African Capital Markets News » East Africa

East African investors opening accounts at Nairobi Stock Exchange

Tom Minney — Wed, 04 Jan 2012 11:41:29 +0000

Although the number of investors from other East African countries opening trading accounts at Kenya’s Nairobi Stock Exchange (www.nse.co.ke) is still very small, it is growing more consistently in the last 2 years than other categories of investors. According to data to 30 Sept released by Kenya’s Capital Market Authority (www.cma.or.ke), East African individual investors opened 97 securities accounts at Kenya’s Central Depository and Settlement Corporation (www.cdsckenya.com). This compares to 92 accounts opened in the full year 2010 and 79 in 2009.
By comparison Kenyan individual investors only opened 27,669 accounts in the 9 months to September 2011, compared to 120,756 accounts opened in 2010 and 52,836 in 2009. Kenyan equity trading has remained subdued as investors say high interest rates make them choose government debt securities over equities.
One potential reason for the East African interest, according to an article in the East African , is that Ugandans are opening trading accounts at the NSE in anticipation of the IPO of electricity distributor Umeme (www.umeme.co.ug) scheduled for 2012. Umeme is expected to cross-list at the NSE and the Ugandan Securities Exchange (www.use.or.ug). Some investors open multiple accounts ahead of a potentially “hot” initial public offering (IPO) of shares, where they hope to sell their initial allocation quickly and make a quick profit, as this is likely to maximise their share of allocation if the IPO is oversubscribed.
Trading experience shows that cross-listed East African shares such as Centum, Kenya Airways, Jubilee Insurance, trade more on the NSE compared with the Dar es Salaam Stock Exchange (www.dse.co.tz) and USE. The increased liquidity in Nairobi means that East Africans are better off having a trading account at the NSE. The paper comments that Rwandans, Tanzanians and Ugandans are probably realising this fact and also taking positions ahead of the listing of some of their firms on the NSE by opening more CDS accounts in Nairobi: “Investors will go the extra mile to open and operate, as proxies, CDS accounts in the names of their relatives or friends who know nothing on trading in shares. Expect an influx of Rwandese, Tanzanians and Ugandans at the NSE in 2012.”

InReturn Capital invests in Kenya’s Eagle Eye Laser Centre

Tom Minney — Thu, 03 Nov 2011 08:49:11 +0000

East African venture capital firm InReturn Capital (www.inreturncapital.com) has entered a partnership with Hurlingham Eye Care Services group (HECS – hurlinghameyecare.co.ke), according to a press release issued on 2 November. InReturn Capital is an impact investing company which aims to generate positive social impact and profits by investing in small and medium enterprises (SMEs) in the East African region, from its offices in Nairobi, Kenya and Dar es Salaam, Tanzania. It has Jacana Venture Partnership (www.jacana.org) as an investor and key partner in fund management, and several Dutch and international partners.
HECS has been operating optical shops and a diagnostics centre around Nairobi since 2000 and in April 2010 opened the Eagle Eye Laser and Diagnostics Centre at the 5th Avenue Building on Ngong Road, close to the Nairobi Hospital. This aims to be a leading provider of eye-care surgery and diagnostics in East Africa, particularly long-term eye problems. The centre is the first clinic in East Africa to offer Lasik surgery, which is the most advanced type of laser surgery for vision correction. Other eye surgeries include cataract, glaucoma, multifocal refractive surgery, as well as a broad variety of eye diagnostics using modern technology. The founders, Dr. Ilako, Dr. Kimani and Dr. Kiumbura, all have a long track record in eye surgery and have teamed up with Dr. Gaeckle, one of the most successful and experienced eye laser surgeons in Germany.
InReturn already has investments in construction, infrastructure and energy and is keen to expand into healthcare. It linked with HECS in July 2011. It provides hands-on support to HECS in strategic focus, human resource management and marketing and financial administration processes, as well as joining weekly management meetings and being a member of the board. Its investment in the surgery centre will assist in expanding and improving operational capabilities while the centre prepares to expand within the region. The plan is also to set up a non-profit unit that will provide free eye-care health services such as free surgeries and consultations to the lowest income groups.
Dr. Kiumbura, CEO and co-founder of HECS commented: “There is a saying in my language that two are always better than one. The partnership with InReturn has just proven this to be true one more time! It has been a time of improvement in the organisation, from personal growth to organizational transformation, and to a more efficient and focused entity from the time we started working together. I have no doubt in my mind that together we will grow to unchartered heights in provision of quality affordable eye-care in this region in the coming years.”
Eelco Benink, Investment Manager of InReturn commented: “We are excited to invest in this state-of-the-art eye-care institute in Kenya. The doctors are amongst the best in their field and the technology available at the Eagle Eye Laser Centre is unparalleled in East Africa. Together with the optical shops it forms the only one stop shop for eye health care in greater East Africa. Our partnership will lead to further expansion of the HECS group, and it will contribute to the growth of quality medical industry in the region.”
Other InReturn investments include Vipingo Stone, Equator Shipping on Lake Victoria and an engineering company developing micro hydropowerplants.

