Archive for the 'Cote d’Ivoire' Category

Sub-Saharan Africa investment banking deals in Q1

Mergers and acquisitions (M&A) in sub-Saharan Africa in Q1 of 2018 at $4.7 billion were 63% down on a year earlier, according to investment banking analysis for sub-Saharan Africa by Thomson Reuters, but there were $2.7bn in equity follow-on issues and $13bn in debt issues. Rand Merchant Bank topped the ranking of investment banking earnings, gaining $10.3 million, 9.3% of the total $117.6m earned during the quarter.

Completed M&A generated 20% and equity capital markets 37% of the total fee pool. Thomson Reuters says equity and related issuance was at its highest since 2007.

Fees from completed M&A totaled $23.4m, a 57% decrease year-on-year, while equity capital markets underwriting reached $43.1m, the best start since 2007. Domestic and inter-SSA M&A totaled $483m, down 81% year-on-year and the lowest annual start since 2006. Inbound M&A is down 73%, driven by the lowest number of deals since 2004, while outbound M&A is on a six-year high, up 91% to $1.6bn. Most (93%) of the outbound M&A was by South African companies, while acquisitions by companies headquartered in Mauritius accounted for 6% and in Seychelles for 1% respectively. Citi topped the financial advisor table for Q1 2018 for announced M&A with “any sub-Saharan Africa involvement” with 7% market share.

The biggest deal of Q1, according to Thomson Reuters, was Milost Global Inc’s US$1.1bn leveraged buyout transaction to acquire the entire share capital of Primewaterview Holdings Nigeria through its African subsidiary Isilo Capital Partners, announced on 10 January.

All the equity capital markets activity in the region was follow-on offerings, with 14 transactions. It is the first time there were no primary equity issues since 2012. The biggest was a follow-on offering by PSG Group, followed by offers from Sanlam and Lafarge Africa. Standard Bank Group tops the SSA equity capital markets league table in Q1 2018 with a 26% share of the market, followed by Investec at 12% and PSG Capital Ltd at 11%.

Sneha Shah, Managing Director for Africa at Thomson Reuters, said: “The most active Sub-Saharan Africa equity capital markets sectors for Q1 2018 were financials followed by materials, real estate, industrials, retail, and consumer staples.”

The most active debt issuer nation was Côte d’Ivoire with US$4.6bn in bond proceeds, 36% of market activity, followed by Nigeria and Senegal. Citi took the top spot in the SSA bond ranking for Q1 2018 with 24% market share. Syndicated lending fees declined, falling to $12.7m down 66% from Q1 2017. ING ranked first for syndicated loans.

Fees from underwriting in debt capital markets were $38.4m, the top value since Thomson Reuters started keeping these records in 2000, and up from $19.4m during Q1 2017.

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 www.brvminvestmentdays.org.

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

This event is organized by AZ Media Agency www.azmediaagency.com
Twitter @BRVM_UEMOA #BRVMInvestmentDays

Egypt is Africa’s new #1 investment destination

The challenge for African economies is to adapt to commodity slowdown and sluggish production growth. Many countries have suffered stress in the past three years, and the latest report from a leading investment bank suggests the new winners – and who is lagging. Rand Merchant Bank’s (RMB) Where to Invest in Africa 2018 report shows changes in the top investment destinations in Africa.

South Africa is off the top spot, edged aside by Egypt, and Nigeria and Algeria have crashed out of the top 10. The theme is “money talks” and focuses on major sources of dollar revenues, important income-generators and investment opportunities.

But the report compares 191 global jurisdictions and measures African against country groupings. African countries are still at the lower end of the global-performance spectrum, which is still dominated by the US, UK, Australia and Germany.

In Africa, according to the RMB press release, there is a new pharaoh in town: “Egypt (#1) displaced South Africa (#2) largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years. South Africa also faces mounting concerns over issues of institutional strength and governance though in South Africa’s favour are its currency, equity and capital markets which are still a cut above the rest, with many other African nations facing liquidity constraints.

