The Nigerian Stock Exchange (NSE) last week listed N4.6 billion bonds floated by Tower Funding Plc on its daily Official list.

The bonds, series one tranche A and series one tranche B, were raised by Tower Aluminium Group from the capital market under its N9 billion (Medium Term Note) last year.

The company issued N3.630 billion bond due on September 9, 2018 (series one tranche A) with a floating rate of Monetary Policy Rate(MPR) plus seven per cent and the N1 billion MPR plus five per cent floating rate bond due September 2018 (series one tranche B).

The funds were raised through a book-building exercise spear headed by Dunn Loren Merrified (DLM) Limited, which acted as financial adviser, issuing house and lead book runner to the transaction.

The N9 billion MTN programme is undertaken by Tower Funding Plc, which is a captive finance vehicle for the Tower Aluminium Group.

The Series N3.63 billion was 331/3 guaranteed and assigned an ‘A-’rating by Global Credit Rating and DataPro Limited while the N1 billion bond was 100 per cent guaranteed with a provisional rating of AA- and AAA from Global Credit Rating and DataPro Limited respectively.

According to the Chief Executive Officer(CEO) of DML, Mr. Sonnie Ayere, the proceeds of the bond were applied towards the funding of the member companies of the Tower Aluminium Group comprising: Tower Aluminium (Nigeria)Plc; Queensway Aluminium Limited; Asaba Aluminium Limited; Tower Roofing Systems Limited; Borno Aluminium Limited and Kolorkote Nigeria Limited.

“The rich history of the Tower Aluminium Group spanning over 50 years in Nigeria contributed in no small measure to the success of the Series 1 bond issuance,” Ayere had said.
Ayere noted that the bonds were the first internationally guaranteed bond by a real sector corporate entity in Nigeria.

The guarantee was given by GuarantCo Limited, a development finance institution regulated by the Financial Services Commission (FSC) of Mauritius with the key objectives of encouraging private sector involvement in the local currency financing of infrastructure projects and promoting local capital market development in low-income countries.

Chairman of GuarantCo, said: “This ground-breaking financing is a material advance in developing the local corporate bond market. Nigerian companies deserve the same access to long term funding from their capital markets as in other major economies and we look forward to more issuers accessing the market.”

Specfically, the Tower Group had explained that the proceeds of the bonds would be used for the refinancing of maturing bank debt obligations utilised by the Group to build the multi-million-dollar aluminium factory at Otta in Ogun state.

According to the company, the factory has been designed to convert scrap aluminium into new and usable aluminium hence reducing its reliance on imports and therefore significantly reduces cash flow vulnerability due to exchange rate fluctuations.

In 2011, the mining insurance market was not only hit by $2.7 billion in natural catastrophe losses, but over 60 operational losses totaling $835 million. The $3.5 billion total estimate of losses facing mining insurers has prompted a 30 percent withdrawal in insurance capacity since the start of 2011. This is according to the latest Mining Market Review released today by Willis Group Holdings plc, the global insurance broker.

The report, published to coincide with this week’s annual African Mining Indaba in Cape Town, a conference held for natural resource professionals, estimates that the current global capacity available to mining Property Damage & Business Interruption (PDBI) insurance programmes is $1.25 billion, down from $1.75 billion at the start of 2011. Willis says that “whilst this does not represent the dramatic loss of capacity that precipitated historical hard markets such as 2001, it may indicate a difficult year ahead for the renewal of mining PDBI programmes”.

Willis’ report identified resource nationalism, natural catastrophe exposure, and supply chain disruption and globalisation, as the three biggest risks facing mining companies:

– Resource nationalism and punitive taxation regimes are no longer only an issue in emerging markets, noted Willis, with “developed countries (notably the United States, Australia and Canada) increasingly adopting resource nationalist policies that include the blocking of Chinese investments and the tightening of fiscal regimes in the extractive sectors”. The report includes a chapter on the myths and realities of resource nationalism by global analysis and advisory firm, Oxford Analytica.

– The huge impact of the Japanese earthquake and tsunami, the Christchurch earthquakes, the Queensland floods, earthquakes in Papua New Guinea, the weather events and floods in Brazil and South Africa all served to reinforce the threat to the mining sector posed by natural catastrophe events.

– The Japanese earthquake and tsunami placed supply chain management at the top of the agenda for most mining boards. Following the disaster, many Japanese companies transferred their production trains off-shore to locations like Thailand, where another natural disaster struck a few months later, further compounding the contingent losses suffered by many companies.

