Archive for the 'Stockbrokers' Category
October 15th, 2010 by Tom Minney
Next month’s upcoming African Stock Exchanges Association conference (10-12 November, Zambia) could be a key event in shaping the future developments of African securities exchanges.
There will be scope for important interviews and news, blogged live from the conference meeting in Livingstone, Zambia and giving the world insight into running news of Africa’s booming securities exchanges for bonds and equities, as well as private equity and social impact investment.
Your organization could support the coverage and be at the forefront of the news. We are offering top billing advertising space on our widely-read blog and will use the money raised to support attending ASEA and to widen and deepen our high-quality coverage of Africa’s capital markets (currently written by a volunteer capital markets professional, see about us).
This is a key opportunity for your investment institution, bank, stockbroker or other company if you want to be identified as THE important role player shaping the future of investment on the world’s new frontier.
Interested advertisers are invited to bid for 1 month’s advertising on this blog, expected to start from a minimum of $500 per month. The top 2 or 3 may be accepted. We will also make sure you get well recognized in the ASEA coverage. The bidding closes on 22 October.
Please send bids by email to tom.minney[at]afrigrow.com.
October 7th, 2010 by Tom Minney
Ecobank (www.ecobank.com), a leading Pan-African banking group, has launched Ecobank Capital, its new capital markets and investment banking arm. The launch came in September 2010, at a prestigious African investment conference in New York.
According to a press release, Ecobank Group CEO, Arnold Ekpe told representatives of the financial media and the investment community: “The launch of Ecobank Capital illustrates our commitment to providing our international customer base with the sophisticated, integrated financing solutions demanded by today’s fast-moving markets.”
“Our rapid expansion across Middle Africa has necessitated the restructuring of our trade, project and equity finance and syndicated lending businesses with a view to enhancing the delivery of our customer services across the Continent,” he added.
Offong Ambah, CEO of Ecobank Capital, commented: “By harnessing all of Ecobank’s considerable in-house knowledge and expertise in pan-African foreign exchange, equities, debt and commodities, we can provide our corporate, governmental and institutional clients with an integrated service from a uniquely local perspective.”
Ecobank says it has a dedicated team of more than 100 professionals located in key financial centres across Africa and internationally, Ecobank Capital provides the full range of financing solutions expected from an integrated investment bank, including trading in all of Middle Africa’s 16 exotic currencies, deal origination and execution, buy-side advisory services and market research to capitalize on pan-African investment opportunities.
The parent company Ecobank Transnational Incorporated (ETI) is incorporated in Lome, Togo. The regional banking group has a presence in 30 African countries, namely: Benin, Burkina Faso, Burundi, Cameroon, Cape Verde, Central African Republic, Chad, Congo (Brazzaville), Congo (Democratic Republic), Côte d’Ivoire, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Liberia, Malawi, Mali,
Niger, Nigeria, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, South Africa, Tanzania, Togo, Uganda and Zambia. The group also has representative offices in Beijing, Johannesburg, Dubai and Paris.
ETI is listed on the stock exchanges in Lagos, Accra and the BRVM, regional securities exchange of the West African Economic and Monetary Union (UEMOA). The Group is owned by more than 180,000 private and institutional shareholders in Africa and beyond and has over 11,000 employees from 29 different countries in over 700 branches. Ecobank is a full-service bank providing wholesale, retail, investment and transactional banking services and products to governments, financial institutions, multinationals, international organizations, medium, small and micro businesses and individuals.
October 7th, 2010 by Tom Minney
Renaissance Capital (www.rencap.com), the Russian emerging-markets bank with operations in Africa, plans to expand next year into Egypt and at least 3 other African countries, according to a 5 October interview published on Bloomberg. Rencap says on its website that its core businesses areas are Mergers & Acquisitions, equity and debt capital markets, securities sales and trading, research, and derivatives. It says it is building “market-leading practices across emerging markets globally in metals & mining, oil & gas and agriculture.”.
