August 2nd, 2010 by Tom Minney
Australia’s Minemakers Limited on 27 July became the 63rd company to list on the Namibian Stock Exchange (www.nsx.com.na) when it joined the Development Capital Board (DevX).
Minemakers has interests in phosphate mining – for which it says Namibia has the world’s sixth biggest resource. Fertilizers could see high demand as “soft commodities” including food and agriculture, may grow in value. The company is also developing Wonarah rock phosphate project in Australia.
It is an exploration and mining development company and is already listed on the Australian Securities Exchange (www.asx.com.au) and has a market capitalisation of A$54 million (US$49.3 million). According to a report in The Namibian newspaper (www.namibian.com.na), Managing Director Andrew Drummond said at the listing that it intends to list soon on the Toronto Stock Exchange (www.tmx.com).
The exclusive prospecting licences, including the Sandpiper/Meob marine phosphate some 60km offshore Namibia, are held in a joint venture company, Minemakers Tungeni Joint Venture Exploration Pty (Ltd). Minemakers, via 100%-owned Bonaparte Diamond Mines, holds 42.5% of the joint venture, fellow Australians Union Resources Limited also has 42.5% and local black-empowerment partner Tungeni Investments cc has 15%.
The secondary listing pushed up the overall market capitalisation of the NSX by about N$356 million to nearly N$1.1 trillion (US$148 billion). The DevX now stands at N$18.3 billion (US$2.5billion).
Drummond said preliminary indications are that Namibia has about 1.6 billion tonnes of phosphate, making it the sixth biggest resource in the world. According to the newspaper, Minemakers 2009 annual report says mining could start next year, “subject to a favourable result from the scoping study, and gaining the necessary development funding and government approvals”.
In its regulatory listing advertisements in the local media, Minemakers said it regarded the development of the Sandpiper/Meob project as “one of its top priorities and the natural expansion strategy for establishing two geographic distribution centres – one in Australia and the other in Namibia – to supply growing global demand for phosphate and related fertilizer products”.
Minemakers said the Sandpiper/Meob project is well-placed to develop into a new “phosphate-producing province” in Namibia. The company has another phosphate project at Rocky Point, north of Walvis Bay.
May 31st, 2010 by Tom Minney
Interest in African sovereign debt has been climbing again in recent months. Angola has stil not issued a $1 billion – $2 billion benchmark bond due in May. However, Kenya, Nigeria and Mauritius and many other countries have flourishing debt markets and international interest is good in high-yielding hard-currency bonds such as those issued by the Republic of Congo and Cote d’Ivoire.
In April top bond broker Exotix (www.exotix.co.uk) gave a “buy” recommendation on the REPCON 2.5% bond, redeemable in 2029. Then it was trading at 57.0 and offered a yield of 10.8% and was the highest-performing African sovereign bond.
Trading in $2.4 billion of Cote d’Ivoire debt in US dollars trading under New York law (2.5%, redeemable in 2032) began in mid-April, after the country exchanged it for Brady bonds it had defaulted on nearly a decade ago. Exotix only rates it a “hold” at 64.2 in mid-April, when it yielded 9.6%. The bond was expected to make up 0.75% of the $400bn Emerging Market Bond Index (EMBI), according to a recent article in The Banker, and many were expected to buy it for this reason. Exotix commentary on the bond included detailed assessment of politics and economic developments including current account surpluses and International Monetary Fund assessments.
Governments in some countries are seeking to create longer-term yield curves for domestic investors, in order to provide a framework for longer-term finance and investment. For instance Barclays Kenya is offering 20-year mortgages, compared to a few years ago when the limit was 5 years. Bonds are also being moved into electronic trading and being handled by central depositories.
According to a report on 19 May on Bloomberg, Angola was awarded credit ratings of B+ by Standard &Poors and Fitch, 4 levels below investment grade, and Moody’s assigned an equivalent ranking of B1, putting Angola on par with Nigeria, Lebanon, Belarus and Ghana. The country plans to issue $1billion – $2 billion in bonds this year.
Other high-yield bonds, including in local currencies, can be found in Tanzania, Zambia, Ghana and Kenya. Economic commentators are encouraged, as debt can be a more cost effective way to fuel long-term economic growth than equity.
Better economic management and good investor interest in government debt has paved the way for more corporate bonds, including for power and telecommunications infrastructure. This site has already reported how Kengen and Nampower have issued bonds to fund urgently needed power expansion. Telecommunications giant Safaricom has also been successful.