Commenting on potential pockets of hardening in the mining market, Steve Higginson, Willis Mining Practice Leader said, “The key elements which are influencing the tightening of insurance terms and capacity availability are firstly the series of losses which have effected the industry over the past 12 months, secondly natural catastrophe exposure, especially flood and earthquake, thirdly the aggregation of exposures carried by insurers in regions such as the Pilbara in Western Australia (cyclone), the Bowen Basin in Queensland (flood and weather events) and Chile (earthquake), and finally the increased complexity of coverage for Contingent Business Interruption (CBI) caused by the globalisation of the supply chain.”

The report details 2011 and potential 2012 conditions in other mining-related insurance markets, including:

– The Construction insurance market remained competitive and stable, with natural catastrophes having little impact.

– The global Directors’ and Officers’ Liability insurance market remained competitive and awash with capacity, a trend that looks set to continue in 2012, although a significant increase in mergers & acquisition litigation might test insurers.

– During the past 12 months it has been difficult to chart any sustained direction in pricing for the international Liability market and this uncertainty is expected to continue in 2012.

– With seven of the top 20 kidnap hot spots being countries with significant mining operations, it is not surprising that several employees from the extractive industries have been kidnapped for ransom over the past year, a trend that will only increase as the global demand for commodities intensifies.

– In 2011 the Marine market continued to be soft, but this year the pace of the downward trend in pricing seems to have slowed, with the market at the beginning of 2012 offering single, not double-digit reductions. However, the implications of the Costa Concordia incident are yet to fully materialise.

– In 2012 the Specie (precious minerals, including cash and securities) insurance market is likely to see a possible hardening of rates as 2011 natural catastrophe claims in the property insurance sector work their way through the market.

– The last two years have witnessed more insurers offering Personal Accident/Accident and Health cover, especially in Lloyd’s, resulting in a competitive pricing environment.

– Terrorism capacity remained static through 2011. Commercial Terrorism capacity in the standalone market is currently estimated at $1.75 billion. However, Political Violence capacity is more restricted compared to previous years, particularly in areas that have experienced political unrest.

Andrew Wheeler, Willis Mining Practice Leader, commented: “Even though the insurance market is still reeling from the unprecedented spate of losses in 2011, well risk-managed mining programmes will still be able to get favourable terms and conditions this year if they can demonstrate: a clear understanding and ability to mitigate the effects of CBI exposures, a pro-active approach to minimising the effect of weather-related events to their operations, and that sound risk engineering and innovative risk avoidance measures form an integral and core part of their business.”

The extensive Willis report also contains sections on mine rehabilitation, Chinese mining investment, strategic loss management, contract certainty and risks to the UK metals market.

Scott Pickering, CEO of Willis South Africa, commented: “The Willis Mining Market Review once again illustrates the thought leadership shown by Willis in the mining insurance sector, represented locally by the specialist expertise of the Willis South Africa mining team located in the Johannesburg office.”

Click here to access the Mining Market Review or pick up a hard copy at stand 3103 where the Willis Group Mining Practice will be exhibiting at this week’s Mining Indaba.

About Willis

Willis Group Holdings plc is a leading global insurance broker. Through its subsidiaries, Willis develops and delivers professional insurance, reinsurance, risk management, financial and human resource consulting and actuarial services to corporations, public entities and institutions around the world. Willis has more than 400 offices in nearly 120 countries, with a global team of approximately 17,000 employees serving clients in virtually every part of the world. Additional information on Willis may be found at www.willis.com .

SOURCE: Willis Group Holdings plc

Willis Group Holdings plc
Media:
Ingrid Booth, +27 11 341-9625
boothi@willis.com
or
Investors:
Peter Poillon, +1 212 915 8084
peter.poillon@willis.com

A recent policy change by South Africa’s National Treasury makes it easier for South African investors to trade in foreign domiciled companies and the Johannesburg Stock Exchange now considers these companies eligible for inclusion in domestic indices. “This means that inward or dual listed shares on the JSE will be classified as domestic assets and they will attract increased investment interest,” says John Burke, head of Issuer Regulation at the Johannesburg Stock Exchange.

“This augurs well for the JSE attracting further resource listings and we look forward to meeting the international mining companies with assets in Africa during Mining Indaba. On account of the policy change, both retail and institutional investors will have more flexibility and this could increase liquidity in dual listed shares.”

Franco Lorenzani, CEO, Macquarie First South Securities South Africa explains, “Inward listed shares have traditionally attracted low volumes due to the limits imposed on foreign exchange allowances. Now the investment decision is based on merit rather than the shackles of regulatory issues and dual listed companies will be able to raise capital more easily in South Africa. There’s demand for commodities particularly out of Asia and other markets and this change was imperative to encourage investment in the region. National Treasury, the Reserve Bank and the JSE are to be applauded for tackling the issue as South Africa and the continent will benefit with increased employment, revenue and the social benefits of mining.”

Euan Worthington, chairman of DiamondCorp plc (listed on AIM and JSE Main Board) and deputy chairman of African Eagle Resources (listed on AIM and JSE AltX), says of dual listings on the JSE: “The process was uncomplicated, the Reserve Bank put no hurdles in our way and institutions were very receptive to our African story.”

