Archive for the 'Listing' Category
January 10th, 2012 by Tom Minney
The JSE Ltd (www.jse.co.za), South Africa’s securities exchange, is hoping to attract more listings from the rest of Africa in 2012 and to expand its range of products and services. This year should also see the JSE installing its equity trading system in Johannesburg, to avoid dependence on a transatlantic cable connecting it to the London Stock Exchange.
Nicky Newton-King, who took up her post as CEO last week after succeeding Russell Loubser and the first woman to hold the post, told Business Day newspaper the plan was to offer more access to African companies and products such as exchange-traded funds products that enable people to access new investments: “With the rules of inward listing being relaxed, we would also like to attract more inward listings.” Besides IPOs, Newton-King said she expected to see more types of products, such as depository receipts and derivatives linked to companies being offered.
The JSE is in “good conversation” with several companies elsewhere in Africa over more potential listings. Last November she told Reuters: “We’ve got good conversations going … particularly on the continent.” She said the bourse is targeting mining, telecommunications and financial services: “Our approach is to look at issuers that need capital — need investors where their home markets might be too small. So we’ve got a lot of different segments we are looking at, but we are looking at particular issuers rather than trying to speak to everyone.”
The JSE already has 14 African companies listed, with 4 different debt instruments and 1 African ETF. Last year Reuters highlighted that some growing African firms preferred other international exchanges, particularly the London Stock Exchange and its AIM market, over the JSE for raising capital and listings, as highlighted in stories on this website. The JSE seeks closer cooperation with other African exchanges as it competes with other world bourses: “Clearly we need to be trying to find a way to cooperate with African exchanges, with African issuers to bring more African product to the table here in SA, where we have a lot of international investors everyday.”
The JSE attracted a total of 16 listings last year, with a combined market capitalisation of more than R35 billion (US$4.3bn), according to data from the JSE’s director of issuer services, John Burke. There were also a number of initial public offerings from the property sector. About 15 companies de-listed last year and 21 were on the suspended list. The number of new IPOs worldwide is lower since the start of the global financial crisis. Newton-King said there is a pipeline for potential listings in 2012: “Definitely there’s a pipeline, there’s always a pipeline. We never talk about the number since how many companies actually list and when they list is very much dependent on the economic circumstances of the country and whether the companies themselves are ready to list.
“We are looking forward to being able to attract a wider range of companies and investment opportunities on the JSE.”
The plan is still to use the same computer provider, Sri Lanka’s Millennium IT which is a subsidiary of the LSE. In terms of a February 2011 press release, the JSE is to migrate to a new system Millennium Exchange™, which the LSE has also adopted, in the first half of 2012. Millennium IT systems are used on many African stock exchanges.
Newton-King told Business Day she hoped this will minimise the outages experienced last year, which were linked to technical issues on the transatlantic cable. The JSE halted trading on its equity markets at least twice last year, which led to the exchange attracting criticism from trading houses, which often spoke anonymously to the media.
She said: “We are critically dependent on information technology (IT) and invest heavily in IT to ensure it is robust and able to handle increased volumes as the JSE grows. Our equity systems are run in London and there’s been some trading outages in the lines between us and London…. We are bringing the systems back to avoid that. We will continue to look at whether our technology is robust enough to withstand volumes.”
She did not give much information on rumours that the JSE is talking with SA Treasury on starting a trading market for carbon credits but said the JSE was looking at the possibility and how it would work with others.
Of the type of environment that she envisions at the JSE, Ms Newton-King says: “In 2012 I would like the JSE to be recognised as a place of excellence, a place where SA’s top talent would come and work, where our clients recognise that we provide products and services that are valuable to them.”
Her former post as deputy CEO no longer exists and duties that fell to her are being given to other people so that they can also grow.
November 3rd, 2011 by Tom Minney
Reuters newsagency has put together stories on issuers’ and investors’ difficulties with African stock markets. These include lack of liquidity and sinking currencies. It notes that African companies are increasingly dual listing on international stock exchanges.
“Liquidity: the scourge of African stock pickers” quotes a range of institutional investors complaining that liquidity is a major constraint on markets such as Malawi Stock Exchange. According to the article: “Poor but fast-growing, Malawi and other sub-Saharan African countries would offer huge opportunities to international equity investors – if it weren’t for the liquidity scourge. Markets across the continent are hampered by a lack of liquidity, making it nearly impossible to take stakes in all but the biggest firms. “With the exception of South Africa, we feel all sub-Saharan African (markets) are illiquid,” said Ronak Gadhia, Africa equities research analyst at London-based frontier markets specialist Exotix. “Most of our investors are unable to invest outside the big 2 markets, and even then their investable universe is usually the largest 5-10 stocks,” he said, referring to the Nigerian Stock Exchange and Kenya’s Nairobi Securities Exchange, the two biggest markets outside Johannesburg.
