.6% a year across the region until 2021 – and on sectors, shares and key investment themes. It is a unique opportunity for South African institutions to learn more about the potential of Africa as regional links become stronger.

WAEMU combines eight West African countries with a population of 110 million: Benin, Burkina Faso, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal and Togo. WAEMU shares a single currency, the CFA franc, which is linked to the value of the euro (EUR), and a single central bank and capital markets regulator.

Mr Amenounve says: “South African investors are taking increasing interest in the opportunities in Africa as the world’s long-term growth story. The West African region offers fast, diversified growth and interesting lessons on regional development and economic linkages. In our countries, demographics, development, technology and increasing productivity all offer opportunities and the regulated exchange market offers liquidity and support to investors.”

The BRVM has 45 listed companies and is Africa’s sixth biggest exchange in terms of market capitalization with $12.5 billion in shares listed at end December 2017, plus 32 government and corporate bonds and five sukuk. To register online, please visit

Contact person for all event-related questions: Ms. Aziza Albou Traore Tel: +1 646 3772178
For any event-related or media enquiries, please contact: Ms. Glynis Loizeau: Tel: +33-6-83-48-75-85

This event is organized by AZ Media Agency
Twitter @BRVM_UEMOA #BRVMInvestmentDays

African Economic Outlook 2018 flagship report is released

“African economies have been resilient and gaining momentum. Real output growth is estimated to have increased 3.6% in 2017 and to accelerate to 4.1% in 2018 and 2019″ says Akinwumi A. Adesina, President of the African Development Bank Group. “Overall, the recovery of growth has been faster than envisaged, especially among non-resource–intensive economies.”

The latest edition of African Economic Outlook 2018 was released yesterday, and contains a lot of excellent analysis and short- to medium-term forecasts on the evolution of key macroeconomic indicators for all 54 regional member countries.

The staff economists of African Development Bank present their analyses of African economic development during the previous year and near term, and on the state of socioeconomic challenges and progress made in each country.

According to Adesina, global institutional investors and commercial banks manage more than $100 trillion in assets and for some of that they search for high returns, some of which could support African investments. Key challenges for Africa are managing the demographics, with a fast-growing young population, by creating more jobs and reducing poverty. Policy-makers can create structural transformation and economic diversification by deeper investment in agriculture and developing agricultural value chains to spur modern manufacturing and services.

Top priority is a shift to growth that absorbs labour; another to invest in human capital, particularly in entrepreneurial skills of youth, to facilitate transition to high-productivity modern businesses. Macroeconomic policy should be prudent and aim to ensure external competitiveness, blending exchange-rate flexibility, mobilizing domestic revenues including tax, and judiciously managing demand and rationalizing public spending.

Infrastructure need soars to $130-170bn a year

The year’s theme is infrastructure. The Bank says that new research shows that Africa’s infrastructure requirements are $130–$170 billion a year, much higher than the long-accepted figure of $93bn a year. According to Adesina: “African countries do not need to solve all their infrastructure problems before they can sustain inclusive growth. They should focus on how best to use their scarce infrastructure budgets to achieve the highest economic and social returns.

“Infrastructure projects are among the most profitable investments any society can make. When productive, they contribute to and sustain a country’s economic growth. They thus provide the financial resources to do everything else.

Changes to 2018 AEO

The report is great reference material for researchers, investors, civil-society organizations, development partners and many others. The African Development Bank has made some changes, to make this key document even more useful:
1. Earlier release date – mid-January each year – so that the Bank, as a leading African institution, will be among the first to provide headline numbers on Africa’s macroeconomic performance and outlook.
2. To boost advocacy and dialogue, the 2018 AEO is being shortened to 4 chapters and 54 country notes in about 175 pages, down from more than 300 pages in previous years.
3. Regional economic outlooks for Africa’s five subregions. These self-contained, independent reports focus on priority areas of concern for each subregion and provide analysis of the economic and social landscape. They also highlight issues of pressing current interest.

The chapters of the report cover 1: Macroeconomic performance and prospects; 2: Growth, jobs and poverty in Africa; 3: Africa’s infrastructure, great potential but little impact on inclusive growth; 4: Financing Africa’s infrastructure, new strategies, mechanisms and instruments. Boxes include China’s 3 lessons for Africa, the Africa50 Infrastructure Fund, PPP dos and donts. Tables include real and per capita GDP growth 2009-2019.

