April 21st, 2014 by Tom Minney
An international panel of securities exchange experts, meeting in New York this month, has
set up a task force comprising a broad, cross-disciplinary group of global experts focused on improving the vibrancy of securities exchanges for small and medium-size enterprises (SME), including the possibility of establishing a specialized SME exchange.
The International Stock Exchange Executives Emeriti, Inc. ( ISEEE) brings together senior executives and former executives from securities exchanges. Participants at the 4-day New York meeting, including special guests, were from Argentina, Australia, Austria, Canada, Egypt, Germany, Israel, Kazakhstan, Luxembourg, Malaysia, Namibia, Russia, Turkey, Slovenia, Sweden, Switzerland, Ukraine, United Kingdom, United Arab Emirates, United States, and Zambia.
Donald Calvin, ISEEE chairman, said: “Increasing access to capital markets designed specifically for small and medium-size companies can help continue to revitalize jobs and economic growth worldwide”. He noted the group has “concern that public policy in many areas of the world is driven by data and individuals with a large-capitalization focus. These views may sometimes be incompatible with the maintenance of a vibrant small-capitalization ecosystem that can support capital formation, innovation, economic growth and job growth.”
Meeting participants also discussed financial transaction taxes on securities and agreed the taxes would be unlikely to contribute positively or to achieve the desired objectives, but could have negative effects on markets and economies where they are launched, Mr. Calvin said. The delegates heard that many European countries are reconsidering earlier enthusiasm for the taxes.
For additional information about the ISEEE, its members and copies of papers presented at the meetings, see www.capitalmarketexperts.org. The body held its first meeting in Orlando, Florida in March 2008 and created a collegial educational forum of former and current exchange officials to identify, discuss and assess the issues germane to the global community of exchanges. In December 2008 the ISEEE was incorporated as a New York not-for-profit educational corporation.
Among the purposes of the ISEEE are to facilitate contact with experts in the fields of finance, regulation and technology as well as to leverage the expertise of former senior exchange executives from major exchanges across the world. It also aims to provide educational opportunities by sharing information on developments in market structure and regulation, on listing, trading, disclosure, clearing and settlement, access to the markets, and enforcement, as well as investor protection, among other issues. In addition, it facilitates opportunities for members and guests to establish and maintain business and social relationships.
The ISEEE currently has member-participants. Many have been or are officials of stock and derivative exchanges from North and South America, Europe, Africa, Asia-Pacific and the Middle East, while others are experts in related activities.
April 9th, 2014 by Tom Minney
The battle for stock exchange technology in Africa hotted up with the recent announcement that Dar es Salaam Stock Exchange (www.dse.co.tz) is switching its trading, clearing and settlement systems to use South Africa’s Securities and Trading Technology (STT). Previously it had been using the Millennium IT systems now owned by the London Stock Exchange Group.
According to a press release from STT, Moremi Marwa, CEO of DSE said: “We are delighted to partner with STT in our endeavour to transform our exchange into being a focus for enterprises and government long-term fund-raising and a vibrant platform for value and liquidity creation to investors. STT’s robust, efficient and scaleable trading, clearing and settlement systems will facilitate our transformation intent and improve our risk management capabilities”.
According to its website, the DSE’s current market capitalization is TZS 17.3 trillion ($10.6 billion) from a total of 18 listed companies. STT says Government and corporate bonds listed are worth more than $2bn and there are about 185,000 investors. Twelve companies have used the DSE to raise capital through share issues and 13 have issued and listed bonds.
Newspaper Business Day reported that former JSE director Allan Thomson said: “things are happening in Africa quickly now” and the Tanzania development is “a very good move”. He is reportedly not involved in the Tanzania transaction but is working with STT in a consortium to rival South Africa’s authorised central securities depository, Strate. He is also setting up the Bond and Derivatives Exchange of Zambia, the Nairobi Securities Exchange’s derivatives exchange for the East African region and a third exchange, which cannot be named yet.