Ethiopia plans more bonds for $4.7bn hydropower dam

Tom Minney — Fri, 30 Sep 2011 08:10:38 +0000

Ethiopia has raised Birr 7 billion ($408 million) of debt to finance the $4.8 bn Grand Ethiopian Renaissance Dam on the Blue Nile River and plans to issue more bonds. Communications Minister Bereket Simon said the country is not raising funds from foreigners in a bid to demonstrate its economic resurgence, according to an interview on Bloomberg yesterday (29 Sept).
The 5,250-megawatt dam, also called the “Millennium Dam”, is scheduled for completion in 2017 with the first 700 MW to be generated in 2015. It is on the Blue Nile, the main tributary of the Nile River, about 30 kilometres from the border with Sudan. According to the report, the dam wall is to be 145 meters high and 1.8 kilometres long and the lake will be 1,680 square kilometres (Lake Tana is 3,000-3,500 square kilometres according to Wikipedia), reportedly mostly uninhabited forest in the western Benishangul-Gumuz region.
Prime Minister Meles Zenawi launched the project and construction in April. Ethiopia is busy with many giant hydropower, wind and other generation projects to use its potential to generate 45,000 MW of hydropower, 10,000 MW of wind and at least 1,000 MW from geothermal sources. It is becoming a regional electricity exporter to counteract shortages in the nine East African Power Pool (www.eappool.org) countries, including Kenya, Djibouti, Sudan and Uganda, which are to be connected by a regional grid by 2016. The country started exports to Djibouti in May, a transmission line to Sudan may be completed by January and a feasibility study for a link to Kenya has been finished. Ethiopia is seeking to diversify the fast-growing economy, which used to rely on commodities such as coffee for most of its foreign currency.
Bloomberg quotes Bereket: “Building a dam on the Nile has been the dream of every Ethiopian. For millennia, we have been looking at the Nile as if it has been a curse that took our fertile soil and benefited others while Ethiopia was impoverished.” Bereket is heading a “public mobilization council” to raise funds for the project.
Egypt depends on the flow of the Nile for all of its water. Previous President Hosni Mubarak opposed infrastructure projects by upstream nations, citing old treaties established by the British which favoured Egypt. However, Ethiopia announced the dam soon after Mubarak was deposed in February and the new government has reportedly sought details of the technical and environmental studies on the effect of the dam on Egypt’s Nile water flow. Bereket told Bloomberg that Egyptian and Ethiopian officials have met twice and relations are improving.
Zemedeneh Negatu, managing partner for Ernst & Young LLP in Ethiopia, told Bloomberg: “The financial capacity to build the dam I don’t think should be in doubt at all. Over the next six years, Ethiopia can collect from taxes somewhere between Birr 450 and 500 billion.” He said the dam is “very critical” for Ethiopia to achieve its industrialization goals and for neighbouring states.
Donations of a month’s salary by civil servants have been converted into bonds to help boost the nation’s savings rate, currently 5.5% of gross domestic product, Bereket said. The opposition have criticized funding pressure on civil servants.
Public funding is unlikely to be maintained as it would be “too taxing,” so private companies have been encouraged to buy the debt, which offers a coupon of 5%. There are also plans for bonds to be offered to the Ethiopian diaspora with returns above the London Interbank Offered Rate, while sales to farmers are planned “early next year,” he said. A “significant” portion of funding will also come from the government’s development budget, Bereket said. A National Bank of Ethiopia directive was issued in April compelling banks to buy government bonds equivalent to 27% of their loans each month may raise Birr 11 bn for development programs in its first year, according to Access Capital (www.accesscapitalsc.com), the Addis Ababa-based research group. That amount is likely to increase in subsequent years, it said in an April research note.
The Ethiopian Government plans to borrow Birr 398.4 bn by mid- 2015 to invest in industry and infrastructure. The World Bank said in June this may lead to the economy over-heating and debt problems, the. Annual inflation in Ethiopia was 40.6% in August, partly because the central bank boosted money supply.

