Archive for the 'Stock Exchanges' Category
June 9th, 2010 by Tom Minney
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.”
June 7th, 2010 by Tom Minney
The brand new Nile Stock Exchange (NILEX – http://www.nilex.com.eg/en/px) saw strong trading appetite on 3 June, its first day of trading. NILEX is an initiative of the Egyptian Exchange (EGX – www.egyptse.com) and aims to support growing medium and small enterprises in the Middle East and North Africa region.
The Chairman of EGX, Maged Shawky, said that 4 companies were traded on 3 June for a total trading volume of 1.4 million shares, worth LE 10 million (US$1.8 mln). Shares had launched at par value and prices registered significant increases in the first trading session from this.
The biggest value traded was in El-Barbary Investment Group (BIG), recording LE 7 mln ($1.2 mln), followed by El Bader Plastic, registering a trading value of LE 2.6 mln.
The NILEX trading runs daily from 11am-noon. Brokerage firms operating in the main market can place Bids and Asks. The EGX supervises the trading in NILEX and listed companies must meet the same disclosure rules as companies on the main market. NILEX had taken 4 years of research, planning and preparation and had its first listings approved in mid-2008.
A total of 10 companies are listed on NILEX, covering industry, information technology, retail, mining and the agriculture, chemicals and medical. They are: El Badr Plastic, Masria Card, TN Holdings for Investment, Kato Agriculture Development Co., Utopia Real Estate Investment and Tourism, Ameco Medical Industries, International Company for Fertilizers and Chemicals, Al Oroba Trading Mining and Supplying, AL Moasher for Programming and Information Dissemination and El-Barbary Investment Group (B.I.G). The last two were only allowed to join in the last few days.
Trading will follow an auction system style like the discovery session applied on the main market. Brokers can enter investors’ bid and ask offers any time during the last ten minutes in the session, and the transaction will be completed based on the price that ensures the highest volume traded. If more than one price matches the criteria, some other criteria is taken to choose from among the prices. The price which ensures that the least amount will be left unexecuted is to be chosen. If 2 prices are equated, in this case the average of the two prices is to be chosen. After the end of the session the orders that match the price are executed (from the orders given during the session). This criterion has been chosen due to the small size of these companies, as the auction system provides a better mechanism for trading and pricing these companies.
Dr. Mohamed Mustafa Omran, EGX Vice Chairman, had been appointed chairman of the NILEX Advisory Committee in terms of a decree issued by Dr. Mahmoud Mohieldin, the Minister of Investment.
May 31st, 2010 by Tom Minney
Interest in African sovereign debt has been climbing again in recent months. Angola has stil not issued a $1 billion – $2 billion benchmark bond due in May. However, Kenya, Nigeria and Mauritius and many other countries have flourishing debt markets and international interest is good in high-yielding hard-currency bonds such as those issued by the Republic of Congo and Cote d’Ivoire.
In April top bond broker Exotix (www.exotix.co.uk) gave a “buy” recommendation on the REPCON 2.5% bond, redeemable in 2029. Then it was trading at 57.0 and offered a yield of 10.8% and was the highest-performing African sovereign bond.
Trading in $2.4 billion of Cote d’Ivoire debt in US dollars trading under New York law (2.5%, redeemable in 2032) began in mid-April, after the country exchanged it for Brady bonds it had defaulted on nearly a decade ago. Exotix only rates it a “hold” at 64.2 in mid-April, when it yielded 9.6%. The bond was expected to make up 0.75% of the $400bn Emerging Market Bond Index (EMBI), according to a recent article in The Banker, and many were expected to buy it for this reason. Exotix commentary on the bond included detailed assessment of politics and economic developments including current account surpluses and International Monetary Fund assessments.
Governments in some countries are seeking to create longer-term yield curves for domestic investors, in order to provide a framework for longer-term finance and investment. For instance Barclays Kenya is offering 20-year mortgages, compared to a few years ago when the limit was 5 years. Bonds are also being moved into electronic trading and being handled by central depositories.
