Archive for the 'Listing' Category
April 29th, 2013 by Tom Minney
Congratulations to the Zimbabwe Stock Exchange (www.zimbabwe-stock-exchange.com) on its excellent new website, launched last month, including a very useful listed companies’ data terminal. This is good work by the ZSE team and Rob Stangroom’s work at African Investor Relations and related websites. The site opens up great access to a wide range of Zimbabwean listed companies annual reports, together with trading and other useful data.
Congratulating the ZSE, Zimbabwe’s Minister of Finance, the Honourable Tendai Biti commented: “The ZSE has come of age and it is moving in the right direction with this new functional data portal. It creates a platform for international investors to obtain the latest information on investment opportunities in Zimbabwe, and we are in effect, promoting and branding Zimbabwe properly as an attractive investment destination. There is now more transparency than ever before and stakeholders’ information requirements are being met.” This is quoted in the ZSE press release on the new system
According to a post by Rob: “The new Zimbabwe Stock Exchange website / data portal has a number of unique notable features not least of which is the complete availability of all corporate data, corporate actions and company information – all of it disseminated using push technology and social media (Twitter and Facebook). Notable is the Investorpass function supplied by B2i Technologies in the USA, which enables each registrant to have their own secure repository (for 7 years) of all communications received from the Zimbabwe Stock Exchange.
“The new ZSE data portal has some handy online share charting tools for retail investors to compare the share price performance of the top 10 companies by market capitalization and any companies that are in the same sector. This may not seem significant other than the fact that information like this usually has to be paid for in Africa’s other stock exchanges.”
In the ZSE press release, Mrs Eve Gadzikwa, Chairperson of the ZSE, said: “The ZSE recognises the role of the Internet in communications in investor relations and, as part of our capacity building exercise, we are now able to respond to the needs of stakeholders who have been looking for a mechanism to obtain almost real-time information at the click of a button. Even though our organisation is a small institution, we are adopting a different approach in data dissemination which has meant a significant input into data collection, implementing functionality that ensures we achieve our objectives. We have teamed up with www.africanfinancials.com , Africa’s largest portal of online annual reports, to ensure that every annual report is available for viewing and download online immediately it is released. This is not something done in other markets. Compared with other data portal sites in Africa, ours is undoubtedly a notch above the rest.”
“Certainly, from a cost perspective, we can do away with hardcopy communications, which will save listed companies a significant amount of money and increase efficiency. On our side is international online investor relations precedent and best practice, high Internet penetration in Zimbabwe, so the pillars are there and it is a case of us getting online experience and taking it from there,” she said.
CEO of the SEC, Tafadzwa Chinamo, said he is impressed that the ZSE is now in control of its information and in charge of communicating relevant data to its stakeholders. “We can see that the necessary steps have been taken to ensure the ZSE’s online information dissemination is of a high standard and as a regulatory body, we look forward to the continued progress the Exchange will undoubtedly make in disseminating information timeously to all its stakeholders.”
According to Rob: “My involvement in online investor relations in Zimbabwe over the past 5 years has been rewarding and the launch of the ZSE Data Portal the pinnacle of this journey. I look forward to taking our integrated communications services to more listed companies and want to urge investors to consider Zimbabwean listed companies as an investment opportunity. In the ZSE Data Portal stakeholders in Zimbabwe now have a comprehensive tool to make more informed investment decisions.
Martin Matanda, Acting CEO of the ZSE, added: “The exchange is pursuing a bigger picture than just efficient information dissemination. It will be moving to a fully electronic communications’ platform.
View the ZSE data portal on www.zimbabwe-stock-exchange.com.
In January Rob’s team announced that stock exchange information was available on smart phones. The African IR App is a smartphone application that allows African stock-exchange-traded companies to optimize their investor relations (“IR”) content for iPhone, iPad and Android mobile devices. The African IR App is powered by the IRapp™, the leading investor relations app platform engine. He said that 8%-10% of investor relations website traffic came from smartphones.