Forbes Coal, which listed on the JSE in July 2011, has a primary listing on the Toronto Stock Exchange with a head office situated in Toronto. According to Stephan Theron, the CEO, “This gives us access to North American investors for early stage mining projects. We listed on the JSE as a South African Reserve Bank requirement but also to gain access to the South African investment community.

“The pre-listing experience was good; the JSE team was world class. Post-listing has been relatively good. We have yet to raise capital since our listing, thus the float of shares trading on the JSE is small. We will however consider raising funds out of SA which will allow us to increase the size of the share register on the JSE. If companies consider doing a dual listing I would recommend coinciding the listing with a capital raise.”

Sasfin Capital has approximately a quarter of its clients inward listed with primary listings in jurisdictions including TSX, ASX and LSE. Sasfin brought two inward listings to the JSE during 2011 – Forbes Coal as well as Ferrum Crescent (an iron ore project developer listed on ASX, AIM and since November 2011, JSE Main Board).

Sarah Williams from Sasfin Capital explains that their business has extensive experience in the listing process as well as ongoing compliance. “The process for an inward listing is very similar to that of a primary listing from a regulatory point of view with a number of added complexities, particularly in terms of creating liquidity in the South African market. We have worked closely with the JSE and various stockbrokers to find ways to improve the market’s perception of investing in inward listings.

“The recent relaxation by Treasury will go a long way to resolving these issues, and we believe that this creates a good opportunity for offshore companies with South African assets to list on the JSE and take advantage of these capital markets.”

If a company is already listed elsewhere, a secondary listing can be fast-tracked as the JSE recognises exchanges that are members of the World Federation of Exchanges. For mining companies, the specific additional requirements include a Competent Persons Report and the application needs to be compliant with one of these codes: SAMREC (South Africa) JORC (Australia), Ni 43101 (Canada).

South Africans, compared with the British, Canadian and Australians, tend to be more risk averse when considering resource stocks. However, according to the JSE’s John Burke, “South Africans are increasingly becoming more educated and understand that with exploration initiatives if an investor doesn’t get in early, he will not satisfactorily participate in the future returns of that business.”

The JSE also makes a considerable effort to expose its listed companies to both local and international fund managers and funds. During Mining Indaba, this year as in other years, two showcases are held which teach investors how to invest in mining companies and then give audiences the opportunity to hear from and meet senior mining company executives. These events are free and booking may be done at www.jse.co.za/events.

Burke continues, “The message that the JSE will share with companies with African assets is that there is capital in South Africa. The JSE has a responsibility to provide an enabling environment in which South Africans and Africans can benefit from their resources and companies operating here.

“The basic hygiene factors are in place. These include a sound macroeconomic environment, securities market regulation rated first in the world by the World Economic Forum, technology provided and operated by the London Stock Exchange, strong surveillance capabilities where we see to client rather than broker level and international best practice in terms of corporate governance. In terms of clearing and settlement, the JSE rates highly in terms of settlement risk .”

Burke concludes, “The reality is that if a business has projects in Africa, the JSE should be a viable preferred destination to list the business and raise capital for that project.

For further information, photographs or interviews, please contact Michelle K Blumenau, Turquoise PR & Marketing Communications T 011 728 5004 / 083 273 9891 michelle@turquoisepr.co.za

Tangiers Petroleum (ASX:TPT) has started trading on London’s Alternative Investment Market under the ticker code TPET (LON:TPET), complementing its Australian listing.

Together with its ASX listing, the AIM listing provides the company with a strong platform from which to strengthen its shareholder base and increase its international profile, it said in a statement.

Following its recently announced A$6.35 million placement to UK, North American and Australian investors, the company is well positioned to unlock the potential of its oil and gas exploration projects in Morocco and Australia.

AIM is recognised as one of the world’s leading exchanges for junior resource companies, with a significant peer group, analyst coverage and institutional investor following of oil and gas explorers active in Africa, Tangiers said.

HB Markets initiated coverage of the oil and gas explorer with a ‘speculative buy’ recommendation last week ahead of the AIM listing.

Analyst Donald Linderyd said the current valuation of could be a fraction of its true worth if indications from the company’s independent competent person’s report on the resources base turn out to be accurate.

Tangiers has two potentially company making assets – the Tarfaya oil block off the coast of Morocco and highly prospective gas acreage off the coast of northern Australia.

Tarfaya has an un-risked prospective resource of 867 million barrels, with a high-end estimate of almost 5 billion.

In Australia, the company has discovered what it believes to be two huge gas finds – Nova and Super Nova – sitting below already existing oil fields.