According to a report on 19 May on Bloomberg, Angola was awarded credit ratings of B+ by Standard &Poors and Fitch, 4 levels below investment grade, and Moody’s assigned an equivalent ranking of B1, putting Angola on par with Nigeria, Lebanon, Belarus and Ghana. The country plans to issue $1billion – $2 billion in bonds this year.
Other high-yield bonds, including in local currencies, can be found in Tanzania, Zambia, Ghana and Kenya. Economic commentators are encouraged, as debt can be a more cost effective way to fuel long-term economic growth than equity.
Better economic management and good investor interest in government debt has paved the way for more corporate bonds, including for power and telecommunications infrastructure. This site has already reported how Kengen and Nampower have issued bonds to fund urgently needed power expansion. Telecommunications giant Safaricom has also been successful.
The successes are tribute to the increasing quality of economic and fiscal management by African governments.
May 30th, 2010 by Tom Minney
Standard Chartered Bank in Kenya (www.standardchartered.com/ke/en/) is to issue KSh 2.5 billion ($30.2 million) in new shares in order to buy the custody business of Barclays Bank of Kenya, according to a Reuters report. Chief Executive Officer Richard Etemesi said the total cost of the transaction was KSh 1.9 billion ($22.7 million) and other proceeds will go into expanding the bank’s ordinary business. The new shares will raise Standard Chartered’s authorised share capital to KSh 1.78 billion from 1.365 billion.
On 27 April the bank announced that it had agreed to acquire the African custody business from Barclays Bank PLC. The acquisition is subject to certain regulatory and other approvals, and is expected to be completed this year. The African custody business forms a key part of Standard Chartered’s widening network of of international custodian services, alongside existing capability in Asia and the Middle East. The Africa-wide acquisition adds direct custody capabilities in 8 African markets (Botswana, Ghana, Kenya, Mauritius, Tanzania, Uganda, Zambia and Zimbabwe) and indirect capabilities in a further 8 markets (Egypt, Cote d’Ivoire, Malawi, Morocco, Namibia, Nigeria, Tunisia and South Africa) through a network of third-party sub-custodians via an operations hub in Mauritius.
Commenting on the deal Karen Fawcett, Group Head of Transaction Banking at Standard Chartered, said: “We are very pleased to have secured the acquisition of Barclays’ African Custody business. This deal will enable Standard Chartered to rapidly develop our custody capabilities in our core markets across Africa. We are already seeing ongoing demand for regional and international investment services across this region. Standard Chartered remains committed to providing clients with an integrated set of solutions that promote ongoing growth of this industry. With this acquisition, we will enhance our custody offering and continue to gain a strong foothold as core bank to our clients in Africa.”
The new business will strengthen Standard Chartered’s regional product offering for both international and regional businesses, strengthening client relationships, whilst providing an additional source of liquidity to the Group.
The Reuters report cites Etemesi as saying the deal will be particularly important for Asian investors looking for returns in the African market: “One rationale behind the acquisition of the custody business is to give our Asian customers opportunity to invest in African capital markets.” He said revenue from the business should be about KSh 1 billion ($12.5 million) by the end of 2012, from about KSh 600 million currently.
According to the bank’s website, it is the oldest foreign bank in Kenya (established 1911) and has over 1,000 employees, 32 branches and 27% market share. In March the bank announced that it had increased pre-tax profits for the year ending December 2009 by 43% to KSh 6.7 billion. Revenues grew by 22% to KSh 12.4 billion while expenses grew by only 3%; loans and advances to customers grew by 31% to KSh 56.7 bln while customer deposits grew 13% to KSh 86.8 bln. In 2009, the bank invested heavily in technology anticipating that it would be the main driver for business growth in the banking sector in future, including in systems infrastructure and technology-based products and services as well as standardising technology platforms to become more nimble and able to anticipate and respond to the changing business environment.
The rights issue and the acquisition are subject to regulatory approval.