The successes are tribute to the increasing quality of economic and fiscal management by African governments.
March 5th, 2010 by Tom Minney
Imara Holdings Ltd (www.imaraholdings.com), an investment banking and asset management group with operations in 10 countries mostly in southern Africa, aims to expand in Zimbabwe, according to Zimbabwe’s Herald newspaper. It is currently listed on the Venture Capital Market board of the Botswana Stock Exchange (www.bse.co.bw) and the Herald reports that it wants to buy the rest of the shares in Zimbabwe’s Imara Capital Zimbabwe (Pvt.) Ltd (www.imaracapital.com), which it owns 32%, and also to dual list on the Zimbabwe Stock Exchange (www.zse.co.zw).
The report says that Imara Holdings has proposed a share deal in which local shareholders and the management will get a shareholding in the parent in return for their shares in the local company. The dual-listing on the bigger exchange could make the shares more liquid and the dollar-based ZSE is attractive to international investors. Imara management reportedly refused to comment, possibly while the transaction is under approval by authorities.
Imara Holdings website does not mention the transaction, although it has been publishing cautionary announcements since 31 July 2009. It describes the group as “medium sized”. It has offices in Botswana, Malawi, South Africa and the UK, and associate offices in Malawi and Zimbabwe as well as working relationships with Stockbrokers Zambia, Namibia Equity Brokers and Mac Capital in Dubai.
According to the Holdings website: “We are independent and privately owned, enabling objective decision-making in the service of our clients. We are active participants in the region’s financial markets and maintain one of the largest research coverage of regional equities. Funds under management exceed US$ 135m and funds under administration exceed US$750m.”
Imara group services fall into three primary operating areas:
• Corporate Finance & Advisory Services
• Institutional and Private Client Asset Management
• Securities Trading
Imara Capital is one of the associates listed in Zimbabwe, others being listed on the website as Imara Edwards Securities (Pvt) Ltd, Imara Asset Management Zimbabwe (Pvt) Ltd and Imara Corporate Finance Zimbabwe (Pvt) Ltd. The Herald report says these are wholly owned by Imara Capital.
On 8 January Imara signed a licence agreement to become the 7th member of Global Alliance Partners (www.globalalliancepartners.com), of which Mac Capital Dubai is already a member. Bernard Pouliot, chairman of GAP and of the Quam Group based in Hong Kong, said Imara joins the alliance at a very opportune time when Chinese interest in Africa is growing: “Imara is good for the alliance and for China. Alongside other members of GAP, we are committed to hit the ground running when an umbrella investment scheme by African countries is developed and eventually implemented.”
The other GAP members are Quam Financial Services Group for Hong Kong and China, Capital Partners Securities for Japan, KT ZMICO for Thailand, Thanh Cong Securities Company for Vietnam, and Westminster of Hudson Securities in USA.
In December, Imara Holdings announced it had recently acquired a majority equity stake in the Botswana stockbroking company Capital Securities (Pty) Ltd., one of 4 licensed stockbrokers on the Botswana Stock Exchange, established in March 1999.
“Shareholders are advised that negotiations relating to a further regional acquisition, which was announced in a Cautionary Announcement published on 31 July 2009 and in subsequent renewal announcements, are still ongoing. Shareholders are therefore urged to continue to exercise caution in their dealings in Imara securities,” says the Botswana announcement published in December.
October 11th, 2009 by Tom Minney
Absa Capital (www.absacapital.com), the investment banking arm of Absa Group, plans to work in a range of African debt markets, particularly in countries where its parent, Barclays, is active. Standard Bank has so far been the leader into Africa. The new Chief Executive, Stephen van Coller, who took over from John Vitalo from 1 October, was reported as having told Reuters the group would hope to increase revenues by up to 50%-60% over the next 3 years through more African business.
Van Coller is reported as saying: “We’ve seen debt capital markets starting to open up in Botswana, Kenya, Tanzania and Nigeria. There’s actually been quite a lot of interest because the yields are quite good and I think people are seeing emerging markets as handling the recession better.” He said there is growing foreign demand for emerging market sovereign debt, particularly in Nigeria, Ghana, Kenya and Tanzania. Botswana has strong demand for debt and other products but analysts say more products are needed on the market before there can be enough liquidity.