Michelle Janke, MD of STT said: “We are delighted to have been chosen to provide trading and clearing solutions to the Dar Es Salaam Exchange. Tanzania is a dynamic and fast developing market and we look forward to working with the DSE to upgrade their technology.”
Millennium IT has a good range of African clients, according to its website, including in Botswana, Egypt, Ghana, Kenya, Mauritius, Mozambique, Uganda and Zambia and it also powers South Africa’s JSE and the London Stock Exchange and other leading international exchanges. Recently it has been criticized by African exchanges for less service since the LSE takeover of the dynamic Sri Lankan company and for high annual licence fees.
There is no notice of the latest deal on the DSE website, but there is notice of a system breakdown on 25 March that halted trading: “DSE Public Announcement: This morning, Tuesday 25 March,2014 one of the DSE’s key infrastructure failed to startup; as a result the trading system also failed to function. In this consideration, DSE had been forced to halt startup of today’s trading session to allow the system engineers to diagnose the source of problem and repair it accordingly.”
April 8th, 2014 by Tom Minney
The Algiers Stock Exchange is working with Euronext Paris to boost the market through cooperation. The two signed a Memorandum of Understanding (MoU) that they will work together to develop the market systems and make it easier for enterprises, especially small and medium enterprises (SMEs), to raise capital through the securities exchange.
Euronext (www.euronext.com), a wholly owned subsidiary of Intercontinental Exchange Group (ICE), announced the MoU with Algiers Société de la Gestion de la Bourse des Valeurs (www.sgbv.dz) on 25 March. It will focus on initiatives including:
• organize events for professionals in finance, including theme-based seminars, training and information sessions in Paris and Algiers, exchange of publications and experience, coordination of joint initiatives
• back financial research and innovation on topics of common interest including sustainable, environmental and social finance, corporate governance
• promotion and international development.
Anthony Attia, CEO of Euronext Paris, said in a press release that the agreement with SGBV “.. will enable us to build on our expertise and work with the Algiers Stock Exchange to promote financial markets to companies seeking capital.”
Yazid Benmouhoub, CEO of SGBV, welcomed “…this new alliance between Euronext Paris and the Algiers Exchange, which is right in line with our efforts to develop financial markets in Algeria.”
SGBV is a stock company organized under Algerian legislative decree 93-10 of 23 May 1993. Its equity is 100% owned by certified brokers (IOB – currently state-owned banks) and it is supervised by Commission d’Organisation et de Surveillance des Opérations de Bourse (COSOB).
Euronext is a main eurozone exchange, with over 1,300 issuers worth €2.6 trillion in market capitalization. It operates regulated markets in: equities, exchange-traded funds, warrants and certificates, bonds, derivatives, commodities and indices. Regulated markets include, Alternext and the Free Market as well as EnterNext, which facilitates SME access to capital markets. It also provides technology and managed services to third parties.
ICE is a leading network of regulated exchanges – its portfolio includes the New York Stock Exchange (NYSE), ICE Futures, Liffe and Euronext – and clearing houses for financial and commodity markets. It delivers transparent, reliable and accessible data, technology and risk management services to markets around the world.
April 4th, 2014 by Tom Minney
“East Africa is the most promising regional bloc. [It] has registered between 5 and 6% growth annually for the past decade. We estimate that regional gross domestic product will expand 18-fold by the middle of the century, from $185bn in 2010 to $3.5trn by 2050. This era is comparable to the period immediately after independence.” This is an intriguing article just published by The Africa Report, quoting Gabriel Negatu, regional director of the African Development Bank.
The article, by Parselelo Kantai in Nairobi and Juba, additional reporting by Patrick Smith in Addis Ababa, talks of the four leaders that dominate the East African “chessboard”. Here are a few sample quotes: “At international gatherings such as the African Union summit in Addis Ababa, the four gravitate towards each other: Ethiopia’s Hailemariam Desalegn, Kenya’s Uhuru Kenyatta, Rwanda’s Paul Kagame and Uganda’s Yoweri Museveni.
“Differing in age and political experience, they argue about many details but there is a critical point of consensus. If East Africa is to grasp the economic opportunities now available, there must be a determined effort to integrate its markets and economies, even if that means making concessions and compromises in the short term.