May 29th, 2010 by Tom Minney
The Nigerian Stock Exchange (NSE) management has hit back at claims that its trading system is obsolete and urged the country’s Securities and Exchange Commission (SEC) rather to support building confidence in the market. According to reports in Nigerian media, the NSE’s Assistant General Manager and Head of Corporate Communications, Sola Oni, on behalf of Director General Prof Ndi Okereke-Onyiuke, said the NSE uses the NASDAQ OMX system used in 30 countries and one of the best in the world.
She appeared to refer to remarks apparently made in Nairobi by the Director General of the SEC, Arunma Oteh. Mrs Okereke-Onyiuke said the NSE is a dynamic organisation that keeps upgrading its standards according to international best practices. She reportedly cautioned that Government officials should refrain from making statements capable of affecting the delicate balance in the exchange, saying its gains should be supported through confidence building. Mr Oni said the exchange had asked the Commission several times to use usual channels, instead of newspaper pages, to discuss issues.
According to Mr Oni, the NSE All share Index had climbed 30% in the last five months, from 20,817 points to 27,227 points, and trading activity was soaring. “Before the global meltdown, our market was one of the best in the world. But when the crisis came, our market over corrected itself and its fundamentals became low. Consequently, the market became grossly undervalued. Today, it is paying off because the market has become a tourist centre for local and international investors. Almost on daily basis we receive enquiries and welcome visitors”,
Mrs Okereke-Onyiuke confirmed that the SEC had approved the commencement of the new second-tier Alternative Securities Market called ASM/Primpex Market. This will benefit companies who want to be traded, but do not meet the requirements of a full listing. She said: “The ASM is a way of restructuring the second-tier securities market to enable companies takes full advantage of listings; they could migrate to the main market as soon as it is practicable.”
She also denied any leadership tussle over her succession, as she is set to retire in November 2010, aged 60. She said the succession plan for the exchange is seamless, and follows the corporate governance principles of the best privately run exchanges in the world. The SEC has called for an independent company to oversee the search for the new DG.
The 17-strong NSE Council, which includes 8 stockbroking members, is also considering changes to the exchange’s Memorandum and Articles of Association which would allow the exchange to demutualize, in line with a resolution taken at an AGM in November 2006. The exchange would move to having its own shareholders, operating for profit and possibly even listing. The SEC is hoping for a strong role to oversee the demutualization, but responsibility currently rests with the Council.
May 11th, 2010 by Tom Minney
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
April 28th, 2010 by Tom Minney
Many thanks to Sola Green of Made in Africa initiative for pointing me to this Somali pirates’ anti-social stock exchange. No doubt some cynics this week in the wake of the Goldman Sachs/Paulson probe would ask “what’s new?”. Something similar, in UK coffee shops, was the origin of the world’s securities exchanges and maybe we can expect great things from the Horn of Africa.
The end is especially good, where shareholder Ms Sahra Ibrahim, 22 years, whose initial stake was a rocket-propelled grenade received as part of the settlement when her husband divorced her, says: “I have made $75,000 in only 38 days since I joined the ‘company’.”
The story was filed by Mohamed Ahmed for Reuters from Haradheere in Somalia on 1 December 2009:
“(Reuters) – In Somalia’s main pirate lair of Haradheere, the sea gangs have set up a cooperative to fund their hijackings offshore, a sort of stock exchange meets criminal syndicate.
Heavily armed pirates from the lawless Horn of Africa nation have terrorized shipping lanes in the Indian Ocean and strategic Gulf of Aden, which links Europe to Asia through the Red Sea.
The gangs have made tens of millions of dollars from ransoms and a deployment by foreign navies in the area has only appeared to drive the attackers to hunt further from shore.
It is a lucrative business that has drawn financiers from the Somali diaspora and other nations — and now the gangs in Haradheere have set up an exchange to manage their investments.
One wealthy former pirate named Mohammed took Reuters around the small facility and said it had proved to be an important way for the pirates to win support from the local community for their operations, despite the dangers involved.
