African Capital Markets News » South Africa

More trading records fall as JSE passed 200k trades in a day

Tom Minney — Wed, 23 Jun 2010 12:21:30 +0000

South Africa’s full service securities exchange, the JSE Ltd (www.jse.co.za), on 17 May recorded 205,748 trades valued at more than R20 billion (US$2.6 billion). This coincided with the JSE’s equity futures “close out” when trades in derivatives called futures contracts had to be settled.
It is the first time in its 123-year history that more than 200,000 trades have been done in a day. On 7 May 2010 the previous record number of trades was 189,253.
According to a press release, Leanne Parsons, Head of Equities Trading at the JSE, explained: “This increased activity occurred on yesterday’s futures close-out as traders closed out their derivatives positions and purchased the underlying shares.”
Close-outs happen 4 times a year in March, June, September and December and usually bring a spike in trading activity.
A general rise in average daily trade numbers in 2010 also contributed to the record. According to the latest JSE monthly trading statistics published for May 2010, the number of equity trades is up by 24% year-on-year, from a total of 8.2 million trades in the first 5 months of 2009 to 10.1 million in the same period of 2010. There has been an average of 99,128 trades each day in the first 5 months of 2010, compared to average daily trade numbers of 46,216 (in 2007), 69,295 (2008) and 84,018 (in 2009).
On the JSE’s equity derivatives market, volumes of futures contracts traded rose nearly 7% during the first five months of 2010 on the previous period (2010: 51.3 million; 2009: 48.1 million). The number of futures contracts traded in May alone was 6.8 million. Allan Thomson, Head of Derivatives Trading, said in a press release: “This year-on-year growth is pleasing.” Trade in index futures increased 101% year-on-year off a low base.
The number of commodity futures contracts traded on the JSE’s commodity derivatives market increased by more than 8% in the first five months of 2010, compared with the same period in 2009 (2010: 662,000; 2009: 610,000). In the same period, volumes traded in commodity options have grown 27% year-on-year.
In the JSE’s interest rate market, cash bond volumes remain stable with volumes reported to the exchange in the month of May slightly below R1.4 trillion compared to R1.1 trillion in April. Year-to-date volumes also remain in the same range as 2009 with the 2010 reported trade number at R5.85 trillion compared to R5.83 trillion in 2009.
“Given the stable interest rate outlook and the continued issuance by National Treasury and state-owned enterprises there is no reason to anticipate any major market volatility with regard to price or volume movements. June and July will present some volume pressure due to the soccer world cup; however volumes should return to normal after the event,” commented Graham Smale, Director: Interest Rate Products.
Positive growth continues in the market for listed interest rate derivatives. Contracts traded during the 3 months ended May grew nearly 45% year-on-year, off a low base. “We will continue to focus on building a successful exchange-traded interest rate derivatives market,” added Smale.
The JSE connects buyers and sellers in 4 different financial markets: equities, equity derivatives, commodities derivatives and interest rate instruments. The JSE Ltd says it offers the investor a first-world trading environment, with world-class technology, surveillance and settlement in an emerging market context. It is amongst the world’s top 20 largest equities exchanges in terms of market capitalisation.
The JSE’s equity market has been particularly volatile recently in line with turbulent global markets. This volatility is represented in numeric form by the JSE’s South African Volatility Index (SAVI) which rose from a low of 18% in April to a high of 33% in May before subsiding to 26% by close of trade yesterday.
The JSE’s introduced a new billing model on 1 March 2010, which aims to incentivise increased trade and to recognise retail and algorithmic investors, both important target markets for the JSE.

Trading statistics for the 17/06/10
Volume 394,839,938
Value R20,839, 256K
Number of trades 205,748

Trading statistics for previous record number of trades 7/05/2010
Volume 1,018,433,885
Value R30,613,372K
Number of trades 189,253

Consensus Business Group launches $92 million “clean tech” fund for Southern Africa

Tom Minney — Thu, 17 Jun 2010 21:44:56 +0000

South Africa’s first, specialised, private equity clean technology fund, Evolution One Fund, has reached its final closing after raising R700 million (US$92 million) from local and foreign investors, including development finance institutions, a family office and sovereign wealth funds. This capital is to be invested into equity in clean technology projects and enterprises including new energy and environment focused technologies in South Africa and across the Southern African Development Community. Evolution One will concentrate on long-term equity and equity-related investment based on active management and adding value after investing.

The fund will prioritise investments in expansion capital but will consider earlier-stage environmental infrastructure projects when there is clear evidence of early revenue streams and profitability. The fund will also invest into proven technology or projects that clearly demonstrate market adoption. The minimum investment size is R10 million ($1.3 million) and its maximum investment is R100 million into any one project or technology.