“All four run interventionist foreign policies – Ethiopia, Kenya and Uganda sent troops into Somalia, while Rwandan and Ugandan troops have been both invited to and expelled from the Democratic Republic of Congo.
“They all favour a statist hand on the economic tiller, but they are all building up business classes on whose political loyalty they can rely. All have supported Kenyatta in his attempts to avoid prosecution at the International Criminal Court.
“Economic growth and breaking away from dependence on Western markets are common imperatives. None of them enthuse about democracy, particularly in its Western, liberal variants.”
The article also gives insights on Uganda’s $8bn oil infrastructure deal of 5 February that will help reshape the region and its economies and 2 giant railway projects due for completion by 2020. It highlights the need for jobs and services to keep up with growth, and China’s giant role in reshaping the region.
It highlights regional diplomatic tensions too. The writers also point to joint pressure on Tanzania, sometimes seen as the laggard in the regionalization project, and give insightful perspective on the lessons from the South Sudan crisis, as well as letting key South Sudanese voices be heard. They write:
“For governments tempted to ignore the new underclass, South Sudan serves as a cautionary tale. An abiding weakness of governments in East Africa is their ethnocentrism: their tendency to favour crassly their ethnic support bases in the allocation of public sector jobs, appointments, commercial opportunities and government tenders.
“South Sudan’s crisis may have been exacerbated by its weak institutions, but the best illustration of this was the government’s failure to rein in cronyism, corruption and ethnic rivalries in the state sector.
“In South Sudan, these weaknesses caused a war. In other countries in the region, they produce bad elections and policy-making, and hold back burgeoning economies.”
The article speaks of the determination not to be proxies for foreign powers in any conflict and says the South Sudan crisis could give an opportunity to rebuild a state more suited to local realities.
For more, we recommend that you read the article in full here.
March 28th, 2014 by Tom Minney
Kenya has invited Ethiopian companies to list on the Nairobi Securities Exchange in a ground-breaking move that would let them raise capital and trade their shares. The Ethiopian Government has been slow to support development of its capital market, hampering investment and private-sector growth.
Churchill Avenue, Addis Abeba (www.tourismethiopia.gov.et)
The invitation came earlier this month as Kenya’s President Uhuru Kenyatta visited Addis Ababa to strengthen trade and other ties. According to Reuters
he told a joint meeting of executives from both nations: “Kenya stands ready to begin consultations for the regulations and guidelines that would allow Ethiopian companies to raise investment capital and trade at our Nairobi Securities Exchange.”
Ethiopia has one of Africa’s biggest economies, a fast-growing population of 85-90 million, and a booming economy which is forecast to grow at over 7% a year for each of the next five years, according to the International Monetary Fund (World Economic Outlook
, Oct 2013).
Foreign multinational companies such as Unilever, Danish pharmaceutical company Novo Nordisk and many Chinese and Indian companies are opening a wide range of operations, including manufacturing. However, many Ethiopian companies have found it hard to raise the risk capital to seize the many opportunities, despite a strong human skills base, as outlined in this perceptive article in Financial Times
The Government is 100% owner of the largest companies such as Ethio Telecom and Ethiopian Airlines and endowment companies linked to the key political parties are also major forces in the economy. There has been a programme of privatizing many state-owned companies in farming, manufacturing and others but Government retains key strategic industries and Reuters says they are resisting calls to liberalize the economy.
Kenyatta took Kenyan companies to look for opportunities in Ethiopia including executives of dairy company Brookside, Equity Bank and telecoms operator Safaricom. The 2 countries signed a special status agreement in 2012, detailing various areas of co-operation in trade, energy and infrastructure. A large transport corridor could link Ethiopia and South Sudan to a new Lamu port in Kenya. Ethiopia recently opened a grid to export electricity to Kenya with $1.5bn financing from the World Bank and the African Development Bank.
