Archive for the 'South Africa' Category
March 7th, 2010 by Tom Minney
Conservation tourism pioneer Wilderness Safaris (www.wilderness-group.com) is aiming to get a primary listing on the Botswana Stock Exchange (www.bse.co.bw) and a simultaneous secondary listing on the Johannesburg Stock Exchange’s Africa Board (http://www.jse.co.za/Markets/Africa-Board) on 8 April. The share offer in Botswana and South Africa closes on 26 March. If successful, it will be the Africa Board’s second listing.
The company opened its offer on 26 February. According to Botswana’s Sunday Standard newspaper, the public offer is for 3 million ordinary shares at P4 ($0.5765 in today’s rate on www.xe.com) in Botswana and R4.56 ($0.6167) in South Africa and is fully underwritten. It closes on 26 March. Before the public offer, the company placed 56.3 million ordinary shares by way of a private placement, also at a price of P4 per share, says the newspaper.
According to an announcement on the company website it is “a strategically significant step in its evolution, designed to enable it to take full advantage of growth opportunities, to give the public an opportunity to participate in its future success, to develop a broader shareholder base and to simplify corporate structure.” Wilderness aims to use its tourism model to the fullest in contributing to conservation in Africa.
Growth in this manner is designed to allow the company to fulfil its objective of using its tourism model to the fullest extent possible in contributing to conservation in Africa.
Andy Payne, the CEO of Wilderness Holdings, says: “We believe that our unique positioning, iconic international brand and management’s long track record of financial and operational delivery present investors with an attractive growth and performance platform.”
Wilderness Safaris’ core philosophy is one of building sustainable conservation economies through responsible tourism, which shares the benefits of tourism with local communities and ensures that pristine wilderness areas are protected profitably.
The 26-year-old business is invested in 7 southern African countries and operates specialist travel businesses in 6 countries and 49 aircraft. It employs more than 2,700 people, most of whom come from remote rural communities.
The Chief Executive Officer, Andy Payne was reported in Sunday Standard as saying the company’s strategic objective was to double the number of owned Wilderness bed-nights by 2015, as well as to double the area under its influence by expanding into regions that complement its biodiversity and experience. It owns 53 destinations comprising of 930 beds and further manages 17 destinations with 280 beds.
The website says that Wilderness is “run by a group of likeminded wildlife enthusiasts who came together to build a successful safari business, delivering a unique experience for guests, fair returns for shareholders and stakeholders, while ensuring that southern Africa’s pristine wilderness areas remain sustainably protected.”
Thanks also to www.southafrica.info.
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.
February 10th, 2010 by Tom Minney
There are several initiatives underway to link Africa’s exchanges, chiefly to make them more economically efficient through achieving better liquidity and thus becoming more responsive and attractive to investors. Talks have been continuing for over 15 years, but recently several starts have been made.
One promising initiative is the Africa Board, offering leading African companies the chance to have a dual listing on South Africa’s JSE Ltd. (www.jse.co.za), Africa’s leading securities market, with good trading,clearing and settlement systems. The aim is that the shares would be traded on both the JSE and the home market. However, so far Namibia’s Trustco is the only listing, although talks continue with top listed companied in several African countries and with stock exchanges, regulators and other stakeholders.
Other initiatives to achieve more liquidity, many of which can develop in parallel and most of which should be encouraged, include a hub-and-spoke technology link-up being developed by the Committee of SADC Stock Exchanges and international broker link-ups through stockbrokers such as Auerbach Grayson (www.agco.com), Exotix (www.exotix.co.uk) and Securities Africa (www.securitiesafrica.com).
African Capital Markets News recently visited Johannesburg. We print an EXCLUSIVE email interview with Geoff Musekiwa (Business Development Manager, Africa Desk of the JSE Ltd.) on 2010 prospects for Africa’s securities exchanges.
ACMN: What are your strategic priorities for 2010?
GM: We will be cementing and building on the relationships that we created with all stakeholders in 2009, continuing with the outreach so that there is greater awareness of the Africa Board. Ultimately we expect the traction to culminate in a number of listings on the JSE Africa Board.
ACMN: What developments do you expect on Africa’s securities exchanges in 2010, including in terms of regional integration?
GM: 2009 was a very trying year for most exchanges from a return perspective, with the fortunes of most exchanges only turning towards the end of the year. One hopes that this year there will be renewed confidence in those markets in line with developments in global markets. There have been various initiatives towards integration, notably in East Africa, SADC and West Africa. The extent of progress will obviously differ across the regions and our expectation is that discussions will continue until member constituents find common ground.