April 29th, 2013 by Tom Minney
The Zimbabwe Stock Exchange (www.zimbabwe-stock-exchange.com) has informed investors and the public in a press release that it has terminated the listings of 3 companies with effect from 23 Apr 2013. In terms of Section 1.18 of the ZSE listing rules, they cannot be traded on the ZSE official list again. The companies are:
Barbican Holdings Limited
The Company was suspended in 2004 following the closure of the Company’s banking subsidiary by the Central Bank. Since then, Barbican Holdings has failed to meet its continuing obligations. No response has been received from the principals of Barbican Holdings Limited at the last known address.
The Company was suspended in 2004 following a material adverse event in a Zambian subsidiary. Since then, TZI Limited has failed to meet its continuing obligations. No response has been received from the principals of TZI Limited at the last known address.
Red Star Holdings Limited
The Company requested for a suspension rather than a delisting at the time of the conclusion of a Scheme of Arrangement within the group. Since then, there has been no report of progress on the purpose of which the suspension was made. Consequently, a decision to terminate has been made.
The order was announced by the Interim Board of the ZSE.
December 24th, 2012 by Tom Minney
Fortunes improved for investors in companies on the London Stock Exchange’s Alternative Investment Market (AIM) market, aimed at mid-capitalization or growth companies. Although the number of companies listed for trading on AIM has fallen every year since 2007, in 2012 the decline was only 4%, compared to a 16% decline in 2009 which was the fastest fall.
In addition, the reasons for companies leaving were mostly positive, according to a report on Reuters citing a report from Deloitte. Richard Thornhill, capital markets partner at Deloitte, is quoted as saying: “There are good reasons to be confident about the market in 2013.”
He said: “During the time of the financial crisis … the principal reasons why companies were leaving the list were negative. Either they no longer perceived that the market offered them value … or the economic climate forced them to de-list. The situation in 2012 has been very different, with the driving force behind companies leaving the list being transactions which have consistently realized value for shareholders.”
By the end of November 2012, 65 companies had been listed on AIM. Of these 44 had raised money and investors had seen an average gain of 26% since the listings. However, 113 companies had left AIM in the period, of which 41 were acquired, 17 were subject to reverse take-overs and 3 transferred to the LSE’s main market. Companies which were acquired received an average premium of 53% to the price at which the shares closed on the day before the acquisition, according to Reuters.
August 23rd, 2012 by Tom Minney
The 100th company listed on the AltX growth capital board of South Africa’s JSE Ltd securities exchange this week. According to spokesperson Nicole Cheyne: “More than R1.25-billion (USD151.9 million) has been raised via this market,” since AltX was launched in 2003.
The latest listing, on 20 August, is Bermuda-based Osiris Properties International. Osiris’ primary listing is on the Bermuda Stock Exchange. According to a press release from the JSE, it offers investors a high-yielding property investment by acquiring quality undervalued property assets predominantly in the UK and Europe. CEO Peter Todd said “Osiris Properties presents an attractive opportunity for South African investors. Our secondary listing on AltX further enhances the company’s ability to raise capital.”
This was the AltX’s third listing this year, and the weak global economy is blamed for drops in listings both on AltX and the JSE main board, but Cheyne said this is expected to improve. Of the 100 listings, 21 had successfully transferred to the JSE’s main board and 16 had delisted, leaving 63 companies currently listed on AltX. Industrials are the biggest segment by number of companies, but financials constitute 46% of the overall market capitalization of over R12.5-billion.
Also on Monday, financial services company Prescient Holdings listed on the JSE main board via a reverse listing into PBT Group (previously Prescient Business Technologies).
Source: JSE Ltd press release.
April 24th, 2012 by Tom Minney
A new securities exchange in Lusaka (Zambia) is installing tried-and-tested bond and derivative trading software and says it will be ready to launch operations next month, May 2012. BaDEx has trading platforms that include spot and derivative trading in bonds, currency, commodities (such as derivatives on metals and silo certificates on the spot market) and a variety of other derivatives including agricultural commodities, precious metals, equity and energy.
There is also a central scrip depository system (CSD) with a separate core management, risk solution, surveillance and settlement systems and platforms. The CSD will apparently link to CSDs in South Africa, Europe and the US and with the central Bank of Zambia’s real-time gross settlement system.