Download your copy in English, French or Portuguese here

Africa’s top stock exchange performance in 2017

Despite a great year on the main US markets in 2017, many African stock exchanges offered USD investors a higher return. Biggest gain in USD was the Malawi Stock Exchange index, which climbed by 56.0%. It was among 6 African exchanges that outperformed the tech-heavy Nasdaq, which scored a strong 28.2% gain in 2017.
Other leading African stock exchange indices included Ghana, up 43.8%, Uganda up 30.7%, Mauritius 29.9% and South Africa JSE All Share up 29.7%.
The Zimbabwe Stock Exchange Industrial Index climbed 124.2%. However, most analysts rebase the market using the Old Mutual Implied Rate (OMIR), comparing the price of Old Mutual shares listed on the Zimbabwe Stock Exchange with the same shares on the London Stock Exchange to act as an inflation adjustor, since local dollar values do not reflect international dollar values. On the OMIR basis, the ZSE still gained a creditable 28.5%.
Other leading African markets such as Nigeria (Main Board index up 25.4%, but still to gain its previous highs of April 2014 and 2008) and Egypt’s EGX 30 (up 24.1%) also delighted investors.

Source – index data from Bloomberg and stock exchange websites compiled by Securities Africa

Stockbroker Securities Africa ( shed light on which of the major counters helped drive 2017 index performance:
• Botswana: Botswana Insurance Holdings Ltd (+14.2%), Barclays Bank of Botswana (+31.1%) and Choppies Enterprises (+9.0%) led the gains in the major names in Botswana.
• BRVM: Whilst Sonatel closed the year 11.29% higher, Ecobank Transnational Inc closed 17.8% lower in USD terms. The currency was also weaker (-10.44%) for the year, contributing to the decline in the USD value of the Index. This was the only Index that closed in negative territory in 2017.
• Egypt: Eastern Tobacco was the stand-out performer, closing the year up 229.3% in 2017.
• Ghana: Standard Chartered Bank was the main driver behind the GSE performance in 2017, gaining 95.7% in USD terms.
• Kenya: Telecom giant Safaricom closed the year 40.2% higher taking responsibility for a large part of the index performance.
• Malawi: Illovo Sugar (+50.4%) and Telekom Networks Malawi (+110.2%) were the two major movers in 2017 in USD.
• Mauritius: Heavyweights MCB Group and SBM Holdings gained 35.5% and 20.5% respectively.
• Morocco: The two banks, Attijariwafa Bank (+28.5%) and Banque Central Populaire (+14.3%) were the big name gainers in Morocco.
• Namibia: Namibia Breweries was the major contributor to the strong local index performance as it gained 55.1%.
• Nigeria: Dangcem (+15.4%), Nestle (+67.7%), Guaranty (+48.2%), Zenith (+55.4%) and Stanbic (+130.9%) contributed to a strong index performance in 2017.
• Rwanda: Bank of Kigali gained 26.7% to help the index close in the positive band.
• S. Africa: Naspers and Glencore led the big name gainers finishing the year 88.8% and 49.3% higher in USD terms.
• Tanzania: Tanzania Breweries and Tanzania Cigarette were the major name strong performers, gaining 20.2% and 52.6% respectively.
• Tunisia: Banque Internationale Arabe de Tunisie closed 31.4% higher and Attijari Bank followed suit, gaining 26.6%.
• Uganda: Stanbic Uganda (+9.9%) and Jubilee Holdings (+17.3%) were the major names that helped the index gain significantly during the period.
• Zambia: Standard Chartered Bank (+58.5%), Zambian Breweries (+13.0%) and Copperbelt Energy (+64.5%) were the major drivers behind the Lusaka Stock Exchanges performance.
• Zimbabwe: Using the Old Mutual Implied rate, the market closed 28.5% higher for 2017. The two major names in Zimbabwe, Delta and Econet, were up 77.8% (17.8% OMIR) and 216.7% (49.7% OMIR) respectively. British American Tobacco which closed the year 136.1% (31.2% OMIR) higher was also one of the best performing names.

Highest ranked African securities exchange websites

Which African stock exchange website gets the most traffic? According to, a respected benchmark of web traffic, in rankings today (9 January) the Nigerian Stock Exchange website ( was ranked #83,112 busiest website in the world and #826 website in Nigeria. It has great user engagement, with 3.1 page-views per visitor and each visitor spends an average of 5 minutes 39 seconds on the site.

The next busiest African securities exchanges websites were Egyptian Exchange (, climbing to rank #124,904), South Africa’s JSE (, #157,543), on a slow decline since June 2017 but also good user engagement, West Africa’s regional BRVM exchange (, ranking climbing recently to #219,284) covering eight markets and Nairobi Securities Exchange ( with ranking of #297,989.