ACMN: How is technology affecting the progress of the Africa Board and the African exchanges? What are the significant developments?
GM: There is a move from the exchanges that are still paper-based, to make their trading electronic so that they can make cross-border trading for dual-listed stocks easier and possibly in readiness for eventual integration. International investors also need a certain level of comfort in the systems they utilize to trade and automation is definitely a key requirement. As part of the JSE Africa (ex-SA) strategy, stock exchanges can utilize the existing JSE platform by linking their systems for trading, clearing and settlement. Thus far, only Namibia has taken up this offer.
ACMN: Initially some exchanges claimed the Africa Board would take liquidity, reducing it even further for African exchanges. What is your response? Do you think that stakeholders and exchanges are starting to change their views?
GM: The key objective of the JSE Africa Board was to assist in the development of the other exchanges on the continent. We have looked empirically at the benefits of dual listings particularly regarding liquidity in the home exchange in the long term. When some JSE issuers sought dual listings in London in the 90s, there was a similar outcry from the local stakeholders. In fact the reverse occurred – as the companies increased their pool of investors and accessed more capital they began to have an increased interest from investors, greater following from analysts and were able to transform themselves into truly international companies without losing their identity. The downstream benefit, in addition to increased volumes on the JSE, was an increase in interest not only on those companies but in SA as an investment destination. This is what we would like to achieve through dual inward listings onto the Africa Board. The increase in liquidity of stocks trading on the Africa Board will be the most persuasive argument to the stakeholders that may still doubt the motives of the Africa Board
ACMN: Any details you can give of listings planned or other developments?
GM: It would be premature to give details of expected listings before the announcements are made but stakeholders will be kept abreast of developments at the appropriate times.
ACMN: How is the interest from institutions and brokers? Which stockbrokers can buy and sell on the Africa Board?
GM: Interest in Africa as an investment destination has grown over the years, mainly because of its perceived low correlation with developed markets. Consequently there has been a proliferation of Africa Funds with a distinct mandate to invest on the continent. But there remain a few challenges (some perceived and some real) that hinder the successful and efficient execution of trades including but not limited to liquidity, different regulations and logistical challenges. Brokers and fund managers are naturally excited about the Africa Board because it offers them an opportunity to trade African assets on a platform that they are fairly comfortable with, so we are in effect bringing the rest of Africa to their doorstep. The benefit for the other exchanges will come through over time, as the standard of the Africa Board constituent issuers will demystify any notions that investors may have on African capital markets.
The brokers that can buy and sell on the Africa Board are those that are members of the JSE. Trading can either be done directly through the JSE members, or through brokers in the home country, who will in turn instruct the JSE member. In order to take advantage of the opportunities that the Africa Board offers, it is important that the brokers on the continent foster cross-border execution relationships with each other, thus creating mutual economic benefits for the brokers.
ACMN: What’s the 2010 outlook for African exchanges?
GM: As global markets recover, there are increasing indications that portfolio flows into Africa are beginning to tick upwards. One hopes this will trigger a renewed interest in listed securities and also provide the necessary capital to allow issuers to resuscitate plans that they had shelved amidst the crisis. We stand ready as the JSE Africa Board to assist issuers to achieve these objectives.
February 10th, 2010 by Tom Minney
Financial information company McGregor BFA (www.mcgregorbfa.com) is offering investors new products, Realtime, which will stream data from South Africa’s JSE Limited securities exchange at lower cost. The company will work with customers to see how much customization is needed for them to feed the data into their existing systems.
McGregor product manager Glenn Orford is reported in Business Day newspaper (www.businessday.co.za) as saying it will: “not only deliver a very competitive offering in terms of price and functionality, but our ability to customise the solution based on the client’s specific requirements will undoubtedly make it quick and easy to slot into existing systems.”
The fee could be a flat monthly rate or a fee per user and could also vary if the client wanted financial ratios and other components. According to operations manager Sandy Kerkhove the product could be as low as R55 (US$7.14) per month per terminal, excluding undefined JSE royalties.
McGregor says it aims to provide real-time foreign exchange rate data within the next two to three months and it is deciding whether to include other exchanges beside the JSE. McGregor reportedly has not decided whether or not to introduce real- time coverage of securities exchanges other than the JSE.
According to the company website: “The McGregor BFA Realtime product set provides a platform for both the corporate and private user to view real time stock market information streamed live to your desktop.”
