News Stories
- Tanzanite miner Richland heads for Dar-es-Salaam bourse listing 8 February 2012
Tanzanians are set to share the gains of the exciting blue-violet gems that bear their country’s name, tanzanite. Richland Resources Ltd (richlandresourcesltd.com), listed on the London Stock Exchanges’s AIM market (ticker: RLD) says that it plans listing at the Dar es Salaam Stock Exchange (www.dse.co.tz) by April, according to local press reports reprinted on the company’s website today (8 Feb).
According to one report in East African Business Week, Dotto Medard, the firm’s corporate and PR manager, said: “We are in the final stages of listing on the Dar bourse, largely to avail opportunity to as many Tanzanians to be part of the tanzanite industry.” Apparently all Richland’s issued capital will be freely traded on the DSE and will be available to Tanzanians to buy and sell on the market without any restrictions on the number or shareholding available for Tanzanians. Another report in Tanzania Daily News says the listing will be completed by April and there may be a float of 20% of the share capital.
On 6 Feb the coloured gem stone miner announced that new tests have indicated the life of its Mereleni mine in Tanzania could be extended by 30 years. The total indicated resource of the mine is now estimated at 105 million carats, up from 72m carats. Between 2004 and 2011 the mine produced over 11.5 million carats from around 266,000 tonnes of material. The new tests have made the asset “JORC compliant”, conforming to internationally recognised measurement standards.
The company is involved in tanzanite mining, processing, cutting and distribution. The local subsidiaries are Tanzanite One Mining will continue to operate with its name along with Tsavorite One Mining Limited, Tanzanite One Trading Limited, Tanzanite Laboratory Limited and Urafiki Gemstone EPZ Limited. It has recently moved into other coloured gemstones, including tsavorite and sapphire. It says TanzaniteOne Mining has been one of the largest mining contributors to tax in Tanzania. It has invested over US$100m through mine acquisition, development and ongoing mining activities and directly employs 650. Mr. Medard pledged: “the Company will continue to support significant growth in the Tanzanian economy, through export earnings, tax and royalty payments.”
It is the largest miner and supplier of rough tanzanite and uses its position to influence the entire channel, from mine to market (it markets tanzanite globally), ensuring maximum stakeholder value at each stage. It requires large capital investment as tanzanite mining is currently operating at down dip depths of over 900 metres and needs sophisticated equipment and experience. Other expansion plans include a modern plant for cutting and polishing the tanzanite stones under the supervision of Urafiki Gemstone Ltd.
Richland backs successful community projects including support to primary and secondary schools, medical dispensary, community centre and water for people and livestock. It also provides assistance to small-scale miners including geological, mining, surveying, safety and logistical. tanzanite gem is its unique beauty, plus the finite nature of a single known resource at the foothills of Mount Kilimanjaro in northern Tanzania. - Africa calls for regional integration and financial infrastructure 6 February 2012
Africa needs to integrate, was one key message from a 26 January briefing co-hosted by Africa investor (Ai – www.africainvestor.com), a leading international investment research and communications group, and Brand South Africa www.brandsouthafrica.com. The meeting was held during the World Economic Forum summit in Davos. In his keynote speech, South Africa’s Minister of Finance, Pravin Gordhan said the continent needs to take advantage of having a market of 1bn people and some of the world’s fastest-growing economies, and become a more effective voice on the global stage.
He said: “The great transition from West to East and South will continue, but we shouldn’t delude ourselves that we are at the end of that – it is just beginning. You can’t ignore a continent like Africa. In the next 15-20 years the focus on Africa will sharpen. It is in that context that we take a tough – but optimistic look – at regional economic integration.”
Maria Ramos, CEO of Absa Group, said Africa needed more financial infrastructure: “This is a unique time for Africa. What we shouldn’t lose sight of is that for growth, you need financial infrastructure and to build it in the same way we prioritise energy, transport. We need to understand what financial regulation looks like and get it done. The banking industry is excited about the prospect of building our business across the continent and we need to have good channels for our products, and the scale to deliver good products in a sensible, cost effective way. That can only be done if we get some of the regional agreements implemented. Standardising processes, ensuring we do understand that financial markets and banking are very much at the centre of the dynamic change that is happening.”
The meeting brought together political, economic and international development leaders to explore how to galvanise and sustain leadership in the private and public sectors to support regional economic integration. Key themes to emerge included infrastructure development, youth engagement and entrepreneurship, and increased political will as key drivers for future growth.
In the panel session, South Africa’s Minister of Trade and Industry, Rob Davies, said: “The barriers to intra-regional trade are not just tariffs; they also include inadequate infrastructure and the need to produce more tradable goods. We have identified the need to industrialise the continent, to add value to mineral and agriculture products through beneficiation and to develop a pharmaceutical industry to eradicate diseases specific to the continent. Africa is growing but we need to turn growth into a sustained economic development effort, based on developing productive activity within our countries. Turning to the continent gives us the scale to turn the growth spurt in to a sustained development effort.”