(photo credit Nigerian Stock Exchange)

Last month in a press release from the Nigerian bourse Olumide Orojimi, Head, Corporate Communications, NSE, said: “We are delighted to see this increase in traffic to our website as it means that we are making the Nigerian capital market easily accessible to investors who are increasingly residing online.

“At the NSE, we are committed to bridging the information gap between the Exchange and market participants, knowing the high correlation between market information (stock market prices, market data, corporate actions and news) and decision making. We are glad our website is also helping us to achieve this.

The NSE has upgraded its website to be more friendly to users with mobile phones and tablets, and has boosted content and improved layout and navigation. Orojimi says: “The revamp was fuelled by feedback from users that wanted certain high demand pages easier to navigate and some key changes implemented. For example, using analytics from visits and usage of our website, we added filter functionality to the corporate disclosure page to enable users browse through results filed by listed companies easily. Our online visitors can now experience a more vibrant and seamless view of our offerings”.

Happy New Year 2018 to our readers

Best wishes to all the readers of African Capital Markets News for 2018. May the year be happy, busy, successful and prosperous for Africa’s securities exchanges, stockbrokers, investment bankers, private equity practitioners and professionals and all those developing the impact investing and financial inclusion space.
We have updated our 2018 listing of conferences, see conferences and events page. Kindly let us know of any events we are missing or should be added.

African issuers raise $1.4bn in IPO share offers in 2017

African share issuers have raised $1,379 million ($1.4bn) in 2017 through initial public offers (IPOs) of shares, compared to $1,154m ($1.2bn) in 2016, the second year of increase. However, the number of domestic African IPOs was down to 7, compared to 15 in 2016. The number of cross-border IPOs in Africa was 2 in each year.

The research was released today (15 December) in the latest Global Cross-Border Index from law firm Baker McKenzie. African issuers raised a total of 19.5% more capital in 2017 through IPOs was up 19.5% on 2016. Worldwide, issuers have increased IPO activity by 44% to $206.6bn and there were 1,694 new listings, up 31%.

Swiss issuers accounted for both cross-border IPOS in Africa in 2017. Aspire Global Plc listed on the Nasdaq First North Exchange, raising $38.96m, and Rainbow Rare Earths Ltd raised $8.22m when it listed on the London Stock Exchange. The total they raised was $47m, compared to $246m raised through cross-border IPOs in 2016.

Wildu du Plessis, Partner and Head of Africa at Baker McKenzie in Johannesburg, commented in a press release: “Africa’s uneven FDI (foreign direct investment) picture reflects the global uncertainty, but local challenges aggravate the unevenness.

“IPO activity is highly dependent on political and economic instability, particularly in the key markets of South Africa, Kenya, and Nigeria. In 2016, more FDI flowed to the hub economies, with new East and West Africa clusters emerging. This trend also dominated in 2017, and while South Africa has the most attractive exchange for issuances, the new clusters are shaping up to drive the IPO landscape going forward.”

“African economies have also engaged in repricing. The most tangible manifestation of this repricing has been rapid fall in some currencies as export revenues slid. This has created shortages of foreign exchange. The currency slide, has in turn, led to an increase in consumer prices, which impacted the retail, logistics, and other consumer-oriented sectors. Currency falls, however, can also create longer-term opportunities, because assets become cheaper,” he said.

Du Plessis added that he expected in coming years that more governments across Africa will privatize state-owned entities through listings, this would boost development of regulatory frameworks. In turn this will inspire market confidence in African bourses. Privatizations can be partial or full.

“In addition, removing barriers to cross-border investments through regional integration, would harmonize regulations and increase cross-border investments. This would provide more choices of financial products for investors in future,” he noted.

Global IPOs

According to Baker McKenzie, worldwide IPO volumes in 2017 reached the highest level since 2007. Momentum built through the year with an acceleration in both volume and value of capital raised in the second half. In total, 1,694 companies raised $206.6bn from IPOs, a jump of around a third in both value and volume on 2016. Both cross-border and domestic activity grew.

Cross-border deals jumped by 60% in volume, growing in all regions, including Latin America, which saw its first cross-border listing in 10 years. However, growth in cross-border capital was once again outpaced by growth in domestic capital raising, which rose 55% in value. This led to a slight decline in Baker McKenzie’s Global Cross-Border Index.