Based on work carried out by Schlumberger, Tangiers cites what it calls a “probabilistic estimate” of un-risked gas in place of 71 trillion cubic feet to 148 Tcf – which makes the pair potentially huge on anyone’s register.

Barney Gray, oil and gas analyst at City broker Old Park Lane Capital, which assisted in the listing, commented today: “The recent fundraising puts Tangiers in a strong position to continue its exciting work programmes in Morocco and Australia and we believe that the company will attract a partner to promote the group’s exploration programme in Morocco in the current year.”

Old Park Lane has set the price target at 115 pence, equivalent to A$1.79. In debut trading on AIM, the stock stood at 37.75 pence at 10.28 am.

Afrinvest West Africa Limited has commended the Nigerian Stock Exchange (NSE) over the various reform initiatives adopted to enhance investor’sa confidence in the nation’s capital market.

Afrinvest believe that the factors that influence investors’ confidence in the market transcend macroeconomic and socio-political considerations.

In the Afrinvest 2012 Nigerian Market Outlook “Diamond in The Rough” made available to Vanguard, the company pointed that in the last one year; the Nigerian stock market has undergone wide-ranging regulatory and “housekeeping” reforms and initiatives that are geared towards restoring investor confidence in the Nigerian bourse.

“The need to capture a significant portion emerging market portfolio inflows necessitates a quantum leap in regulatory and administrative oversight, including high corporate governance standards, on the Nigerian bourse in line with acceptable global standards.”

The company revealed that having initiated varied reforms, which are targeted at enhancing fair and transparent market place, enhanced investor confidence, and improving market depth, the bourse is on course for boosting investors’ confidence going forward.

Revealing further, Afrinvest stated that policies such as the introduction of market making, securities lending, short selling and introduction of ETFs need to be accompanied with effective regulatory oversight, while their general acceptance and participation by the investing public will largely depend on improved investor education going forward.

However, the company, estimated a GDP growth rate of 7.0 per cent and 7.5 per cent for the country’s economy in 2012 with increased contribution from the non-oil sector especially agriculture, telecoms and financial services.

“We expect the CBN’s banking sector reforms to berth in 2012, giving further impetus to bank lending particularly given the mild uptick in credit growth observed towards the end of 2011. We envisage less aggressive fiscal tightening measures in 2012 even as reduced government borrowing should bear positively on the domestic equity market.”

“Given unfolding realities in Nigeria’s macroeconomic backdrop, as well as anticipated global economic conditions, our focus in 2012 remains on fundamentally strong and countercyclical companies, with strong cash generating capacity and strong management teams,” it added.

Standard Bank Group has for the second year in a row been independently ranked the most valuable banking brand in Africa, according to the 2012 global Top 500 Banking Brands report.

The definitive report is published in the leading global banking journal The Banker and is compiled by the valuation consultancy and asset management company Brand Finance.

According to the report, the Standard Bank brand is worth US$2.17-billion. This saw Africa’s biggest banking group jump up three places in the world rankings, from position 76 in 2011 to position 73 in the world. It also means that Standard Bank Group maintains its top spot as the highest ranked brand on the continent.

BrandFinance calculates the value of brands by using a “royalty relief method” that estimates the notional price a company would have to pay for the brand. The methodology employed uses a discounted cash flow (DCF) technique to discount estimated future royalties at an appropriate discount rate to arrive at a net present value (NPV) of the trademark and associated intellectual property: the brand value.

Standard Bank Group Deputy CEO Ben Kruger says: “We are delighted to receive this recognition, which adds to a growing list of prestigious awards in recognition of building a successful brand on the African continent. Standard Bank acknowledges the relationship between brand equity and the key value drivers in the business, and we view brand management as a key element to enhance value for all stakeholders.”

As a South African headquartered bank with subsidiaries in 17 African countries, Standard Bank Group is uniquely positioned to service clients doing business on the continent. Mr Kruger says this latest recognition bears testimony to this competitive advantage.

“This ranking is a reflection of the value created through the focus and dedication of our people in delivering what is important to our customers in different segments and markets, as we strongly believe that is what ultimately differentiates banks and builds value in a brand,” says Mr Kruger.

“The benefit of our strong commitment to Africa is increasingly evident and injects extra value into our relationship with customers. This enhances brand value, a measure of commitment and loyalty to Standard Bank.

“Whatever we do should help the customer advance in some way. Merely completing a routine activity or facilitating a complex transaction is only really worth something if we are assisting our customers and clients in their needs and delivering on their expectations.”

Brand Finance’s Top Banking 500 directly compares the values of the world’s banking brands. It is the only direct comparison of brand value in the banking industry. The consultancy produces a study that illustrates how the methodology, findings and value-based marketing techniques can be used for decision-making and to determine the impact of brand equity on business performance.