“Morocco (#3) retained its third position for a third consecutive year having benefitted from a greatly enhanced operating environment since the Arab Spring which began in 2010. Surprisingly, Ethiopia (#4), a country dogged by socio-political instability, displaced Ghana (#5) to take fourth spot mostly because of its rapid economic growth, having brushed past Kenya as the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.

“Kenya (#6) holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies and brisk consumer spending growth. A host of business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania (#7) climb by two places to number seven. Rwanda (#8) re-entered the top 10 having spent two years on the periphery, helped by being one of the fastest reforming economies in the world, high real growth rates and its continuing attempt to diversify its economy.

“At number nine, Tunisia (#9) has made great strides in advancing political transition while an improved business climate has been achieved by structural reforms, greater security and social stability. Cote d’Ivoire (#10) slipped two places to take up the tenth position. Although its business environment scoring is still relatively low, its government has made significant strides in inviting investment into the country leading to a strong increase in foreign direct investment over the years resulting in one of the fastest growing economies in Africa.

“For the first time, Nigeria (#13) does not feature in the top 10, with its short-term investment appeal having been eroded by recessionary conditions. Uganda is steadily closing in on the top 10 though market activity is likely to remain subdued after a tumultuous 2016 marred by election-related uncertainty, a debilitating drought and high commercial lending rates.

“Though Botswana, Mauritius and Namibia are widely rated as investment grade economies, they do not feature in the top 10 mostly because of the relatively small sizes of their markets – market size has been a key consideration in the report’s methodology.”

RMB Africa analysts spoke on economic trends:

Neville Mandimika: “The last three years have sounded an alarm, amplifying what is now a dire need for the economies of Africa to shift their focus from traditional sources of income to other viable alternatives.”

Celeste Fauconnier: “Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues.”

Nema Ramkhelawan-Bhana: “Some countries have been more nimble and effective than others in managing shortfalls,” says and an author of the report. “But major policy dilemmas have ensued, forcing governments to balance economically prudent solutions with what is politically palatable.”

Where to Invest in Africa 2018 also includes 191 jurisdictions around the world, and measures Africa’s performance relative to other country groupings. The report is available via: www.rmb.co.za/globalmarkets/where-to-invest-in-africa-2018-edition.

Africa IPO round-up

A roundup of some recent initial public offers (IPOs) of shares on Africa’s stock exchanges to raise capital

In early October, MTN launched plans to sell up to 35% of shares on the Ghana Stock Exchange. Ghana’s Securities and Exchange Commission Director General Adu Anane Antwi confirmed they had started the listing process and were working on the prospectus but no timeline had been given. According to local reports, MTN received its 15-year 4G licence in 2015 after spending $67.5m and on condition that it lists. It hopes to raise up to $500m.
MTN Nigeria is also working on plans for an initial public offer (IPO) of shares on the Nigerian Stock Exchange in 2017 which could raise up to $1bn. Nigeria is among several African governments encouraging telcos to list on local bourses and listing is among conditions to settle a record NGN330bn ($1.1bn) fine for failing to disconnect 5.1m unregistered subscribers. Nigeria contributes a third of sales and profit for the Africa’s biggest phone company, which is listed in Johannesburg with market capitalization of ZAR212.8bn ($15.3bn) in early October.
Listings and capital-raising momentum has been maintained on the Nairobi Securities Exchange. Deacons Kenya is the first listed fashion retailer, after joining the Alternative Investment Market Segment (AIMS) of the NSE on 2 August. CEO Muchiri Wahome said the extra funds were to fund expansion into towns with “a vibrant middle class” across Kenya, spurred Kenya’s rapid and ambitious devolution and setting up 47 counties under its 2010 Constitution. Deacons is also eyeing opportunities in neighbouring Rwanda and Uganda. It will also help existing shareholders who want to sell. The retailer listed about 123m shares at an opening price of KES15 ($0.15) each, but by early October the price had slumped to KES8.55.