“Four months ago, during the monsoon rains, we decided to set up this stock exchange. We started with 15 ‘maritime companies’ and now we are hosting 72. Ten of them have so far been successful at hijacking,” Mohammed said.
“The shares are open to all and everybody can take part, whether personally at sea or on land by providing cash, weapons or useful materials … we’ve made piracy a community activity.”
Haradheere, 400 km (250 miles) northeast of Mogadishu, used to be a small fishing village. Now it is a bustling town where luxury 4×4 cars owned by the pirates and those who bankroll them create honking traffic jams along its pot-holed, dusty streets.
Somalia’s Western-backed government of President Sheikh Sharif Ahmed is pinned down battling hard-line Islamist rebels, and controls little more than a few streets of the capital.
The administration has no influence in Haradheere — where a senior local official said piracy paid for almost everything.
“Piracy-related business has become the main profitable economic activity in our area and as locals we depend on their output,” said Mohamed Adam, the town’s deputy security officer.
“The district gets a percentage of every ransom from ships that have been released, and that goes on public infrastructure, including our hospital and our public schools.”
Risk vs Rewards
In a drought-ravaged country that provides almost no employment opportunities for fit young men, many are been drawn to the allure of the riches they see being earned at sea.
Abdirahman Ali was a secondary school student in Mogadishu until three months ago when his family fled the fighting there.
Given the choice of moving with his parents to Lego, their ancestral home in Middle Shabelle where strict Islamist rebels have banned most entertainment including watching sport, or joining the pirates, he opted to head for Haradheere.
Now he guards a Thai fishing boat held just offshore.
“First I decided to leave the country and migrate, but then I remembered my late colleagues who died at sea while trying to migrate to Italy,” he told Reuters. “So I chose this option, instead of dying in the desert or from mortars in Mogadishu.”
Haradheere’s “stock exchange” is open 24 hours a day and serves as a bustling focal point for the town. As well as investors, sobbing wives and mothers often turn up there seeking news of male relatives missing in action.
Every week, Mohammed said, gang members and equipment were lost to the sea. But he said the pirates were not deterred.
“Ransoms have even increased in recent months from between $2-3 million to $4 million because of the increased number of shareholders and the risks,” he said.
“Let the anti-piracy navies continue their search for us. We have no worries because our motto for the job is ‘do or die’.”
Piracy investor Sahra Ibrahim, a 22-year-old divorcee, was lined up with others waiting for her cut of a ransom pay-out after one of the gangs freed a Spanish tuna fishing vessel.
“I am waiting for my share after I contributed a rocket-propelled grenade for the operation,” she said, adding that she got the weapon from her ex-husband in alimony.
“I am really happy and lucky. I have made $75,000 in only 38 days since I joined the ‘company’.”
(Writing by Daniel Wallis; Editing by Jon Boyle).
April 25th, 2010 by Tom Minney
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.
April 9th, 2010 by Tom Minney
Top of this month’s conference agenda is the Africa investor’s Analysts’ and Fund Managers Forum & Financial Reporting Awards, organized in association with NYSE Euronext and Bloomberg. This prestigious event will be next Monday and Tuesday, 12-13 April, at Bloomberg’s London headquarters, and your editor will be day chairing the whole of the first day. Sorry, this will mean that updates and news disseminated via this blog will be late.
Ai (www.africa-investor.com) is a leading African provider of benchmarks and indices and their opening speaker is editor Hubert Danso. Bloomberg (www.bloomberg.com) is a top rated supplier of market data, news and other information services and will be represented for the opening by Ian Yeulett, Chief Executive, Europe and Africa. It is part of Ai’s series of road shows profiling African capital markets to the international investment community.
It offers high-level networking to analysts, fund managers, pension funds, sovereign wealth funds, investor relations officers and the financial media to meet CEOs from Africa’s leading listed companies and stock exchanges.
The theme is “capital introduction” and the organizers are also putting together one-on-one meetings for institutions currently raising capital and seeking investors.