BaDEx, also known as Bond and Derivatives Exchange, reports that it was licensed by Zambia’s Securities and Exchange Commission on 1 January 2012 and the licence covers all securities under the Securities Act – bonds, equity, derivatives and commodities. It has signed a contract effective 12 March with South Africa’s STT (www.sttsoftware.co.za, which has also provided the JSE’s bond trading software for many years), for STT to immediately deploy trading, clearing, settlement and surveillance systems, and systems for auctioning government securities that will be suitable for the central bank, among others.
Dominic Kabanje, CEO of BaDEx, told AfricanCapitalMarketsNews that the exchange is a public-liability company owned by “banks, pension funds and private companies including the major securities dealers in Zambia”. He says they started with 6 local stockbroking members (approach stockbrokers Madison Asset, Integral Initiatives, Intermarket Securities, Laurence Paul Investment Services, Pangaea Renaissance, African Alliance Securities for more information) but are also looking for remote members, working with a South African merchant bank.
Mr Kabanje said they are now doing primary listings. BaDEx will start secondary trading using an online, Internet-based platform when the systems go live and are also seeking to partner with an international clearing house. In a press release he said they had been excited for 18 months: “We are glad to have finally concluded and signed the contract with our software systems vendors. STT applications have been tried and tested in the South African financial markets at the Johannesburg Stock Exchange (JSE), who have used this software for the past 18 years.
“We are currently setting up a network of domestic and foreign-based settlement banks, local and remote foreign members and dealers, institutional underwriters, a clearing house as well as primary panels of domestic, regional and international investors. We plan to link up all willing domestic and regional banks, institutional investors, pension funds, treasury departments, the local central bank, the government debt management office and the local member brokers to our system by providing interfaces and online access to our platforms.
“We will also shortly join the international community of CSDs in South Africa, Europe and the United States initially to facilitate faster and smoother clearing of international securities transactions. The applications from STT and others will enable us to do this and in addition will allow us to compete internationally for bond and derivatives business”.
“I do not see any obstacles from the Zambian side for companies wishing to list. Even SA companies can list on BaDEx. We want Zambian companies to dual list on JSE and BaDEx. At BaDEx we are implementing SADC protocols on the free-trade area as well as enhancing intra-regional trade. An exchange is one such conduit for regional trade. We will, however, have to deal with the problem of exchange controls in SA.”
Michelle Janke, STT’s Managing Director, said the company was happy to reach further into SADC: “We have worked closely with the executives of BaDEx for more than a year, and the closely formed relationship will stand us in good stead over the coming months whilst we deliver all the software applications and prepare the new securities market in Zambia to go live. We hope that in due course through an ongoing cooperation between BaDEx and regional merchant banks we can assist in transforming Lusaka into a key financial hub within the SADC region. We will be there to make this happen operationally.”
Products to be traded include: corporate bonds, municipal bonds, currency futures and options, interest-rate derivatives (including swaps), equity derivatives and commodity derivatives on underlying copper, cobalt, gold, oil, wheat, soya and maize spot markets, bond derivatives market, spot bond market, spot and currency derivatives market, commodities derivatives (including metals) and the commodities spot markets (with silo certificates), agricultural derivatives market, spot equity and equity derivatives markets, precious metals derivatives market and energy derivatives market.
April 2nd, 2012 by Tom Minney
This morning (2 April) South Africa’s securities exchange, the JSE Ltd, announced a revised strategy to attract more listings from African countries, as they say international interest in investing into the continent’s growth story continues to soar. The JSE is closing its Africa Board and moving the 2 listed companies onto the Main Board (listing requirements for the Africa Board are the same as for the Main Board) or to Alt-X if they are growth companies. The JSE is also stepping up trading in depository receipts (DRs) and offering a broader range of exchange-traded funds and debt instruments.
Siobhan Cleary, Director of Strategy and Public Policy at the JSE, said in a press release: “The JSE’s existing African offering includes 12 African companies. In future, there will be no differentiation (for listing purposes). For equities, this will mean that we will list the companies on the Main Board or AltX as applicable. We will also actively market and profile the African companies that are already listed.”
She says the move is driven by demand for capital and also by the increasing supply of capital from investors. African consumer markets are increasingly being targeted by local companies and companies from overseas, including a growing wave of foreign direct investment activity. Other very active channels for investments are private equity funds, hedge funds and other investors. “We think it is time that stock exchanges started to play an appropriate role in channelling the investments.”