The offering includes: Pure Internet delivery, live streaming prices, live indices and stock market announcements service (SENS), user portfolios and selective ticker.
January 6th, 2010 by Tom Minney
South Africa’s Nedbank (www.nedbank.co.za) has announced an agreement with international non-governmental organisation Wildlife Works Incorporated (www.wildlifeworks.com) to launch an African carbon credit scheme.
Nedbank is to acquire carbon credits which stem from Wildlife Works’ efforts sustainably to prevent the deforestation of the Kasigau Corridor. The project will monetize the biodiversity assets of a 200,000 hectares dryland forest and savannah grassland strip called Kasigau Wildlife Corridor until 2026. It was awarded gold-level approval under the Climate Community and Biodiversity Alliance’s forestry protection standard and is apparently Africa’s first approved large project under the international Reduced Emissions from Deforestation and Degradation (REDD) scheme, which pays for projects which prevent further deforestation sustainably and measurably in areas which has seen previous deforestation. It is seeking registration with the Voluntary Carbon Standard registry. Business and people in developed countries can “off-set” carbon emissions through buying carbon credits from developing countries, which are preventing deforestation and conserving their natural resources and helping the world climate.
Over 2.5 million tonnes of carbon is expected to be released into the global carbon trading market through the Kenyan REDD carbon project partnership. The Kasigau project applies market-based solutions to conservation of biodiversity and should benefit local communities through education, job creation, environmental protection and direct financial rewards.
The investment banking division Nedbank Capital will make the Kagisau credits available. Head of carbon, Kevin Whitfield, reportedly says: “The carbon market provides a mechanism for linking Africa to the global green economy, while simultaneously conserving its rich natural heritage and safeguarding the livelihoods of its people. We hope this partnership will prove Africa can fight climate change, uplifting both rural communities and protecting wildlife by connecting them to the global carbon market.”
Saliem Fakir, Head of the WWF in South Africa reportedly confirms: “Rukinga and the associated Kasigau Wildlife Corridor project are world-class examples of projects that are making a tangible difference to both communities and the environment. It is innovative finance solutions, like carbon financing, which makes them possible.”
Wildlife Works applies innovative market-based techniques to conserving biodiversity and forest habitat. It sees the emerging Global Carbon Marketplace as a logical and exciting extension and its website gives a useful rundown of the theory (How It Works). According to WW, the Rukinga community was being forced to destroy their magnificent wilderness in order to survive. In the last ten years WW has restored a huge piece of land to a healthy vibrant ecosystem with elephants, lions, and 50 other species of large mammal. At the same time, the community has received 18 new classrooms for their children, and the employees and their families have received full health care benefits in a community with incredibly high HIV incidence. Wildlife Works also provides jobs, including through founding an organic greenhouse to promote healthier farming practices, providing local farmers with cash-generating citrus trees and free agroforestry trees to use for building and fuel wood. WW is exploring the extensive and expensive preparation for a new REDD project to save the Ngoyla-Mintom Rainforest (2 million acres) in Cameroon from being logged.
Wildlife Works Carbon is a new joint venture between Wildlife Works and Colin Wiel Investments LLC formed to pursue the emerging Reduced Emissions From Deforestation and Degradation (REDD) marketplace for Carbon Offsets as a sustainable and scaleable funding mechanism for biodiverse forest protection.
Nedbank, a subsidiary of the Old Mutual Group, is one of South Africa’s oldest banks and listed on the JSE Ltd. since 1969. The project further boosts the bank’s “green” credentials after the bank announced in October that it had won the National Business Initiative (NBi) 2009 South Africa Carbon Disclosure Project (CDP) Report Leadership Index. Other leading corporates included Bidvest Group, Woolworths Holdings, BHP Billiton, Goldfields and Sappi. It is also reportedly the only African bank included in the Dow Jones Sustainability Index.
The Global CDP is the largest source of transparent information on carbon emissions in the world. Nedbank is moving towards becoming carbon neutral and is cutting its “carbon footprint” through a robust entrenched carbon management programme including awareness, energy efficiency targets, paper and waste reduction initiatives, travel reduction, and various other methods of internal carbon reduction. Tom Boardman, Chief Executive, Nedbank Group, says: “Our position as a truly environmentally aware organisation is not the result of ad hoc environmental interventions. Rather, the external realization of our green credentials is the natural consequence of a deeply ingrained commitment to a culture of sustainability – one that runs throughout our operations and is embraced as a value by our staff members, business partners, suppliers and other stakeholders.