Bank of Kigali IPO lifts Rwanda Stock Exchange: 52% gain on first day

Tom Minney — Mon, 05 Sep 2011 16:15:12 +0000

Interest in share offers is high in Rwanda, after shares of Bank of Kigali (BK) rose 52% to RWF190 in their first day of trading on 1 September. The Initial Public Offer (IPO), which opened on 30 June and ran for a month, offered the shares at RWF125. According to today’s market report (5 September) total trading today was 5 deals in BK shares which ended at RWF172 (it closed on Friday at RWF 191) and in brewer BRALIRWA which was unchanged at RWF246.
The BK shares offered included a sale by the Government of its 20% stake and the bank offered a further 25%, making a total offer of 300.3 million shares for a total value of RWF37.5 billion ($63.6 m). This was 274% oversubscribed with Rwandan investors making up 75% of the shareholding. The retail investors’ pool was oversubscribed by 291%, institutional investors from Rwanda 165%, institutional investors from the region 221%, international investors 330% and BK employees and management 135%, according to a report in the East African newspaper.
The bank plans to use the IPO funds to expand its network including opening 44 branches in 2011, increase the loan portfolio and consolidate its leadership position in the increasingly competitive banking industry. The listing should also boost activity on the young RSE, Africa’s newest stock exchange which was launched on 31 January
Lado Gurgenidze, chairman of the BK board, is reported in New Times newspaper saying: “The transaction and new capital comes at the right time when the bank is focusing on building a great bank and retaining the leading position in the market. Through great service and 45% of the shares being in the hands of the public, we have all the reasons to be optimistic that it will be very liquid on the secondary market.”

Investors waitng for more offers
It is the fourth listing on the RSE. When it launched in January it immediately started trading the shares of the first domestic IPO, brewer Brasseries et Limonaderies du Rwanda BRALIRWA (www.bralirwa.com). This had been offered at RWF136 and started trading at RWF220. The other two counters are cross-listings from Kenya: Kenya Commercial Bank and Nation Media Group.
Reuters reports that appetite for shares is likely to be strong, partly because of the favourable pricing. The BK shares were offered at a multiple of 1.4x book value, a 15% discount to Kenyan banks at the time of the sale. The article quotes Nkoregamba Mwebesa, managing director of CFC Stanbic Financial Services in Kenya, saying: “Being a government exit, the Government is able to offer a discount which will attract (investors). We should continue to see appetite for all that. Rwanda is also stable politically, and that encourages investors as well. When the Government is exiting they don’t care about dilution. They are not out to really make money. The agency reports that market players said the main aim of the government was to help kick-start the bourse.
Future share offerings are likely to attract sustained interest, including government plans to sell a 20% share in the country’s biggest insurer Sonarwa (Societe Nouvelle d’Assurance du Rwanda – Nigeria’s IGI owns 35%). It is also hoping to sell shares in what Reuters called “an unidentified cement firm”, although earlier this year Ciments du Rwanda Ltd was mentioned.
Government has also held talks about selling its 10% stake in telecom operator MTN Rwanda. MTN Group is majority shareholder and has the right of first refusal on any share sales. John Rwangombwa, Minister of Finance and Economic Planning, reportedly said earlier this year: “We have two options; if MTN gives us (Government) the price we want, we will sell the shares to them directly while the other option is through an IPO depending on the other investor.” (as reported on this website)
The Minister had also said that Government would sell more of its stake in BK later. It owned 66.3% before the offer.

