Archive for the 'South Africa' Category
December 14th, 2012 by Tom Minney
Africa’s 24 stock markets should learn to work together better if they are to seize high levels of investor interest, said Nicky Newton-King, CEO of South Africa’s JSE Ltd (www.jse.co.za), Africa’s biggest securities exchange. She was speaking in an interview with agency AFP.
“The appetite for Africa is very, very high. I think everybody is trying to find their way, to participate meaningfully in that. All of us who are privileged enough to run exchanges, need to figure out that these waves of investor appetite aren’t yours by right. Once they come you have to be able to ride them properly. We should not be taking this as business as usual, this is a business opportunity.”
The International Monetary Fund forecasts the aggregate economy of sub-Saharan Africa will grow at around 5.7% next year, presenting a giant opportunity.
Newton-King said on 7 Dec that one way to channel the investor interest through African markets would be to make it easier to invest across borders and to improve liquidity in small markets so that assets can be bought and sold quickly.
The JSE already works closely with the Namibian Stock Exchange (www.nsx.com.na) and she said it is looking to make deals with two other African bourses. She said that creating a single pan-African bourse is not currently on the agenda and the JSE is concentrating on improving the continent’s financial plumbing including allowing cross- and dual-listings and easier order-routing.
“I think it is far more about collaboration. Were we not to have any exchanges on the continent I think we would have wanted to create a single exchange that would service multiple jurisdictions out of one legal base. That’s the most efficient way to do it, but I’m a bit of a realist. Once you try to do cross-border mergers and acquisitions, you run into much more trenchant issues of a regulatory nature, all of which stem from ‘how do we protect the local investor?’, ‘how do we make sure the local market grows?”
Newton-King identified liquidity as a key challenge to attract foreign investors: “Really big trades are not going to go to illiquid markets. The average day’s trade on the JSE is more than the average annual trade on Kenya and Mauritius put together. There are amazing companies in both of those countries.”
She said that allowing Kenyans to invest in joint-listed South African stock in KES shillings, or by allowing South Africans to more easily place orders into Nigerian stock markets would attract more foreign investors. She adds that there are benefits from cross-listing (securities being traded on more than one exchange), as the JSE learned when its leading shares moved to London: “When Anglo-American cross-listed in London, the amount of trades in Anglo-American increased. South Africa’s percentage of trade in Anglo-American decreased, but the decreased percentage was worth more. In those cases you have to think quite bravely.”
She was echoing a theme about Africa’s securities exchanges needing to become more liquid to serve the growing needs both of investors and of enterprises seeking capital.This theme has been strongly stressed by Sunil Benimadhu, CEO of the Stock Exchange of Mauritius, since he took over as Presdient of the African Securities Exchanges Association in October 2010, as reported on this blog.
The JSE has consistently offered to work closely to help other exchanges to develop and the author of this blog was GM of NSX when it linked its trading and broker systems in 1998-9. Exchanges in Southern Africa and in East Africa are stepping up the pace of collaboration. The Committee of SADC Stock Exchanges (COSSE) is working to forge more links,improve technology and other connections and take other steps to improve markets and boost liquidity, as reported here.
“Nigeria the new gateway to African capital markets”
The Nigerian Stock Exchange (NSE – www.nse.com.ng) aims to transform Nigeria into the gateway of African capital markets. Oscar Onyema, CEO of the NSE, on 12 Dec said this at a national competition for secondary and tertiary schools and colleges in Lagos. Priorities for the NSE management in 2013 will continue to be innovations in technology and new product development. Onyema promised more technology-based solutions and data services and said the NSE would advocate changes in policy and would also continue cleaning and restructuring, and making the market accessible.
November 29th, 2012 by Tom Minney
New giants are arising in African investments – the domestic pension funds. In Nigeria the National Pensions Commission (PenCom) estimated registered pensions to be worth US$14bn in June 2011, with asset values up by 8% in three months; Namibia’s Government Institutions Pension Fund alone is worth some $6bn; South Africa’s pension funds grew at a compound annual growth rate of 14.3% in US dollar terms over 10 years to December 2010, including over 28% in 2010 and Tanzania’s pension industry was audited at $2.1bn for 2010, and growing by 25% a year.