 

Nairobi centre (credit www.kenya-advisor.com)

Nairobi centre (credit www.kenya-advisor.com)

In June, leather and shoe retailer Nairobi Business Ventures, which operates the brand KShoe, had become the fifth listing on the NSE’s Growth and Enterprise Market Segment aimed at smaller businesses. It was listed through introduction and valued at KES118m ($1.2m). Previous 2016 share issues included Longhorn Publishers in May. In June power generator Kengen succeeded in the Kenyan bourse’s largest rights issue, raising KES26.4bn ($262.1m) by offering 4.4bn new shares at KES6.55 each, with a 92% subscription rate. Kengen has projects to generate another 700MW of power, of which 605MW is geothermal.
However, Fusion Capital had to cancel its IPO despite extending twice after only getting 38% uptake and four investors for its KES2.3bn offering and failing to meet the minimum threshold.
The Johannesburg Stock Exchange had its second private equity listing. Universal Partners raised R1.3bn ($93.7m) in an IPO which was only open for 4-5 August and started trading on the Alt-X market on 11 August. The company was registered in Mauritius in April and also listed on the Stock Exchange of Mauritius. Its mandate is to invest in properties across Europe, at £10m-£30m ($12m-$37m) each and it aims to start investing within six months. The IPO was for 72m shares at R18.07 each. Several companies aiming to raise capital for African and international investments have dual-listing on the Mauritius and Johannesburg exchanges.
Liberty Holdings is likely to follow up its Kenyan IPO success with a South African Real Estate Investment Trust (REIT) called Liberty Two Degrees in December. This will include some ZAR6bn of its existing portfolio, including iconic malls around Gauteng, and ZAR4bn of new money. As in Kenya, the property investments are managed by Stanlib.
West Africa’s integrated regional stock exchange, Bourse Regionale des Valeurs Mobilieres (BRVM), based in Abidjan, Côte d’Ivoire, plans to build a platform for listing mining shares and raising capital locally. The exchange is talking with Canada’s Toronto Stock Exchange (TMX Group), a favourite bourse for early-stage mining entrepreneurs. BRVM General Manager Edoh Kossi Amenounve says it could open by 2018 and will be for companies exploring or operating mines in the region. There is likely to be a waiver to the usual requirement for 2 years of trading history. The BRVM links eight West African countries, including gold exporters Mali, Burkina Faso and Côte d’Ivoire, and fourth-largest uranium producer, Niger.
Egypt’s Minister of Investment Dalia Korshid says the Government aims to raise up to $10bn over the next three to five years with IPOs of government-owned companies in the oil sector but will start with restructuring state-owned electricity companies.

BRVM securities exchange strategy dialogue with US frontier funds

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

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

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

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

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

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

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

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

Edoh Kossi Amenounve, CEO of BRVM exchange

Edoh Kossi Amenounve, CEO of BRVM exchange

Cross-exchange trading between Ghana and Nigeria stock exchanges

A trade in July was one of the first examples of cross-border trading, where a broker in Ghana was able to buy shares on the Nigerian Stock Exchange through links with a Nigerian broker. It points the way for closer capital market integration in West Africa, where economic links are already strong.

According to this story on Bloomberg, the trade was executed by Ghana’s CAL Brokers Ltd and Nigeria’s United Capital Securities Ltd. CAL Brokers bought 100 Dangote Cement and 6,000 Guaranty Trust Bank shares from United Capital Securities. It bought the shares for its own portfolio to sell later, paying commission and money transfer costs.

“Investors can now tap into bigger pool of funds,” Geoffrey Maison, a research analyst at CAL, told Bloomberg in an interview. “Investors from Ghana can look out for opportunities on the Nigerian Stock Exchange or BRVM if they can’t get stocks to buy here.”

Wole Shonibare, Deputy Group CEO/ Managing Director, Investment Banking at United Capital PLC wrote: With signed memoranda of understanding (MOU) (recognized by each regulator in the two jurisdictions) in place, Ghana and Nigerian dealing members (broker-dealers) were able to trade among themselves via Sponsored Access. The first trade which was completed on 15 July 2015 was facilitated by the Nigeria Stock Exchange (NSE), in conjunction with the Ghana Stock Exchange (GSE) with the actual trade conducted by United Capital Securities. This first trade has successfully developed the framework for subsequent trades in the market.

