Archive for the 'Stockbrokers' Category
October 29th, 2009 by Tom Minney
Here are some extracts from the keynote speech by US stockbroker Jonathan Auerbach at a joint conference between his company, Auerbach-Grayson & Company (www.agco.com), Nedgroup Securities (www.nedsec.com) and Nedbank Capital (www.nedbank.com) on 5-6 October in Johannesburg.
“They call us Frontier Markets.. we are reaching for the Final Frontier, the edge of our world. We are out there accessing the world’s investment pools, asset managers, pension funds, insurance companies, sovereign wealth funds, some passive and some not so passive, convincing them both internally and externally to make larger investments outside their home markets and into Africa. We are providing capital where it’s needed most and the returns are impressive.
“We are the agents of development. When the public sector alone ran Africa, with the legacy of Cold-War great powers and post-colonial anointed kleptocrats.. capital and assets fled from Africa. Today, 50 years later, many African nations’ growth rates are greater than 7%, savings rates are increasing, cell phone and internet usage doubles yearly. African leaders, like Kikwete of Tanzania and Khama of Botswana, who visit the developed world now meet investors and businesses. This is the true Africa; hungry for trade and investment, not handouts.
“Mainstream press tells us we are in a global economic slow down. Well, excuse me, but the slowdown of consumer spending in the developed world even with central banks spiking their punch bowls is not the case in Africa. Africa is echoing the success of China, Singapore, Korea, India, Brazil – need I name more? And this successful model is more about business missions establishing new multi and bilateral trade arrangements (South Africa’s Shoprite has just announced they will open 14 new supermarkets in Nigeria. Currently they only have one). It’s about educational growth. It’s about capital markets combined with technology (Safaricom raised $800 million in a domestic IPO last year. Today 800,000 Kenyans are shareholders). It’s about taking the governments out of the realm of the economic domination business and into the realm of producing supportive business services and catalyzing business investment.
“Let’s understand why we in Africa have a clear advantage in this generational secular event we call the leveling of the global economic playing field.
1. Labor force growth will be at least 2% higher than the developed world with significant surpluses that will seek to redeploy as they rush to participate in growth.
2. Investment rates in the frontier/emerging world run 27% on average (China is 45%) compared to barely 20% in the developed world.
3. Productivity growth is running on average twice the developed world.
4. Local businesses now with access to indigenous capital markets no longer are captives of global banks or suppliers to multi-nationals.
5. Ownership of public companies is organically expanding to employees, local shareholders and local institutions, and global institutions as government ownership and plodding multinational corporate ownership is minimized.
6. Transactional efficiency – Electronic trading platforms and book entry custody have made many markets in Africa as efficient as the developed world. In Kenya, this development has quadrupled daily volume from four years ago. Our firm has never had a fail in Africa and I speak with 15 years experience having had share turnover of $1 billion in Africa last year. Your word is your bond here and a firm handshake works as well here as anywhere else in the world.
7. While the developed world is feverishly dealing with de facto nationalization and stimulating reluctant consumers, Africa basks in privatization and organic middle class growth of close to 20% unencumbered with debt or car clunker deals.
8. The remarkable growth of local banking within countries and cross-border is astounding… Among the new African bank leaders are Mauritius Commercial Bank; Equity Bank in Kenya; DFCU Bank in Uganda; National Microfinance in Tanzania; Zanaco in Zambia; UBA in Nigeria (beginning to appear everywhere else); and Guaranty Bank in Nigeria (a classic corporate banker).
9. Education – Almost all of my partners in Africa have at least one employee as a CFA candidate rapidly homogenizing African analysts with their global counterparts.
“We must convey to Sir Bob, and the always well-meaning donors to Africa, that they must grasp that here in Africa private initiatives and pan-Africanism are rocketing along and the legacies of colonialism, kleptocracy, and tribalism are crumbling as a fresh information–empowered generation gets it. For me, and I hope for you, Africa has never looked better and it’s all about the burgeoning presence of empowered people and institutions.