Hubert Danso, CEO of Ai, said: “As we focus on access to leadership in 2012, Brand South Africa and Africa investor will lead by example by carrying forward these recommendations and outcomes.” He said they would keep contact with institutions and leaders that influence intra-regional trade and investment flows, policy and competiveness. Miller Matola, CEO of Brand South Africa (www.brandsouthafrica.com), stated, “We have covered a significant ground since we first met here last year. Many of the things we are talking about are becoming more of a reality, particularly with regards to the free trade agreement. Clearly this agenda requires a long term and enduring leadership approach and we hope that this leaders’ public-private sector dialogue platform on regional integration, is making a modest contribution in that regard.”
Future Brand South Africa and Ai regional economic integration events will include:
1. An Africa Consultation at the World Economic Forum on Africa, in Ethiopia, to be held in May 2012.
2. Hosting a follow-up UN Consultation during the UN General Assembly in New York in September 2012,
3. Return to Davos in 2013 for a Global Consultation to review progress and plans for 2013.
4. Launch of our Thought Leadership Research Series of CEO Briefings, which will highlight African intra-regional trade and investment issues – and opportunities. - British small-cap stockex PLUS-SX up for sale 4 February 2012
PLUS Markets (www.plusmarketsgroup.com), a British-regulated investment exchange for trading the shares of small companies, has put itself up for sale on 3 Feb. According to a press release, the company says it has spent 2 years investing heavily in repositioning itself as a trading solutions services provider alongside its roots as a stock exchange.
The Board of Directors says it is “well positioned strategically to exploit commercially the opportunities offered by significant changes in the regulatory and technological environment”. The Board has decided to conduct a formal sale process “in order to identify appropriate potential partners for the Company or major strategic investors”. It calls on potential offerors for the entire issued and to be issued share capital to contact their adviser, Wyvern Partners (www.wyvernpartners.com, Anthony Gahan +44 207 355 9857).
Plus Markets Group plc describes itself on its website as a “next-generation” stock exchange and a market operator under the European Union Markets in Financial Instruments Directive (MiFID) on Recognised Investment Exchanges (RIE). It operates a regulated market and multilateral trading facility (MTF). PLUS is the holding company for the PLUS Stock Exchange (PLUS-SX) and the PLUS Derivatives Exchange (PLUS-DX).
As an RIE, PLUS-SX can provide trading and listing services in the full range of financial instruments including cash, equities, derivatives, bonds and commodities. It provides cash trading and listing for UK and international companies with a range of markets through fully listed and growth markets to access capital. PLUS-DX offers derivatives and technology services and plans to offer short-to medium-term interest-rate related products. “We have designed PLUS-DX’s services to meet the changing regulatory and commercial landscape.”
PLUS Trading Solutions (“PLUS-TS”) responds to the growing demand from market participants to segregate or create their own matching systems and delivers a competitive, fully managed matching and surveillance service, designed to help firms satisfy new regulatory requirements. The group brings “product innovation and competitive pricing to market participants by operating a low cost base RIE. PLUS offers a neutral trading environment, wholly independent of any market user.”
The Board of PLUS adds: “scale and international reach will become increasingly relevant for interaction with exchanges, investment banks and other trading entities.”
According to a story on Reuters, the company reported a loss of GBP5.8m ($9.2m) on revenue of GBP3m in 2010, its sixth consecutive loss-making year. PLUS grew out of Ofex, an exchange for British small-cap stocks that required less regulation than the London Stock Exchange or AIM. The share price was at 1 penny.
“The Board believes that it is in the best interests of the Company to seek a partner which will help it achieve the scale and reach required to maximise value to stakeholders.” - JSE seeks more African equity listings in 2012, targets telecoms, mining and financials 10 January 2012
The JSE Ltd (www.jse.co.za), South Africa’s securities exchange, is hoping to attract more listings from the rest of Africa in 2012 and to expand its range of products and services. This year should also see the JSE installing its equity trading system in Johannesburg, to avoid dependence on a transatlantic cable connecting it to the London Stock Exchange.
Nicky Newton-King, who took up her post as CEO last week after succeeding Russell Loubser and the first woman to hold the post, told Business Day newspaper the plan was to offer more access to African companies and products such as exchange-traded funds products that enable people to access new investments: “With the rules of inward listing being relaxed, we would also like to attract more inward listings.” Besides IPOs, Newton-King said she expected to see more types of products, such as depository receipts and derivatives linked to companies being offered.