More than 180 securities are listed on the Nigerian bourse, while Ghana Stock Exchange has 35 equities and the Bourse Régionale des Valeurs Mobilières SA or BRVM, a regional stock exchange bringing together eight countries from a base in Abidjan, Cote d’Ivoire, has 39 deals. Ghana and BRVM have been seeing lower trading volumes.

Four West African exchanges including the Sierra Leone stock exchange are busy with a staged integration process under the West African Capital Markets Integration Council (WACMIC), set up in January 2013 to harmonize the regulatory environment for issuing and trading securities and to develop a common platform for cross-border listing and trading. WACMIC is made up of Chief Executives of the regulators (securities commissions) and of the securities exchanges. Adu Anane Antwi, director general of Ghana’s Securities and Exchange Commission told Bloomberg the council had been working on rules and technicalities of cross market trade since 2012.

The current phase is.known as “sponsored access”. Maison said broker can ask a dealer in another country to execute trades on its behalf, Maison said. Previously, an investor wanting to buy equities in another country would have to go through an audit before opening an account with a broker.

Antwi said: “Even at this first stage if you’re interested in a Nigerian stock you don’t have to go to Nigeria to find a broker,” Antwi said. “You can buy the stock by talking to a broker here.”

Next step will be “direct access”. Traders will be able to execute transactions in other markets. The final is a common board to display prices across the 4 markets. This is facilitated as the exchanges have automatic trading and allow direct market access (DMA)

According to United Capital’s Shonibare: This landmark transaction is important and beneficial to West Africa and the African financial markets in many ways. Liberalizing capital transactions across any region is the first step for integrated capital markets. Over the years, African financial markets have been left vulnerable to volatility resulting from massive portfolio inflows from countries that share little economic similarities with the region, causing a significant bout of macroeconomic instability in the domestic financial markets. The Ghana-Nigeria deal is expected to be a precursor to greater capital flows within a sub-region that already operates a liberalized trade environment.

In the near term, market operators intending to participate in this laudable initiative would need to scale up their IT support for trading securities as transactions can only be done electronically while orders would require an order management system that is synchronized with the local Stock Exchange. There is need to provide information about investment opportunities across markets within the region as this will help boost inter-market dealings by investors and assist market operators increase their revenues. Stronger Settlement system is also important. Additionally, there is need for a more robust banking system across markets such that investors can make payments in local currencies where orders are originated irrespective of the market they are trading into as this will help increase the volume/value of trades. Finally, there is urgent need to pass the enabling laws that would allow electronic trading and direct market access to take place in the various exchanges within the region.

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.