“On Saturday I made my annual pilgrimage to the Hector Pieterson Memorial and Museum in Soweto. If you haven’t been there just know that it’s integral to your African awareness. One of the videos that plays at the museum is a passionate reading by the late South African poet Ingoapele Madingoane of his iconic poem, Africa, My beginning, Africa My Ending- and I quote the last lines, “…Africa my beginning/ And Africa my ending/ Lets do something.”
October 14th, 2009 by Tom Minney
Free information on African listed companies? There are three excellent sites which offer fine material and services on promoting investor relations, and feature an enticing line-up of online published annual reports of listed companies from all over Africa as well as many other useful tips and advice. The sites are www.africaniscool.com, www.africanshareholder.com and www.africanfinancials.com. Congrats to Rob Stangroom on a great initiative.
Here are some good words of advice to African stock exchanges, from the www.africaniscool.com blog. I hope Investor Relations and shareholder activism will feature strongly on the agenda at the upcoming African Stock Exchanges Association Conference (www.aseaabuja2009.com) on 2-4 December 2009 in Abuja, Nigeria.
10 Investor Relations Tips for African Stock Exchanges (from www.africaniscool.com) on 2 Oct 2009.
TIP 1:
Make it mandatory that annual reports be published online as soon as they are made available or posted to shareholders. Less than 30% of African annual reports are currently online!
TIP 2:
Require an IR contact to be clearly indicated on the company website or stock exchange website and require a maximum turn around time. Investors should have access to companies that they own. They usually don’t!
TIP 3:
Automate the publication of corporate actions online with free access to attachments. The JSE has been offering the SENS platform to African stock exchanges for years – why not use it? Investors need information to make educated investment decisions.
TIP 4:
Incorporate the core investor relations best practices into the listing rules. And name the companies that are not compliant. Why? It makes sense, and it creates value.
TIP 5:
De-list companies that should not be listed, i.e. those with very low free floats and low number of shareholders. They are not serving any purpose except adding to the apathy of other listed companies.
TIP 6:
Do not seek rents from investment data of listed companies. Africa can’t afford it. Monetising these data should happen later, after the value has been created.
TIP 7:
Host a mandatory annual investor presentation event and ensure that all companies participate. Make sure to follow up and disseminate the presentations online. Why? To increase awareness in directors that they have a duty to ensure information is available.
TIP 8:
Standardise minimum requirements for the investor relations sections of websites, and name those not complying. Why? To create awareness.
TIP 9:
Pay for an IR specialist to present to listed companies at least every 6 months to increase awareness.
TIP 10:
Have an active public investor education programme, co-funded by government. Typically governments have created the masses of shareholders by privatising former state-owned companies through the stock exchange. Therefore it should be a joint responsibility into ensuring these investors become meaningful participants
October 12th, 2009 by Tom Minney
South Africa’s securities exchange, the JSE Ltd (www.jse.co.za), is offering trading in gold, platinum and sweet crude oil futures contracts on its commodities derivatives market, according to an official announcement on 12 October. Previously, only agricultural commodities were traded.
The JSE recently signed an agreement with the world’s largest derivatives marketplace, CME Group (www.cmegroup.com). This builds on the heritage of the Chicago Board of Trade, Chicago Mercantile Exchange and Nymex (www.nymex.com) and offers the world’s biggest platform to hedge risks, with trading floors in New York and Chicago and the CME GLOBEX electronic trading platform.
The locally listed contracts will be cash-settled, using benchmark gold settlement prices referenced from CME’s COMEX division and platinum and crude oil prices from its NYMEX division. The underlying instrument is a contract traded on NYMEX or COMEX, giving extra liquidity.
Ashley Erasmus, Senior Commodities Trader at Nedbank Capital (www.nedbank.co.za), says: “The two metal commodities should interest local investors as South Africa is the world’s largest platinum producer and the third largest gold producer. The price of the commodities is generally linked to the prices of mining stocks. The liquidity that the current market makers and any new ones will bring to the market can only be beneficial to investors.”