Analysts said Ethiopia would benefit if its firms take up the offer to tap Kenyan capital and Reuters quoted a analyst from Nairobi-based Standard Investment Bank in a note to clients: “The advantage for Ethiopia for this arrangement would be the ability to provide companies with an inflow of capital without necessarily running the risks of an open capital account economy which Kenya is already accustomed to.”
The Nairobi bourse is the powerhouse of Eastern Africa and there are already many dual-listings in the region and plans to create further links and harmonization with Dar Es Salaam, Uganda and Rwanda securities exchanges.
One Ethiopian lawyer told African Capital Markets News
: “There is no law that prohibits Ethiopian companies to trade on another stock market. The President of Kenya has made his intention clear on the subject and there is no clear rejection or acceptance from its Ethiopian counterparty. The Ethiopian companies could benefit much. Principally they will be able to implement corporate governance policies and procedures that are lacking today and also be competitive over the world market.”
According to Million Kibret, managing partner of BDO Consulting Ethiopia
, confirmed to African Capital Markets News that lawyers agreed “there is no law or directive or regulation that forbids interested Ethiopian companies to register at the Nairobi Securities Market. If their enrollment requires investment it will be up to the National Bank of Ethiopia to allow same.”
Kenyatta said that Kenya exported goods worth $53.2m to Ethiopia in 2012 and imported goods worth $4.1m in the same year.
March 14th, 2014 by Tom Minney
Photo credit: Government of Ghana
Investors aim to finalize fund-raising for a new Ghana Commodity Exchange (GCX) during the coming month. A private-public consortium has been put together to create a regional hub for trading commodities, including Ghanaian institutions Data Bank Agrifund Manager Ltd, Ecobank Ghana Ltd, UT Bank Ghana Ltd and a minority shareholding by the Government of Ghana, and international investors such as the International Finance Corporation (IFC, part of the World Bank Group), the private-equity 8 Miles Fund, and eleni, a company which describes itself as Africa’s “premier commodity exchange promoter”.
According to an announcement by eleni, the consortium partners and the Government of Ghana have jointly signed a Letter of Intent with the aim of completing the investment process by April 2014 and launching the GCX over the coming 12 months.
Dr. Eleni Gabre-Madhin, chief executive officer of eleni, is noted for the successful creation of the Ethiopian Commodity Exchange (ECX) as we saw in this story last year. Her model is different from many consultancy models as she is primarily an agricultural economist interested in helping farmers and production while making markets more efficient. She does not see the commodity exchange as only a trading screen, but as a key part of modernizing the whole agricultural marketing system. Successfully improving warehousing, storage, logistics, crop quality and farmer financing are all critical to the success of the venture, in her view.
According to yesterday’s announcement (13 Mar): “A second consortium is also in formation for a large-scale investment in warehouse and logistics infrastructure and equipment in 8 delivery sites around Ghana, as a strategic eco-system partner to the GCX.”
Ghana’s President John Dramani Mahama had announced the GCX on 25 Feb in his second State of the Nation address: “As part of efforts to create an orderly, transparent and efficient marketing system for Ghana’s key agricultural commodities to promote agricultural investment and enhance productivity, the Government has committed itself to the establishment of a Ghana Commodity Exchange (GCX) and associated Warehouse Receipt System (WRS).
“This move is to encourage market access and fair returns for smallholder farmers and to facilitate the formalization of informal agricultural trading activities. It is expected that the establishment of the Ghana Commodity Exchange will position it as a West Africa regional hub for commodity trading activities.”
Agriculture accounts for 22.7% of Ghana’s fast-growing $73 billion GDP and employs 41.5% of the 29m population, according to statistics website Quandl.
The GCX will start with spot and futures trading of agricultural commodities, including maize, soybeans, paddy rice, palm oil and groundnuts. Once these and the related deliveries of actual crops are settled, the GCX aims to introduce other key agricultural and
non-agricultural commodities and to position itself as a future regional trading platform.
According to Gabre-Madhin: “We can think of no better time and no better place than Ghana today to start a new thrust of developing an efficient and transparent price discovery platform. Ghana’s exchange has every potential to become a leading West African hub for globally traded commodities and we are excited to partner with the consortium to bring this idea to reality. The African commodity exchange momentum is real.”