Consensus Business Group (www.consensusbusiness.com), the London-based advisor to The Tchenguiz Family Trust, has played a leading role in establishing and advising the fund. Consensus owns or manages 300,000 UK residential units and £4 billion of commercial properties, as well as extensive “clean tech” investments. As founding cornerstone investor, Consensus has secured the participation of 7 other leading international organisations.

Vincent Tchenguiz, Chairman of Consensus said: “We have extensive experience and a long track record in global clean technology investing and this has given our partners the confidence to join with us in setting up Evolution One in South Africa. We are delighted to have successfully achieved final closing of this ground-breaking fund.

“Evolution One Fund is the first dedicated clean technology private equity fund to be established for Africa and its value proposition is to bring Consensus’s active financial modelling and specialist insights together with expertise to projects and technology enterprises in South Africa and the SADC region. In addition, the investment capital of this network of leading investment institutions inherently leverages access to specialised knowledge and skills in the broader global clean technology sector.

“The Fund is advised by a fund management team comprising 9 principals and analysts who collectively bring their unique breadth and depth of commercial, financial and sustainability credentials. This is combined with strong black empowerment credentials and the ability to structure broad-based black economic empowerment transactions.”

Consensus is joined in the Evolution One partnership by IFC, a member of the World Bank Group; the Finnish Fund for Industrial Cooperation (Finnfund); the Swiss Investment Fund for Emerging Markets (SIFEM); fund of funds the Global Energy Efficiency and Renewable Energy Fund (GEEREF- www.eif.org), a compartment of the European Investment Fund; the African Development Bank (AfDB); the Norwegian Investment Fund for Developing Countries (Norfund); and the Industrial Development Corporation of South Africa (IDC).

The local South African fund advisor is Inspired Evolution Investment Management (IEIM – www.inspiredevolution.co.za), which aims to support and guide target invested companies and provide long-term capital growth. The Evolution One fund is a 10-year fund is committed to investing into clean technologies in the new energy and environmental sectors, including cleaner energy generation such as wind and solar energy, and energy efficiency, cleaner production and more efficient manufacturing processes, air quality and emissions control, water quality and resource management, waste management, agribusiness, natural products and materials and related services for sustainable buildings.

Michael Brooks, CEO of IEIM, says the fund management team has already appraised numerous deal opportunities and within weeks would announce details of the first 3 investments to be undertaken by the fund: “In the past 2 years we have seen significant positive shifts in the commercial thinking underpinning the roll out of clean technology projects and enterprises, both within the public and private sectors.

“The South African government’s recent adoption and implementation of the Renewable Energy Feed-in Tariffs and Co-Generation Feed-in Tariffs are evidence of the state’s support for regulatory drivers to underpin the development at scale of commercially viable renewable energy projects here and in our neighbouring countries. We are currently actively engaging with a range of promoters of clean technology enterprises and with developers of renewable energy projects.”

The first close of the fund was announced in July 2008 when $54 million had been raised from the initial 4 investors: IFC, Castleway Properties (owned by Tchenguiz Family Trust), SIFEM and FinnFund.

Adlevo announced first closing on African technology fund

Tom Minney — Mon, 14 Jun 2010 07:22:31 +0000

Adlevo Capital Managers (www.adlevocapital.com) announced on 10 June that it has completed the first closing of Adlevo Capital Africa LLC fund with capital commitments of US$52 million. The fund will make expansion capital investments into companies with technology-enabled business models across sub-Saharan Africa.
The fund has received capital commitments from development finance institutions and private institutional investors based in Europe, South Africa and the US. Adlevo Capital plans to hold additional closings for the fund over the next nine months with a final closing in the first quarter of 2011.
Yemi Lalude, founder and Managing Partner of Adlevo Capital, says in a press release: “We are very pleased to have attracted investments from several of the most successful Africa fund investors who, like us, see the growing scope for compelling technology-enabled company investments and believe that investments in this area will also provide positive social development outcomes. The Adlevo Capital team has developed a pipeline of attractive investment opportunities and is looking forward to commencing investments and working with the management teams of its portfolio companies.”
Adlevo Capital, a Mauritius-based fund manager, is the first private equity firm focused on investments into technology-enabled companies across multiple African countries. It aims to capitalize on growing investment opportunities in the technology-enabled service segments of multiple industry sectors in sub-Saharan Africa.
Its founders have a combination of private equity and operational IT experience in Africa and the United States. Through this and an extensive network of relationships, as well as offices in Lagos and Johannesburg, it aims to add significant value to portfolio companies.
In October 2008, the European Investment Bank (www.eib.org) announced it would be lead investor, committing $20 million. EIB said CDC Group (www.cdcgroup.com), the UK government-owned fund of funds, would join as the other lead investor with a commitment of $15 million.
At the time, in a press release Plutarchos Sakellaris, EIB Vice President responsible for lending operations in the African, Caribbean and Pacific regions said: “This is a landmark project for the EIB and for the African technology sector. We are confident that Adlevo’s experienced management will build a portfolio of investments which provide strategic support for technology companies. Moreover, we hope that this operation will act as a catalyst to develop private equity and foreign direct investment in the region.”