It notes that Sonatel, the giant of the BRVM West African regional securities exchange, is concerned about liquidity on that market and thinking about a secondary listing. An earlier story said the pressure comes from investors.
“Africa’s growing firms shun Jo’burg for London” suggests that even when companies are thinking about dual-listing, they head to the London Stock Exchange or AIM market and don’t consider Johannesburg. The article quotes Zambeef executive director Yusuf Koya: “It was a tough decision. A key factor in the decision process was London’s reputation as the world’s financial centre, which allows us to access a potentially wider range of investors and liquidity.”
According to the article: “A total of 104 African companies are listed on the London exchange, with the majority on AIM. The combined market value of African companies listed in London is now bigger than every African exchange except Johannesburg. Just under $2.1 billion was raised by African companies on the London bourse in 19 transactions in 2010, representing about 90 percent of all equity capital raised by Africa-focused companies in 2010, said Ibukun Adebayo, the LSE’s head of equity primary markets. Dual listings are critical for companies that outgrow their home exchanges, where thin liquidity keeps large investors out. Big bourses such as London and Johannesburg also boast tougher disclosure requirements, reassuring investors concerned about Africa’s corporate governance.”
It also cites bankers that London-based investors tend to have a bigger appetite for emerging market assets than their South African counterparts and quotes a private equity manager: “South African investors don’t understand Africa risk in the same way UK investors do.” It also suggests London may be an easier sell to international investors unfamiliar with Johannesburg. Nicky Newton-King, incoming CEO of South Africa’s JSE Ltd, says Johannesburg offers a world-class standard of disclosure for a lower price and less hassle than London: “You can come to the JSE, you can raise the money here, and your shares will be traded in a very liquid environment, a very respected environment. Without going through the costs and the hoops of listing in London, but with exactly the same standards.”
African investment institutions are just starting to rise, it could be a great time to heed the call from ASEA Chairman Sunil Benimadhu for African securities exchanges to find ways to get more liquid. SADC Stock Exchanges already have a workable model, but what will cause anyone to initiate the change to move onto the next level before many more firms move activity to London , New York or elsewhere?
October 27th, 2011 by Tom Minney
Private equity managers (“General Partners” or GPs) have been able to exit some of their investments, spurred by good valuations, global private equity funds entering Africa and more interest from international companies. According to a story on excellent private equity website, www.privateequityafrica.com, data from research house Preqin (www.preqin.com) says that reported exits this year are worth $1.2 billion “as company values finally recover to reasonable levels despite uncertainty in the broader global economy.”
This compares with $79 million sold in the whole of 2010, according to Preqin data.
Here are some of the exits listed, plus a couple of others we added, which may not be included in Preqin’s data for various reasons. For more details take a look at www.privateequityafrica.com and other sites:
• Sweden’s Electrolux bought Egypt-based white goods manufacturing company Olympic Group Financial Invetment SAE for $404m, including a 52% stake previously owned by Egypt’s Paradise Capital Holding for Financial Investments SAE. The deal started in October 2010, and the price changed a bit during the revolution. Electrolux followed with a mandatory offer to other shareholders. A 2010 statement by Paradise Capital said the new funds would be put into other businesses: “Expanding the existing Paradise Capital business activities will help the Sallam Family realize its declared mission statement “80K by 2020” (to provide 80,000 jobs by the year 2020 in Egypt).”
• Mark Shuttleworth’s HBD Venture Capital sold its stake in South Africa-based mobile payment company Fundamo to Visa in a $110m trade deal.
• South Africa’s Ethos Private Equity Fund V sold a 70% stake in South Africa-based sporting goods company Holdsport (formerly Moresport), raising approximately $137m (R930m) through a pre-placement after a book-build by UBS. Holdsport listed on the Johannesburg securities exchange JSE Ltd in July, its first retail listing since 2004. According to reports, Ethos paid R681 million to acquire the retailer, including its debt, in a 2006 buyout with management, who retain their interest.