In October 2011 South Africa’s National Treasury announced that companies previously viewed as foreign listings would in future be treated as domestic and this makes it easier for South Africans to invest in JSE-listed African stocks and makes it easier for foreign companies to raise capital. South African institutions will apparently be able to include JSE listed companies among their domestic asset holdings. Second, the JSE has developed good relations with several stock exchanges on the continent through the African Stock Exchanges Association and the Committee of SADC Stock Exchanges. Third, there are increasing investment flows into the continent’s markets and more funds focused on the region, seen as high growth compared to many world markets.
Nathan Mintah, Chairman of the JSE’s Africa Advisory Committee, commented: “This evolution in JSE’s strategy is a step in the right direction in the quest to increase capital flows into the rest of Africa. Offering issuers and investors the ‘whole JSE’ market platform for access to instruments across the capital structure in equities, mezzanine, and fixed income combined with the JSE’s liquidity will clearly benefit all stakeholders and serve as a catalyst for product innovation in areas such as exchange traded products for the rest of Africa.”
The JSE is diversifying the instrument range it offers investors from the rest of the continent. Cleary says: “We already have four interest-rate instruments from the rest of the continent, as well as an African exchange-traded product. We will give increased focus to listing further debt and quasi-equity products in future. These will also include DRs, which are traded like shares and offer investors the same economic, corporate and voting rights as holding underlying shares directly. DRs enable issuers to reach investors located outside their home markets while reducing the risk of cross-border investment.” The JSE altered its listing requirements last year to accommodate DRs, which will provide a way for African companies to raise capital on the JSE without requiring a secondary listing. DRs are applicable for African companies regardless of whether they have an existing listing on an African exchange or any other exchange. Freely traded in South African Rands, this will allow African companies to market themselves to both South African and international investors.
Cleary says there is a pipeline of companies interested and she expects more African listings this year. The JSE is competing with international exchanges such as London and New York for key listings, and also with Australia and Toronto for mining listings. Recently Nigeria’s Aliko Dangote said (see article in Financial Times, for instance) he would take the $11bn Dangote Cement for a London listing in 2013, and last year Zambia’s Zambeef also opted for London.
The two listings on the JSE Africa Board, launched in February 2009, were Trustco from Namibia and Wilderness Safaris from Botswana. The JSE says both prefer to be ranked with their sector peers and in industry sectors. Quinton van Rooyen, Trustco Group MD, commented: “This repositioning of Trustco allows the company, whilst keeping its African identity, to be benchmarked against its peers, on a world-class platform. This can only be beneficial to Trustco and the extensive African investment community.” The JSE is also pledging roadshows and analyst events to highlight the African companies from outside South Africa.
The JSE believes that its approach provides a workable solution to the sometimes complex issue of investment on the continent. The JSE’s approach also contributes to the development of markets within their own economies. Cleary added: “There is an opportunity for the JSE to work with these exchanges and various development institutions to build capacity on the continent. It also gives the JSE the opportunity to evolve its Africa strategy. This has meant looking critically at what issuers – companies, governments and others – from the rest of the continent are looking for, and aligning their needs with the JSE’s objectives,” says Cleary.
March 8th, 2012 by Tom Minney
The first offshore company was approved to be listed for trading on the Stock Exchange of Mauritius (SEM). The company has a Global Business Licence Category 1, which is more stringent than GBL 2, and the listing is in line with a new Chapter 18 of the regulations. The Financial Services Commission of Mauritius licences global business sector companies.
The listing of the ordinary shares of Evisa Investments Limited was approved on 28 February for the SEM’s Official Market. Evisa is a holding company and its primary investment is in Cannon Assurance Ltd, a company incorporated since 1967 in Kenya. Evisa has 1,000,000 Ordinary Shares of US$5.45 each in issue. Its main objective is to provide its shareholders with dividend income and long-term gain through expanding and diversifying its investments.
Chapter 18 addresses specific requirements for corporations holding a GBL 1 licence and certain types of debt instruments targeted to special categories of investors, including “expert investors”, as defined in the Securities (Collective Investment Schemes and Closed-end Funds) Regulations 2008.