Robert Dowuona Owoo, former head of policy, research and IT at Ghana’s Securities and Exchange Commission, is the GCX Project Coordinator. The SEC had commissioned a feasibility study on a commodity exchange in 2010 and set up a technical committee.
According to Samuel Ashitey Adjei, MD of Ecobank Ghana Ltd: “This exchange will undoubtedly have a transformative impact on our economy and we are very pleased to
be backing it.”
IFC and Soros invest in feeding data to farmers
IFC and the Soros Economic Development Fund have both invested $1.25 million of equity in Esoko, a Ghanaian technology firm, to help provide small holder African farmers and businesses with timely crop information that can be shared via text messaging. According to its website, Esoko can also transmit weather data and farmer helplines to agricultural experts.
Esoko CEO Mark Davies said: ““Our platform was developed by African software engineers here in Accra, Ghana, and has been a totally local, market-driven initiative” said. “IFC and SEDF have a strong track record of helping local companies get the funding and advice needed to expand into new regions and markets. With their support we hope to export this African technology all around the world.”
Current market information and efficient markets will help farmers to make educated, cost-effective decisions when buying and selling their crops, to farm more efficiently and to get better value for their crops. Transforming the warehousing and logistics across the economy, as was done in Ethiopia, transforms the economics of agriculture and is likely to result in increased food production and better livelihoods for farmers without increasing consumer prices.
March 14th, 2014 by Tom Minney
The Nigerian Government is planning to privatize the Abuja Securities and Commodities Exchange (www.abujacomex.com) by mid-2014, according to Arunma Oteh, Director General of Nigeria’s Securities and Exchange Commission (SEC). According to an interview on Bloomberg, the aim is to revive trading.
Oteh said: “The Government wants to privatize the only commodity exchange and it had committed to doing it by the end of last year. It didn’t meet that deadline, but it’s planning to do something by the middle of 2014.
“We have a number of both domestic players and international players who are very interested. They’d rather acquire the privatized exchange, so they’re trying to see how far the government is going with this initiative and if not they’re prepared to seek a registration for a new commodity exchange.”
One of the key investors interested is local firm Heirs Holdings Ltd, based in Lagos but with interests across Africa in banking, energy, real estate and agriculture. Chairman Tony Elumelu said in an interview in December the company wants to acquire the Abuja exchange when it is sold or else it will apply to the SEC to set one up.
Heirs Holdings is an investor with Berggruen Holdings and 50 Ventures in African Exchange Holdings Ltd (AFEX www.africaexchange.com). This facilitates an exchange using NASDAQ OMX technology which can be accessed anywhere in the world through the X-Stream electronic trading platform. Other key figures in AFEX include managing partner Jendayi Frazer, who was key in U.S.-Africa policy for nearly 10 years and U.S. Assistant Secretary of State for African Affairs (2005-2009) and Nicholas Berggruen whose charitable trust funds the investment arm to take “a long-term, patient capital value-oriented approach”.
AFEX has set up the East African Exchange (EAX www.ea-africaexchange.com) in Kigali, with the first node launched in Jan 2013 and the first regional auction – 50 metric tons of maize at $398 per metric ton – between a Ugandan seller and Rwandan buyer in November 2013. Expansion is planned for Kenya and Uganda to build a regional exchange.
AFEX also set up an electronic warehouse receipt system in Nigeria last November, working with the Nigerian Grain Reserve Agency and the Agriculture Ministry. This links farmers and traders as part of the groundwork to set up a commodities exchange, according to Bloomberg.
According to AFEX website: “Warehouse storage is critical complementary infrastructure to any commodity exchange. Properly managed warehouse facilities allow farmers to safely store their harvest without worrying about loss of value until market prices are favorable. An electronic warehouse receipt (e-WR) is issued by the warehouse and represents the stored commodity and is the security instrument that is traded on the exchange. It is only transferable through the electronic system, avoiding issues such as side selling, theft, forgery, etc.