Clifford Sacks, CEO of the South African unit and head of Pan-African Equities, told Bloomberg from Johannesburg the bank may buy or start a brokerage in Egypt that would also cover Morocco and Tunisia. Hasnen Varawalla, global head of corporate finance, added that it also plans to move into Angola, Uganda and Rwanda. Rencap is bsed in Moscow, and currently operates in African nations including Ghana, Kenya, Nigeria, South Africa Zambia and Zimbabwe. Bloomberg quotes Varawalla: “Each of these countries will see a huge development in their capital markets. We are looking to expand into another 5 or 6 countries in Africa.”
The bank is half-owned by billionaire Mikhail Prokhorov. It started its African business in 2007. According to Bloomberg last year it participated in 24 transactions across 13 African countries, including the $955 million sale of Central African Mining & Exploration Co. to Eurasian Natural Resources Corp. Africa accounts for a quarter of RenCap’s investment-banking business. Varawalla told Bloomberg that Non-Russian activities will generate more than 50% of revenue within 2 to 3 years.
In July, it paid ZAR207 million (then US$27.3 million) to acquire BJM Securities, the brokerage business of South Africa’s Barnard Jacobs Mellet (BJM) Group. A press release by Rencap describes BJM: “Founded in 1985, BJM Securities is the leading independent full service broker-dealer in South Africa. The firm is known for its outstanding research franchise, having been ranked No.1 in South African research surveys.
The Firm entered South Africa in February 2010 and appointed Clifford Sacks. The press release quotes him: “The combination of a leading independent brokerage in South Africa with award-winning research franchise and Renaissance Capital’s unparalleled expertise in capital markets and M&A, complemented by our unique access to global emerging markets creates a powerful platform across research, sales and trading in Africa’s largest economy.”
September 14th, 2010 by Tom Minney
Nigeria’s biggest cement producer has been approved for listing on the Nigerian Stock Exchange (www.nigerianstockexchange.com), and is expected to boost market capitalization by 37% in the process, according to newsagency Bloomberg. The agency quotes a statement from the NSE that the 2.09 trillion naira ($14 billion) Dangote Cement company will be formed from a merger between Dangote Cement and Benue Cement Co.
According to the report, a total of 15.5 billion shares will be listed at 135 naira each before the wider offer closes.. Afrinvest (West Africa) Ltd. will introduce the issue.
Recently the NSE, one of the African giants, with a a market capitalization of some $37.2 billion, has been troubled by a range of governance issues. Alhaji Aliko Dangote, a Nigerian billionaire and one of Africa’s richest men, had been ordered to stop acting as President of the NSE in a clampdown which also saw the sacking of the Director General.
Bloomberg quotes Bismarck Rewane, chief executive officer of Lagos-based Financial Derivatives Co.: “It is a very important development because it will boost confidence in the market. The listing is another opportunity for investors to participate in a company that has become the leading producer of cement in Africa.”
Dangote Cement has projects and operations in Nigeria, Benin, Senegal, Zambia and Ghana.
Dangote Group has interests in Dangote Sugar Refinery Plc, National Salt Co. Nigeria Plc, logistics and real estate. Some of these are listed in their own right.
According to reported announcements, shareholders of Dangote Cement and Benue, in which Dangote has a stake, will meet on Sept. 28 to pass resolutions on the proposed merger.
August 8th, 2010 by Tom Minney
The Securities and Exchange Commission (www.sec.gov.ng) has moved in hard on the Nigerian Stock Exchange (NSE www.nigerianstockexchange.com) on 4 August, ordering the Director-General to leave her post and Alhaji Aliko Dangote, one of Africa’s richest men, to stop acting as NSE President. The SEC appointed the former chief executive of audit firm Deloitte in West and Central Africa, Emmanuel Ikazaboh, as interim manager.
The move comes after years of legal and other wrangling, as reported in this blog on 31 July, culminating in an order from the court to Police to force Prof Ndi Okereke-Onyuke and Dangote to come to court on 27 July to answer charges of contempt after they failed to comply with earlier court orders suspending the August 2009 election of Dangote. The SEC also ordered the NSE Council also to stop meeting.
Meanwhile local media reported that Dangote has accused Okereke-Onyuke of mismanaging the accounts of the NSE, which she has led for 10 and served for 27 years after coming from the New York Stock Exchange. Dangote is reported to have said that the exchange has been mismanaged to the tune of N9 billion ($60 million) and owes N900 million (US$6 million) to the accounts of its subsidiary, the Central Securities Clearing System.