“Nedbank is serious about influencing others to follow our lead, by linking environmental considerations to all our financing activities, an aggressive green procurement policy that encourages suppliers to operate in an environmentally friendly manner, and a Green Affinity that raises awareness among our clients of the need to be environmentally aware and affords them the opportunity to contribute towards conservation projects simply by utilising affinity-linked Nedbank products.”
January 5th, 2010 by Tom Minney
South African listed companies are to change accounting standards next July, after the Department of Trade and Industry in December released the long-awaited regulations to the new Companies Act of 2008. The changes are good for businesses but will mean extensive changes. They offer reporting flexibility to suit different business types but align standards between companies and the often smaller close corporations.
Companies that require auditing, including public, state-owned and private companies, will need to meet highest reporting standards. Accounting for smaller companies is expected to be aligned in a way that makes them more useful for shareholders, lenders and the SA Revenue Services tax authorities.
The new regulations are expected soon on the Department’s website. The Act was promulgated last April and is set to come into effect in July 2010.
December 17th, 2009 by Tom Minney
South African investors can trade two of the best-known IT names through the listing of single stock futures (SSFs) on Microsoft (www.microsoft.com) and Google (www.google.com) on the JSE Limited (www.jse.co.za) on 11 December.
“The listing of SSFs on these two IT stocks, as well as the present SSF listing on Apple, will allow South African investors to further diversify their portfolios,” says Allan Thomson, Director of Derivatives Trading at the JSE.
Other International Derivatives (IDX) products trading on the JSE include “blue-chip companies” such as Berkshire Hathaway, Bank of America, Nokia, LVMH Moet Hennessy Louis Vuitton, BP, Vodafone and GlaxoSmithKline. Contracts are priced and settled in South African rand.
IDX listed on the JSE can be purchased through any JSE-registered broker in the same way as local derivatives products. This offers investors international exposure cost-effectively on a trusted trading platform with none of the counterparty risk associated with over-the-counter trading. Retail South African investors can trade in these 2 US companies without using their ZAR2 million foreign allowance but institutional investors have to comply with foreign portfolio regulations.
Microsoft Corporation is the world’s leading computer technology provider and largest manufacturer of software products. Its most profitable products are the Windows operating system and the Microsoft Office suite, according to the JSE press release. The company is headquartered in Redmond, Washington and is listed on NASDAQ.
Launched in 1996, Google Inc is a recent arrival but has taken the lead as the world’s most popular Internet search tool. The company derives the major portion of its revenue from advertising related to its Internet search, email, online mapping and social media services. Google has its headquarters in Mountain View, California and is listed on both NASDAQ and the London Stock Exchange.
October 12th, 2009 by Tom Minney
South Africa’s securities exchange, the JSE Ltd (www.jse.co.za), is offering trading in gold, platinum and sweet crude oil futures contracts on its commodities derivatives market, according to an official announcement on 12 October. Previously, only agricultural commodities were traded.
The JSE recently signed an agreement with the world’s largest derivatives marketplace, CME Group (www.cmegroup.com). This builds on the heritage of the Chicago Board of Trade, Chicago Mercantile Exchange and Nymex (www.nymex.com) and offers the world’s biggest platform to hedge risks, with trading floors in New York and Chicago and the CME GLOBEX electronic trading platform.
The locally listed contracts will be cash-settled, using benchmark gold settlement prices referenced from CME’s COMEX division and platinum and crude oil prices from its NYMEX division. The underlying instrument is a contract traded on NYMEX or COMEX, giving extra liquidity.
Ashley Erasmus, Senior Commodities Trader at Nedbank Capital (www.nedbank.co.za), says: “The two metal commodities should interest local investors as South Africa is the world’s largest platinum producer and the third largest gold producer. The price of the commodities is generally linked to the prices of mining stocks. The liquidity that the current market makers and any new ones will bring to the market can only be beneficial to investors.”
Rod Gravelet-Blondin, Head of the Commodities Division at the JSE, adds: “We are confident that trading will gain traction as more and more investors realise that they can trade these highly traded commodities in an easy and more affordable manner.” In February 2009, the JSE listed a Chicago corn contract. It plans to list more cash-settled commodities in 2010.
The JSE makes the contracts accessible to individuals by trading smaller lot sizes than those traded in the US. The minimum contract size for crude oil is 100 US barrels (15,898.73 litres) with contracts expiring in Feb, June, August and December, while in New York the contract minimum is 1,000 barrels. Each gold and platinum contract size equates to 10 troy ounces and the minimum price movement is set at 100 South African cents per ounce. The gold contract expiry months are April, June, August and December and a minimum of two expiries are always available for trading. The contract for platinum expires in January, April, July and October with a minimum of two expiries always available for trade.
