Archive for the 'Algeria' Category

Egypt is Africa’s new #1 investment destination

The challenge for African economies is to adapt to commodity slowdown and sluggish production growth. Many countries have suffered stress in the past three years, and the latest report from a leading investment bank suggests the new winners – and who is lagging. Rand Merchant Bank’s (RMB) Where to Invest in Africa 2018 report shows changes in the top investment destinations in Africa.

South Africa is off the top spot, edged aside by Egypt, and Nigeria and Algeria have crashed out of the top 10. The theme is “money talks” and focuses on major sources of dollar revenues, important income-generators and investment opportunities.

But the report compares 191 global jurisdictions and measures African against country groupings. African countries are still at the lower end of the global-performance spectrum, which is still dominated by the US, UK, Australia and Germany.

In Africa, according to the RMB press release, there is a new pharaoh in town: “Egypt (#1) displaced South Africa (#2) largely because of its superior economic activity score and sluggish growth rates in South Africa, which have deteriorated markedly over the past seven years. South Africa also faces mounting concerns over issues of institutional strength and governance though in South Africa’s favour are its currency, equity and capital markets which are still a cut above the rest, with many other African nations facing liquidity constraints.

“Morocco (#3) retained its third position for a third consecutive year having benefitted from a greatly enhanced operating environment since the Arab Spring which began in 2010. Surprisingly, Ethiopia (#4), a country dogged by socio-political instability, displaced Ghana (#5) to take fourth spot mostly because of its rapid economic growth, having brushed past Kenya as the largest economy in East Africa. Ghana’s slide to fifth position was mostly due to perceptions of worsening corruption and weaker economic freedom.

“Kenya (#6) holds firm in the top 10 at number six. Despite being surpassed by Ethiopia, investors are still attracted by Kenya’s diverse economic structure, pro-market policies and brisk consumer spending growth. A host of business-friendly reforms aimed at rooting out corruption and steady economic growth helped Tanzania (#7) climb by two places to number seven. Rwanda (#8) re-entered the top 10 having spent two years on the periphery, helped by being one of the fastest reforming economies in the world, high real growth rates and its continuing attempt to diversify its economy.

“At number nine, Tunisia (#9) has made great strides in advancing political transition while an improved business climate has been achieved by structural reforms, greater security and social stability. Cote d’Ivoire (#10) slipped two places to take up the tenth position. Although its business environment scoring is still relatively low, its government has made significant strides in inviting investment into the country leading to a strong increase in foreign direct investment over the years resulting in one of the fastest growing economies in Africa.

“For the first time, Nigeria (#13) does not feature in the top 10, with its short-term investment appeal having been eroded by recessionary conditions. Uganda is steadily closing in on the top 10 though market activity is likely to remain subdued after a tumultuous 2016 marred by election-related uncertainty, a debilitating drought and high commercial lending rates.

“Though Botswana, Mauritius and Namibia are widely rated as investment grade economies, they do not feature in the top 10 mostly because of the relatively small sizes of their markets – market size has been a key consideration in the report’s methodology.”

RMB Africa analysts spoke on economic trends:

Neville Mandimika: “The last three years have sounded an alarm, amplifying what is now a dire need for the economies of Africa to shift their focus from traditional sources of income to other viable alternatives.”

Celeste Fauconnier: “Over the past three years, some African governments have had to implement deep and painful budget cuts, announce multiple currency devaluations and adopt hawkish monetary policy stances – all as a result of a significant drop in traditional revenues.”

Nema Ramkhelawan-Bhana: “Some countries have been more nimble and effective than others in managing shortfalls,” says and an author of the report. “But major policy dilemmas have ensued, forcing governments to balance economically prudent solutions with what is politically palatable.”

Where to Invest in Africa 2018 also includes 191 jurisdictions around the world, and measures Africa’s performance relative to other country groupings. The report is available via:

Nigerian and African economies.. after the rebasing

Charts circulated by Reuters today (28 Aug) show the rebased Nigerian economy as much bigger than sluggish South Africa, and followed by Egypt, Algeria, Angola and Morocco. They also show Africa’s fastest-growing large economies over 2010-13, with oil-fuelled Ghana leading the pack with historic growth of 10.2% a year, followed by non-commodity driven Ethiopia (9.0%), Zambia (6.7%) and the rebased Nigeria at 6.4% a year.