SA listed companies have to integrate sustainability reports

Tom Minney — Wed, 09 Jun 2010 07:57:57 +0000

South Africa’s JSE stock exchange (www.jse.co.za) is requiring listed companies to integrate their sustainability reports with their annual reports, with effect from this month. According to a report in Business Day newspaper (www.businessday.co.za) Mervyn King, chairman of the King committee and a leading expert on governance, said: “SA is among the first countries in the world to require integrated reporting of listed companies. This puts us ahead of the game.”
The newspaper says there are still no set standards for companies’ integrated reporting, and Mr King will chair a new Integrated Reporting Committee to issue guidelines on good practice in integrated reporting.
The King Report on Corporate Governance in South Africa 2009 (King III) includes an integrated report disclosure checklist, effective March 2010, according its publication by Ernst & Young. Companies should apply this, or explain why they feel it approroriate not to apply or to apply it differently (“apply or explain”). An integrated report should contain “adequate information on the operations if the company, the sustainability issues pertinent to its business, the financial result and the results of its operations and cash flows”.
Jayne Mammatt, an associate director in governance and sustainability at Ernst & Young, was cited in the newspaper saying an integrated report should evaluate all areas of performance, including economic, social and environmental issues. It was not sufficient for companies to provide wordy platitudes and vague estimates, Ms Mammatt said. It cites a 2009 study by Ernst & Young showed that only a handful of 3,000 sustainability reports around the world were integrated.
Mr King is quoted as saying: “The corporate identity of companies has changed and so reporting has to change. Stakeholders need to make informed assessments about the longer-term sustainability of a company and that it is operating as a responsible corporate citizen.” The requirement is likely to make more work for companies.
The founding organisations of the committee include the Association for Savings and Investment SA, Business Unity SA, the Institute of Directors SA, the JSE and the South African Institute of Chartered Accountants (Saica). Graham Terry, Saica’s senior executive of strategy and thought leadership will chair a working group whose first task will be to develop a framework for integrated reporting.
Leon Campher, CEO of the Association for Savings and Investment, was quoted saying the project was considered a priority initiative, given the volumes of annual reports generated by the association’s members. “We have 153 member companies managing in excess of R2,5-trillion of assets. Integrated reporting will facilitate more holistic and meaningful reporting of financial results, enabling shareholders and clients to gain a better understanding of a company’s triple bottom line.”
Freda Evans, chief financial officer of the JSE, was quoted as saying: “Reporting on the financials alone is no longer sufficient, as all aspects of the business – environmental, social and governance aspects – affect the company’s bottom line.”
Saica CEO Matsobane Matlwa was cited: “Corporate reporting is entering a new era. Shareholders and other stakeholders need broader information to enable them to make more informed decisions about a company. This does not necessarily mean more detail, but greater insight into the strategy, risks and value creation of the company.”

JSE breaks 3 records for numbers of trades in global market volatility

Tom Minney — Tue, 11 May 2010 05:41:23 +0000

Volatility and increased uncertainty in global markets last week meant extra demands for huge trading volumes on world markets. South Africa’s JSE Ltd. handled the increased action and it broke three trading records with record numbers of trades first on Wednesday and then again on Friday. At least one leading US exchange had some error trades last week.

According to figures from the JSE (www.jse.co.za) a record number of 189,253 trades were executed on the exchange last Friday 7 May, valued at more than R30 billion ($4.05 bln). The previous record was set on Wednesday 5 May, with 184,336 trades for a total value of R20.1 bln.

The total number of trades on the exchange for last week was also a record, totalling 751,381 trades. The previous weekly record was 535,883 trades set in October 2008, during the global financial crisis.

Leanne Parsons, Head of Equities Trading at the JSE, says: “This record trading week is due to increased global uncertainty, both in Europe and the United States. This fear in the marketplace leads to increased volatility and increased trading activity.”

Yesterday (10 May), the JSE’s SAVI Volatility Index was at 30.3%, up sharply from 18% a month ago (10 April).