Koen Vanhaerents, Global Head of Capital Markets at Baker McKenzie, commented: “The IPO market in 2017 has put in its best performance in 10 years. A more stable political environment in some of the key markets, combined with strong economic growth, has boosted both the number of listings and the volume of capital raised.”

“With key risks to the global economic outlook easing, we expect IPOs to hit a new post-financial crisis high in 2018,” he added. “We recently forecast that domestic IPO activity will continue to rise, to a peak of over $220bn in 2018.”

About: “Baker McKenzie helps clients overcome the challenges of competing in the global economy. We solve complex legal problems across borders and practice areas. Our unique culture, developed over 65 years, enables our 13,000 people to understand local markets and navigate multiple jurisdictions, working together as trusted colleagues and friends to instil confidence in our clients (

London Stock Exchange – blue blood in the City after shoot out

“Quentin Tarantino couldn’t have written it better. After weeks of everyone at the London Stock Exchange pointing guns at each other, Reservoir Dogs-style, on Wednesday they all pulled the trigger.

“The final scene: Xavier Rolet takes one to the head, Donald Brydon reels from a gutshot, hedge funder Sir Chris Hohn makes a break for it, only to meet a hail of bullets offstage.

“A gory, unedifying, end to a film that, though being great box office, leaves all the cast bloodied.

“Rolet looks truculent in the extreme. Despite his “what, me?” statement today condemning the “unwelcome publicity” around his departure, it’s hard to believe he couldn’t have stopped all this weeks ago by having a quiet word with Hohn — through intermediaries if the gagging order on him prevented direct contact.

“Clearly, and understandably, he was miffed about getting the boot. But by letting the row run for so long, he has self-immolated a successful next career in City chairmanships. Who would hire him now? The manner of his ending will overshadow his extraordinary achievements turning the LSE around.”

This is columnist Jim Armitage in yesterday’s Evening Standard in London.

“This whole film would be fun were it not for the fact that the LSE is weakened just as it needs to be at its strongest.

“The Stock Exchange is about as essential to the City’s future financial dominance as you can get, and with Brexit coming, it has rarely been so challenged by EU rivals.

“The only character to emerge with reputation enhanced, is Mark Carney. Back in the day, the Governor of the Bank of England could order companies into line with a raise of the eyebrow. Carney lifted his beetle brow yesterday, declaring himself “mystified” by the whole affair. Within 24 hours, the squabble was over.”

The announcement from the London Stock Exchange Group came yesterday. Xavier Rolet said in the statement: “Since the announcement of my future departure on 19 October, ‎there has been a great deal of unwelcome publicity, which has not been helpful to the Company. At the request of the Board, I have agreed to step down as CEO with immediate effect. I will not be returning to the office of CEO or director under any circumstances. I am proud of what we have achieved during the past eight and a half years.”

CFO David Warren took over on £700,000 salary as interim, after 5 years at LSE and previously 9 years as CFO at NASDAQ. The Chairman of the Board, Donald Brydon, announced he would not seek a new term at the London Stock Exchange Group AGM in 2019.

Brydon paid tribute to “Xavier’s immense – indeed transformative – contribution to the business.” According to one newspaper report in City AM, over 9 years: “Rolet is widely acknowledged to have driven the LSE from a declining, if venerable, City stalwart to a major player on the international scene through acquisitions”,

The Financial Times has a great article on the drama including charts of LSE mergers and acquisitions in the top rank of world stock exchanges since 2005, and changes in the LSE share price compared to that of other exchanges.

The row started on 19 October when it was announced that the Board was looking for a successor for Rolet to leave by the end of December 2018 . That follows Rolet saying he would leave if a $13.8bn merger with Deutche Börse did not succeed – it was blocked by regulators – but then saying he would stay indefinitely. Activist shareholder Sir Chris Hohn of the Children’s Investment Fund (TCI) called for a shareholder meeting to discuss the dismissal in view of Rolet’s excellent track record.

Commentators did not dispute the track record, where Rolet transformed the institution which is at the heart of the City of London’s standing. On 4 Nov, columnist Anthony Hilton wrote this insightful defence of corporate governance and the foolhardiness of overruling the authority of the Board. “The chief executive is accountable to the board, and the board has a duty to tell him or her when it is time to go. What makes it so tough is that the problem invariably lies not with poor-quality bosses, who are relatively easy to show the door; the challenge is reining in those who have done well, those who have shown the vision and skill to move the business to a new and altogether higher level and who have in the process built a significant fan club. But it needs to be done. A major reason why good companies fail is that boards fail to exercise proper control over a successful leader who evolves into an over-mighty chief executive, and are then powerless when he overreaches himself. The danger is hubris.”