T+2 settlement here, electronic trading “by June”
On 3 August the RSE announced that it was adopting a T+2 settlement cycle for all securities with effect from 5 August. Sellers of securities receive money and transfer of ownership is effected on the third day. This replaced T+5 for equities and T+3 for bonds. The new system was made possible after the Central Bank of Rwanda (BNR) introduced a modern payment system, the Rwanda Integrated Payment and Processing System (RIPPS), which offers real-time gross settlement (RTGS), an automated clearing house (ACH), an automated transfer system (ATS) and a central securities depository (CSD).
Reuters reported that the next step would be electronic trading and other steps to attract more stock and debt issues. Robert Mathu, chief executive of Rwanda Stock Exchange, was reported as saying: “We are hoping to put in place an electronic trading platform by June next year.”

Kenyan IPO only 60% subscribed but regional plans go ahead

Tom Minney — Thu, 25 Aug 2011 19:23:50 +0000

Kenya’s financial services holding company British-American Investments Company Ltd.(www.british-american.co.ke) issued a statement on 23 August outlining that its initial public offering (IPO) had only attracted 60.09% of the targeted KSh5.85 billion ($63million). The company owns 2 insurance firms and an asset manager and said it will reconsider its plans, which had included real estate and regional expansion, including in South Sudan.
The listing was previously detailed on this site here.
The company successful raised KSh3.5bn by selling 390.6m shares at KSh9.00 each. It meets the minimum 50% requirement in its prospectus to go ahead and with 28,000 shareholders is permitted to list on the Nairobi Stock Exchange main board. The shares are due to start trading on the Nairobi bourse on September 2.
According to stockbroking analysts, foreigners were largely absent due to risk aversion and worries about the Kenyan economy. Reuters quotes George Bodo, a research analyst at ApexAfrica. “The timing of the IPO came … when the global markets were risk averse and foreign investors were cutting risky positions internationally.” International problems include the US economy and the eurozone debt crisis. “It was unfortunate that the US debt crisis escalated right in the middle of the offer period, causing loss of appetite amongst institutional investors especially those outside Kenya,” said Group chairman Nicholas Ashford- Hodges, according to a report in “Business Daily” newspaper.
Foreign investors normally account for 70% of action on the NSE, but Reuters says they are less active and this has been made worse as the Kenyan currency declines against world currencies.
Local retail investors recorded the highest participation, taking up 70.9% including a 142% oversubscription of the 195m shares offered to them; qualified institutional investors hung back and took up 23.7%, just over a third of their 240.5m shares allocation; employees, agents and individual life policyholders snapped up 5.2% and foreign investors were almost absent, taking up only 0.3% of the offer, less than 1% of the 195mn shares reserved for them.
Analysts said the poor macroeconomic environment in Kenya did not augur well and inflation in Kenya hit 15.53% in July, driven by food and fuel prices. Rising interest rates have dissuaded many investors from seeking funds from banks to invest in shares and banks were also not willing to take shares as collateral. Gregory Waweru, an analyst at Kestrel Capital, was reported as saying: “There was competition for funds due to tight liquidity in the market.” Many investors have not yet realized substantail returns from East Africa’s biggest IPO which was Safaricom’s listing in 2008.
British American had planned to spend KSh2.5bn on property development and group managing director Benson Wairegi said in a statement: “The property development initiative where the bulk of the funds were targeted will be reviewed with a view to scaling it down.”
The company was also to set aside KSh1bn for regional expansion and KSh1.28 bn to expand its Kenyan operations, including the asset management business and to launch new funds for Kenyans in the diaspora as well as local and international investors and to comply with a proposed law for real estate investment trusts.
Mr Wairegi said the company may consider using bank loans to finance other planned projects: “The group has no other gearing despite the very strong balance sheet, which has become even stronger with the raising of KSh3.5bn. We shall, therefore, be able to easily leverage to implement all the profitable projects that have been lined up,” according to a report in “Business Daily”.
British American launched a Ugandan subsidiary in July and at the time the chairman said next stop would be to open offices in Rwanda, Tanzania and South Sudan.