The number of pensioners is set to soar, according to United Nations figures, as the number of people over 60 years in Africa will rise from 55m in 2010 to 213m by 2050, compared to 236m Europeans over 60 years old by 2050. Current pension funds cover only 5%-10% of Africans ranging from 3% in Niger but it used to be 80% in North African countries such as Egypt, Libya and Tunisia. Pensions are not available at all in some countries.
Regulatory reforms are driving the growth of African pensions. Recent reformers include Cote d’Ivoire, Gabon, Kenya, Nigeria, Senegal and Uganda. Ghana created a National Pensions Authority with a 2010 act. Reform in Kenya, including investment guidelines and a new regulator, resulted in strong growth and good investment returns. Tanzania passed the Social Security Regulatory Act in 2008. The rising pension industry is likely to boost fund management and equity industries, exits for private equity and even to fill some of the $45bn annual funding gap for infrastructure. For instance, In January 2012, Tanzania’s National Social Security Fund signed an agreement to finance 60% of the $137m cost of building Kigamboni Bridge. South Africa’s $130bn Government Employees Pension Fund is a major investor in the Pan-African Infrastructure Development Fund which raised $625m in 2007 and is targeting $1bn on its second offering.
For more details on Africa’s pension industry, please check my article published in The Africa Report magazine and website, here is the link www.theafricareport.com and for brief profiles of 6 giant African funds, check here.
November 28th, 2012 by Tom Minney
The 86 emerging markets members of the world’s securities markets regulator, International Organization of Securities Commissions (IOSCO) (www.iosco.org), form 80% of IOSCO membership and are increasingly important in the global economy. They have backed the setting up of IOSCO Foundation, to boost funding so IOSCO can scale up research, education and training and technical assistance. IOSCO, the leading international policy forum for securities regulators, is recognized as the global standard setter. The organization’s membership regulates more than 95% of the world’s securities markets in 115 jurisdictions and it continues to expand.
IOSCO’s Emerging Markets Committee (EMC) met on 19-21 Nov in Santiago, Chile, and was reported in this IOSCO news release. It includes the world’s fastest growing economies and 10 members of the important G-20 group of countries. New members are still joining, boosting its role in IOSCO. The Chairman of EMC has a seat on IOSCO’s influential Financial Stability Board.
EMC Chairman Vedat Akgiray of the Capital Markets Board, Turkey said: “Since the distribution of global economic wealth is continuously changing in favour of today’s rapidly growing emerging markets, as the future candidates for being developed economies, ‘proper’ securities regulation in today’s emerging markets is tantamount to ‘proper’ regulation of tomorrow’s developed markets. Therefore, emerging markets within IOSCO and the global financial system are much more important than they were in the past.”
A task force is working on ensuring emerging markets have a stronger voice in IOSCO. According to Akgiray: “A stronger role for the EMC in the future is supported by its members, given its growing importance in the global financial markets and international bodies. The new structure and the functions of the EMC in IOSCO after 2014 will be designed in the coming months, with more importance given to market development and capacity building activities.”
EMC members also debated their perceptions of major emerging risks in their jurisdictions, as part of an IOSCO effort to anticipate systemic risks before they disrupt markets. They warned of spill-over effects from developed economies’ crises, the unintended consequences of some global regulatory reforms as they are applied to emerging markets, sudden capital withdrawals and their impact on liquidity, and the expanding regulatory perimeter. Members highlighted the following as major concerns and challenges, among others:
• Capacity-building, investor education, financial inclusion and literacy to rebuild trust in capital markets;
• Strengthening corporate governance, developing SME financing and corporate bond markets;
• Predominance of bank financing;
• Complex financial products and institutions;
• Risk management and risk-based supervision,
• Development of corporate bond markets
IOSCO secretary-general David Wright who started in March (see IOSCO press release) said one of his core priorities was boosting IOSCO’s funding to help aid its work in assisting emerging market regulators with technical advice. He was reported on eFinancial News as saying: “Helping develop emerging markets’ securities markets and ensuring that they are fully on board at a decision-making level is fundamentally important to the global economy.