According to the FT the row is not yet over. It says the share price of LSE is down 2% since the October announcement, while that of Deutsche Börse is up more than 12%. Hong Kong Exchanges and Clearing is the other big winner, up nearly 8&, followed by CME (over 6%). The LSE share price has had a great run under Rolet.

Rolet is on “gardening leave” for the next 12 months on his £800,000 salary, although he tweeted yesterday morning “I doubt if my wife would tolerate me meddling with her vineyard although I do sample the product every now and then”. According to the news his total payout including annual bonus, deferred bonuses and long-term incentives could be up to £13m.

Former London Stock Exchange Group CEO Xavier Rolet is on gardening leave. (Photo: Anne-Christine Poujoulat/AFP/Getty Images)

On 28 Nov, Bank of England Governor Mark Carney, said he was “mystified by the debate” but called for “clarity… as soon as possible”. According to City AM newspaper he said: “I can’t envision a circumstance where the CEO [chief executive] stays on beyond the agreed period.”

The Bank, which regulates the London Stock Exchange as owner of LCH (clearing house) had been informed of the LSE’s plans to appoint a new head before Rolet publicly announced his retirement in October, and has been kept updated on progress, Carney said.

Carney hailed Rolet’s “extraordinary contribution” to the LSE.

Xavier Rolet and Donald Brydon in 2013 (photo Royal Mail Group/Getty Images).

How big are African pension funds?

Here are selected findings from a recent hunt through the Internet:

According to a recent report by PricewaterhouseCoopers, “Africa Asset Management 2020” (get your copy here) total assets under management in 12 selected Africa countries were $293 billion in 2008, more than doubling to $634bn by 2014. They are forecast at $1.1 trillion in 2020. (The 12 countries are: South Africa, Morocco, Mauritius, Namibia; Egypt, Kenya, Botswana, Ghana, Nigeria; Angola, Algeria, Tunisia).

Pensions are increasingly important as many countries set up and grow pension schemes. Mauritius and Ghana are examples of countries with 3-pillar pension systems and some countries are starting to revise their regulations to allow pension funds to invest more widely than just into domestic bonds, money market and equities

How big are the funds and are do they invest in infrastructure?

The giant African pension fund is South Africa’s Government Employees Pension Fund (GEPF), which had an investment portfolio of ZAR1.67trn ($124bn) at 31 March 2017 while accumulated funds and reserves grew at 10.2% a year for the last decade, according to the latest annual report.

The fund has 14 direct investments in 904MW of renewable energy including Bokpoort (50MW concentrating solar power CSP), wind and the 175MW photovoltaic (PV) Solar Capital Plant. GEPF has also backed 646 housing projects and unlisted investments include ZAR3.9bn ($290m) into the Pan African Infrastructure Development Fund run by Harith General Partners, ZAR2.4bn into South Africa’s airports and ZAR996m in telco MTN Nigeria, with a total of 1.2% of assets in infrastructure including roads and power in South Africa and across Africa.

Next-door Namibia has 2.5m people and David Nuyoma, CEO of the Government Institutions Pension Fund (GIPF) told a workshop in October 2017 its total assets were N$105bn ($7.9bn), 64% of the nation’s gross domestic product. Its unlisted portfolio includes residential, tourism and commercial developments, solar power and an infrastructure fund run by Old Mutual.

Botswana Public Officers Pension Fund has assets under management of BWP54.6bn ($2.6bn), including BWP11m invested with Harith.

Other markets are growing fast. In September 2017, Nigeria’s Pencom put pension fund assets at NGN7.16trn (down to $20.1bn after currency falls) of which NGN5.2bn was in infrastructure funds and NGN221.5bn in real estate including real-estate investment trusts (REITS). Earlier the industry had been growing by 30% a year from 2008-2015. There are 2015 regulations governing investment into infrastructure, and fund managers Asset and Resource Management Company and Harith General Partners, based in South Africa, have teamed up to create a $250m infrastructure fund for West Africa that meets the requirements.