London-based private equity fund Actis intends to sell shares of Uganda’s power company, Umeme, through a double initial public offering (IPO) in Nairobi and Kampala.

This could mark the region’s first cross-border IPO listing, though the transaction is still in the early planning stages and the fund is yet to file applications with the capital market regulators.

Paul Fletcher, a senior partner at Actis — which owns the electricity distributor — told the Business Daily that the firm was targeting a cross-border IPO to secure liquidity of the stock in the secondary market. TransCentury and CFC Insurance Holdings listed at the NSE by introduction last year.
Listing on the Nairobi and Uganda securities markets is also expected to boost chances of a full subscription of the offer.

“We would like a dual listing as it would not only help liquidity post-IPO, but it would be an important step towards regionalising the market,” said Mr Fletcher, who added that the timing of the planned offer is still under review.

In their last meeting held in 2011, the East African Securities Exchanges Association said that listing of Umeme and Tullow Oil on the Uganda Securities Exchange (USE) was expected this year.

Joseph Kitamirike, the chief executive officer of the USE, told the Business Daily two weeks ago that the Uganda bourse was still awaiting applications from the two companies and therefore could not comment on the issue.

“We have not received any documents from the companies,” he said, adding that although the bourse is expecting new listings, the timelines will only be established once applications are received.

Umeme , which was established in 2005 won a 20-year concession from the Uganda government for power distribution.

In November 2009, Actis took over the power company in a deal that was valued at approximately Sh1.33 billion ($15 million).

At the end of 2010, Umeme had secured a loan with the International Finance Corporation for a refurbishment programme which saw over 90,000 electricity distribution poles replaced at a cost of approximately Sh8.9 billion ($100 million).

The Uganda power utility firm could become one of at least three other firms that have announced an intention to list at the Nairobi Securities Exchange (NSE).

The others include CIC Insurance, clothing and lifestyle goods retailer, Deacons and Longhorn Publishers.

CIC Insurance has already submitted its application for listing at the NSE to the Capital Markets Authority.

The companies that have already announced intentions to go public are however, opting for listing by introduction, fearing IPO under-subscriptions due to the high interest rate and inflation environment in the country.

8 plan to list

Last year, only three firms in the region listed through IPOs, which included Kenya’s British American Investments Company and Rwanda’s beer maker Bralirwa and Bank of Kigali.

Precision Air in Tanzania also raised funds for expansion at the Dar es Salaam Stock exchange, while Kenya’s brewer East African Breweries Limited sold its 20 per cent stake in Tanzania Breweries at the Dar es Salaam bourse.

The NSE chief executive, Peter Mwangi, said in an interview last month that at least eight firms have signalled their intention to list at the bourse this year.

He said five of the companies are planning to list on the main market segment; two others will list on the Growth and Enterprise Market Segment—which is expected to be operational by the middle of the year—while one firm from a neighbouring country is expected to list its shares in Nairobi.

South African investment fund New Europe Property Investment NEPI has taken over the majority stake in ModaTim Investment Properties, the developer of the City Business Center CBC in Timisoara. Businessman Ovidiu Sandor, the initiator of the project, will continue to administer the project untill 2015, and will be in charge with managing the development of buildings D and E from the project.

City Business Center Timisoara is a class A office projects with five buildings having a total rentable are of 43,000 sqm. Buildings A, B and C, totaling 25,000 sqm of rentable space are currently in use, while the other two are set to be finalized in 2012 and 2013.

Jones Lang LaSalle was the real estate advisor in the project, NNDKP provided the legal consultancy, and PwC was the financial and fiscal consultant in the project, all on the seller’s side.

NEPI has been active in Romania since its launch in 2007. Some of its recent investments are the acquisition of Floreasca Business Park (December 2010), the acquisition of the remaining part of the Auchan Retail Park in Pitesti (May 2011), the completion and opening of a leisure extension of Promenada Mall Braila (April 2011) and the completion of a refurbishment of an office building in Brasov (June 2011).  NEPI is currently listed on the main board of the Johannesburg Stock Exchange (South Africa) and the AIM market of the London Stock Exchange and, starting from June 2011, is also listed on the Bucharest Stock Exchange.  The group recently announced a EUR40 million underwritten rights issue that is expected to complete in December 2011.

Kenyan companies will benefit from improved funding essential for growth and investment following a EUR 20 million finance agreement between the European Investment Bank, the long-term lending institution of the European Union, and two Kenyan banks, ABC Bank and Consolidated Bank, with proven experience in understanding business needs.

The European Investment Bank’s Private Enterprise Finance Facility II will assist African Banking Corporation and Consolidated Bank of Kenya to provide long-term funding in Kenyan Shillings, US dollars and Euros to assist lending to local businesses seeking to expand or invest in new activities. This is similar to a previous scheme in Uganda that created 1,700 new jobs across the tourism, manufacturing, agribusiness, construction and education sectors.