• Oil company Kosmos Energy Ltd raised $594m (more than expected) when it listed on New York Stock Exchange in May in an IPO, it had been backed by private equity firms Blackstone Group and Warburg Pincus.
• Aureos’ $381m Africa Fund achieved its first exit in February when it sold its stake in Nigeria-based biscuit maker Deli Foods to Tiger Brands, after holding the company for only 3 years. Tiger Brands paid a total of R275m ($35m) for the company. Aureos said it gained “solid” returns. In a press release, Ravi Sharma, partner for Aureos West Africa added: “Aureos’s involvement with Deli Foods has been about taking the company to the next stage in its development. As well as growing the company to the extent that it has been able to attract an international buyer, we are also proud that the improvements that we have made in health, safety and environmental procedures will bring significant benefits to the strong workforce, as well as the wider community in this part of Lagos.”
• Blackstar Group SE (linked to Blackstar Investors plc in UK) announced that it had reaped a 72% internal rate of return (IRR) in sterling and 4x returns on its sale of a 54% stake (shareholding and shareholder loans) in Ferro Industrial Products, after less than 3 years of holding the asset (it was acquired in January 2009 for GBP4.8m ($7.7m), according to a press release). The investor sold its stake in the company to Investec and Ferro management for R220m (about $30m at the time).
Other deals reportedly in the making include plans by Ethos and Actis to sell stakes in South Africa’s Savcio Holdings, an equipment repair company. This year’s arrival into African private equity Carlyle Group was understood to be one of the players looking at the company, estimated at $500m in value, according to reports General Electric and Siemens AG are also keen.
Look at the www.privateequityafrica.com for more and to subscribe to the October issue of the Private Equity Africa quarterly printed journal.
October 6th, 2011 by Tom Minney
The Initial Public Offering (IPO) of 58,841,750 shares at TSh 475 (US$ 28 cents) each in Tanzania’s Precision Air Services is set to start on 7 October and continue to 28 October. The results are to be announced on 11 November and the company expects to list and start trading on the Dar Es Salaam Stock Exchange www.dse.co.tz from 8 December. The minimum application is for 200 shares.
The airline aims to raise TSh27.9 billion (US$16.7m) to finance expansion, with most dedicated to capital spending and 6.5% for working capital. The IPO represents 30% of the company’s shares. Chairman Michael Shirima was quoted in local newspaper, The Citizen, as saying the offer price was discounted by 11% from the expert valuation.
The company prospectus was to be available on the Precision Air website (www.precisionairtz.com) from 4 October, although we cannot find it, and printed copies are also to be available from all stock brokers by today, 6 October.
At a press briefing, Shirima invited the government, individuals and public institutions to contact registered stock brokers and some banks for the application forms, noting that people might buy the shares in any CRDB Bank branch or Stanbic Bank branches across the country. He told: “It should not be surprising if the government buys shares and has partial ownership of the company. Precision Air is a Tanzanian airline and 51% of the shares should be owned by the locals.”
Kenya Airways currently owns 49% of the company. Precision Air is looking at new routes to the Democratic Republic of Congo (DRC) and Angola. During the briefing, Precision Air CEO Alfonse Kioko said talks with Angolan authorities were in final stages and they may start the route early in 2012: “The fleet expansion plan includes the increase of the number of aircraft and launching of new routes.” The airline was launched in 1993.
September 5th, 2011 by Tom Minney
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.”
August 25th, 2011 by Tom Minney
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.
August 25th, 2011 by Tom Minney
Morocco’s Casablanca Stock Exchange (www.casablanca-bourse.com) is offering grants to small and medium enterprises to encourage them to raise capital. It is offering up to 500,000 MAD (approximately $63,740 at current exchange rate for Moroccan Dirhams) from 1 July 2011 to 31 December 2012. According to an announcement on the bourse’s website, the offer is because of important role played by SMEs in the development of the Moroccan economy.
The grant is given under certain conditions and the SME must be listed on the stock exchange’s Growth or Development boards and have equity of less than 50 million MAD. It also needs to issue at least 20% of its capital and to use the IPO to raise capital. Normally the cost of an IPO is 2.2%-5% of the capital raised and the stock exchange says this can be a barrier to raising more capital.
First listing for 2011
STROC Industrie S.A. (www.stroc.com) on 30 June became the first new listing on the Casablanca Stock Exchange in 2011. The company had planned to offer 288,515 extra shares at MAD357.00 each, raising a total of MAD 102,999,855 ($13 mn), with the offer dates from 20-22 June. However the offer attracted 7,229 bids for a total of 2,515,369 shares, 8.7 times oversubscribed, and was closed on 21 June.