“As banks become ever more constrained in terms of leverage, and the public sector is starved of cash for years, if not decades, then the securities markets will have to play a much greater role in capital allocation. For that reason, we must have a vision for a truly global securities market, based on the application of rigorous standards.”
The Foundation is to be proposed at the IOSCO Board meeting in March 2013 in Sydney. Paul Muthaura, Acting CEO of the Capital Markets Authority Kenya, said: “The Capital Markets Authority Kenya and indeed the whole East African Securities Regulatory Community warmly welcome the launch of the IOSCO Foundation. This initiative is central to mobilizing the critical resources necessary for capacity building, training exposure and research support that are at the core of supporting emerging markets to converge with international standards of the Foundation.”
A key tool of IOSCO is the framework for the Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information which enables regulators to exchange information in the case of an investigation, boosting international enforcement and effective global regulation of securities markets. IOSCO members who have not yet signed are encouraged to do so by January 2013. So far 89 IOSCO members have signed and another 30 are invited to be listed in Appendix B, members who are committed to becoming signatories but lack legal authority to comply. Two members of EMC have not applied to sign the MMoU. South Africa, Nigeria and most recently Tanzania are Appendix A signatories in Africa, as reported on this blog in May.
Ranjit Ajit Singh, the Vice Chair of the EMC and Chairman, Securities Commission Malaysia, said: “Our role as securities regulators in emerging markets has become undeniably more challenging as capital markets in emerging economies grow in size and take on a more significant role in financing global economic growth. The Emerging Markets Committee will therefore need to play an increasingly more significant role within IOSCO and the wider regulatory policy framework to contribute to international efforts in regulatory reform and market stability.”
NOTE: Vedat Akgiray, Chairman of IOSCO’s Emerging Markets Committee, Vice Chairman of IOSCO’s board and Chairman of the Capital Markets Board in Turkey will be a speaker on the panel “Capital Market Reforms: Impact of Global Regulations on Emerging Market Economie” next Monday (3 Dec) at the African Stock Exchanges Association conference (ASEA 2012) in Cairo, Egypt. Other speakers are Dr Ashraf El Sharkawy, Chairman of the Egyptian Financial Supervisory Authority (EFSA) and Bob Singletary, PFS Senior Capital Markets Advisor and Principal, Lenzie Fisher Hendry LLC (and I will be moderator). For more details of the conference, look here: http://www.aseaegypt2012.org.
November 4th, 2012 by Tom Minney
South Africa’s JSE Ltd (www.jse.co.za) continues to expand its commodity derivatives range. It has added silver and platinum “quanto futures” to its existing gold, copper and Brent crude quanto futures launched earlier this year. It is also helping develop the South African grain market by allowing Safex silo receipts to complete a futures contract, so that producers and buyers can trade grain with a bid or offered premium depending on location, for instance if a buyer wants grain in a particular location.
The JSE has partnered with Rand Merchant Bank, which is the initial market maker. The commodities are referenced as part of the JSE’s existing licensing agreement with the CME Group.
Commodity gain, without currency pain
According to a JSE press release on 1 Nov, a quanto future is a derivative instrument which, on the JSE, is a ZAR-denominated commodity investment product which delivers the same payoff as a pure USD-denominated commodity investment. This lets investors gain exposure to the foreign underlying commodity without being exposed to the USD-ZAR exchange rate. It simplifies decisions and allows investors to focus only on the returns of the underlying commodity.
Chris Sturgess, Director of the JSE’s Commodities Division, says: “We have seen keen interest expressed in the new Quanto Futures we offer and by adding silver and platinum to the product offering, we continue to provide derivative market participates with opportunities to easily access the international commodities markets.”