“Ensuring long-term funding is available for small companies in Kenya will promote sustainable economic growth and job creation in Kenya. The European Investment Bank looks forward to working closely with local Kenyan banks to help entrepreneurs to expand their business activities across the country.” said European Investment Bank Vice President Plutarchos Sakellaris.

“We are excited about this partnership with EIB and view it as a valuable endorsement of the good working relationship we, at ABC Bank, have with our customers. This facility is also in line with our vision of facilitating our customers, especially in the SME sector, to grow their businesses because we will be able to lend to them for a longer tenor and at very competitive pricing. Also, our Importing and Exporting customers will get the additional benefit from this facility through the multi currency long-term lending opportunities that will safeguard against currency fluctuations and allow business expansion.” said Mr. Shamaz Savani, ABC Bank, Managing Director.

Speaking at the event, Consolidated Bank’s Chairman Eunice Kagane said that the facility will enable the Bank to play an active role in the much needed financial inclusion for small and medium businesses in Kenya’s economy. “SMEs will continue to play a significant role in the growth of our economy. We have begun to see the positive impact of local companies through delivery of innovative products and services in the market, as well as provision of employment. However, we appreciate that banks like ourselves have a crucial role to play to enable enterprises to optimize their contribution to the economy. ” said Ms Kagane.

Consolidated Bank’s CEO, David Wachira said that the funds will be available to the Bank’s existing as well as new customers. “The facility which will be available at reduced interest rates comes at a time when lending rates in the market have risen significantly. Therefore we expect to fund businesses which otherwise may have faced challenges with access to funds.” Wachira said. According to Mr. Wachira, the signing of this agreement is one of several initiatives by the Bank to reach out to growing businesses countrywide. The Bank is investing in technology to enhance service to business customers through mobile and internet banking. Additionally, the Bank will roll out its agency banking services in the second quarter of the year. These moves are aimed at deepening and widening its reach of financial services to more customers to enable them transact their business faster and easier.

The Private Enterprise Finance Facility II programme will provide new finance for Kenyan companies seeking long-term loans and will reduce the risk of interest rate fluctuations. Providing funding in Euros and US Dollars to export-oriented enterprises, alongside Kenyan Shillings for firms targeting local sector demand and generating revenues in Shillings, will help local firms to grow. The tenor of the facility ranges between four and ten years and will match the economic lifetime of planned activities. Small companies, a crucial segment essential for growth in Kenya, will be able to make use of three-year loans.

The European Investment Bank funding will be supported by a technical assistance programme for capacity building of the final beneficiaries of the facility. Companies seeking loans or existing SME clients of the bank will be able to receive training in workshops and individual coaching to improve their management skills and enable them to prepare bankable loan applications and business plans. This will increase the potential number of qualifying projects that could be financed by the Private Enterprise Finance Facility II programme and reduce the credit risk of the financial intermediaries.

Kenyan small businesses have benefited from more than EUR155m of European Investment Bank funding since 1991 this has played a crucial role in promoting long-term lending to private sector companies in the country. Last year the European Investment Bank provided more than EUR 1.3 billion for projects across Africa.

THE Zambia Agricultural Commodity Exchange (ZAMACE) has revealed that the Lusaka Stock Exchange (LuSE) has expressed interest in the commodities exchange.

ZAMACE suspended trading activity in August 2011 to pave way for a process of demutualisation, which is the delinking of shareholding from brokerage ownership. ZAMACE chief executive officer Brian Tembo, however, said negotiations with LuSE have not yet commenced because the stock exchange institution has only expressed interest.
He said LuSE is one of the potential investors interested in investing in the demutualised ZAMACE while other parties from financial and farming sectors are also interested.

“This is not unusual as it has happened in South Africa where the stock exchange in that country, JSE, took over the South African Futures Exchange (SAFEX), which is now their agricultural and equities derivatives division. “In similar style, the commodities sector presents the LuSE with a potential expansion area,” Mr Tembo said.

Mr Tembo was responding to a Zambia Daily Mail press query recently.

He said ZAMACE, equipped with the recent research findings of factors facing its development, has decided that the mutual structure was not optimal in the current environment and that there is need to reform. “It is scheduled that the recapitalised and re-energised and demutualised ZAMACE with a broader shareholding will be ready for the new marketing season and better positioned to exploit the sound re-organised role of Government in crowding in and not the previous crowding out of the private sector in agriculture and other commodities,” he said.

ZAMACE’s total value stood at over US$72 million over the last years (2008-2010), with an estimated annual value of wheat trade in Zambia of US$60 million.

The commodities agency was initially set up with mainly traders and processors as owners. These are the ones who took the risk and established the exchange with the initial financial and technical support of USAID/PROFIT.