The event also includes the annual Africa investor Analysts’ & Fund Managers Forum and the Financial Reporting Awards as well as a full day (13 April) Investor Relations Training Workshop for IR professionals from African listed companies, CEOs, Finance Directors, Compliance Professionals, IR and communication consultants and other advisory professionals from listed companies.
Monday, 12 May
Session 1(10:10am): The Value Proposition – overview of African capital markets (equity and bonds) including their size, how do capital flows compare with other regions, direct vs portfolio investment, how do its exchanges compare to global leaders, and why did it lag the recovery of other emerging markets after the crisis? Chair: Anton Hobbs (Africa Sales, Bloomberg), panel: Matthew Pearson (Head of African Equity Products, Standard Bank), David Cowan (Economist Africa, CitiGroup), Luca del Conte (Executive Director, MediCapital Bank) and Veronica Kalema (Director, Fitch).
Session 2 (10:50am): Hidden value? Valuation and Accounting in African Companies including leading investment researchers, credit rating analysts and financial journalists reviewing some special factors behind the valuation of companies and sectors in our resource-rich but under-developed continent. Chair: Joseph Wambia (CEO, Wambia Capital LLC), Neil Shah (Research, Edison Investment Research), Daniel Broby (CIO, Silk Invest), Gregory Kronsten (Chief Economist, First City Monument Bank UK), Maciek Szymanski (Investment Strategist, African Alliance Securities)
Session 3 (12:00 noon): Capital Introduction – Trends and Prospects. Leading pension funds and fund managers will analyse global capital raising market for Africa-focused listed, bond, Shariah, hedge and private equity funds, including the views of international pension funds, new directions for sovereign wealth funds and family funds and sector-focused funds. Chair: Rafael Stone (Foster Pepper LLC), Christopher Grune (State Street Global Advisors), Martin Poulsen (Chief Private Equity Officer, African Development Bank), Craig Mercer (Senior Investment Consultant, Towers Watson), Hela Dammak (MD, Global Markets Societe Generale) anf Zain Latif (Partner, TLG Capital).
Session 4 (12:40): Global emerging markets investors and African pension funds and CEOs will debate: disclosure compared with other global markets; can companies identify and talk to their owners, do African companies take investor needs seriously and what could they do to reduce their cost of capital? Chair: Sunil Benimadhu (CEO, Mauritius Stock Exchange), Tim Goodman (Hermes Fund Managers), Nicolas Clavel (CIO, Scipion), Richard Veringa (Executive Director/COO, Sigma Pension Funds), Stephen Swanson (Senior Legal Counsel, Abu Dhabi Investment Company).
Session 5 (14:30): CEO Roundtable: Success stories and strategies from leading African capital markets personalities, including investment strategies and other experiences. Chair: Ekow Afedzie (CEO, Ghana Stock Exchange), Arnold Ekpe (CEO EcoBank), Geoffrey White (CEO, Lonrho), Euan Worthington (Chairman, African Eagle Resources), Dr James Mwangi (CEO, Equity Bank) and Ismail Douiri (Directeur, Attijariwaffa Bank)
Session 6 (15:10): Fund Managers’ Analysis of Market Trends and Forecasts for 2010. Sharing and analysing research, profiling countries, sectors, funds and companies they believe will do well, with predictions and forecasts. Chair: Tom Minney (Editor, African Capital Markets News), Andrew Lister (Senior Investment Manager, Advance Emerging Capital), Ian Morley (CEO, Corazon Capital). Marc Sullivan (Portfolio Manager, Cadiz), Jamie Allsopp (Fund Manager, Insparo Asset Management), Renaissance Capital.
The Africa investor Financial Reporting Awards: The winners will be announced at the end of the forum followed by a cocktail reception in recognition of the award winners. Africa investor will recognise the best listed companies and media houses as well as the leading financial analysts with an outlook on Africa.
Tue 13 May
Industrial Relations workshop sponsored by supported by the IR Global League (www.irgl.info).
For bookings for this and for the industrial relations workshop contact Africa investor click here.
April 5th, 2010 by Tom Minney
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.