Rod Gravelet-Blondin, Head of the Commodities Division at the JSE, adds: “We are confident that trading will gain traction as more and more investors realise that they can trade these highly traded commodities in an easy and more affordable manner.” In February 2009, the JSE listed a Chicago corn contract. It plans to list more cash-settled commodities in 2010.
The JSE makes the contracts accessible to individuals by trading smaller lot sizes than those traded in the US. The minimum contract size for crude oil is 100 US barrels (15,898.73 litres) with contracts expiring in Feb, June, August and December, while in New York the contract minimum is 1,000 barrels. Each gold and platinum contract size equates to 10 troy ounces and the minimum price movement is set at 100 South African cents per ounce. The gold contract expiry months are April, June, August and December and a minimum of two expiries are always available for trading. The contract for platinum expires in January, April, July and October with a minimum of two expiries always available for trade.
Gravelet-Blondin says: “We are particularly excited about the opportunities that a crude oil contract offers. Oil has a knock-on effect on all sectors of the economy. Notably, as diesel is a major cost in farming, this will give our agricultural market a tool to hedge a major input cost. Organisations in the transport and manufacturing sectors that use large quantities of fuel may also want to hedge their energy usage against the benchmark,” adds.
Nedbank, Standard Bank and Rand Merchant Bank will quote live rand prices for investors. Previously investors wishing to trade these derivatives or hedge exposures had to trade on foreign markets and were subject to exchange controls and limits. The futures contracts still count as overseas assets in terms of limits for pension funds and long-term insurance companies (20% foreign allocation limits) and asset managers and registered collective investment schemes (30%), according to the announcement.
The listing comes at a time when metals prices, including gold, are soaring. Many investors seek gold and other refuges in times of global economic crisis, including the weak dollar.
The JSE connects buyers and sellers in four financial markets: equities, equity derivatives, agricultural derivatives and interest rate instruments (Yield-X). It is in the world top 20 exchanges in terms of market capitalization.
September 24th, 2009 by Tom Minney
The brightest and best of Africa’s capital markets were highlighted in New York on 21 September at an awards dinner.
The Johannesburg Stock Exchange (www.jse.co.za) was recognized as Most Innovative African Stock Exchange, particularly for the Africa Board initiative. Best Performing Ai40 Company was Maroc Telecom (www.iam.ma). Co-operative Bank of Kenya (www.co-opbank.co.ke) won Best African IPO. The Capital Market Authority of Egypt (www.cma.gov.eg) took gold, winning the Most Innovative Capital Markets Regulator and Standard Bank Group (www.standardbank.co.za) took both the Best Africa Investment Bank and Best Africa Research Team Awards.
Kenyan and South African business leaders dominated the CEO categories, as James Mwangi (www.equitybank.co.ke) scooping the Ai100 CEO of the Year and Jacko Maree (www.standardbank.co.za) the Ai40 CEO of the year. Hussein Manzi, CEO, Bamburi Cement in Kenya (www.bamburicement.com) won the AiSRI50 CEO of the Year award and South Africa’s Phuthuma Nhleko, CEO, MTN Group (www.mtn.com) awarded the AiSRI30 CEO of the Year.
Africa investor (Ai) (www.africa-investor.com/), a leading international investment research and communication group announced the 2009 Africa investor Index Series awards jointly with the New York Stock Exchange (www.nyse.com), the world’s largest exchange.
Three winners were presented for each category with a winner, first runner-up and second runner-up, based on performance between April 2008 and April 2009. The awards, based on the Ai100 and Ai40 indices, are reportedly the only international, pan-African awards that recognize institutional investors, stock exchanges, stockbrokers and capital market regulators across the continent.
Raila Odinga, Prime Minister of Kenya opened the awards and praised them for showcasing African investment leaders and opportunities to the world. Over 200 senior executives from Africa and the world attended, including CEOs of the Nigerian, Mauritian, Egyptian, Casablanca and Ghanaian Stock Exchanges, as well as leading financial institutions such as the African Development Bank, Overseas Private Investment Corporation (OPIC), Afrexim Bank, Bank of New York Mellon and Scipion Capital.