It is a tough move by SEC Director-General Arunma Oteh, who took office at the start of 2010. She pledged tougher regulation of Nigeria’s capital markets, and may have taken the court moves as the prompt to clean up, although many had said tough action by the SEC was long overdue. Last year Central Bank Governor Lamido Sanusi swooped and sacked up to 8 bank chiefs during a $4 billion bailout to clean up corrupt and mismanaged bankers and restore confidence in the banking sector and the capital market urgently needed a clean-up.
Local press reported drama at the Lagos trading floor of the NSE on Thursday, as officials of SEC and the Economic and Financial Crimes Commission (EFCC), accompanied by armed police and plain-clothes security officer came to enforce the dismissal of Okereke-Onyuke. Calm returned on Friday but over the week the NSE All-Share Index shed 105.39 basis points (0.4%) to close the week at 25,738.79 points (http://www.emerginvest.com/WorldStockMarkets/Nigeria) from 25,844.18 points, although company results were also mixed.
One local paper says newly appointed interim administrator Ikazaboh has outlined a 4-point towards the recovery of the NSE. Most important is to stop the slide in market confidence, also responsibility to restore the integrity of the capital market and of the administration, finance and IT. He also aims to continue the agenda of transformation and attain a world-class capital market and let a new DG emerge. Senior stockbrokers apparently rushed there on Thursday to join their dealing clerks, before a closed door meeting with Oteh and other regulators which announced Ikazaboh’s appointment.
Reuters agency says Ikazoboh had 30 years of experience in auditing, consulting and financial advisory services. The website of Akintola Williams Deloitte (www.deloitte.com) says he joined as a Senior Audit Assistant in 1975, became partner in 1982 and senior partner in 1990. The company is auditor of the NSE.
Reuters quotes Kemi Owonubi, head of research at Lagos-based investment bank and stock brokerage Vetiva Capital Management, saying: “The allegations against the former director-general had started having a negative effect on the market.. The market has been in a holding position oscillating at current levels for about a month, even when we have seen positive earnings results from key institutions … It is all about investor confidence.” It also quotes Kayode Akindele, a director at financial advisory firm Greengate Strategic Partners, as saying: “Investors want to know that the regulators have a firm grip of the market.. This strong move by the SEC to get a grip of the situation and try to resolve the leadership crisis can only improve investor confidence, especially if the proposed interim administrator organises elections in a timely manner.”
Taken from material in Reuters, and local Vanguard,This Day and Daily Independent newspapers, among others.
March 15th, 2010 by Tom Minney
We are blogging LIVE from the 5th Annual African Investment Conference, organized by stockbroker Securities Africa and Citigroup. This brings to London a lot of the top listed companies, and gives them chances for a series of one-to-one meetings with institutional and other investors. The conference runs today (Monday 15th) and tomorrow (16th) March. Speakers include CEEMEA Equities of Citigroup, Dexter Mahachi, the head of research at Securities Africa, the JSE Africa Board from Johannesburg.
This evening (UK time), African Capital Markets News’ editor will moderate the panel on African Capital Markets, with the JSE Africa Board, the Stock Exchange of Mauritius, CGF Bourse from Senegal and the Kestrel Capital of Kenya. Expect an update much later tonight/tomorrow (depending on the entertainment afterwards..).
Top listed companies presenting include:
• Agriculture: Zambeef from Zambia, aiming to be the continent’s top provider of low cost protein,
• Telecoms: Econet Wireless from Zimbabwe, Access Kenya and Safaricom of Kenya, Sonatel of Senegal,
• Mining: Athi River Mining (Kenya), African Consolidated Resources (Zimbabwe), Petra Diamonds, Toro Gold (W Africa)
• General: Rogers & Co (Mauritius)
• Oil: Kenolkobil (Kenya),
• Financial Services: Afren (Nigeria), Ghana Commercial Bank, Equity Bank (Kenya), Letshego Holdings (Botswana), Mauritius Commercial Bank and State Bank of Mauritius, Skye Bank and United Bank of Africa (Nigeria)
These are only some of the top speakers, we will keep you updated with some extracts, but will help to field any other information requests or contacts that our readers need.