Dar Es Salaam bourse aims for IPO and 2 cross listings, capital controls easing

Tom Minney — Thu, 25 Aug 2011 07:20:28 +0000

As the East African region moves towards faster integration, Tanzania is preparing to ease controls on the amount of shares foreigners can buy, in line with changes in the rest of the region. The Dar Es Salaam Stock Exchange (www.dse.co.tz) is also hoping to increase from 15 to 18 listed companies and is preparing for an initial public offering (IPO) for Precision Air (www.precisionairtz.com) during September and cross-listings of 2 mining firms listed in London.
Gabriel Kitua, CEO of the Tanzanian bourse, told Reuters on 24 August at a meeting organised by the Nairobi Stock Exchange: “Tanzania is not exactly a closed market. Up to 60% of any listed security is available to any citizen of the world, 40% is reserved for Tanzanians… with time, the control will be erased especially as we go to the regional monetary union where free movement of funds across the countries will automatically be there.”
Reuters says the 5-nation East African Community (EAC) bloc of Rwanda, Burundi, Uganda, Tanzania and Kenya aims to have a monetary union in place in 2012 and move to a political federation by 2015. It reports that Tanzania has the tighter capital controls, including barring foreigners from investing in government securities.
Kitua also said that the approval of the cross-listing of African Barrick Gold Corporation (www.africanbarrickgold.com) is advanced: “The approval process is almost complete”. He added “The other one is in very initial stages … it is a mining company,” according to Reuters.
Barrick (ABX, listed on the Toronto and New York stock exchanges) owns 73.9% of African Barrick Gold and raised $884 million through offering the rest of the shares in an IPO on the London Stock Exchange in March 2010. Barrick describes itself as “the gold industry leader, with a portfolio of 26 operating mines and advanced exploration and development projects located across 5 continents”.
Precision Air’s listing application was received and being considered by the Capital Markets and Securities Authority (CMSA) in February, according to local news reports. At the time it was reported that Precision Air sought to raise $25m (about TSh38bn) in the IPO. Kenya Airways owned 49% and Michael Shirima, the founder and chairman of the airline, owned 51%. The IPO would see their stakes diluted to 34.2% and 34.6% respectively.
Reuters also adds that East African Breweries Ltd of Kenya is expected to offload its 20% stake in Tanzania Breweries Limited in a public offering. Kitua rejected claims in a regional paper earlier this year that EABL had been compelled by Tanzanian authorities to offer the shares at a set price: “In capital markets there is no compelling of people. This is a free market economy and decisions are done by the board of directors of the companies and no one can interfere with that.”
The agency says the most heavily traded shares on the DSE are banks such as CRDB and National Microfinance Bank and manufacturer Tanzania Cigarette Company. TBL is the biggest by market value.
“For the last 12 months the Tanzania share index has risen by 17% and the all share index by close to 7%. The market has been growing,” Kitua said. The Tanzania share index excludes shares cross-listed from the NSE, including Kenya Airways. Kitua said the postive performance is due to good earnings by listed companies and the stable Tanzanian economy: “There are signals that the trend will be on an increase for the next 6 months.” He warned that inflation is past 10% and is emerging as a challenge.
The DSE delisted the National Investment Company (NICOL) with effect from 6 July after a 1-month suspension from 6 June and it become the first company in the 12-year history of the Tanzanian bourse to be delisted. This was on account of the firm’s failure to submit 2009 and 2010 financial results, and failure to comply with a directive from the DSE Governing Council about plans to sell 22m shares it owned in National Microfinance Bank (NMB), which is also listed.