chart circulated by Reuters

chart circulated by Reuters

Nigeria’s economic rebasing came in April, after they updated the sectors and weights of different parts of the economy. Countries are supposed to do it every 3 years, Nigeria last did it in 1990. This was The Economist’s comment in April: “The GDP revision is not mere trickery. It provides a truer picture of Nigeria’s size by giving due weight to the bits of the economy, such as telecoms, banking and the Nollywood film industry, that have been growing fast in recent years. Other countries perform similar statistical magic – Ghana, for example, added 60% to its economy in 2010.
“Its economy has been growing at an average rate of around 7% a year over the past decade. It is rich in resources, especially oil. It has energetic entrepreneurs and aspirations to be the tech hub of Africa, boasting startups such as Konga and Jumia, budding Nigerian Alibabas. In other industries it has giants such as Dangote Cement (see article), which plans to list in London—as a big oil firm, Seplat, did this week—and is likely to become part of the portfolio of many pension funds. Growing numbers of foreigners wanting to invest in Africa’s rise will buy Nigerian stocks; after Johannesburg, Lagos has the biggest, most liquid market in the region. Above all, Nigeria has lots of people: more than 170m of them”.
Most commentators at the time pointed out that the GDP revision did not mean more food in anyone’s mouth in Nigeria and numbers of unemployed are very high and the number of people in poverty has increased, despite the high annual growth rate. GDP per head is only $2,700 after the rebasing, South Africa’s is nearly 3 times as much. Nigeria’s infrastructure is extremely poor, including transport and power. They point to lack of development and the spiraling political uncertainty and The Economist added: “To absorb the millions of young people pouring into the labour market, Nigeria requires the sustained double-digit growth that China has shown to be possible.”
However, the clearest lesson, according to The Economist: “.. is for sluggish, complacent South Africa, which has long taken its status as the continent’s giant for granted. With Nelson Mandela dead, it looks ever less like a rainbow nation. The ruling African National Congress is tainted by corruption: President Jacob Zuma is trying to explain how the state spent $24m on his private home. Without economic and political reform, it will slip further behind.”
The figures in the chart come from the International Monetary Fund (IMF), Nigerian National Bureau of Statistics and analysis by McKinsey Global Institute.

Algiers stock exchange signs MoU with NYSE Euronext Paris

The Algiers Stock Exchange is working with Euronext Paris to boost the market through cooperation. The two signed a Memorandum of Understanding (MoU) that they will work together to develop the market systems and make it easier for enterprises, especially small and medium enterprises (SMEs), to raise capital through the securities exchange.
Euronext (, a wholly owned subsidiary of Intercontinental Exchange Group (ICE), announced the MoU with Algiers Société de la Gestion de la Bourse des Valeurs ( on 25 March. It will focus on initiatives including:
• organize events for professionals in finance, including theme-based seminars, training and information sessions in Paris and Algiers, exchange of publications and experience, coordination of joint initiatives
• back financial research and innovation on topics of common interest including sustainable, environmental and social finance, corporate governance
• promotion and international development.
Anthony Attia, CEO of Euronext Paris, said in a press release that the agreement with SGBV “.. will enable us to build on our expertise and work with the Algiers Stock Exchange to promote financial markets to companies seeking capital.”
Yazid Benmouhoub, CEO of SGBV, welcomed “…this new alliance between Euronext Paris and the Algiers Exchange, which is right in line with our efforts to develop financial markets in Algeria.”
SGBV is a stock company organized under Algerian legislative decree 93-10 of 23 May 1993. Its equity is 100% owned by certified brokers (IOB – currently state-owned banks) and it is supervised by Commission d’Organisation et de Surveillance des Opérations de Bourse (COSOB).
Euronext is a main eurozone exchange, with over 1,300 issuers worth €2.6 trillion in market capitalization. It operates regulated markets in: equities, exchange-traded funds, warrants and certificates, bonds, derivatives, commodities and indices. Regulated markets include, Alternext and the Free Market as well as EnterNext, which facilitates SME access to capital markets. It also provides technology and managed services to third parties.
ICE is a leading network of regulated exchanges – its portfolio includes the New York Stock Exchange (NYSE), ICE Futures, Liffe and Euronext – and clearing houses for financial and commodity markets. It delivers transparent, reliable and accessible data, technology and risk management services to markets around the world.

Tunis Stock Exchange IPO is largest listing


The listing of Société d’Articles Hygiéniques (SAH), on the Tunis Stock Exchange yesterday (9 Jan) after a private placement and an oversubscribed initial public offer (IPO) is the largest listing on the Tunis bourse (Bourse de Tunis), with the company valued at TND 270.5 million ($163.5m). It is a successful exit for leading African private equity firm Emerging Capital Partners which scored a cash multiple of 2.4x on exiting the investment.