The JSE was launched 123 years ago and used to be known as the Johannesburg Stock Exchange. On 1 March it introduced a new billing model that recognises both low- value and high-volume traders.

Trading statistics for 7 May
Volume 1,018,433,885
Value R30.6 billion (R30,613.4 million)
Number of trades 189,253
Trading statistics for 5 May
Volume 431,071,716
Value R 20.1 billion (20,143.6 million)
Number of trades 184,336
Trading statistics for the previous record 18 March 2010
Volume 539,232,426
Value R26.2 billion (26,160.7 million)
Number of trades 172,433

Values of the JSE All Share Index (3 – 7 May)
Date Value
2010/05/03 28630.82
2010/05/04 27935.85
2010/05/05 27616.68
2010/05/06 27512.83
2010/05/07 26515.07
Source: JSE Ltd

JSE to offer “Dark Pool” for very large trades

Tom Minney — Sun, 25 Apr 2010 09:05:44 +0000

South Africa’s JSE Ltd (www.jse.co.za) this week announced that it was close to creating Africa’s first “dark pool” for trading large orders. These are structures that allow bidders to post and transact very large orders or block orders without disrupting the market, for instance prices and volumes may not be revealed publicly before the trade but only get posted after the event.
The Financial Times (www.ft.com) quotes the JSE’s Head of Equity Market Leanne Parsons as saying the JSE’s facility will be called Block X and was the exchange’s “response to market demand when trading in large volumes”.
“Our large users have made it clear to us that while the transparent central order book has numerous advantages, they would also like hidden-order functionality. This is offered in other markets which offer trading in JSE-listed securities,” she said, referring to multilateral trading facilities (MTFs) such as Chi-X, BATS Europe, Nasdaq OMX Europe and Turquoise
Ms Parsons added: “As competitive pressure in the exchange environment builds, innovation becomes increasingly important.”
Worldwide exchanges found recently that the average order size has fallen by 52%, caused by high frequency and automated or algorithmic trading. Last month the JSE changed its fee structure “to recognise both low-value and high-volume traders”.
However, for many years banks and brokers have set up their own dark pools, for instance initially calling each other when clients have large orders or significant stakes in a company so that the market would not start to move share prices up or down in response. Prices and trades may or may not be revealed after the trade, and some of the trades would bypass a stock exchange entirely. This has led to the development over the years of trading systems on or off the major exchanges.
According to a presentation that JSE CEO Russell Loubser prepared for the World Federation of Exchanges (www.world-exchanges.org) in October 2009, their survey of major exchanges that had or had not introduced these facilities found that main reasons for setting up or intending to set up such a facility were: Mitigate market impact of large trades; provide confidentiality or trading anonymity; improve liquidity levels; cost efficiency; new regulations (MiFID); adding value; avoiding defragmented market; and others. Those that did not want to set itup responded that they were concerned about additional fragmentation; do not see the benefits; or have market mechanisms not suited for dark pool offering.
Dark Pools represent less than 10% of trade volume on the European equity shares market. According to Mr Loubser, in the US the figure was closer to 14% of equity trading volume.
Two years ago the EU Markets in Financial Instruments Directive (MIFID), came into force. It allowed for the opening up of new trading systems, particularly in the equities market (see helpful background on The Official Board website www.theofficialboard.com). In order to ensure market transparency and integrity this Directive establishes pre-trade and post-trade transparency requirements. For example, the directive’s pre-trade transparency requirements include the obligation to make public on a continuous basis current bid and offer prices and the depth of trading interests at these prices during a continuous basis during trading hours.
However, MIFID allows for the waiver of these obligations for transactions that are large in scale compared to normal market size. The aim is to prevent the acquisition or transfer of a large number of shares from triggering a large increase or decrease in share prices if this order were made public. This has spurred the development of dark pools for block trades, i.e. trading systems that operate without pre-trade transparency.
In the second half of last year there has been increasing debate and regulatory discussions about the impact of dark pools on major world markets.