According to a press release, the listing of GBL 1 companies is in line with SEM’s internationalisation strategy, and fosters the development of synergistic links between the Global Business Sector and the Stock Exchange of Mauritius. It also fits with the overall objective of positioning Mauritius as a jurisdiction of substance.
The SEM was incorporated in Mauritius on March 30, 1989 under the Stock Exchange Act 1988, as a private limited company responsible for the operation and promotion of an efficient and regulated securities market in Mauritius. Since October 2008, the SEM has become a public company, and over the years the Exchange has witnessed a significant overhaul of its operational, regulatory and technical framework to reflect the changing standards of global stock markets. Mauritius is well poised to become a leading base for funds investing into Africa from all over the world, including from India and China and there is potential for more listings.
SEM is today one of the leading Exchanges in Africa and is a member of the World Federation of Exchanges, the South Asian Federation of Exchanges, the African Securities Exchanges Association and the Committee of SADC Stock Exchanges. SEM is an Approved Stock Exchange by the Cayman Islands Monetary Authority and a “Recognised Stock Exchange” by Her Majesty’s Revenue & Customs in UK.
Evisa is a public company limited by shares, incorporated on 16 May 2002 and licensed by the FSC to operate as a GBL 1 company. The company secretary and registered office address of Evisa is International Management (Mauritius) Limited, Les Cascades Building, Edith Cavell Street, Port Louis.
February 8th, 2012 by Tom Minney
Tanzanians are set to share the gains of the exciting blue-violet gems that bear their country’s name, tanzanite. Richland Resources Ltd (richlandresourcesltd.com), listed on the London Stock Exchanges’s AIM market (ticker: RLD) says that it plans listing at the Dar es Salaam Stock Exchange (www.dse.co.tz) by April, according to local press reports reprinted on the company’s website today (8 Feb).
According to one report in East African Business Week, Dotto Medard, the firm’s corporate and PR manager, said: “We are in the final stages of listing on the Dar bourse, largely to avail opportunity to as many Tanzanians to be part of the tanzanite industry.” Apparently all Richland’s issued capital will be freely traded on the DSE and will be available to Tanzanians to buy and sell on the market without any restrictions on the number or shareholding available for Tanzanians. Another report in Tanzania Daily News says the listing will be completed by April and there may be a float of 20% of the share capital.
On 6 Feb the coloured gem stone miner announced that new tests have indicated the life of its Mereleni mine in Tanzania could be extended by 30 years. The total indicated resource of the mine is now estimated at 105 million carats, up from 72m carats. Between 2004 and 2011 the mine produced over 11.5 million carats from around 266,000 tonnes of material. The new tests have made the asset “JORC compliant”, conforming to internationally recognised measurement standards.
The company is involved in tanzanite mining, processing, cutting and distribution. The local subsidiaries are Tanzanite One Mining will continue to operate with its name along with Tsavorite One Mining Limited, Tanzanite One Trading Limited, Tanzanite Laboratory Limited and Urafiki Gemstone EPZ Limited. It has recently moved into other coloured gemstones, including tsavorite and sapphire. It says TanzaniteOne Mining has been one of the largest mining contributors to tax in Tanzania. It has invested over US$100m through mine acquisition, development and ongoing mining activities and directly employs 650. Mr. Medard pledged: “the Company will continue to support significant growth in the Tanzanian economy, through export earnings, tax and royalty payments.”
It is the largest miner and supplier of rough tanzanite and uses its position to influence the entire channel, from mine to market (it markets tanzanite globally), ensuring maximum stakeholder value at each stage. It requires large capital investment as tanzanite mining is currently operating at down dip depths of over 900 metres and needs sophisticated equipment and experience. Other expansion plans include a modern plant for cutting and polishing the tanzanite stones under the supervision of Urafiki Gemstone Ltd.
Richland backs successful community projects including support to primary and secondary schools, medical dispensary, community centre and water for people and livestock. It also provides assistance to small-scale miners including geological, mining, surveying, safety and logistical. tanzanite gem is its unique beauty, plus the finite nature of a single known resource at the foothills of Mount Kilimanjaro in northern Tanzania.
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?