The private placement for 90% of the shares attracted 85 local and international investors, signalling a return by international investors to the Tunisian capital market. The public offer in the Tunisian IPO was over-subscribed 22.1 times, according to a press release. Adel Grar, Chairman of the Tunisian Brokerage House Association, said: “The IPO of SAH is a milestone.. it demonstrates the ability for a local or foreign investor to exit through the Tunis Stock Exchange.”

SAH ( is Tunisia’s leading manufacturer of feminine and baby hygiene products and operates under the “Lilas” brand. ECP has invested since 2008 and, according to the announcement, “has supported SAH as it increased its customer base to 17 countries across North and sub-Saharan Africa, created subsidiaries in Algeria and Libya, and developed a paper mill factory in Tunisia.” Products include baby diapers, feminine-care pads, disposable diapers, bathroom and facial tissues, kitchen towels, hand towels and tissue wipes.

“Over the last 2 years, SAH has grown at 17% per year, despite a difficult economic climate – testament to its focus on product innovation, diversification and locally produced, high quality offerings. SAH’s sales are expected to exceed TND 200m ($120m) in 2013 and the company currently employs over 2,000 people.” According to a 2011 profile in The Africa Report, also on the ECP website , SAH was founded in 1995 by wife and husband team Jalila Mezni and Mounir el Jaiez.

The sale was of 14,176,590 shares, representing 48.99% of the capital at listing and the fixed offer price of TND 9.35 per share.

Nayel Georges Vidal, Director in the Tunis office at ECP, said in the press release: “Under the guidance of Ms Jalila Mezni, the company has worked hard to more than double its performance over the last 5 years. With ECP’s support, SAH has expanded its production capacity, brought new products to market, expanded beyond Tunisia, and built a strong customer brand – all made possible by its employees’ dedication to improving its systems, governance and product range. We firmly believe that SAH will continue to create further value for its shareholders – which include many foreign investors showing renewed interest in the Tunisian stock market.”

Private equity firm ECP was founded in 2000 and has raised more than US$2bn for growth capital investing in Africa. It was one of the first firms dedicated to Africa and has investments in more than 50 African companies through 7 funds. It boasts “more people on the ground than any other firm” with more than 70% of its investment professionals, who hail from 12 African countries, in 7 local offices.

Its private equity investments include financial services, telecommunications, retail and consumer, natural resources, agriculture and infrastructure in over 40 African countries. In 2013 Africa AM magazine was awarded ECP as “PE Fund of the Year”. Private Equity Africa awarded it for mid-cap “PE Deal of the Year” as reported here, for investment in casual dining chain, Nairobi Java House.

SANAD Fund to target SMEs in North Africa and Middle East

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 ( This was set up in August 2011 by German development bank KfW Entwicklungsbank with funding from the German Ministry for Economic Cooperation and Development and the European Commission and will offer debt and equity financing to partner institutions in the Middle East and North Africa (MENA) region that serve micro, small and medium enterprises (MSMEs). Other target countries include Middle Eastern countries such as Lebanon and Jordan.
The fund is expected to attract further investments from public and private bodies. The partners who will help invest the money will be banks, microfinance institutions, financial service providers, leasing and factoring companies, guarantee funds or venture capital funds. The fund will also offer them technical help to build their skills and reach.
Development finance alternative asset manager Finance in Motion GmbH ( and Oppenheim Asset Management Services S.à r.l. ( will manage the new fund which will be structured as a Luxembourg-based Specialized Investment Fund, SICAV-SIF, involving different share classes.
By facilitating access to finance in the region, SANAD – literally “support” in Arabic – aims to strengthen the MSME sector and local financial markets in the MENA region in line with the principles of responsible finance.

Algiers Stock Exchange: Results of Alliance Assurances IPO offer

Results have recently been released of the share offer of insurance company Alliance Assurances ( on the Algiers Stock Exchange ( The share offer was open from 2 November until 1 December and was oversubscribed, with private individuals flocking to receive the shares. Alliance aims to be the first private company to list on the Bourse d’Alger. It was one of the last IPOs or public offerings of shares on the African stock exchanges in 2010.
According to the official announcement from the Bourse d’Alger total of 1,804,511 shares were subscribed, the full amount offered, at a price of 830 Algerian dinars (USD11.17) each.