Source: PricewaterhouseCoopers

In December 2016, Kenya’s Retirement Benefits Authority then CEO Edward Odundo said the industry would be KES1trn ($9.8bn) by the end of that month. The regulator is investigating structures for pensions and other funds to invest in road Government-led infrastructure such as Nairobi-Nakuru-Mau Summit superhighway (report in Nation newspaper)

Investments of social security schemes in Tanzania were TZS7.8trn ($3.6bn) in June 2015 and had grown 17% in the year, according to the Social Security Regulatory Authority (SSRA). The National Social Security Fund invested for 60% of the $140m Kigamboni toll bridge (Government has 40%).

Social Security and National Investment Trust (SSNIT) in Ghana, has assets GHS8.8bn ($2.0bn) and is invested in power projects, housing, health and other infrastructure in support of Government initiatives.


(Figures from author’s Internet research of annual reports of regulators and funds or recent news updates)

African pensions and infrastructure investment – recent research

Learning from Latin America
The challenge to create structures so that pension funds can invest in local infrastructure projects and help develop the capital markets has led to some innovative ideas across Latin America. There are lessons for African regulators of pensions and social security as well as for those promoting public-private partnerships for a full range of African infrastructure, including roads, bridges, telecoms, hospitals and house. Here are a couple of examples (from a 2017 World Bank paper by Fiona Stewart, Romain Despalins and Inna Remizova).

Mexico’s CKDs (Certificados de Capital de Desarrollo) securities are traded on the Mexican Stock Exchange (Mexican Bolsa/BMV) and were created in July 2009 with the mandatory pension funds (Siefores) as their key source of capital. CKDs are designed to boost infrastructure projects from ports to electricity and water, and real estate amounted to 30% of the total since 2009. Regulator CONSAR has deregulated investment restrictions for Siefores in stages to allow them to invest into private equity, real estate and infrastructure projects through CKDs.

Peruvian funds have created trust structures to allow pension funds to invest in infrastructure projects. The World Bank has helped Columbia develop infrastructure debt funds which pension funds can invest into.


Excellent recent research

Several excellent papers have been published this year. Here are some of them, with links to their sources.

  • Maurer, Klaus (April 2017). “Mobilization of of Long-term Savings for Infrastructure Financing in Africa”. Study prepared for Germany’s Study prepared for Federal Ministry for Economic Cooperation and Development (BMZ). Bonn. Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ) GmbH, available here. Sources include 2 articles on this blog in Feb 2017 and in Mar 2015!
  • PricewaterhouseCoopers (2017). “Africa Asset Management 2020”. PwC. Download here.
  • RisCura (current). Bright Africa. Cape Town. RisCura. The report was published in 2015 but the website is interactive and updated, check out the excellent information and stats here.
  • Stewart, Fiona, Romain Despalins and Inna Remizova (July 2017). “Pension Funds, Capital Markets, and the Power of Diversification”. Policy Research Working Paper. Washington, DC. World Bank Group. Download via here.
  • Sy Amadou (Mar 2017). “Leveraging African Pension Funds for Financing Infrastructure Development”. Washington, DC. African Growth Initiative of The Brookings Institution with NEPAD and the United Nations Office of the Special Advisor on Africa (OSAA). Available from Brookings.

Another good resource is African Development Bank’s Making Finance Work For Africa (MFW4A).

Tanzania’s Kigamboni Bridge, an investment by NSSF (Credit Nairobi Wire)

Innovative African IPO and listing successes show strong demand

Here is a round-up of recent initial public offers (IPOs) and other listings of shares on African Stock Exchanges, many of them over-subscribed. Namibia has scored its first listing of a special purpose acquisition company (SPAC), while Mauritius is the home for an innovative listing of Afreximbank GDRs and of 2 primary listings on the Johannesburg Stock Exchange.

Namibia: Nimbus Infrastructure Limited is first SPAC vehicle
Nimbus Infrastructure Limited listed on the Namibian Stock Exchange (NSX) via private placement and started trading on 6 October. It raised more than N$100 million ($7m) from local investment institutions and retail investors. It aims to invest into information, computer and telecommunications (ICT) projects and institutions in sub-Saharan Africa.

It is Namibia’s first listed capital pool company (CPC). This is a type of company, also known as a special purpose acquisition company (SPAC), is most popular in the USA or Canada and South Africa’s Johannesburg Stock Exchange (JSE) has listed several SPACs.

The company has no commercial operations or assets, except cash. It uses its cash to evaluate promising investments and once it has invested in a viable business, usually within a set timeframe, it continues to operate as a conventional listed company. The funds are kept in an escrow account and are released on approval by shareholders or in line with a pre-approved spending budget, according to the company website. It must also comply with the Corporate Governance Code for Namibia (NamCode).