Hubert Danso, Vice Chairman of Africa investor, also part of the judging panel, said: “The Awards record performance from April 2008 to 2009, which represents one of the most challenging investment periods in economic history. These Awards go a long way to highlighting the enormous potential and opportunities offered by Africa’s capital markets.”
Dr Tukur, Chairman of the NEPAD Business Group and Africa investor remarked: “Regarded as Africa’s Fortune 500, these awards are a tribute not only to those nominated or the winners, but all the actors in Africa’s capital markets community enabling us to have remarkable success stories to showcase to the world.”
The 2009 Africa investor Index Series Awards will be in the November-December issue of Africa investor magazine (published in English and Chinese). Supporters were NYSE Euronext, Thomson Reuters, the African Development Bank, CNN International, the NEPAD Business Group and the New Partnership for Africa’s Development (NEPAD).
September 24th, 2009 by Tom Minney
(based on April 2008-April 2009):
Most innovative African Stock Exchange
Johannesburg Stock Exchange (JSE) (winner)
The Egyptian Stock Exchange (EGX) (1st runner-up)
Stock Exchange of Mauritius (SME) (2nd runner-up)
Casablanca Stock Exchange (CSE) (2nd runner-up)
Best African Investment Bank
Standard Bank South Africa (winner)
ABSA Capital – South Africa (1st runner-up)
Banco Africano de Investimentos (BAI) – Angola (2nd runner-up)
Best African Research Team
Standard Bank – South Africa (winner)
Renaissance Capital – United Kingdom (1st runner-up)
UBA Capital – Europe (2nd runner-up)
Most Innovative Capital Markets Regulator
Capital Market Authority Egypt (winner)
Morocco Capital Market Authority (1st runner-up)
Financial Services Board of SA (2nd runner-up)
Best Performing Broker in Africa
BJM Securities – South Africa (winner)
Auerbach Grayson & Company – NY (1st runner-up)
EFG Hermes – Egypt (2nd runner-up)
Best African Fund Manager
Investec Asset Management – SA (winner)
Coronation Fund Managers – SA (1st runner-up)
EFG Hermes – Egypt (2nd runner-up)
Best African IPO
Co-operative Bank – Kenya (winner)
Poulina Group Holdings (1st runner-up)
UT Financials Services – Ghana (2nd runner-up)
Best Performing Ai 100 Company
Equity Bank – Kenya (winner)
Press Corporation – Malawi (1st runner-up)
Namibian Breweries – Namibia (2nd runner-up)
Best Performing Ai 40 Company
Maroc Telecom – Morocco (winner)
State Bank Mauritius (1st runner-up)
Barclays Bank of Kenya (2nd runner-up)
Most Innovative Ai SRI 50 Company
Bamburi Cement – Kenya (winner)
Guaranty Trust Bank – Nigeria (1st runner-up)
Kenya Airways (2nd runner-up)
Most Innovative SRI 30 Company
MTN Group – South Africa (winner)
Safaricom – Kenya (1st runner-up)
Mauritius Commercial Bank (2nd runner-up)
Ai 100 CEO of the Year
James Mwangi – Equity Bank (winner)
Olutayo Aderinokun – Guaranty Trust Bank (1st runner-up)
Francis Atuche – Bank PHB (2nd runner-up)
Ai 40 CEO of the Year
Jacko Maree – Standard Bank (winner)
Mohamed El Kettani – Attijariwafa Bank (1st runner-up)
Adan Mohamed – Barclays Bank (2nd runner-up)
Ai SRI 50 CEO of the Year
Hussein Manzi – Bamburi Cement (winner)
Olutayo Aderinokun – Guaranty Trust Bank (1st runner-up)
Hassan Kabanni – Mobinil (2nd runner-up)
Ai SRI 30 CEO of the Year
Phuthuma Nhleko – MTN Group (winner)
Mohamed El Kettani – Attijariwafa Bank (1st runner-up)
Naguib Sawaris – Orascom Telecom (2nd runner-up)
Best Performance by an African/South African Hedge Fund
Kadd Capital – SA (winner)
Fairtree Capital – South Africa (1st runner-up)
Scipion Capital – London (2nd runner-up)