Growing grain markets
Trading in grain silo receipts to settle grain futures contracts is likely to benefit both producers and buyers, according to another JSE press release. Producers can negotiate a better price for stock in the specific silo represented in the receipt by placing an “offer” onto the system for a premium over and above the Safex price. Buyers such as millers and processors will benefit through access to bid at all registered delivery points at a premium per ton, regardless of whether or not physical grain is on offer. Buyers will be able to bid for preferred delivery locations. Previously no bids were permitted without available stock on offer.
There are more than 200 registered delivery points. The silo owner continues to guarantee the quality and quantity of the physical stock on the Safex silo receipt. However, the JSE guarantees the cash-flow process and settlement, so there is no risk of counterparty default. Settlement will take place over a 2-day cycle, meaning a trade is settled the next business day after trade, eliminating the delayed payments generally associated with cash market transactions.
The price when making physical delivery is a function of Safex’s mark-to-market price on the day, less the location differential (indicative transport cost) to the registered delivery point. With this new functionality the value of grain at each delivery point can be negotiated transparently between buyer and seller and included in the final settlement price.
The JSE says it offers a first-world trading environment, with world-class technology, surveillance and settlement, in an emerging market context. It is among the world’s top 20 largest equities exchanges by market capitalisation.
October 5th, 2012 by Tom Minney
The World Bank has cut its growth forecast for sub-Saharan Africa. Earlier in the year it forecast 5.2% growth overall for SSA economies in 2012, but yesterday (4 Oct) it cut this to 4.8%. World Bank said in its bi-annual Africa’s Pulse report that Africa is still vulnerable to a fragile global economy and a slowdown in China, although high commodity prices and an increase in exports from countries that have made mineral discoveries are likely to underpin growth for the rest of 2012.
Africa achieved 4.9% growth in 2011. According to the study, excluding South Africa, the continent’s biggest economy, growth is likely to hit 6% in 2012. Strong performers are expected to include countries such as Mozambique, home to some of the world’s biggest untapped natural gas reserves, and Sierra Leone which has started exporting iron ore, according to a story on Reuters. Foreign direct investment (FDI) is projected to rise to $48.7 billion by 2014 from $31bn in 2012, as investor interest in Africa soars. African exports rebounded in the first quarter of 2012, growing at an annual pace of 32%, up from the -11% pace recorded in the last quarter of 2011.
World Bank Vice-President for Africa, Makhtar Diop, said in a press release: “A third of African countries will grow at or above 6%, with some of the fastest growing ones buoyed by new mineral exports and by factors such as the return to peace in Côte d’Ivoire, as well as strong growth in countries such as Ethiopia. An important indicator of how Africa is on the move is that investor interest in the region remains strong.. despite difficult global conditions.”
Most of SSA “middle income” by 2025
The majority of sub-Saharan Africa’s 48 countries could also achieve middle-income status by 2025 though their dependency on natural resources is likely to continue in the medium term, it added. Shantayanan Devarajan, the World Bank’s chief Africa economist, said that this highlights the need for governments to spend their resource wealth wisely and focus on public investment: “Resource-rich African countries have to make the conscious choice to invest in better health, education and jobs, and less poverty for their people because it will not happen automatically when countries strike it rich,” he said.
Diop said there was an opportunity for “strengthening economic transparency and financial controls around the new discoveries, to leverage their full potential through development policies that increase economic growth, create jobs, reduce poverty, and improve health and education especially for young people and future generations, while balancing the immediate needs.”
The World Bank said that after 10 years of economic advancement, 22 of Africa’s 48 countries have officially achieved middle-income status and another 10 could reach middle-income status by 2025 if current growth trends continue. It warned that recent soaring prices for wheat and corn were a concern, after the worst U.S. drought in 50 years. Africa’s Sahel region is already suffering from higher food prices, high rates of malnutrition and recurring crisis and insecurity. Furthermore, swarms of desert locusts and the ongoing conflict in The Sahel also undermine the region’s food security, including Mali and Niger.