The private placement was open from 15-29 September. The listing of Nimbus was a joint initiative between Cirrus Capital, Paratus Namibia and Cronje and Company.

According to the company, it “is currently looking at a number of potential transactions and as per the stock exchange rules, aims to take these transactions forward for shareholder approval before the end of the year.” Nimbuas has signed a management agreement with Paratus.

According to an NSX statement, reported in Namibian Economist: “The Nimbus listing boasts exciting opportunities for Namibia, as not only does it focus on the fast-growing ICT sector across the continent, but in so doing, it offers a strong diversification opportunity for the funds of institutions and individuals alike, allowing diversified jurisdiction, currency and sector returns for investors. Further to this, as Namibia’s first CPC, Nimbus represents an opportunity to prove a new concept that will likely form a critical part of the future development of the Namibian real and financial sectors”.

Côte d’Ivoire: Ecobank Cote d’Ivoire
Ecobank Cote d’Ivoire launched a share offer on 27 September and closed it the same day as it was already twice oversubscribed. The IPO was to sell 20.44% of the bank’s shareholding in the form of 2,250,000 shares at XOF20,000 per share, raising XOF45bn (USD79.5m).

The bank is set to list on the Bourse Régionale des Valeurs Mobilières (BRVM) in December, where it will join parent company Ecobank Transnational Incorporated (ETI), a leading share on the BRVM, the Nigerian Stock Exchang and the Ghana Stock Exchanghe.

The offer, organized by stockbrokers EDC Investment Corporation and Hudson & Cie had been scheduled to run from 22 September to 11 October. It was 2.2x oversubscribed on the first day.

According to Enko Capital “Ecobank Cote d’Ivoire was created in 1989 following the acquisition of Chase Manhattan Bank. The bank has since expanded to become the third largest lender in Ivory Coast with a market share of 10.5% in terms of loans and 11.7% in terms of deposits and employs 648 people across 53 branches holding 274,018 accounts.

“Prior to the IPO, ETI held a 94.26% stake in Ecobank Cote d’Ivoire and this will reduce to 75% post listing. ETI was founded in Togo in 1985 and currently has a presence in 36 African countries. The banking group is listed on three exchanges in Africa.. Its stock is owned by more than 600,000 shareholders and the group employs over 17,000 people across 1,200 branches and offices. Ecobank Cote d’Ivoire is the third largest contributor to ETI’s group revenue after Ecobank Nigeria and Ecobank Ghana.”

Namibia: Letshego Holdings
Letshego Holdings Namibia had to extend its IPO by 4 days to 26 September and drop its offer price from NAD4.70 to NAD3.80 per share, according to Enko Capital: “The main purpose of the IPO was to satisfy the Bank of Namibia’s conditions for granting a banking license to Letshego Bank Namibia in 2016 which require a minimum 45% local ownership within a four year period.”

Letshego listed on 28 September on the Namibian Stock Exchange (NSX)with a market capitlaization of NAD1.9 billion, according to a report in New Era and a press release.

Finance Minister Calle Schlettwein did not have a warm view of capital markets as he celebrated the listing: “’With this listing Letshego has taken a dive into the shark pool, but this is a well-prepared dive that you were truly prepared for”.

Over 3,600 qualifying applications were received during the 4-week offer, with individuals and non-institutional investors making up NAD40m of the total NAD180m raised.

NSX CEO Tiaan Bazuin said: “I am extremely pleased with the successful listing of Letshego. There has been a lot of talk about localization in the Namibian market and this listing shows the best way, in my mind, to achieve this goal.”

Letshego Namibia is an offshoot of Letshego Holdings Limited, listed on the Botswana Stock Exchange, which has reduced its holding from 85% to 79%. Letshego Bank Namibia has had a full licence since July 2016, and is a 100% subsidiary of Letshego Holdings Namibia. Its origin in 2002 was as Edu Loan Namibia, making salary loans, and in 2008 Letshego bought majority shareholding.

Mauritius – Afeximbank global depositary receipts
African Export-Import Bank (Afreximbank), headquartered in Egypt, raised more than its $100m minimum target after selling global depositary receipts (GDRs) backed by its Class D shares. The GDRs listed on the Stock Exchange of Mauritius was on 4 October. The minimum investment for the offer was $30,000 and it closed on 22 September.

Afreximbank is a supranational trade finance bank established in October 1993. Class A shareholders consist of African States, African central banks and African public institutions; Class B shareholders are African financial institutions and African private investors; Class C shareholders are non-African investors, such as international banks and export credit agencies; while Class D shareholders can be any investors.