Top performances for USD investors at Africa’s stock exchanges

Malawi came out as Africa’s top-performing securities exchange for USD-based investors over 2013, with a strong 62.4% return over the year to 31 December. According to data published by the excellent website, www.investinginafrica.net, 8 out of 13 African exchanges surveyed beat the 29.6% return achieved by the key US S&P 500 equity index.
Other top performers for USD investors included West Africa’s regional securities exchange Bourse Régionale des Valeurs Mobilières (BRVM) which covers 8 countries. Ghana Stock Exchange gave 44.8% return, the Nigerian Stock Exchange was close behind with 44.6% and Kenya’s Nairobi Securities Exchange scored 43.7%.
Worst performers were the Namibian Stock Exchange (-2.6%) and the South Africa’s Johannesburg Stock Exchange (JSE) with a return of -9.3%, both strongly affected by the decline in the exchange rate of ZAR currency against USD.
Prospects for African exchanges continue to look good with many African economies expected to continue strong growth in coming years and increasing deal interest. However, changes in quantitative easing in the US could lead to cash withdrawals from emerging and frontier markets including Africa.
Liquidity is a major challenge for many exchanges, according to the data by Ryan Hoover of InvestinginAfrica. Zambia’s Lusaka stock exchange only traded $0.7million of African equities a week, while Malawi and Uganda only achieved $0.8m each and Namibia $1m. Ghana was at $3.5m a week, just behind Abidjan-based BRVM which traded $4.6m, while Mauritius managed $5.7m a week, Botswana $6.2m and the Zimbabwe Stock Exchange $8.5m. Most liquid exchanges in the list (which does not include the Egyptian Exchange) include Nairobi averaging $37.1m a week, Nigeria at $106.8m and the JSE at $3.5 billion of equity trading a week.
Although Hoover lists the Dar es Salaam SE as trading a creditable $10.7m a week, a news report in the Tanzania Daily News say turnover jumped 5 fold to TZS252.3bn ($155.9m) in 2013, up from TZS50.9bn in 2012, which is equivalent to $3m a week. The paper quotes DSE’s CEO Moremi Marwa saying: “The DSE outstanding performance demonstrates the increased activities coupled with education campaigns geared at enhancing awareness that gradually made the market more vibrant”. However, the article notes there was a single transaction for TZS78.5bn ($48.5m) in Tanzania Breweries (TBL) in the third week of December 2013 as 48 deals between the International Finance Corporation and local investors which boosted local ownership and may have influenced the figures.

For the full table, check www.investinginafrica.net here:

Africa’s securities exchanges and their part in Africa’s future

“How can African exchanges become an integral part of the continent’s economic transformation?” This is the challenge from Sunil Benimadhu, President of the African Securities Exchanges Association (ASEA www.african-exchanges.org), at the flagship conference in Abidjan, Cote d’Ivoire, earlier this month. It is a good agenda for action by Africa’s securities exchanges in 2014.
Benimadhu asks how the stock exchanges can “become powerful enablers and powerful drivers of change”; how they can “empower the middle-class, democratize the economy and help overcome poverty”; and how capital markets can “effectively provide the much-needed capital for corporate funding, but also the funding of governments’ social programmes in Africa?”
He identified 4 “S”s for securities exchanges:

S is for synergy
“There is a fundamental need for African stock exchanges to establish strong synergies with the other clusters within the financial services sector, like the banking sector, the insurance sector, the asset-management industry, the pension-fund industry, and work towards the emergence of an integrated approach to the development of the financial services sector in Africa. African exchanges have, for too long, been considered as mere appendages to the mainstream financial services clusters, when in effect they should have occupied a central position within the financial services spectrum, as clearly evidenced by successful financial centres in the world.”

S is support
Governments and policy-makers in Africa need “to understand the fundamental transformational role of capital markets to the socioeconomic fabric of African economies. Governments need to be fully supportive of the development of vibrant capital markets and they need to adopt policies that are conducive to the development of efficient and competitive markets.” Benimadhu cites Singapore, whose success began with a “direct interventionist approach of the Singaporean Government which made a clear statement about its vision to transform Singapore into an international financial centre and adopted policies that were fully supportive of the stated vision.” He points out how Singapore’s capital markets have contributed immensely to the transformation of the country’s economy into a world star. He added that Africa’s most successful companies should support the African stock exchanges by listing and contributing to market growth.

S is scope
African securities exchanges should “move up the value-chain and extend the scope of products and services they offer”. He acknowledges the short-term challenge is still the flotation and listing of new, valuable and liquid companies, but adds: “the short-to-medium term target implies a fundamental review of the exchange business model and the diversification of revenue streams via a strategic shift from the current equity-centric focus. New products including bonds, exchange-traded funds, structured products and eventually derivatives need to be introduced.”