Gravelet-Blondin says: “We are particularly excited about the opportunities that a crude oil contract offers. Oil has a knock-on effect on all sectors of the economy. Notably, as diesel is a major cost in farming, this will give our agricultural market a tool to hedge a major input cost. Organisations in the transport and manufacturing sectors that use large quantities of fuel may also want to hedge their energy usage against the benchmark,” adds.
Nedbank, Standard Bank and Rand Merchant Bank will quote live rand prices for investors. Previously investors wishing to trade these derivatives or hedge exposures had to trade on foreign markets and were subject to exchange controls and limits. The futures contracts still count as overseas assets in terms of limits for pension funds and long-term insurance companies (20% foreign allocation limits) and asset managers and registered collective investment schemes (30%), according to the announcement.
The listing comes at a time when metals prices, including gold, are soaring. Many investors seek gold and other refuges in times of global economic crisis, including the weak dollar.
The JSE connects buyers and sellers in four financial markets: equities, equity derivatives, agricultural derivatives and interest rate instruments (Yield-X). It is in the world top 20 exchanges in terms of market capitalization.
September 18th, 2009 by Tom Minney
Africa’s biggest exchange the JSE Ltd. – the Johannesburg Stock Exchange in South Africa – has seen increased revenues. The SA interest-rate market is set for dynamic new change after the JSE consolidated its merger with the Bond Exchange of South Africa (BESA). The exchange is adding new products, including derivatives, to give investors exposure to leading international shares and commodities.
JSE revenues depend on volumes of equities traded. According to a statement of the interim results to June 2009 (www.jse.co.za) released in August : “The volatile conditions in the first half of 2009, combined with increased foreign investment in South African equities, boosted trading volumes and therefore revenues. However, there was a significant fall in volumes of derivatives contracts traded (off a high base).”
The number of trades in spot equities soared by 31% to 9.96 mln (2008: 7.62 mln). Group revenue climbed 7% to R544.5 million ($72.9 mln) compared to the period to June 2008: R508.8 mln. Fixed costs remained controlled and this boosted profit before net financing income by 9% to R206.1 mln (June 2008: R188.8 mln).
Key development was the finalization of the merger of BESA under a “Scheme of Arrangement” and on 22 June the bond exchange became a 100%-owned subsidiary of the JSE. BESA’s market operations have been merged with the JSE’s existing Yield-X division to form a new interest-rate division, which runs the combined products. It is also developing a fresh interest-rate strategy for the South African fixed-income market and this will be finalized in consultation with market participants in due course.
BESA’s operating activities and personnel were integrated into the JSE. Former chair Nonkululeko Nyembezi-Heita joined the JSE Board, with Jonathan Berman, also a former non-executive BESA director, as her alternate.
The JSE added a new International Derivatives Market (IDX) as “an innovative series of derivatives on large foreign companies” which it says are “in response to client demand for rand-denominated exposure to well-known companies listed offshore”. According to JSE Chair Humphrey Borkum, writing recently in Business Report newspaper: “Essentially a market maker bank will buy the foreign share and write the South African investor a single stock future which will then trade on the JSE’s SAFEX trading platform. This enables South African investors, without exchange control restrictions, to trade and gain exposure to internationally listed shares such as BP, Vodafone, Smith Kline, Rio Tinto, Nokia and newcomers Warren Buffet’s Berkshire Hathaway and Bank of America.
There are now 29 of these international companies available on IDX none of which are listed on the JSE. I notice that in the latest Fortune 500 listing of the world’s largest corporations BP is at number four and Berkshire Hathaway at 41.”
In January, the exchange launched the cash-settled Chicago Corn futures contract under licence from the Chicago Board of Trade (CBOT) Group. This month (September 2009) it plans to launch rand-denominated contracts in platinum, gold and oil under licence from CBOT.
The announcement further says the JSE “encouraged institutions to reduce risks by bringing exposure to derivatives on-exchange, using Can-Do instruments”. It also “bedded down the new derivatives trading and clearing systems implemented late last year” while nearly doubling the number of currency derivatives contracts traded (on the previous period).
In February, the JSE launched its Africa Board, designed to attract dual listings of leading companies listed on African exchanges “as part of the JSE’s strategy to promote the growth of African capital markets’. It listed Trustco Ltd from the Namibian Stock Exchange as its first counter.