IPO Offer allocation
The offer was allocated as follows:
Section A: 33.3% (600,000 shares) for individuals with Algerian nationality: received 1,338,346 shares of 74.17% of the total. There were a total of 5,374 applications of which 5,284 each applied for less than 3,591 each and were allocated in full, while the remaining 90 applicants got 3,591 or 3,592 shares each.
Section B: 28.5% (514,286 shares) for institutional investors: received 181,625 shares or 10.07%. There were 4 applicants of which 3 each applied for less than 60,240 and were allocated in full and one applied for more and received 60,240 shares.
Section C: 28.5% (514,285 shares) for Algerian companies: received 186,022 shares or 10.31%, all who applied were allocated.
Section C2: Subscription Right, allocated 90,226 shares, received 100% of the allocation, all who applied were allocated.
Section D: 2.37% (42,857 shares) for insurance brokers and were allocated 3,635 shares (0.2%), all who applied were allocated.
Section E: 2.37% (42,857 shares) for the company’s employees across the 35 Algerian provinces, of which 4,657 shares were subscribed, 0.26%, all who applied were allocated.
The financial adviser for the offering is Nomad Capital ( – website still says “under construction”), with PriceWaterhouseCoopers and Hadj Ali.
According to a previous report, General Manager Hacen Khelifati said that the company would also sell 30% to an unnamed European company in a separate transaction, which awaits regulators’ approval. He was also reported as saying that the company would benefit from government incentives to encourage listing including a 5-year tax holiday on profits from the operation in order to raise new capital for development and to help revitalise the Algiers Bourse.
Alliance plans to use the capital to meet new regulatory requirements and to set up 2 new subsidiaries:
• A real estate asset manager to maximize value for Alliance and third-party investors;
• A venture capital vehicle dedicated to investments in sectors related to the insurance field.
Alliance Assurances already has two subsidiaries: ATA, and a dedicated IT engineering subsidiary named ORAFINA.
Alliance Insurances is a joint-stock company created in July 2005 and says it is now a multiline insurance company with more than 300,000 insured clients and total net premiums in 2009 of 2.8 billion Algerian Dinars with a net profit of 312 million Algerian Dinars, providing a 39% return on equity, according to a press release.

About the Bourse d’Alger
The Société de la Gestion de la Bourse des Valeurs Mobilières was set up in 1997 under a 1993 law and started trading in 1999. The bourse website says the listed equities are Egh el Aurassi (state-owned hotel) and Saidal (state-owned pharmaceutical company) while the listed debt securities are Algerie Telecom, Spa DAHLI and Sonelgaz securities. Trading takes place twice a week, on Monday and Wednesday mornings for two hours.

Alliance Assurances to be first private listing on Algiers Bourse

Insurance company Alliance Assurances ( plans an initial public offering on the Algiers Stock Exchange ( from 2 November for one month. It will be the first private company to list on the Bourse d’Alger.
Approval was given by the Algerian Capital Markets Authority (Commission of Organization and Surveillance of Stock-market transactions – on 8 August. The financial adviser for the offering is Nomad Capital ( – website says “under construction”), with PriceWaterhouseCoopers and Hadj Ali.
The share price is 830 Algerian Dinars (US$11.22) and the company plans to issue 1.8 million shares. The company had increased its paid-up capital to 800 million Algerian Dinars ($10.8 million) in 2009, and with the current offering it aims to increase to 2.2 billion Algerian Dinars ($29.7 million).
According to local reports, General Manager Hacen Khelifati has indicated that the company’s shares are in 5 categories: 20% for individuals with Algerian nationality, 30% for Algerian companies, 30% for institutions – including foreign investors “abiding to the Algerian legislation”, 10% for insurance brokers and 10 % for the company’s employees across the 35 Algerian provinces.
He told Reuters that the company would also sell 30% to a European company in a separate transaction. He did not name the suitor and said the transaction awaits regulatory approval
Khelifati was also reported as saying that the company would also benefit from government incentives to encourage listing including a 5-year tax holiday on profits from the operation in order to raise new capital for development and to help revitalise the Algiers Bourse. He was quoted on Reuters as saying 4 more companies would list before the end of 2011.
The aim of the capital expansion is to meet the regulatory requirements of an executive decree (N 09-375 of 16 November 2009) and to be able to capitalize on the expected strong growth in the insurance sector. According to website, the insurance sector had turnover of €790 million in 2008 and is growing by 13% a year. It is dominated by state-woend firms (70%) and Alliance is the second private company, with a 4% market share.
Alliance also plans to use the capital to set up 2 new subsidiaries:
• A real estate asset manager to maximize value for Alliance and third-party investors;
• A venture capital vehicle dedicated to investments in sectors related to the insurance field.
Alliance Assurances already has two subsidiaries: ATA, and a dedicated IT engineering subsidiary named ORAFINA.
Purchase orders will be underwritten by a banking syndicate which is led by Crédit Populaire d’Algérie and includes Banque Nationale d’Algérie, Banque Extérieure d’Algérie, Banque de Développement Local, Caisse Nationale d’Epargne et de Prévoyance-Banque, Banque de l’Agriculture et du Développement Rural, la Société Générale Algérie and BNP Paribas Algérie.
This operation is backed by an advertising campaign (press, TV, radio, posting, Web, event) to give people the right information and encourage them to subscribe. The motto is ” Become shareholders and let’s grow together”
After the subscription period, Alliance Assurances aims to have its shares listed for trading on the Bourse d’Alger during the first quarter of 2011. The CPA will provide the liquidity to the stock over a 1-year period.
According to the regulatory requirements, Alliance Assurances will communicate regularly its financial results and any critical data relative to its activity and its development.
Alliance Insurances is a joint-stock company created in July 2005 and says it is now a multiline insurance company with more than 300,000 insured clients and total net premiums in 2009 of 2.8 billion Algerian Dinars with a net profit of 312 million Algerian Dinars, providing a 39% return on equity, according to a press release.

