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Thursday, August 23, 2007

Africa Capital Markets; Which Way Forward

Immense Growth: The last decade has witnessed a rapid and immense growth amongst the African Stock markets in terms of market capitalization, listed firms, available equities, bonds and debt instruments listed, number of investors and brokers, innovative financial products that have enhanced the deepening of the African capirtal markets as well as the growing interest by Small and Medium Enterprises (SMEs ) to offer the shares through Initial Public Offers for subscription by the public.
Investors: There has also been a strong and growing focus amongst the investors in the developed economies of the world to invest in the African Stock Markets with a focus of capitalizing on the opportunities available therein in portfolio diversification and enhance portfolio return.
The African capital markets encompass the following:
-The African capital markets encompass 16 member strong African Stock Exchanges Association (ASEA) dealing in a broad range of securities and include the fast growing markets of Nigeria, Ghana and South Africa.
-An equities market representing a host of the Continent' s strongest , reputabe and profitable companies.
-The fast growing private equity and Venture Capital markets dealing in Small and Medium Enterprises.
-A fast growing bond and debt securities market.
-A growing derivative and innovative structured products market.
-Most of the African Stock Exchange Association (ASEA) members have totally deregulated their foreign exchange controls provide free and unfeterred access for investors around the world.
-In Nigeria, the Nigerian Stock Exchange in association with the Nigerian Central Bank have developed a pain free system for foreign investors to access and invest in the Nigerian Stock Market (Central Securities Clearing System is the securities clearing body) and repatriate their returns without hassle.
-The African capital markets are being rated as having the highest return in the World in dollar terms.
-The capital markets in Africa are beginning to open up and open up significantly. For example who would have forecast 12 months ago that, by this time this year Nigeria's markets would see $3bn worth of new issuances?
-Countries like Nigeria, Ghana, Kenya and even Zimbabwe are all offering investment opportunities.“Nigeria’s market has made average returns of over 30% this year and Zimbabwe’s returned over 100% this year even after adjusting for inflation, so there’s a lot of interest, and a lot of investment.
-Kenya is also rapidly gaining popularity amongst the western investors ands especially the top Wall Street Investment Banks with its rapid growth and increased IPOs that have been oversubscribed.
-The East African stock exchanges have mooted a plan to merge and form one East African Exchange that will be a step towards the integration of the countries in the East African Community. The Exchange will widen the scope of investment opportunities available to investors.
-African Capital markets are also contemplating forming a universal african capital market whereupon trading, listing and other financial market operations will run smoothly without any difficulting enabling investors undertake their investment decisions. Companies intending to list in other african exchanges will be able to do so without much stumbling blocks and hindrances set by countries.
-Egypt and South African stock markets have grown by leaps and bound and lead the continents stock market capitalizations and number of listing companies.
-Johannesburg stock exchange has for a long time attracted alot of investors from the developed markets as USA, London as well as from other parts of Africa. With the world cup 2010 being held in SA things are looking good for this market and if the current trends are to go by, investors in tourism, real estate, banking and such like stocks will reap bountifully.
-In Kenya the stakes raised with expectation of the continents much awaited listing of Safaricom, Kenya's leading and most profitable company cannot be overemphasized. The tender bids already issued have attracted hosts of major investment banks in Kenya , USA and far and wide, leading legal experts, brokers, top banks, as well as registrars and other operatives. We can lonly wait and see despite threats of impending court battles.
-The establishment of the privatization commission in Kenya is long overdue and with parliament forcing the minister of Finance to gazette the same, things are up and running and what more share we say except to invest, invest and invest in our lovely continent.


bankelele said...

there's a financial seminar at Strathmore on 7/9 titled "kenya as an emerging capital market"

Kip said...

Thanks Banks would love to attend and sample what it in store in relation to what Kenya as an emerging market portends for Kenyan investors and the international community.

charles said...

The Center for Media Research has released a study by Vertical Response that shows just where many of these ‘Main Street’ players are going with their online dollars. The big winners: e-mail and social media. With only 3.8% of small business folks NOT planning on using e-mail marketing and with social media carrying the perception of being free (which they so rudely discover it is far from free) this should make some in the banner and search crowd a little wary.