“Regulation stops SA from being centre for Africa’s mining finance”

Tom Minney — Fri, 09 Apr 2010 07:40:24 +0000

South Africa could be the centre of mining finance for Africa, according to Mick Davis, CEO of international mining company Xstrata (www.xstrata.com), as reported in the local Business Day (www.businessday.co.za) newspaper. However, he is reported to have told a business school audience that restrictions by the JSE Ltd stock exchange (www.jse.co.za) and remaining exchange controls made this almost impossible to achieve.
Africa contains some of the world’s richest untapped mineral deposits and could be the world’s next major copper- and cobalt-producing region. Mr Davis says that South Africa should allow free flow of funds in and out and scrap exchange controls completely if it wanted to attract foreign resources companies to the JSE.
Xstrata reportedly operates in 20 countries and is evaluating 20 new projects across the globe. It is listed in London and has 15% of its assets in South Africa, Mr Davis is described by the newspaper as “the maverick CEO who has built Xstrata into a major global resources player in just 8 years”.
According to the report, he said the commodities “super-cycle” was not over yet – but that if SA wanted to take full advantage this time, the government and mining industry had to work together to restore the mining industry’s competitiveness. He cited unstable transport and energy infrastructure, skills shortages and “constrained capacity” in regulatory bodies as factors that had prevented SA’s mining sector reaching its potential.
“The mining sector’s GDP (gross domestic product) contribution actually shrank by 1% during one of the greatest natural resource booms in history.”
The medium- term outlook for commodities remained very promising. Driving forces of the “secular change” in demand in recent years – industrialisation and urbanisation, particularly in China but also in India, Brazil and others – were still in place. However, the supply side remained fractured and the financial crisis has delayed many projects, making it more likely that the supply of certain commodities would fall significantly short of demand.
He also called for amendments to the regulations that prevent foreign-listed companies from enjoying full indexation on the JSE, saying without this there would be no liquidity in such companies’ shares, which would mean they would not be able to access capital in SA and so would not waste time or money listing on the JSE.
It is important for listed companies to be included in the FTSE/JSE indices so that funds that track the index are obliged to invest in their shares. Companies such as Anglo American, which moved its primary listing to London but retained a dual listing on the JSE, are included in the index. Newer entrants are not, such as British American Tobacco, which gained a secondary listing on the JSE in 2008. Xstrata has the fact that it cannot get indexed is a potential problem.
According to the newspaper, Mr Davis said major global players had operations across the globe and if there was uncertainty in one country about the regulatory, financial or political regime, investments would be diverted to another.
Security of energy supply was critical. Power utility Eskom should continue to be the major generator of power. However it was quicker and cheaper for resources companies to build their own generation capacity, all they needed was a credible price and the right regulation.

AltX companies struggle to attract investors

Tom Minney — Mon, 05 Apr 2010 10:57:46 +0000

Companies on Johannesburg’s Alternative Stock Exchange (AltX), a division of the JSE Ltd (www.jse.co.za), continue to struggle to attract sufficient mainstream attention. However, at a recent conference, one fund manager told them to concentrate on running their companies well and not to watch the share price continuously.
According to a report in Business Day (www.businessday.co.za) newspaper, investor activity has been low on AltX, which was established in 2005 for small and medium-sized companies that do not necessarily meet the requirements of the JSE main board.
Problems had occurred with unregulated instruments such as contracts for difference (CFDs a contract between a trader and provider to exchange the difference between opening and closing price of the investment they are written on, including index, share or commodity) and single stock futures (SSFs – futures contracts written on a particular share, usually in batches of 100). CFDs are popular because they allow companies with smaller market capitalisation to trade higher volumes than traditional trading, while using less capital. In both cases trading occurs on speculated price movement, not the purchase of the nominated instrument.
Senior GM of the JSE, Noah Greenhill, said both highly geared futures were no longer tradable on the AltX.
Stanlib chief economist Kevin Lings said many investors had focused on companies with a long record of stability and liquidity during SA’s recent “great recession” and avoided “smaller companies”. Alphen Asset Fund manager Phillip Wörz said too many CEOs were overly concerned about their share prices: “Too many bosses are watching their Reuters wristwatches at meetings. They should focus on running their businesses well, and we’ll take care of the share price.”
The manager of primary markets at the London Stock Exchange (www.londonstockexchange.com), Richard Webster-Smith, explained how London’s Alternative Investment Market (AIM) had gained “a strong reputation” among institutional investors. Institutional investors (70%) had focused on the fundamental qualities of companies, while retail investors (30%) had responded to emotion, he said. JSE business development manager Lauren Czepek says AltX has 40% institutional and 60% retail investors, including management shares.
Webster-Smith said nominated advisers (NOMADS) had done well in monitoring UK corporate governance standards for AIM companies. Some AltX companies felt designated advisers – SA’s version of NOMADS – needed to be more strictly punished for any actions not in the interests of good corporate governance.

Wilderness Safaris public offer aims for BSE and JSE Africa Board

Tom Minney — Sun, 07 Mar 2010 09:03:38 +0000

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.

Imara Holdings on expansion path

Tom Minney — Fri, 05 Mar 2010 05:48:56 +0000

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.