Nairobi Stock Exchange and FTSE work on new market indices

Tom Minney — Fri, 06 May 2011 21:52:23 +0000

The Nairobi Stock Exchange (www.nse.co.ke) and FTSE International (www.ftse.com) are to create new FTSE/NSE share and bond indices. These could be marketed to international investors who monitor FTSE indices, create more revenues for the Kenyan bourse and encourage foreign portfolio investors, boosting liquidity.
According to a report in Business Daily newspaper (www.businessdailyafrica.com), Terrence Adembesa, Product Development Manager at the NSE, said: “We believe this partnership will lay the foundation for the creation of data products, exchange-traded funds (ETFs) and other index-based products and will further attract enhanced foreign investment in the local market.
The NSE recently announced it would introduce a local bond index, starting with treasury bonds.
According to the FTSE Group website, it works with partners and clients in 77 countries worldwide and calculates over 120,000 end-of-day and real-time indices covering more than 80 countries and all major asset classes such as equity, bond and alternative asset classes. It is an independent company jointly owned by The Financial Times and the London Stock Exchange.
The website explains: “FTSE indices are used extensively by a range of investors such as consultants, asset owners, fund managers, investment banks, stock exchanges and brokers. The indices are used for purposes of: investment analysis, performance measurement, asset allocation, portfolio hedging, and creation of index-tracking funds.
“Independent committees of senior fund managers, derivatives experts, actuaries and other experienced practitioners review and approve all changes to the indexes to ensure that they are made objectively and without bias.
FTSE has offices in London, Frankfurt, Hong Kong, Beijing, Shanghai, Madrid, Milan, Mumbai, Paris, New York, San Francisco, Sydney and Tokyo, FTSE Group.
The NSE said they were considering developing the bond index, an equity index, equity sectoral and finally shariah index series and they should be launched during the third quarter of 2011, helping diversify the NSE’s income and enhancing the value of its brand. Mr Adembesa commented: “The agreements have been firmed up within the technical teams for both FTSE and NSE and are awaiting board approvals.” Modalities on the equity and bond index constituents, weighting and calculation are still being worked out. The partnership could work towards developing an East African index series, while maintaining the NSE 20 share and NSE All Share indices.
The newspaper reports that the NSE made KSh35.8 million loss after tax for the year ended December 2009 (compared to a KSh59 mn profit in 2008). Total income was KSh184.5 mn (KSh328.4 m in 2008) of which 89% came from transaction levies, annual listing fees, initial listing fees and application and additional listing fees. Other income was advertising, data vending and sale of publications and merchandising items and this contributed 6% in 2009. According to law, the NSE earns 0.12% of the value of all equity transactions and 0.0035% on bond transactions at the bourse.
Kestrel Capital (www.kestrelcapital.com) executive director Andre DeSimone told the paper that having an international index would add confidence and acceptability among international investors: “Stock exchanges internationally not only make revenue from fees but they also from selling the information. It would also allow international investors to benchmark and compare the performance of other markets with the Kenyan market and exposes Kenya internationally.”
Mr Adembesa said that adopting FTSE’s global index methodology would attract enhanced international investment into the local market and NSE staff would be able to share and knowledge transfer through exposure to FTSE’s calculation systems and global distribution network.

East Africa monetary union by 2012?