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.
January 29th, 2010 by Tom Minney
International stockbroker Exotix (www.exotix.co.uk) is bullish on African equities and on growth prospects. According to the latest report “Top 30 Companies: sub-Saharan Africa excluding South Africa”, many share prices still have to catch up with the improved fundamentals and Africa has lagged the recovery in the stock markets of Brazil, Russia, India and China.
Analyst Christopher Hartland-Peel writes: “We expect 2010 to be a strong year for sub-Saharan African markets and we think the improving fundamentals that we have seen in the region were not reflected in stock prices during 2009. Many investors believe that BRIC markets have outperformed the improving fundamentals; Sub-Saharan Africa has been the reverse and has underperformed the improving fundamentals. Now, we see a significant valuation gap between the BRIC’s, other emerging markets and frontier markets.
He adds: “Emerging markets continue to lead global growth and commodity prices will likely stay around current levels. This backdrop should be the equity sweet spot for frontier markets, especially since the 2009 global rally barely touched frontier markets.”
The research team, which also includes David Aserkoff and Stuart Culverhouse, highlights Nigerian banks which will be “interesting”. Regulators have spent considerable time and funds clearing up some banks last year, and share prices plunged. The report says: “The Nigerian banks clearly have value. The big four Nigerian banks – First Bank Nigeria, Guaranty Trust Bank, UBA and Zenith Bank are trading only marginally above book value at 1.4 times… The average big BRIC bank is trading at twice the book value of the average big four Nigerian banks.”
He also backs Nigerian non-financials, citing strong GDP growth including 8% for the non-oil sectors, and higher oil prices in the $70-$80 range.”Food companies and cement would be our favourites. The breweries are hurting from rising competition”.
He also highlights low-capital and early-stage resources and mining – “High commodity prices are back” – picking out stocks such as Mwana Africa and Bowleven. He adds that African assets listed in UK can give investors better liquidity and balance the portfolio.
Other highlighted economies are Kenya (4.0% growth forecast), Mauritius (2.0% growth forecast) and Botswana (4.1%). “We look closely at consumer stocks in Kenya such as East African Breweries, Safaricom and the banking sector…. Better harvests in Kenya would drive the agricultural sector, which still accounts for 22% of GDP.”
Investors who would like a copy should apply through the website.
December 19th, 2009 by Tom Minney
Proposed amendments to Kenya’s Capital Markets Authority (CMA: www.cma.or.ke) Act would block institutional investors from getting compensation for money lost in cases of collapse of their stockbroker or any other investing agent. Currently all investors are eligible for compensation from the Investors Compensation Fund (ICF).
The draft CMA Act 2009 excludes financial institutions, insurance companies, collective investment schemes and other categories of investors who are generally recognised as “institutional investors” from drawing compensation from the ICF kitty. This leaves the “retail investors” as the only category of investors that can claim compensation for losses suffered due to failure or fraud by market intermediaries.
Current ICF regulations cap the maximum compensation payable per investor at KSh50,000 (US$667) and have called it to be increased to match commercial banks’ depositors compensation ceiling (KSh100,000).
Hong Kong-based International Securities Consultancy Ltd (ISC) drafted the proposed amendments jointly with local law firm Kaplan and Stratton Advocates. ISC’s Ray Astin reportedly says “It is generally assumed that the professional investors have the capacity to make prudent investing decisions and can look after themselves,”
Market players have argued that it will be unfair to compel institutional investors to contribute to the ICF pool while they do not expect to get any compensation for losses incurred. Mr Astin said contribution is guided by best practice recommendations by the International Organisation of Securities Commissions (IOSCO) of which the CMA is a member. The CMA uses allocations from new product listing charges and fees received from trading commissions in the secondary market to boost the ICF.
