African Capital Markets News

SADC stock exchanges work together towards links, shared skills and better visibility

The 10 stock exchanges of the Southern African Development Community (SADC) are working together to increase the effectiveness of their markets. The Committee of SADC Stock Exchanges (CoSSE) has agreed to concentrate on 6 priority areas in support of regional moves to more efficient capital markets.
The stock exchanges will explore ways to use technology to link their trading and order systems and work together to ensure clearing and settlement systems align with global standards adopted in April. They are working closely with SADC institutions to support development of regional systems, including payment and will boost visibility of trading data and enhance their joint website (www.cossesadc.org), launched in April by the JSE and I-Net Bridge. The bourses will also pool resources to accelerate training and skills development for capital markets staff.
CoSSE members are Botswana Stock Exchange, Malawi Stock Exchange, Stock Exchange of Mauritius, Bolsa de Valores de Moçambique, Namibian Stock Exchange, South Africa’s JSE Ltd, Swaziland Stock Exchange, Dar es Salaam Stock Exchange of Tanzania, Zambia’s Lusaka Stock Exchange, and the Zimbabwe Stock Exchange. They met on 25 June in Gaborone, Botswana in a meeting convened by CoSSE with support from SADC Secretariat.
“Stock exchanges have their roles cut out in each of our economies to augment our governments’ efforts to grow national economies for the greater good and as part of the SADC region’s struggle for growth to escape poverty,” says Mrs Beatrice Nkanza, Chairperson of CoSSE and CEO of the Lusaka Stock Exchange. “They are the channel for long-term risk capital, which is urgently needed for the region’s businesses, infrastructure providers and even governments. They also encourage saving and investment. CoSSE members are working closely together to support SADC initiatives and to make individual markets even more effective”.
CoSSE was set up in 1997 as a collective body of the stock exchanges in the Southern African Development Community (SADC). It promotes co-operation and collaboration between member stock exchanges and is resourced by a Secretariat, supported by the JSE. SADC defines CoSSE’s role in the Finance and Investment Protocol and other policy documents and CoSSE has links to ministerial and senior treasury bodies and also works closely with the Committee of Insurance, Securities and Non-Banking Financial Authorities (CISNA) and the Committee of Central Bank Governors (CCBG).
CoSSE had set up three working committees to implement six business plans, prioritized from the initiatives identified in its Strategic Plan 2011-2016. These are:
1. Legal and Secretariat working committee – chaired by Geoff Rothschild of the JSE. This is responsible for formalizing and resourcing the Secretariat, and for continuing and improving liaison with CISNA and other SADC organs.
2. Market Development working committee – chaired by Vipin Mahabirsingh of the Stock Exchange of Mauritius. CoSSE has been developing models for inter-connectivity between automated trading systems at some or all member exchanges. The working committee will help member exchanges ensure their clearing and settlement systems comply with new global standards and support regional initiatives.
3. Capacity-Building and Visibility working committee – chaired by Anabela Chambuca Pinho of the Bolsa de Valores de Moçambique. This will liaise with member exchanges, regulators, stockbrokers, investors and others to develop and coordinate training courses. It will also enhance the new CoSSE website, help members to upgrade their own websites and to ensure their trading data and company news are disseminated internationally.
Progress will be guided by an Executive Committee, consisting of CoSSE Chairperson Mrs Nkanza, CoSSE Vice-Chairperson Gabriel Kitua (CEO of the Dar es Salaam Stock Exchange in Tanzania) and the three working committee chairpersons. The strategic plan was developed with assistance from FinMark Trust.

For more information contact
• Beatrice Nkanza, CEO Lusaka Stock Exchange, tel +260 (1) 228391 or email nkanzab [at] luse.co.zm
• Gabriel Kitua, CEO Dar es Salaam Stock Exchange, tel +255 22 2135779 or email gabriel.kitua [at] dse.co.tz.
• Pearl Moatshe of CoSSE Secretariat, tel +27 11 5207118 or email pearlm [at] jse.co.za

Chinese hunt Africa mine bargains

In an article this morning (30 Sept), FT Tilt writer highlights a swift move by a state-backed Chinese company to acquire upstream mining assets in Africa. Writer Denise Law says Hong Kong-listed Minmetals Resources (MMR – www.minmetalsresources.com), part of China’s biggest metals trader, has offered C$1.3 billion ($1.25bn) for Toronto-listed Anvil Mining (www.anvilmining.com), with an all-cash offer for Anvil at C$8 per share, a 39 per cent premium to its closing price in Toronto on Thursday (29 September). The deal is subject to shareholder approval.
In April MMR bid $6.5bn for Equinox Minerals with mining assets in Saudi Arabia and Zambia but was outbid by Canada’s Barrick Gold and withdrew.
The author comments “underlining how state-backed Chinese companies were becoming increasingly reluctant to over-pay for overseas assets.” The article quotes Mark Hinsley, analyst at Foster Stockbroking in Sydney as saying the Chinese are keen to buy and current worries of slower global growth and extreme market volatility are giving them opportunities to buy up cheaper assets: “Chinese mining companies with strong balance sheets will use this opportunity to pick up assets as equity markets get pushed back and valuations fall.” He added that Africa will be an attractive destination for the Chinese, “given the supply/demand dynamics of copper and the huge exploration potential and operating cost landscape of Africa”.
Anvil’s main asset is the Kinsevere mine in DRC, which produces 60,000 tonnes of copper cathode a year. According to an MMR statement, the takeover would increase MMR’s copper output by 60%: “Anvil’s copper operations are an excellent fit with MMR’s strategy to build an upstream, international diversified base metals company. Anvil provides a sound platform and experienced management and operations team for MMR to further expand into the Central African copper belt and Southern Africa.”
A note by Foster Stockbroking says it is unlikely that a rival will emerge with a bigger bid for Anvil given that MMR’s offer is attractive. It notes how fast MMR is working to close this deal, from announcing a strategic review on 4 August to takeover bid, a total of 8 weeks. “This demonstrates the pace at which the Chinese can move to act on a strategic C$1.3bn deal. In our view, the valuation is compelling and unlikely to be trumped.”
Other Chinese mining companies looking to expand further in Africa, especially in DRC, include China Non-Ferrous Metal Mining and Jinchuan Grou as regional consolidation in the copper industry continues to play out. Hanlong Mining is also currently trying to acquire Sundance Resources, which has iron ore assets in Cameroon.