“Berggruen Holdings signed a Memorandum of Understanding establishing a strategic partnership with the East African Community (EAC) Secretariat to support the goals of regional economic and financial integration. With this strategic partnership, AFEX will seek to share its strengths, expertise, experience, technologies, methodologies, and resources in order to advance the goal of regional integration of capital markets.”
“Our vision is to create lasting institutions that will capitalize on Africa’s agricultural potential, support African farmers, achieve food security, provide energy security, and improve Africa’s overall global trade competitiveness.”
Nigeria has a fast-growing population which is already 170 million people. It produced Africa’s third-biggest cocoa harvest in 2013 and produces cotton, sugar and other crops.
The ASCE website says it was originally set up as a stock exchange in 1998 and started electronic trading in 2001 and was converted into a commodity exchange 3 months later and brought under the supervision of the Federal Ministry of Commerce. The website does not appear to have been updated recently.
February 27th, 2014 by Tom Minney
African capital markets could raise more donor finance and other resources to drive development projects. There are substantial technical, financial and other resources available to spur market growth, driven by the key role that African securities exchanges, private equity and other institutions can play in driving economic growth, creating jobs and channelling investment, but exchanges, governments and regulators have not been as successful in applying compared to other emerging markets.
Developing projects and raising finance is the subject for a FREE masterclass in “Funding Sources for Capital Markets Development”. This will be held on 9 April (2pm-5pm)-10 April (9am-1pm, approx) in the Museum of American Finance in New York City.
The masterclass is organized by ISEEE (International Stock Exchange Executives Emeriti, Inc. (www.capitalmarketexperts.org) and is highly recommended to African and other emerging markets securities exchanges executives, regulators such as Securities and Exchanges Commissions, and policy-makers. All stakeholders can apply.
The agenda includes overview of potential financing sources; specifics of donors and international financial institutions interested; defining project objectives and beneficiaries; case studies of exchange, securities commission and clearing house projects; and workshops in drafting funding applications.
The masterclass is presented by capital markets development expert Hannes Takacs of CAPMEX (www.capmex.com) and Dr Drasko Veselinovic, founder of the Ljubljana Stock Exchange (www.ljse.si). Drasko is a professor with a doctorate in financial economics with extensive experience in buiding and running securities exchanges and banking, as well as in privatization, non-executive board directorships and capital markets development.
I have had the pleasure of working with Hannes on several capital markets strategy projects, including in Dar es Salaam and Baku, and I can highly recommend his deep knowledge and experience, combined with a pragmatic approach. He has very extensive experience of working on securities exchanges and capital markets development projects all over the world, including Russia, China, SE Asia, and he is on the board of several stock exchanges in central Europe and does many training and other sessions.
He has a very good knowledge of securities markets developments. He pointed out that very few of the donor-funded securities market development projects are happening in Africa, despite this being a priority for many donors, compared to other regions.
According to Hannes: “The participants in this free-of-charge interactive master class will learn how to design development projects for capital market development, exchanges, clearing houses and supervisory authorities, which are eligible for funding by international finance institutions, multilateral development banks and donor agencies.”
Hannes is also ready to answer any individual questions, email him on firstname.lastname@example.org. For more information and the brochure and application form, apply here as early as possible. Participants have to cover their own travel and accommodation expenses.
February 6th, 2014 by Tom Minney
Tanzania is planning to issue a Eurobond of up to $1 billion, but the issue could be delayed until after June, according to a report on Reuters. The newsagency quotes Benno Ndulu Governor of the Bank of Tanzania, saying the size has not yet been decided but could be between $500m and $1bn: “Anything up to a billion should make sense.”
The money raised could be used to build new roads, railways and ports and to help use the giant reserves of natural gas and coal to end chronic energy shortages. Infrastructure is a key challenge and Government is increasing borrowing. Tanzania’s gross domestic product is forecast to grow at about 7% in the medium-term, according to the African Development Bank, which says the main drivers of growth are telecommunications, transport, financial intermediation, manufacturing, construction and trade.