South African banking and asset management group Investec’s Irish arm is to acquire NCB Group, an Irish financial services provider specialising in wealth management, corporate finance, capital markets, venture capital and investment funds, for about �32-million.

NCB is one of Ireland’s leading financial services groups, and employs 120 people at its Dublin headquarters, from where it services a client base of high net-worth individuals, Irish and international corporate customers and institutional investors.

“The deal will bring together to like-minded and innovative businesses whose operations are very complementary and whose combined experience and expertise will create real added value,” NCB chief executive Connor O’Kelly said in a statement this week.

“We believe that Investec’s balance sheet strength and diversified product offering will resonate very well with existing and prospective clients.”

Since setting up in Ireland in 2000, Investec Ireland has built up a successful capital markets business and has become a leading provider of treasury products to Irish corporates and is a market leader in the personal deposit market.

Internationally, Investec Ireland has a significant business in the structured equities arena. The company currently employs over 110 people in Ireland.

According to the statement, the combined business created by the deal will deliver a more diversified product and service offering, broader international access and enhanced financial strength for the existing clients of NCB.

Investec Ireland CEO Michael Cullen said that NCB was long established and well-regarded both domestically and internationally.

“The NCB business will complement our successful capital markets business in Ireland and is consistent with the group’s overall objective to expand its fee based and capital light activities,” he said.

“The transaction will provide a strengthened and diversified offering to both sets of our clients, bolstering Investec’s capability to become one of Ireland’s leading specialist banking groups.”

CIC Insurance Group on Monday submitted an application to the Capital Market Authority (CMA) for approval of its proposed listing at the Nairobi securities Exchange (NSE).

This follows suspension of Over The Counter (OTC) trade, in CIC shares and official closure of the share register, paving way for the share split that was approved at the company’s 33rd AGM in May 2011.

“In effect all shareholders in the company’s register by 27th January 2012 will qualify and accrue benefits of the split to be executed by the Co-operative Bank Shares Registrars”, said Nelson Kuria, CIC Group’s Chief Executive.

Subsequently CIC Group will communicate the resultant and necessary immobilization process to all shareholders.

Share immobilization is the conversion of physical share certificates (traded over the counter) to electronically held share balances that are traded via the Central Depository and settlement Corporation (CDSC).

The CIC Group shareholders had early last year resolved to increase the insurer’s share capital to Ksh3 billion from Ksh1.2 billion by creating 90 million ordinary shares.

CIC hopes to list at the NSE to tap opportunities for capital growth in light of its pan African expansion plans, while accruing gains in shareholder value.

“This calls on us to be very focussed in our business in the short and long-term to sustain the impressive performance of the company over the last five years”, added Kuria.

Faida Investment Bank Ltd is the lead transaction advisor with Oraro & Company Advocates and Mboya, Wangongu & Waiyaki Advocates acting as the Joint legal advisors and Kingdom Securities as the sponsoring stock broker.

Deloitte and Touche will act as the reporting accountants and Co-operative Bank of Kenya Limited as share registrars.

Nearly half of international fund managers and investment bankers see Kenya as a top frontier investment market only second to Nigeria in Africa.

A survey of 158 international investors conducted by the Economist Intelligence Unit (EUI) showed that 76 of them believed that Kenya offered the best prospects for institutional investors over the next five years, compared to 81 per cent who said Nigeria was better.

The survey is set to attract renewed international investor interest critical to faster growth of the economy and recovery of the stock market, especially coming in the wake of massive sell offs last year when equities shed 28 per cent of their aggregate value.

“This is extremely good news for Africa as a strong capital flow should feed a virtual cycle of job creation, income rises and more investment,” said Nazem Al Kudsi, chief executive of Abu Dhabi-based Invest AD, which manages funds investing in Africa and the Middle East.

“Institutional investors are recognizing an Africa that is better-governed, is less dependent on resource extraction, and is increasingly dominated by middle class expectations,” he said.

The survey by EIU showed a shift to long-term investment strategies from more speculative and short-term bets, with a third of the respodents saying their allocation to Africa will be at least five per cent of their portfolio.

Local fund managers have attributed the growing interest to the emerging middle income class that is offering a ready market for new products, including financial services, consumer goods, property and energy.

Edward Gitahi, a senior investment manager at PineBridge Investments, said there is demand for goods and services in the Kenyan market, making a case for international investors seeking profitable ventures.

“There are profit-making opportunities in the market presented by ready demand for goods and services, and this is what investors are looking for,” said Mr Gitahi.The diversity of the Kenyan economy provides a variety for investors seeking to spread their risk.

Energy, communication and banking services sectors, he said, were recording a growing demand which perhaps explains why foreign investor interest has traditionally been biased to listed companies operating in the respective sectors.