Borkum also advised investors that Exchange Traded Funds (ETF’s) are a value for money investment which advisers often do not promote, due to lack of commission. There are 26 ETFs listed including SA equities, international equities, dividend, bond, property, commodity and currency ETF’s An ETF is an investment product which tracks the performance of a basket, known as an “index” of shares, bonds or commodities but is not actively managed – it just represents the price changes of the index securities.
In the results announcement, Borkum and JSE CEO Russell Loubser state: “The JSE will continue to focus on increasing liquidity and improving market competitiveness. In the equity derivatives market, the exchange will work with clients who previously traded off-exchange but who now want to trade on-exchange to manage risk.
“Moreover, new products planned for the second half in cash and derivatives markets should provide trading volume in the medium term. The JSE remains committed to delivering value to issuers and investors.”
August 29th, 2009 by Tom Minney
Aureos Capital announced on 25 August that Aureos Africa Fund has increased its funds under management to US$317.8 million. The fund initially closed in September 2008 and is listed on the website (www.aureos.com) as having $253.5 million. It expects a final close by mid-December 2009.
Aureos Capital is a private equity fund manager investing in small to mid-sized businesses in emerging markets.
The Aureos Africa Fund invests across several sectors, countries and transaction types. It targets opportunities where Aureos sees potential for above- average growth via regional expansion. It makes initial investments of up to US$10 million in small to mid-size companies with a strong potential to expand to pan-African businesses within 2 to 3 years via “buy and build” strategies and/or through carefully executed organic growth.
The Fund has so far made 9 investments including in financial services; technology media telecommunications; fast-moving consumer goods; building products; real estate development and agri-business. The companies operate in more than 15 different countries, reflecting their regional expansion.
First investors were international finance institutions (IFIs) and US-based private sector investors. Recently European pension funds, family offices, commercial banks and European Development Finance Institutions have committed funds.
Sev Vettivetpillai, CEO of Aureos Advisers Ltd, said: “Despite the global economic slowdown, we are seeing continuous economic growth in Africa and foreign direct investment seems to be picking up providing a vibrant economic platform for building a well diversified portfolio of sustainable companies in the SME segment of the market. We were confident that the Aureos track record was of great interest to investors who had appetite for investing in Africa”
Davinder Sikand, Regional Managing Partner of Aureos Africa, adds that small and medium-sized businesses are key players in domestic demand and supply chains, which make them very well-placed to achieve critical mass and pursue regional growth strategies: “We are building an exciting investment portfolio across the African continent. This clearly demonstrates Aureos’ business model to partner with leading mid-market companies and to build sustainable first-rate regional businesses through both organic growth as well as M&A driven strategies.”
“We are beginning to develop relationships between portfolio companies at opposite ends of the continent – which we see as a first step towards building pan-continental businesses that will truly capitalise on the enormous opportunities on the ground in Africa today”.
Aureos’s successful track record of investing in Africa includes its regional funds in East, West and Southern Africa, which were launched in 2003 and between them have invested $140 million in 34 investee companies.
Meanwhile news reports say that Aureos has paid R66 mln ($8.5 mln) to increase its existing 10% stake in technology service provider Sandbox (www.sandbox.co.za) to 39%. The transaction was funded through the $254 million Aureos Africa Fund and the $50 million Aureos Southern Africa Fund. In 2008, the Southern African Fund bought 10% of Sandbox from the founding shareholders and Aureos simultaneously funded a 21% empowerment stake. The latest deal sees Sandbox management gaining 20%.
Aureos SA managing partner Ron den Besten is quoted as saying: “We believe that Africa has fantastic and exciting growth potential, despite the downturn in global markets. With Aureos’ networks throughout Africa and the emerging markets, we will be able to add significant value to the business.”
Sandbox was founded in 1998 and focuses on enterprise resource planning, customer relationship management, enterprise compliance, enterprise intelligent building management and integration, high-definition large-scale electronic and video surveillance, enterprise security and allied enterprise active audio visual systems. It operates in SA, the Middle East and the UK.
Paul Wootten, a Sandbox founding shareholder and current CEO, is reported as saying the Management Buy Out is part of the company’s growth strategy: “It is imperative senior management and, ultimately, all staff share in the financial performance they are called upon to deliver.” Sandbox’s strategy is to boost existing organic operations with strategic and complementary acquisitions, leveraging its current R350 mln ($45mln) turnover.