Ndulu also told Reuters that Tanzania is on course to rein in its large current account deficit. The Government’s target is 5% or below but the International Monetary Fund (IMF) estimated it at 13.5% in the fiscal year 2012/2013. Reuters quotes Ndulu: “We are working hard to bring it down back to 5% this year and I think we may be able to do that.”
According to a report last year on Making Finance Work for Africa, the Financial Times quoted former Minister of Finance William Mgimwa as saying Tanzania planned to ask the IMF to raise its debt ceiling by about $300 million for the 2013-2014 fiscal year, in a bid to issue the Eurobond, which he said would mature in 5-10 years and would be used on power generation and transport infrastructure. Although the economy is still dependent on foreign aid, an article in Jeune Afrique points out that investors are attracted by recent discovery of large reserves of natural gas off the coast. Tanzania offered $600m of 7-year securities in March 2013 which was 4x oversubscribed, reflecting its attractiveness to markets.
Bloomberg reported in November that Tanzania was busy with a credit rating and Finance Ministry Permanent Secretary Servacius Likwelile said they planned to raise $750m: “We plan to invest heavily in energy, road construction, water-supply development and airport construction.”
Bloomberg said it was in the final stages of a risk assessment by Citigroup Inc.and would then approach Standard & Poor’s, Moody’s Investors Service or Fitch Ratings for an assessment of the country’s creditworthiness, Tanzania had been discussing plans to obtain a credit rating and tap the Eurobond market since at least 2008.
It says Tanzania is Africa’s 4th biggest gold producer and together with bordering Mozambique has natural-gas reserves that could supply the global market for a decade. The country is selling sovereign debt to help finance infrastructure projects, including a gas pipeline from the southern Mtwara region to Dar es Salaam.
The credit rating is not yet finalized, according to a 31 Jan local news report in The Guardian/IPP Media, citing Finance Minister Saada Mkuya.
January 31st, 2014 by Tom Minney
pic: Tom Minney
Three new initial public offer (IPO) share flotations with a total value of over $300 million are planned for the Egyptian Exchange (EGX
) this year, says Egypt’s largest investment bank. According to a story on Reuters
, these would be the first listings on the Cairo bourse since the revolution, the last IPO was in 2010.
The Egyptian Exchange has been booming in recent months, after suffering in the political turmoil since Mubarak’s fall in 2011.
Reuters reports that Karim Awad, co-CEO of EFG Hermes
, told financial newspaper Al-Mal
that Egypt’s Arabian Cement Company would be one of the listings but did not name the other two. Awad told Reuters by email: “The IPOs will hopefully happen this year. The exact timing in the year will be agreed with the companies who are undertaking the IPOs and considering the state of the financial markets.”
Egyptian stock market investors have chosen to ignore increasing violence and repression and are focusing instead on the ongoing national economic and political stabilization, particularly since the 14 Jan referendum approving a new constitution and cleared the way for presidential and parliamentary elections. The main EGX 30 Price Return index
of the Egyptian stock exchange is up over 45% since the army ousted Islamist President Mohamed Mursi in July 2013, after mass protests against his rule.
As reported here
, Egypt’s financial regulator the Egyptian Financial Supervisory Authority (EFSA
) will implement new regulations for companies listed on the bourse from tomorrow (1 Feb), which could help boost liquidity and attract listings and further investment.
On 28 Jan, Finance Minister Ahmed Galal said
details of its second stimulus package since Mursi’s ousting would be announced within days. The aim is to boost growth and investment, which had slowed dramatically. Government had done a first stimulus package of EGP30 billion ($4.3bn) last year and promised a second of the same size this month. Gulf countries have pledged more than $12bn in aid since Mursi was overthrown and Galal has said that EGP20bn would go on public investment and the rest would create a new public-sector minimum wage.
Before the 2011 revolution, Egypt was attracting around $8bn a year of foreign direct investment (FDI) but that shrank to $4bn in the year to June 2012 and $3bn to June 2013. Investment Minister Osama Saleh said this week they expect to beat the target of $4bn in FDI by June 2014.
is last week’s Economist
article on Egypt.