News and developments on African capital markets, includes: African securities, African stock exchanges/stock markets, African equities, African bonds, African private equity/venture capital, and African social impact investment
The International Finance Corporation plans to issue a $50 million (NGN 8 billion) local-currency “Naija” bond in Nigeria to support the domestic capital markets and increase access to local-currency finance. IFC bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s.
Demand was strong for most Treasury bills in Tanzania at the last auction on 21 November, the average yield-to-maturity was 13.43% (up from 13.18% at the previous auction) on the 364-days bills, 12.86% on the 182-days paper, 11.76% on 91-days and 7.25% on 35 days.
World investors and debt-rating agencies should rethink criteria for evaluating political and other risk. “Risk is up for developed markets (DM) and down for Emerging Markets (EM)” was a key message from a Thomson Reuters conference in London on 18 September.
Zambia went to the global market yesterday (13 September) with its first eurobond, a USD750 million 10-year bond priced at a 5.625%. It will be used to fund its budget and invest in infrastructure and the issue highlights “great appetite” for African credit.
A new securities exchange in Lusaka, BaDEx (Bonds and Derivatives Exchange Zambia) is installing tried-and-tested bond and derivative trading software from South Africa’s STT Software, which supplies the JSE, and says it will be ready to launch operations next month, May 2012. BaDEx trading platforms will include spot and derivative trading in bonds, currency, commodities (such as derivatives on metals and silo certificates on the spot market) and a variety of other derivatives including agricultural commodities, precious metals, equity and energy.
The number of investors from other East African countries opening trading accounts at Kenya’s Nairobi Stock Exchange is still very small, but has grown more consistently in the last 2 years than other categories of investors.
Share prices on the Tunisian Stock Exchange have been moving ahead all November, starting with a positive reaction to the meeting between Rachid Ghannouchi, leader of the Islamist Ennahda party and stock market executives only days after the election and moving forward as the politics progressed well.
2012 could be an active year for African bonds and particularly eurobonds, judging by the 5.5 times oversubscription for the Namibia’s debut $500 million, 10-year Eurobond. However, timing and terms of issues will be crucial in the turbulent markets.
The Namibian government issued a debut US$500 million, 10-year Eurobond on 27 October and got a price of 5.75%, taking advantage of a lull in the capital markets turmoil.
Tiny, small and medium businesses in Egypt and Tunisia, later Algeria and Morocco, are set to benefit from a new €30 million ($43.2 mn) SANAD Fund for MSME.