Tom Minney — Tue, 26 Apr 2011 21:04:57 +0000

The East African Monetary Union is supposed to be effective from 2012. The New Vision newspaper reported that senior officials including central bank governors, capital markets authorities, insurance and pensions regulatory agencies and national statistics officials from the East African Community (www.eac.int) partner states are set to meet in the last week of April 2011 for a third negotiation round in Tanzania.
The second meeting of the EAC High Level Task Force to negotiate the East African Monetary Union (EAMU) Protocol was in Burundi for 5 days in Feb-Mar and the first in Tanzania in January.
Four working groups – macroeconomic, statistics, financial sector and payment and settlement systems- will discuss the draft protocol.
According to reports, the second meeting considered the structure of the proposed East African Community Monetary Union Protocol and also finalised and adopted a matrix of issues to be negotiated in the different areas through the 4 working groups. It considered draft terms of reference for EAC macroeconomic convergence criteria that will be part of the monetary union protocol. It also advised that the study to review the EAC macroeconomic convergence criteria needed to be undertaken urgently.
The East African monetary union is supposed to be effective by 2012 after the EAC common market protocol that was effected on July 1, 2010 and the customs union in 2005.
EAC Deputy Secretary General (Planning and Infrastructure) Alloys Mutabingwa said in February that the EAC Secretariat was building capacity for the negotiation process and had signed a US$16 million grant agreement with the World Bank to support the EAC Financial Sector Development and Regionalization, initially for 3 years but with an extension for 6 more years. The project covers 5 areas with a base component of capacity building including: i) financial inclusion and strengthening market participants; ii) harmonize financial laws and regulations against common standards; iii) mutual recognition of supervisors; iv) integration of financial market infrastructures; and v) development of a regional bond market.

Rwanda Chair calls for integrated East African capital market

Tom Minney — Sun, 24 Apr 2011 23:24:24 +0000

Dr James Ndahiro, Chairperson of the Rwanda Stock Exchange, said East African countries should form a single stock market by 2015. He is quoted in the local Standard newspaper as telling a conference in Nairobi: “Financial markets contribute to 28% of the region’s gross domestic product, which stands at $80 billion. This is a very big percentage from one sector, which should be nurtured to promote further growth.”
He said that the growth of stock and capital market would help East African countries liberate themselves from dependence on foreign aid.
Companies cross-listing their stocks and offering shares to citizens of the 5 countries without discrimination was one step, he said: “We saw it in Safaricom initial public offering where all citizens of countries in East Africa bought shares as local investors. This was good because it encouraged flow of investment in the region,” he said.
He also said governments should spread knowledge and encourage people, particularly the middle-class, to invest in stock markets and infrastructure bonds: “This is where Governments can find money to develop infrastructure, create employment opportunities and improve the quality of life of its citizens.”
The Summit of the East African Community Heads of State met in Dar es Salaam on 19 April and appointed Dr. Richard Sezibera, who was until April Rwanda’s Minister of Health, as Secretary-General for a 5-year term.

IFC invests $10 mn in East Africa’s Catalyst I private equity fund

Tom Minney — Wed, 09 Mar 2011 08:42:13 +0000

The International Finance Corporation (www.ifc.org), a member of the World Bank Group, on 8 March announced it was investing $10 million in equity in Catalyst Fund I LLC. The fund aims to stimulate employment and accelerate economic growth across East Africa by improving access to equity financing for emerging and mid-size companies.
Catalyst Principal Partners (www.catalystprincipal.com), a private equity firm based in Kenya, has raised $70 million for the fund. Other investors include the African Development Bank, the Commonwealth Development Corporation, Germany’s development finance company DEG and PROPARCO of France.
The fund will invest in growth companies with dynamic management to drive growth, regional expansion, consolidation, and performance improvement. Investments in target companies will range from $5 mn to $15 mn. It will be managed by Catalyst Principal Partners LLC, and aims to invest in Kenya, Uganda, Tanzania, and other East African countries. It will provide financial and management advice to up to 14 mid-size companies across different sectors.
Paul Kavuma, Chief Executive Officer of Catalyst, said: “We anticipate additional substantial commitments in the coming months to achieve our target fund size. We are particularly encouraged by the interest expressed from regional pension funds and insurance companies, noting that we have already received significant capital from reputable local institutions and private investors.”
Jean Philippe Prosper, IFC Director for Eastern and Southern Africa, said: “IFC is supporting this fund to help East Africa’s entrepreneurs gain better access to finance and promote the high growth and dynamic companies that encourage sustainable development and create jobs and new opportunities.”
IFC is the largest global development institution focused on the private sector in developing countries. Investments climbed to a record $18 billion in fiscal 2010.