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AfricaMoney | August 21, 2017

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Come 2014

Come 2014, African bourses can expect flood of new companies

As much as $1bn has been raised in Mauritius since 2010 and local companies are using the stock exchange platform to raise capital to fund their growth. (Image: United Nations)

For African bourses from Côte d’Ivoire to Kenya, New Year is expected to bring a deluge of new listings.

Stock exchanges across Africa are forecasting an increase in share sales next year as a recent rally in stock markets marks the end of a drought in initial public offerings (IPOs).

The Stock Exchange of Mauritius may see 15 offerings, while the Nairobi Securities Exchange is predicting five.

Trading volumes on the Mauritian Semdex index will probably jump 30% next year after the Port Louis-based bourse introduced lower trading fees last month, CEO Sunil Benimadhu said.

He added that as much as $1bn has been raised in Mauritius since 2010 and local companies are using the stock exchange platform to raise capital to fund their growth.

The Abidjan-based Bourse Regionale des Valeurs Mobilieres, which trades securities from eight West African countries, is set for its first new listings since 2010 with two Senegalese companies, chairman Gabriel Fal has said.

Fal noted that the African economy, and especially the exchange industry, has been through a very severe crisis since 2008.

He also stressed the importance of getting new companies and new names listed on the stock exchange.

However, he noted that things were looking up, with Côte d’Ivoire’s exchange in line to get shares listed as the government sells stakes in state-owned firms.

Kenya, Nigeria and Ghana saw their main exchanges being mentioned among the world’s 10 best performers this year, with investors seeking higher returns as the US Federal Reserve’s monetary stimulus programme pushed buyers into emerging markets, seen as riskier.

Kenya’s index led the African rally, notching up the fifth-best performance globally by adding 47% in 2013.

In Kenya, three firms may list on the main bourse, while two others will join the growth and enterprise market segment trading board, which was set up this year, said the board’s CEO, Peter Mwangi.

In Kenya, officials are bringing in new products such as a bond market and derivatives trading to give investors more opportunities, said Mwangi.

Mauritius, Namibia, Nigeria and Kenya had new stocks this year.

African markets need to have big, high-profile listings to really get things going, African Alliance Securities head of research Randolph Oosthuizen said.

To get a large number of IPOs, the African exchanges might well be successful in getting smaller companies to list, he noted.

Source: Bloomberg

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