S – substance
“Substance is about the ability of African Stock Exchanges to demonstrate that they have created value for the different stakeholders they service, namely issuers, investors and society as a whole.” Benimadhu says exchanges need to show how they have enabled existing issuers to raise capital to fund their growth and to create value for their shareholders and this will help bring new issuers to the market. “The substantive contributions of African Exchanges on both these counts are quite compelling and I think that these strengths need to be aggressively marketed by African exchanges to attract new issuers and broaden our product offerings.”
It is also important for African stock exchanges to improve their image and marketing to investors: “African exchanges need to demonstrate that they operate in a cost-effective and transparent manner, that information on listed scrips are readily and timeously available and that exchanges offer products that can potentially generate attractive returns to investors.
“With regards to society, exchanges should demonstrate that they can contribute to the democratization of the economy, create wealth for the citizens of a nation, contribute to the job-creation process, improve corporate governance and finally contribute to the overall well-being of a society from both a quantitative as well as a qualitative perspective.”

Panels at the conference included government support to the development of vibrant capital markets in Africa; how exchanges can generate substance and value for issuers, helping issuers tell their story right and endorsing effective communication strategies; and listening to issuers and investors on how African exchanges have added value to each.

African securities exchanges celebrate – and get challenged

ABIDJAN, COTE D’IVOIRE – The atmosphere was festive as Africa’s securities exchanges got together for the annual “must go” conference. Some 350 delegates from all over the world gathered at the atmospheric Hotel Sofitel Ivoire for 2 days of debate including 8 panels.

Prime Minister pledges support says exchanges should be innovative
Cote d’Ivoire Prime Minister Duncan Kablan Duncan came to open and close the panel, and he challenged the exchanges to come up with innovative solutions that would help finance Africa’s growth. He made clear that the conference theme “from progress to achievements” meant that Africa’s leaders expect a lot from the securities exchanges.
He pointed to the strong economic growth in Africa and its world beating economies, and said that this still hid a lot of challenges. Building the electricity and other infrastructure are among the challenges and African states do not have the right instruments yet to finance these through the capital markets.
He said governments and markets had to seek to remove constraints to growth, such as the overwhelmingly short-term nature of funding available and lack of finance for small and medium enterprises (SMEs), compounded by drastic reductions in development aid since the crisis. He pointed to giant achievements too, such as the creation of a common market in ECOWAS with 300 million people.
He told of Cote d’Ivoire’s own efforts to recover fast from a decade of destruction. He said growth was 9.8% in 2012, and is targeted for 8.7% in 2013 and 10% in 2014. He added that peace, security, reconciliation and cohesion were essential and hailed the success of the Committee of Dialogue and Reconstruction which “has contributed to the normalization of peace and the return of stability”.
The Prime Minister pledged a new emphasis on privatization after the previous round in the 1990s and progress on many regional projects including highways to Lagos, Ndjamena and Ouagadougou as well a railway to link six countries, airport and seaport expansion, the gas interconnect line and the West African Power Pool investments.
“We appeal to all parties, please increase your support and look for new initiatives that bring synergies. We need to improve the number of companies that are listed and the market capitalization many times by 2020. The market deserves to be supported at the regional level.”
He cited as good initiatives the fibre network and popularizing stock exchange activities.
He said that at the heart of the challenges for stock exchanges is the transformation of Africa, “our stock exchanges should be ambitious to bring the innovative solutions”

Other opening speakers included Sunil Benimadhu, President of the African Securities Exchanges Association, and Thierry Tanoh, CEO of Ecobank Transnational International.

Your editor had the honour of moderating 2 panel discussions
* Panel 1: “Why now and why African frontier markets?”, the panellists were Colin Bell (Head of Global Emerging Markets at leading stockbroker Auerbach Grayson), David Finch (Head of Portfolio Mangement at BNP Paribas) and Hubert Danso (CEO, Africa investor).
* Panel 7: “Innovation in capital markets infrastructure: relevance to African securities exchanges”, with banter between leading African IT vendors Sandy Frucher (vice-chairman of Nasdaq OMX Group) and Tony Weeresinghe (CEO of Millennium IT and Director of Global Development at the London Stock Exchange Group), and other contributions from Naseer Akhtar (President and CEO Infotech Group) and Hannes Takacs (managing partner of CAPMEX, the capital markets advisors).