STROC joins the “Engineering and Industrial Equipment” sector. Société de Travaux de Réalisations d’Ouvrages et de Construction Industrielle was founded in 1989. Al Istimrar Holdings has 57.7% of the shares and Nabil Ziatt a further 14.6% while the free float on the stock exchange is 23.1%. The company said it chose to raise capital for its development through the capital market as part of its strategy to be open and transparent to its customers and the financial community. It will use the capital to expand its plant and equipment and build a new headquarters.
August 25th, 2011 by Tom Minney
Tunisia’s stock exchange, the Bourse des Valeurs Mobilières de Tunis (www.bvmt.com.tn), aims to play its role in faster economic growth in coming years. On 9 July, Mr. Mohamed fadhel Abdelkefi, President of the BVMT’s management committee, announced a 5-point development strategy for 2011-2013. This will include:
1. Develop the financial market culture and awareness through media and education outreach campaigns and open days
2. Deepen the capital market by making more companies eligible to list
3. Further develop the bond market including possibly a secondary mortgage market
4. Improve the IT platforms, including a new electronic trading and information platform in 2012
5. Develop BVMT staff and human resources through additional training programmes.
There are 58 companies listed for trading. According to CEO Mohamed Bichiou foreign participation makes up about 20% of the market capitalization, which was TND 13.2 billion ($9.6bn) on 30 June. At its 2011 peak on 7 January the TUNINDEX was at 5,217.41, before crashing 23% to a low of 4,033.43 on 25 February after the stock exchange closed during the revolution. It then gained, slipped back to 4,077.05 on 26 May but has since been climbing well and closed at 4,476.94 on 24 August, up 9.8% in 3 months. The construction and building materials index has been the best performing followed by industrial and basic materials companies, while banks have been the worse performing (many investors expected them to take hits on loans to people linked to the former regime of President Ben Ali), followed by insurers.
The first listing of 2011 was technology company Telnet Holding on 23 May at the new BVMT headquarters. The IPO for 2,070,000 shares at TND5.80 each had closed after attracting 3,950 applicants and being 3.2 times oversubscribed. The share started trading at 6.37 and closed on 24 Aug at 9.70. The BVMT is seeking to encourage more listings. During 2010 there were 5 listings, partly encouraged by the reintroduction of tax incentives for companies which list more than 30% of their capital before 2014 to benefit from a 5-year reduction in corporate tax rates, from 30-35% (depending on the sector) to 20%. They included Carthage Cement, one of the most active stocks this year, which raised TNB134.9mn ($98.7mn), and automobile distributor Ennakl which raised TND128.4mn ($93.7mn) as well as insurance company Assurances Salim, reinsurer Tunis Re and Modern Leasing.
Recently the World Bank, African Development Bank, European Union, and Agence Francaise de Développement said they would finance a programme of reforms covering administration, the financial sector, and social services. The World Bank has reportedly offered to lend $500mn for this. Tunisia is in a recession after 2 quarters of GDP shrinkage, including 3.3% in the first quarter. In June the World Bank said it expects GDP growth of 1.5% for 2011, and said Tunisian industrial output was down by more than 15% in the first part of 2011, while foreign tourists’ arrivals fell 45% in the first quarter of the year. The bank says “the pace of economic activity should pick up in Tunisia in 2012” although no rate was given and would be around 5% in 2013.Creating jobs is a key challenge.
August 8th, 2011 by Tom Minney
The Nigerian Stock Exchange (www.nigerianstockexchange.com) has placed 24 companies on full suspension for failing to submit their financial statements for the year ended 31 December, 2010 (including some since September). The NSE is reported in Nigerian media as making the suspension effective from 2 August, after the companies were given a 1-month technical suspension from 1 July. The NSE has also suspended trading in 3 nationalized banks with effect from 5 August.
In addition, 9 companies were placed on technical suspension for failing to submit their audited accounts for the year ended 31 March, 2011. This means trading is allowed, but no price movement. Further action could be taken if they do not submit results.
Full suspension means there are no transactions on the shares of the companies until the suspension is lifted. Initially 48 companies were placed on technical suspension on 1 July, but 24 of them had submitted their account statements and the technical suspension was lifted. The compliance rate is now 89% of listed companies.