The ICF has had to pay out an estimated KSh302 million ($4 mln) to investors who lost money following the collapse of Nyaga Stockbrokers in March 2008, and the kitty is also likely to come in handy in paying claims to investors who also lost following the collapse of Discount Securities Stockbrokers early this year. About 90% of the estimated 27,879 Nyaga claimants were expected to receive full compensation for their losses, but some invested more than the maximum amount allowed
The CMA estimated that Nyaga could have gone under with over Sh800 million of investors’ funds, while there were allegations that Discount Securities had misappropriated Sh1.4 billion owed to the National Social Security Fund. The CMA’s financial statements for 2008 show the ICF had KSh227.5 million (June 2008), up from KSh165.2 mln (2007). “If you are investing a lot of money please take caution to know your broker and his lifestyle,” said the CMA chairman Micah Cheserem in September, according to reports.
Capital markets will be regulated by two sets of laws, the CMA Act, which deals with establishment of the regulatory body, and the Securities Industry Act addressing trading rules. The Central Depositories Act, which regulates custody of tradable securities such as shares and bonds, will also be amended.
The Nairobi Stock Exchange (www.nse.co.ke) has meanwhile introduced a mobile phone short message service (SMS) to receive complaints from all over Kenya. Complaints and questions can be sent to 8485, on both Safaricom and Zain mobile phone service at a cost of KSh10 per message.
“It is important to have an educated investor who understands the products traded and procedures governing transactions, said NSE chief executive, Peter Mwangi.
“Statistics show that 30% of the queries received at the Complaints Handling Unit (CHU) refer to a request for general information on processes, while a further 14% relate to questions on dividend issues by shareholders.”
Wycliffe Shamia, the market regulator for the Capital Markets Authority (CMA), reportedly praised the SMS complaints service and asked licensees and agents to provide clients with service charters. “Clients need to know beforehand what to expect from an agent or whoever they are dealing with, in order to make it clear what they offer, and avoid unnecessary delays and misunderstandings.”
The SMS service, which will also be used as a vehicle for investor education through the Complaints Handling Unit website (http://www.nsecomplaints.co.ke/chu) launched in August.
December 19th, 2009 by Tom Minney
Stockbroker and investment bank Exotix Limited (www.exotix.co.uk) says the Ghana Stock Exchange’s All-Share Index has so far been the world’s worst performer in 2009, falling 49% after being among world beaters in 2008 with a 58% gain.
London-based Exotix analyst Christopher Hartland-Peel says the index is likely to climb 25% to 30% in 2010 as the west African nation starts producing oil for export, according to Bloomberg.
“We view Ghana as one of the countries that are going to be among the strongest growing” in Africa, Bloomberg quotes Hartland-Peel. “The reason for this is oil.”
GSE share prices plummeted as international investors fled assets perceived as risky during the height of the global credit crisis, and 15% depreciation in the currency (cedi) triggered 20% inflation and a $1 billion rescue by the International Monetary Fund.
Ghana’s Jubilee oil field was discovered in 2007 and is scheduled to start production in the fourth quarter of 2010. Tullow Oil Plc, which owns a 34.7% stake, says the field may hold as much as 1.8 billion barrels of oil, with initial production estimated at 120,000 barrels a day. The firm adds that Ghana will be one of the world’s top 50 oil producers.
Currency depreciation and consumer price inflation helped double yields on Ghana’s 91-day Treasury bills compared to a year earlier, reaching 24.7% before declining slightly. Hartland-Peel says stocks won’t rebound until an economic recovery reduces bond yields: “If you can get 23%-24% in Treasury bills, why put your money in the stock market?”
The central bank in November cut its key lending rate for the first time in nearly three years by 50 basis points to 18%. Further cuts may follow after consumer inflation fell for the fifth straight month to 16.9% in November.
Finance Minister Kwabena Duffuor reportedly said the budget deficit will fall to about 10.2% in 2009 and 7.5% in 2010, from the 2008 peak of 24.2%. Economic growth will likely reach 5.9% in 2009 and 6.5% in 2010, after 7.3% in 2008.
The cedi has gained nearly 5% against the dollar since the International Monetary Fund agreed in July to lend Ghana $1.02 billion over 3 years. Stocks may also benefit from 1 bln. cedis set to be invested in Ghana’s securities markets through a government pension-reform programme starting next year, allowing private brokers to develop and manage corporate retirement plans.