Kenya’s Safaricom mobile phone company (www.safaricom.co.ke) on 7 October announced a KSh 5 billion (US$67 mln) bond, pegged to Central Bank of Kenya rates. It is the first tranche of a KSh 12 bln programme approved by the Capital Markets Authority (CMA). The offer, aimed at institutional clients, closes on 29 October.
Safaricom Chief Executive Officer Michael Joseph is reported by local media as saying: “The conditions and pricing are right and we are confident the market will endorse our overall strategy by taking it up. Safaricom will be using the funding for general corporate capital purposes, including the rollout of some critical projects.” He said it would increase capacity, build a better network and expand to other areas that are yet to be accessed especially the north eastern part of the country.
Arrangers are Barclays Bank of Kenya (with Absa Capital), CFC Stanbic Bank and CFC Stanbic Financial Services. The joint sponsoring stockbrokers are CFC Stanbic Financial Services and Kestrel Capital (East Africa) Limited. The five year bond has a fixed component offering 12.25%, compared to 9.50% on the 5-year treasury bond, and a floating component offering 1.85 percentage points above the 182-day treasury bill, according to Business Daily (www.businessdailyafrica.com). The minimum subscription is KSh1 million. In 2008, Safaricom’s Initial Public Offer attracted 866,000 applicants, and the minimum share uptake was KSh10,000.
Nampower (www.nampower.com.na), the Namibian Government-owned electricity provider, plans to issue a ZAR 250m bond in November 2009 to raise capital in order to help it bridge the looming gap to supply enough power for growing demand. The company is reported as planning to boost cash reserves and strengthen its generation capacity and transmission network so as to avoid power supply disruptions next year. IN March 2009 ratings agency Fitch gave Nampower a BBB- long-term foreign currency rating and national long-term A- rating as monopoly provider.
Nampower already has a bond (NMP20) listed on the NSX, with a coupon of 9.35% and maturity in 2020.
Power shortages are becoming common in the southern end of Africa, and Namibia faces difficulties to buy sustainable imports from South Africa. However it is building an interconnector through the NorthEast Caprivi Strip to import an agreed 150MW from Zimbabwe, and agreements are also signed with ZESCO of Zambia (100MW), Mozambique (40MW) and it is in discussion with Democratic Republic of Congo’s SNEL to import 50MW. The Southern African Power Pool has led to strategic planning and connections.
In Uganda, the PTA Bank has extended the deadline to 12 October for its UgSh 40 billion ($21 million) bond issue, apparently to meet demand. Kenya Electricity Generating Company (Kengen) is reported on Reuters to have said it has received applications worth over KSh 25.2 bln for its KSh15 bln 10-year bond. However, it has regulatory approval to absorb an extra KSh 10 bln, in what is known as a “greenshoe” option. Earlier Kengen said it had enough projects to use the extra funds.
August 7th, 2009 by Tom Minney
The listing bell rang at the Namibian Stock Exchange (www.nsx.com.na) on 4 August for the listing of West Australian Metals Limited (“WAM”) on the NSX’s Development Capital Board (DevX). It is the sixth uranium producer to be listed on the NSX and is also listed on the Australian Securities Exchange (www.asx.com.au, where it is listed as WME).
WAM is exploring for uranium and in 2006 acquired 80% of Marenica uranium project, with an inferred resource of about 34 million pounds of uranium oxide, just north of the Trekkopje uranium mine in the western desert Erongo Region which is being developed by French giant Areva.
Namibia is the fourth largest producer of uranium in the world, supplying 7%-10% of the total. This could rise driven by increased exploration, in turn caused by rising uranium prices as the world takes keener interest in alternat ive energy sources which do not have global warming impact. WAM is the sixth dual-listed uranium producer on the NSX.
The company has pledged investment of AUD 8 mln ($6.7 mln) and could start production in 2012. Namibia is becoming a major uranium producer and WAM CEO John Young was reported in local press at the listing ceremony to attribute the company’s interest in Namibian uranium to the stable regulatory and political environment, as well as the high prospects of discovering both primary and secondary uranium deposits.
“This is one of the best places to explore, certainly in Africa, if not in the world,” he is reported to have said.
He said the mining project would have only positive effects on the surrounding communities and minimal environmental impacts. The company also intends some Black Economic Empowerment transactions and currently reportedly employs five Namibians.
WAM dual listed 448,740,896 fully paid shares, which closed at N$1.27 on 4 August – adding some N$567 mln ($71 mln) to the total market capitalization – and up 7 cents by the close of trading on 5 August. The listing was sponsored by IJG Securities (Pty.) Ltd.