About the Bourse d’Alger

The Bourse d’Alger (Société de la Gestion de la Bourse des Valeurs Mobilières – was set up in 1997 under a 1993 law and started trading in 1999. According to Les Afriques: “At the moment there are only 2 listed companies in Algeria: state pharmaceutical company Saidal and the El Aurassi hotel. Trading takes place twice a week, on Monday and Wednesday mornings for two hours. Average volume so far in 2010 was €80 000 and the float is €15m.”
The bourse website says the listed equities are Egh el Aurassi and Saidal while the listed debt obligations are Air Algerie, Algerie Telecom, Spa DAHLI and Sonelgaz securities. It says there were a total of 488 trades in 2009 (worth $6.7 million) and 293 to date in 2010.
Reuters reports that Khelifati said he had received assurances from Algerian officials that a programme of reform was underway to encourage the development of the exchange. This will include a new law to give exemption from tax for all capital gains on stock-market operations for 5 years. The agency comments; “An opening up of the stock exchange would go against the trend in Algeria, where investors and analysts say the government has been creating new obstacles for some private businesses and especially foreigners.”

Emerging Capital Partners targets North Africa construction

Emerging Capital Partners (ECP) announced on 27 July it has bought controlling stakes in Shoresal and Almes – both North African construction companies – for a total USD $26.2 million. ECP ( is an international private equity firm focused on investing across the African continent with a nine-year track record and the first to raise more than $1.6 billion to invest in companies across Africa.

It is expanding its North African investments.

Thomas Gibian, chief executive officer of ECP, says:  “ECP has invested in various African engineering and construction companies since 2006, and we have long been evaluating opportunities in the North African market…Unlike many western markets, North African real estate and construction is generally driven by a lack of supply to meet the increasing demand from both foreign and domestic companies.”

In Algeria, ECP acquired a $13.8 million stake in Shoresal, a real estate development company, which will use ECP’s investment, in part, to finance the development of a 14-storey Class A office tower in the Bab Ezzouar business district of Algiers. According to the company’s research, demand for office space in Algeria’s major cities is approximately eight times greater than the current supply, driven by a tripling in the number of multinational companies since 2000.

The investment was made through ECP’s MENA Growth Fund LLC, which was established in September 2007 to capitalize on investment opportunities throughout the Middle East and North Africa.

In Morocco, ECP invested $12.4 million in Almes, the holding company of Entreprise Marocaine de Travaux (EMT) and Somadiaz. EMT specializes in public works infrastructure projects such as dams, levees and airports. Somadiaz is an equipment leasing company that provides specialized equipment to commercial and industrial clients. The companies will expand in Morocco and into neighbouring countries – such as Libya and Mauritania – where demand for public works and other construction services are also high. ECP’s investment is in partnership with Alliances Développement Immobilier, a leading integrated real estate and tourism group in Morocco.

The investment in Almes was made through the Moroccan Infrastructure Fund, a joint venture between ECP and Attijariwafa bank, which was established in December 2006 to capitalize on the ongoing reforms that are spurring economic growth in Morocco. It targets numerous sectors including telecoms, transportation, energy, power and water.

“ECP views the construction markets across North Africa as uniquely poised for growth,” said Vincent Le Guennou, executive vice president of ECP. “We believe the strong supply and demand imbalance in the sector is a compelling reason to invest.”