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AFRICA MACRO shares of listed companies are reserved for nationals. Foreigners are also prohibited from investing in government bonds. When Precision Air Service is listed, there will be 17 companies trading on the exchange of which four are cross listings of Kenyan companies; National Media Group, Kenyan Airways, Kenya Commercial Bank, and East African Breweries. The most actively traded stocks on the exchange are CRDB Bank, National Microfinance Bank, Tanzania Cigarette Company and Tanzania Portland Cement Company. African Barrick Gold is expected to be cross listed by the end of the year or in early 2012. The company is 73.9% owned by Barrick Gold (Canada). An IPO of African Barrick Gold on the London Stock Exchange in March of 2010 raised $884 million. The largest IPO in Africa this year, and the largest in the stock market history of Ghana, was the June 2011 offering of Tullow Oil, the Anglo-Irish oil company that discovered Ghana’s offshore oil fields. It has also found oil in Uganda. The company, which is listed on the London stock exchange, offered 3.531 billion shares and raised $72.3 million in proceeds. The stock began trading in July. Ekwow Afedzie, the Deputy Managing Director of the Ghana Stock Exchange said the listing of Tullow Oil Ghana “would make the Ghanaian stock market more visible and attractive to both the domestic and international business world.” The newest stock exchange in Africa is the Rwanda Stock Exchange in Kigali, which began operations at the end of January, 2011. The first public offering was BRALIRWA, a brewer. The government sold a 20% stake in the company for RwFr 22.1 billion ($37.3 million). It sold a further 5% to Heineken, which brought its holdings to 75% of the company. BRALIRWA sells beers such as Amstel, Guinness, Mutzig and local brand Primus and has an estimated 95% market share in the country. The company also bottles Coca Cola drinks. Annual revenues for 2010 were about $93 million.


bond issued by the Commercial Bank of Rwanda and several government bonds. In August, British-American Investments, a Kenyan financial services holding company, which owns 2 insurance companies and an asset manager, raised KSh 3.5 billion ($37.7 million) by selling 390.6 million shares. Telnet Holdings, a technology company was listed on the Tunis Exchange on May 23. The IPO of 2,070,000 shares at TND5.80 ($4.19) per share was 3.2 times oversubscribed. Trading of the shares began on August 24. This was the first listing in 2011. During 2010, there were 5 listings. To encourage companies to list on the exchange, the previous government of deposed President Zine El Abidine Ben Ali introduced tax incentives, including a five year reduction in the corporate tax rate from 30%-35% (depending on the sector) to 20% if a company listed more than 30% of its capital before 2014. To further develop the stock market, Mohamed Fadhel Abdelkefi, President of the Bourse des Valeurs Mobilières de Tunis management committee announced a five point development strategy that includes developing a “financial market culture” and “market awareness” through media and education outreach programs, making it easier for companies to list, enhance the development of the bond market, including establishing a secondary mortgage market, improve the IT of the exchange and conduct additional training programs for the staff. There are presently 58 listed companies. Foreign investors account for about 20% of the market capitalization.

Bank of Kigali raised $35.4 million through an IPO. The government sold its 20% stake in the bank. The issue was oversubscribed by 274%. Rwandan nationals bought 75% of the issue. The bank will use the proceeds to expand its branch network and increase its loan portfolio. In its first day of trading on September 1, the stock price surged by 52%.

In early 2011, Alliance Assurances became the first private company and the seventh listed on the Algiers stock market. The share offering was open to the public from November 2, 2010 to December 1, 2010. A total of 1,804,511 shares were subscribed at a price of 830 Algerian dinars ($11.17) each. A third of the shares were allocated to Algerian citizens, 28.5% went to institutional investors, 28.5% went to Algerian companies, 2.4% of the shares went to insurance brokers and another 2.4% was allocated to employees of the company. The company will benefit from a 5-year tax holiday on profits that is designed to encourage share listing. The Algiers market is nearly catatonic. Trading takes place just twice a week, on Monday and Wednesday mornings for two hours.

The only other shares that are traded on the exchange are cross listings of the Kenya Commercial Bank and the National Media Group of Kenya. The government has been contemplating selling its 10% holding of MTN Rwanda, which is 55% owned by MTN of South Africa on the exchange. Cementmanufacturer Ciments du Rwanda Ltd., Rwanda Commercial Bank and insurance company SONARWA are companies that are partly owned by the government which are likely to be listed in the near future. The exchange also lists one corporate

With the notable exception of South Africa, stock market capitalization as a percentage of GDP is very low when compared to the major developed and emerging markets. In Ghana, Namibia, Nigeria, Tanzania and Tunisia, it is less than a third of GDP. This suggests there is enormous potential for future growth. As the middle class develops in Africa, they will use the stock market as an investment vehicle to increase their wealth and to save for retirement, thus supporting the likelihood of additional gains.

Joab’s Technologies and Research, Natu Court Flat B.

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Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  
Equity Research in Africa, Like an Electric Train Africa is picking up, a True Emerging Market  

Economic analysis of Africa as a whole, as well as of particular countries and sectors, with special regard to their potential as investment...