Development gains – poverty and child mortality down
Child mortality has also been declining. Between 2005 and 2008, for the first time the absolute number of people living on $1.25 a day fell, as poverty rates on the continent have been falling faster than one percentage point a year. With fast population growth Africa is urbanizing rapidly and 41% of Africans live in cities, with an additional 1% every 2 years. By 2033, Africa – like the rest of the world – will be a majority urban continent. The bank says this has deep implications for social and economic opportunities as urbanization and development go together and it claims that no country has ever reached high income with low urbanization.
October 5th, 2012 by Tom Minney
Leading African private equity group Actis has won the title for “Best Developer in Africa” in the 8th annual global Euromoney Real Estate Survey run by finance magazine Euromoney. To collect data for the award, Euromoney was canvassing the opinions of senior real-estate bankers, developers, investment managers, corporate end-users and advisory firms in over 70 countries since March. It was the biggest Euromoney real estate poll with over 1,900 responses. Actis invests mainly in retail and office developments in high-growth markets such as Ghana, Kenya, Nigeria, Tanzania and Zambia. It launched its first real estate fund in 2006 and concentrates on institutional quality investments. It is sub-Saharan Africa’s most experienced private equity real estate investor and developer, according to a press release.
Current Actis developments include Ghana’s first green-certified building One Airport Square in Accra; East Africa’s biggest retail centre Garden City in Nairobi, and Ikeja City Mall in Lagos which welcomed 45,000 people on its first day of trading in December 2011. Past investments include Accra Mall in Accra and The Junction in Nairobi.
According to the press release, David Morley, Head of Real Estate at Actis, said: “Sub-Saharan Africa has a population of 800 million people and is the fastest urbanising region in the world; an increasingly sophisticated consumer class seek places to live, eat, shop and relax in the face of chronic undersupply. There is tremendous opportunity for those who take up the challenge and we are very proud to see our work recognised in this way.” Euromoney Editor Clive Horwood said, “The winners of this year’s Euromoney survey are those that exhibited the ability to innovate and make best use of the inherent strengths of their organisation. In Africa, in particular, there are great opportunities for those companies best equipped to operate in challenging markets. Through the Euromoney real estate survey, the market has recognised Actis as the leader in this field.”
Nairobi’s Garden City
In July Actis confirmed its investment in Nairobi’s Garden City, a 32-acre mixed use development on the recently expanded 8-lane Thika Highway. This will be a 50,000 sqm retail mall, with commercial premises, 500 new homes and a 4-acre central park, offering family friendly leisure space for Kenyans and visitors to the city. The park will also house an outdoor events arena for the staging of concerts and shows. Groundbreaking is due in December 2012 and completion targeted for May 2014, according to a press release.
Actis is working with leading retailers, including a flagship store for South Africa’s Game, their first in Kenya. Letting is underway with specialist agents Knight Frank Kenya and Broll in South Africa. There are detailed discussions with other foreign retailers looking to enter the rapidly-expanding Kenyan market, such as South African fashion group, Foschini. There is a strong focus on environmental features and the aim is to achieve the first LEED (Leadership in Energy and Environmental Design) certification for a retail mall in East Africa. This brings down operating costs for tenants by reducing electricity and water consumption.
Accra Mall sold
In May Actis confirmed that it had sold its 85% shareholding in Ghana’s Accra Mall to South Africa’s commercial and retail property developer Atterbury and financial services group Sanlam. Actis managed the development process, invested the equity and raised the debt to finance the project, working in partnership with renowned Ghanaian entrepreneurs, the Owusu-Akyaw family. The mall opened its doors in July 2008 fully let, and attracts 135,000 shoppers each week, according to a press release.
Accra Mall is Ghana’s first A-grade shopping and leisure centre, home to international brands such as Shoprite and Game, as well as Ghanaian brands including Kiki Clothing and Nallem. The trade sale demonstrates an increasing interest in Ghana by foreign investors and also reflects the acute demand for high quality real estate assets in sub-Saharan Africa.
Actis 100% owned
Also in May, Actis said it had bought the UK Government’s remaining 40% shareholding in the company. In the deal announced on 1 May, the government will receive a cash payment of US$13m (£8m) and will participate in future profits as Actis’s investments are realised over the next decade. To date, Actis has invested £1.7bn on behalf of the UK government’s direct finance institution CDC and has returned £3.1bn to CDC and by extension the British taxpayer.