The JSE is in “good conversation” with several companies elsewhere in Africa over more potential listings. Last November she told Reuters: “We’ve got good conversations going … particularly on the continent.” She said the bourse is targeting mining, telecommunications and financial services: “Our approach is to look at issuers that need capital — need investors where their home markets might be too small. So we’ve got a lot of different segments we are looking at, but we are looking at particular issuers rather than trying to speak to everyone.”
The JSE already has 14 African companies listed, with 4 different debt instruments and 1 African ETF. Last year Reuters highlighted that some growing African firms preferred other international exchanges, particularly the London Stock Exchange and its AIM market, over the JSE for raising capital and listings, as highlighted in stories on this website. The JSE seeks closer cooperation with other African exchanges as it competes with other world bourses: “Clearly we need to be trying to find a way to cooperate with African exchanges, with African issuers to bring more African product to the table here in SA, where we have a lot of international investors everyday.”
The JSE attracted a total of 16 listings last year, with a combined market capitalisation of more than R35 billion (US$4.3bn), according to data from the JSE’s director of issuer services, John Burke. There were also a number of initial public offerings from the property sector. About 15 companies de-listed last year and 21 were on the suspended list. The number of new IPOs worldwide is lower since the start of the global financial crisis. Newton-King said there is a pipeline for potential listings in 2012: “Definitely there’s a pipeline, there’s always a pipeline. We never talk about the number since how many companies actually list and when they list is very much dependent on the economic circumstances of the country and whether the companies themselves are ready to list.
“We are looking forward to being able to attract a wider range of companies and investment opportunities on the JSE.”
The plan is still to use the same computer provider, Sri Lanka’s Millennium IT which is a subsidiary of the LSE. In terms of a February 2011 press release, the JSE is to migrate to a new system Millennium Exchange™, which the LSE has also adopted, in the first half of 2012. Millennium IT systems are used on many African stock exchanges.
Newton-King told Business Day she hoped this will minimise the outages experienced last year, which were linked to technical issues on the transatlantic cable. The JSE halted trading on its equity markets at least twice last year, which led to the exchange attracting criticism from trading houses, which often spoke anonymously to the media.
She said: “We are critically dependent on information technology (IT) and invest heavily in IT to ensure it is robust and able to handle increased volumes as the JSE grows. Our equity systems are run in London and there’s been some trading outages in the lines between us and London…. We are bringing the systems back to avoid that. We will continue to look at whether our technology is robust enough to withstand volumes.”
She did not give much information on rumours that the JSE is talking with SA Treasury on starting a trading market for carbon credits but said the JSE was looking at the possibility and how it would work with others.
Of the type of environment that she envisions at the JSE, Ms Newton-King says: “In 2012 I would like the JSE to be recognised as a place of excellence, a place where SA’s top talent would come and work, where our clients recognise that we provide products and services that are valuable to them.”
Her former post as deputy CEO no longer exists and duties that fell to her are being given to other people so that they can also grow. - East African investors opening accounts at Nairobi Stock Exchange 4 January 2012
Although the number of investors from other East African countries opening trading accounts at Kenya’s Nairobi Stock Exchange (www.nse.co.ke) is still very small, it is growing more consistently in the last 2 years than other categories of investors. According to data to 30 Sept released by Kenya’s Capital Market Authority (www.cma.or.ke), East African individual investors opened 97 securities accounts at Kenya’s Central Depository and Settlement Corporation (www.cdsckenya.com). This compares to 92 accounts opened in the full year 2010 and 79 in 2009.
By comparison Kenyan individual investors only opened 27,669 accounts in the 9 months to September 2011, compared to 120,756 accounts opened in 2010 and 52,836 in 2009. Kenyan equity trading has remained subdued as investors say high interest rates make them choose government debt securities over equities.
One potential reason for the East African interest, according to an article in the East African , is that Ugandans are opening trading accounts at the NSE in anticipation of the IPO of electricity distributor Umeme (www.umeme.co.ug) scheduled for 2012. Umeme is expected to cross-list at the NSE and the Ugandan Securities Exchange (www.use.or.ug). Some investors open multiple accounts ahead of a potentially “hot” initial public offering (IPO) of shares, where they hope to sell their initial allocation quickly and make a quick profit, as this is likely to maximise their share of allocation if the IPO is oversubscribed.
Trading experience shows that cross-listed East African shares such as Centum, Kenya Airways, Jubilee Insurance, trade more on the NSE compared with the Dar es Salaam Stock Exchange (www.dse.co.tz) and USE. The increased liquidity in Nairobi means that East Africans are better off having a trading account at the NSE. The paper comments that Rwandans, Tanzanians and Ugandans are probably realising this fact and also taking positions ahead of the listing of some of their firms on the NSE by opening more CDS accounts in Nairobi: “Investors will go the extra mile to open and operate, as proxies, CDS accounts in the names of their relatives or friends who know nothing on trading in shares. Expect an influx of Rwandese, Tanzanians and Ugandans at the NSE in 2012.”