According to reports, affected companies include Dangote Flour Mills, African Alliance Insurance, UNTL Textiles Plc, Daar Communications Plc, Omatec Computers, African Alliance Insurance Plc, Great Nigeria Insurance Plc, Guinea Insurance, Standard Alliance Plc, MTI Pl, and Investment & Allied Assurance. According to one report, Omatek and UNTL had submitted results on 3 August, within 24 hours of being suspended.
The bourse CEO, Oscar Onyema, was reported as saying it was painful to place companies on suspension, but that the exchange would ensure that it enforces its rules.
3 banks suspended pending delisting
The banks were suspended after being sold to the Asset Management Corporation of Nigeria (AMCOM). According to an announcement by the NSE: “Pursuant to the nationalization of AfriBank Plc, Bank PHB Plc, and Spring Bank Plc by the Nigerian Deposit Insurance Corporation (NDIC) on Friday, August 5th, 2011 and subsequent purchase of the banks by AMCON, the NSE has placed the shares of the affected banks on full suspension as a first step towards their delisting from the Daily Official List. “This means that no trading will occur in the shares of these banks as these banks no longer exist following the revocation of their licenses by Central Bank of Nigeria
The Central Bank of Nigeria on 5 August revoked the 3 banks’ licenses and the Nigeria Deposit Insurance Corporation (NDIC) transferred their assets and liabilities to newly-formed “bridge banks”, which were then bought by AMCOM, which is to provide enough capital to restore the banks to capital adequacy. According to news reports the AMCOM statement read: “AMCON has identified independent and credible persons with significant and required experience to fill the board and senior management positions for the banks and will be seeking the approval of the CBN for their appointments. AMCON is confident that the new teams will manage the banks to establish strong market positions and effectively compete in the Nigerian banking sector, providing quality service to their customers and value to shareholders.”
AMCON would evaluate its options and consider the optimal exit strategy to maximize returns. According to a breakdown, AMCON would inject N285 billion into Mainstreet Bank, formerly Afribank, N283 billion into Keystone Bank, formerly Bank PHB, and N111 billion into Enterprise Bank, formerly Spring Bank.
Dr. Kingsley Moghalu, Deputy Governor, Financial System Stability, was reported as saying the move was to ensure all 9 banks rescued would be recapitalized by 30 September. The banks had failed a 2009 stress test. Recapitalization agreements signed with investors by 4 of the other rescued banks would solve around 80% of the banking crisis and the bailout package would be recouped from all rescued banks: “We believe we have drawn a line under the banking crisis. By September 30, all banks in Nigeria will be fully capitalized.”
Several organizations, including Nigerian Shareholders Solidarity Association, Afrinvest Research and Chartered Institute of Bankers of Nigeria (CIBN), were reported to have criticized the CBN move and said it should have waited until the 30 September deadline.
July 25th, 2011 by Tom Minney
Tullow Oil plc (www.tullowoil.com) is expected to start trading on the Ghana Stock Exchange (www.gse.com.gh) from 27 July after allocating 3,531,546 ordinary shares of 10p each in a successful offer of up to 4,000,000 shares. The company says this is the largest primary share offer completed on the GSE and will more than double the market capitalisation.
The offer was open between 13 June and 4 July and shares were offered at 31 Ghana Cedis. During this period, 10,147 valid applications were received for 3,531,546 shares, representing 109.5 million Ghana Cedis ($72.3m). Everyone who submitted a valid application is to receive their shares in full, applicants are to have their GSE Securities Depository Accounts credited with their allotted shares today (25 July) and can start trading the shares on 27 July.
Tullow is also applying to the UK Listing Authority (www.fsa.gov.uk/pages/doing/ukla) to admit the extra shares to the Official List (they rank pari passu with previous shares) and to the London Stock Exchange plc (www.londonstockexchange.com) for the shares to be admitted to trading, also expected for 27 July. The same would apply to the Irish Stock Exchange (www.ise.ie).
Aidan Heavey, chief executive, said in a company announcement: “I am delighted by the success of our offer on the Ghana Stock Exchange, the largest primary share offer ever completed in Ghana. Ghana remains at the heart of Tullow’s investment decisions and underpins our long-term future in Africa.
“I would like to welcome all new shareholders, including Ghana’s National Basic Pension Scheme, to Tullow and thank them for their investment in the company. I look forward to updating all our shareholders with news of our progress, both in Ghana and beyond, over the coming years.”
BLOG PREDICTION: Look out for the rise of African financial institutions such as pension funds and life assurance. What do you think?