Paul Fletcher, Senior Partner at Actis, said: “When Actis opened for business in 2004 our purpose was to attract private capital to countries that were dependent on aid and to legitimise them as investment destinations. Over the last eight years our work in Africa, Asia and Latin America, investing in over 70 companies employing 113,000 people, has shown what is possible. Successive governments have shown real vision backing a private sector model like Actis. We are pleased that HMG has realised the value of their decision to support Actis from the start. We look forward to continuing our work, investing in high quality companies in high growth countries and delivering strong returns for our investors.”
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.
July 6th, 2012 by Tom Minney
The 10 stock exchanges of the Southern African Development Community (SADC) are working together to increase the effectiveness of their markets. The Committee of SADC Stock Exchanges (CoSSE) has agreed to concentrate on 6 priority areas in support of regional moves to more efficient capital markets.
The stock exchanges will explore ways to use technology to link their trading and order systems and work together to ensure clearing and settlement systems align with global standards adopted in April. They are working closely with SADC institutions to support development of regional systems, including payment and will boost visibility of trading data and enhance their joint website (www.cossesadc.org), launched in April by the JSE and I-Net Bridge. The bourses will also pool resources to accelerate training and skills development for capital markets staff.
CoSSE members are Botswana Stock Exchange, Malawi Stock Exchange, Stock Exchange of Mauritius, Bolsa de Valores de Moçambique, Namibian Stock Exchange, South Africa’s JSE Ltd, Swaziland Stock Exchange, Dar es Salaam Stock Exchange of Tanzania, Zambia’s Lusaka Stock Exchange, and the Zimbabwe Stock Exchange. They met on 25 June in Gaborone, Botswana in a meeting convened by CoSSE with support from SADC Secretariat.
“Stock exchanges have their roles cut out in each of our economies to augment our governments’ efforts to grow national economies for the greater good and as part of the SADC region’s struggle for growth to escape poverty,” says Mrs Beatrice Nkanza, Chairperson of CoSSE and CEO of the Lusaka Stock Exchange. “They are the channel for long-term risk capital, which is urgently needed for the region’s businesses, infrastructure providers and even governments. They also encourage saving and investment. CoSSE members are working closely together to support SADC initiatives and to make individual markets even more effective”.
CoSSE was set up in 1997 as a collective body of the stock exchanges in the Southern African Development Community (SADC). It promotes co-operation and collaboration between member stock exchanges and is resourced by a Secretariat, supported by the JSE. SADC defines CoSSE’s role in the Finance and Investment Protocol and other policy documents and CoSSE has links to ministerial and senior treasury bodies and also works closely with the Committee of Insurance, Securities and Non-Banking Financial Authorities (CISNA) and the Committee of Central Bank Governors (CCBG).
CoSSE had set up three working committees to implement six business plans, prioritized from the initiatives identified in its Strategic Plan 2011-2016. These are:
1. Legal and Secretariat working committee – chaired by Geoff Rothschild of the JSE. This is responsible for formalizing and resourcing the Secretariat, and for continuing and improving liaison with CISNA and other SADC organs.
2. Market Development working committee – chaired by Vipin Mahabirsingh of the Stock Exchange of Mauritius. CoSSE has been developing models for inter-connectivity between automated trading systems at some or all member exchanges. The working committee will help member exchanges ensure their clearing and settlement systems comply with new global standards and support regional initiatives.
3. Capacity-Building and Visibility working committee – chaired by Anabela Chambuca Pinho of the Bolsa de Valores de Moçambique. This will liaise with member exchanges, regulators, stockbrokers, investors and others to develop and coordinate training courses. It will also enhance the new CoSSE website, help members to upgrade their own websites and to ensure their trading data and company news are disseminated internationally.
Progress will be guided by an Executive Committee, consisting of CoSSE Chairperson Mrs Nkanza, CoSSE Vice-Chairperson Gabriel Kitua (CEO of the Dar es Salaam Stock Exchange in Tanzania) and the three working committee chairpersons. The strategic plan was developed with assistance from FinMark Trust.