South Africa: African Rainbow Capital Investments
This newly formed company listed on the main board of the Johannesburg Stock Exchange on 7 September, the 12th listing to date in 2017. It raised ZAR4.0bn ($282m) and brought the total capital raised on the JSE in the year to date to ZAR76bn ($54bn), according to this JSE press release.

ARC Investments is a capital raising and investment entity incorporated in Mauritius which will offer shareholders the opportunity to invest in a permanently broad-based black controlled investment entity holding a diversified portfolio of investments. The initial investment portfolio held by ARC Investments will be seeded by African Rainbow Capital Proprietary Limited (ARC), which will remain the majority shareholder in ARC Investments.

Shareholders invest alongside ARC in the initial portfolio of 16 investments in financial services including: Alexander Forbes Limited, Alexander Forbes Group Limited, Indwe Broker Holdings, Senayo Securities and Santam and and 17 non-financial services including investments in agriculture and food production, building and construction, energy, information technology and telecommunications, investment holding companies and real estate businesses. Its most significant investment is a 20% interest in Multisource Telecoms Proprietary Limited, currently trading as Rain. According to Reuters, ARC Investments is valued at ZAR8.5bn, and has 3 cornerstone investors including Singapore’s GIC Pte Ltd, the Public Investment Corporation and Sanlam Private Wealth.

ARC is a majority black-owned investment holding company which seeks to utilize its empowerment credentials, strong balance sheet and the track record of its leadership and brand to invest in financial services distribution businesses. ARC is wholly owned by Ubuntu-Botho Investments (UBI), which was created in 2003.

Patrice Motsepe, Chairman of both Ubuntu Botho Investments and ARC, said: “the listing of ARC Investments on the JSE is a major step towards realising one of the key objectives of ARC, namely to build a world class broad- based black – controlled investment entity for all South Africans.”

Nemer says the JSE is equally proud to help ARC Investments facilitate its goal of providing investment exposure for the public to B-BBEE assets, which are often only held privately.

South Africa – Steinhoff Africa Retail (STAR)

Holding company Steinhoff Africa Retail (STAR) successfully raised ZAR15.38bn (USD1.08bn) after placing 750,000,000 shares at ZAR20.50 each between 4 and 14 September. It listed on the JSE on 20 September.

It brings public shareholding to 21.7% of STAR, which was formed as part of the restructuring of the Steinhoff Group, and Steinhoff International holds 78.3%. The group has 4,808 stores in Angola, Botswana, Lesotho, Mozambique, Malawi, Namibia, Nigeria, South Africa, Swaziland, Uganda, Zambia and Zimbabwe. Brands operating under the STAR group include Pep, Ackermans, Poco, Russells, Flash, Bradlows, Rochester, Buco, Timbercity, The Tile House, Incredible Connection, HiFi Corp, Dunns, John Craig, Refinery, Shoe City, Tekkie Town and Sleepmasters.

According to Enko capital, the offer was 4.8x over-subscribed.

South Africa: Brainworks
Mauritius-registered investment holding company Brainworks, with an investment base focused on hospitality, real estate, financial serice and logistics in Zimbabwe, listed on the JSE on 13 October, after an IPO from 28 September to 11 October. It is the first Zimbabwean company with a proimary listing on the JSE and the 16th listing for the year to date, according to a JSE press release, where it sought to raise ZAR316.5m (USD22.3m) through the sale of 27,523,951 shares at ZAR11.50 per share.

Brainworks was established in 2011 and holds investments including controlling stakes in 2 listed hospitality companies, African Sun and Dawn Properties, which are listed on the Zimbabwe Stock Exchange. It also has investments in GetBucks, GetCash, GetSure, MyBucks, Skyclear and FML Logistics and says approximately 38% of revenue is generated in hard currency.

Donna Nemer, Director: Capital Markets at the JSE, says the exchange is proud to welcome Brainworks to the South African market. “As Africa’s largest stock exchange, the JSE believes we can make an important contribution to the growth and the development of our continent. We do this through offering foreign investors a secure and transparent entry point into Africa and providing the companies who do business here with a liquid platform to raise further capital to fund their expansion.”

Nemer says the JSE also favours dual- or cross-listings, wherein debt or equity is listed simultaneously on the JSE and on a local market. “This assists companies from other African countries to gain access to a much larger capital pool and trade in a more liquid environment, while still allowing local market participation.”

Thanks to research contribution by Enko Capital, which invests in African opportunities.