For more information contact
• Beatrice Nkanza, CEO Lusaka Stock Exchange, tel +260 (1) 228391 or email nkanzab [at] luse.co.zm
• Gabriel Kitua, CEO Dar es Salaam Stock Exchange, tel +255 22 2135779 or email gabriel.kitua [at] dse.co.tz.
• Pearl Moatshe of CoSSE Secretariat, tel +27 11 5207118 or email pearlm [at] jse.co.za
May 16th, 2012 by Tom Minney
Five leading Africans and innovators were named Social Entrepreneurs of the Year 2012 Africa last week at the World Economic Forum on Africa in Addis Ababa, Ethiopia. The awards are made by the Schwab Foundation for Social Entrepreneurship and were presented by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum.
The five winners include 2 entrepreneurs from South Africa and 1 each from Ethiopia and Rwanda, plus an award to a team (2) in Burkina Faso:
Bethlehem Tilahun Alemu, Co-Founder and Managing Director, soleRebels, Ethiopia
SoleRebels uses recycled car tyres for rubber soles to create durable, stylish and eco-friendly footwear for international markets. It offers training and employment to hundreds of underprivileged workers in Ethiopia, tapping the country’s rich artisan heritage and creating a new employment model for local enterprises. it also uses other environmentally friendly practices and is committed to zero carbon footprint.
Sameer Hajee, Chief Executive Officer, Nuru Energy Group, Rwanda
The group works with micro-entrepreneurs to disseminate its Nuru LED light, which gives up to 26 hours of light and costs one-sixth of the cost of kerosene to recharge. It can be recharged using an off-grid, pedal-powered platform. So far, Nuru Energy has set up 70 village-level entrepreneurs who have sold 10,000 Nuru lights. Many homes in Africa are not connected to electricity grids.
Paul Scott Matthew, Director Africa, North Star Alliance, South Africa
In the 1990s, Paul Matthew saw the alarming impacts of HIV/AIDS on mobile workers such as truck drivers and realized these workers lacked access to basic healthcare. North Star Alliance provides mobile workers and related communities with continual access to high-quality health and safety services through a network of interlinked clinics known as “Roadside Wellness Centres”. Since opening its first centre in 2005 in Malawi, North Star has grown to 22 centres in 10 countries.
Andrew Muir, Executive Director, Wilderness Foundation, South Africa
The Wilderness Foundation, founded in 1972, integrates conservation programmes with social and educational work. It has trained thousands of youth to be community leaders and national park rangers and more than 100,000 disadvantaged/vulnerable youth have benefitted from the Wilderness Foundation through its social intervention and environmental education programmes. The stewardship of the Wilderness Foundation has rehabilitated over 200,000 hectares of African wilderness and these areas are being expanded in the interests of conservation and environmental protection.
Seri Youlou and Thomas Granier, Co-Founders, Association la Voute Nubienne, Burkina Faso
Seri Youlou, a farmer from Burkina Faso, and Thomas Granier, a French mason, built a Nubian vault home in Burkina Faso over 10 years ago. By training farmers in the construction of homes with vaulted earth-brick roofs, the association provides an affordable, ecologically sustainable housing alternative and source of income to farmers during the off-seasons. Today, more than 200 masons have built over 1,300 Nubian vault homes in West Africa.
Hilde Schwab, Chairperson and Co-Founder of the Schwab Foundation for Social Entrepreneurship, commented in a press release: “Africa has seen tremendous growth over the past decade. Social entrepreneurs use innovative approaches to extend access to healthcare, education, energy and housing to marginalized populations that may not otherwise be included in the traditional markets. They ensure that growth, such as that experienced in Africa, is and will be inclusive.” Social entrepreneurs implement innovative and pragmatic solutions to social problems by tackling the root causes and creating social transformation
The Schwab Foundation was founded in 2000 and has been identifying the world’s leading social entrepreneurs in over 40 countries around the globe.
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.