Shares of KCB, Equity Bank and Safaricom have been highly sought-after by international investors, who account for over two-thirds of turnover at the NSE on average.

Results of the poll indicate that foreign investors could troop back in bigger numbers to the NSE to lift its overall performance as prospects in the US and Europe remain depressed.

The proposed sale of multimillion dollar stakes by British-based explorer Tullow Oil to France’s Total and China’s CNOOC has been delayed by disagreements over tax compensations, President Museveni has said.

Mr Museveni told reporters at a news conference in Kampala yesterday that the companies involved in the deal had requested to include a stabilisation clause to shield them from possible loses in case Uganda increased its tax policy but the failure to agree on what sort of formula to calculate any compensation now stands in the way of the $2.9 billion (Shs7.3 trillion) deal.

Tullow Oil had initially indicated that it was on track to complete the long-blocked sale of stakes by the end of January but Mr Museveni’s comments, reflective of comments he recently told ruling party MPs, tell of uncertainty as to just when the deal will finally be completed.

“I was ready to authorise but some of the oil groups brought new confusion so I did not accept,” said Mr Museveni when asked to offer any indication as to when Uganda will finally endorse Tullow’s quest to sell part of its shares in what is known as a farm down.

He said government had found no objection to the oil company’s insistence on including a protective clause to “stabilise the income of the oil company” but only if “we have got a formula of calculating that loss.”

Mr Museveni said Uganda had suggested “scientific” methods of calculating the loss, Net Present Value (NPV) and Internal Rate of Return (IRR), but the oil companies “didn’t like that.”

The NRM leader also said there were disagreements over plans by the government to build an oil refinery in Uganda to process petroleum or build a pipeline to export crude oil.

“Now one of the oil companies, [from] France [Total], said, no you must agree now. We said no, we cannot agree without a kibalo [a calculation of the crude oil for processing or export],” he said. “I don’t know whether they have changed their minds, but I have not heard from them recently.”

At an earlier press briefing, Equatorial Guinea’s visiting leader Theodore Obiang Nguema offered counsel on how best Uganda can manage its nascent oil industry and recommended the establishment of a national body that will oversee petroleum exploration and resource management. “This will be the basis for you to actually have full control over this business,” said Mr Nguema.

Mr Museveni said Uganda would “definitely” cooperate with oil producer Equatorial Guinea in the oil sector, as well as “the question of strengthening Africa, guarding the freedom of African countries.”

Mr Nguema, current chair of the African Union admitted that the fall of governments in Ivory Coast and Libya last year at the behest of western powers, had left him “highly disillusioned” with the discovery that “Africa is not respected, is not given the recognition it is supposed to be given.”

egyezaho@ug.nationmedia.com

JOHANNESBURG: South Africa’s All-share index closed above 34,000 for the first time in its 17-year history on Thursday, after news the US Federal Reserve will continue to support economic growth lifted stocks and commodities around the world.

Gold miners such as Gold Fields surged as bullion touched its highest in more than 6 weeks after the Fed said it planned to keep interest rates at rock bottom for some years and hinted at further stimulus.

But despite the better outlook for the United States and therefore for South African resource companies, some local investors are concerned Johannesburg’s valuations can no longer be justified by company earnings prospects.

“It appears that the expensive stocks are getting more expensive,” said Nic Norman-Smith of Lentus Asset Management in Johannesburg. “Everyone is bullish and has forgotten all of the risks. There’s still a lot of expensive stocks out there that we’ll be avoiding.”

The All-share closed up 1.3 percent at 34,065.49, its highest finish since the index was launched in June 1995. Earlier in the session it rose to a new lifetime high of 34,079.54. The benchmark Top-40 index gained 1.5 percent to 30,508.85, its highest close since May 2008. The Top-40 is about 900 points shy of its own lifetime high, also set in May 2008.

South African stocks are now trading at a price-to-earnings ratio of more than 13, putting them roughly on par with US stocks. That also makes South Africa more expensive than emerging market rivals Brazil, Russia, India and China, according to Thomson Reuters data. Miner Gold Fields was the biggest gainer among blue chips, rising 5.1 percent to 129.86 rand.

Mobile operator Vodacom rose for a second day after being upgraded to “buy” from “neutral” by brokerage UBS, which cited the strength of the company’s recent performance.

Shares of Vodacom added 2.2 percent to 94.50 rand. Trade was relatively active, with 205 million shares changing hands, according to preliminary exchange data, compared to last year’s daily average of 256 million shares.

Orange (http://www.orange.com) and the Wikimedia Foundation today announced a major partnership designed to make knowledge more easily available to Orange mobile customers throughout Africa and the Middle East. In the first partnership of its kind for Wikipedia, Orange and the Wikimedia Foundation will provide customers in both remote and urban areas of AMEA with access to Wikipedia.

In 2009, Orange and the Wikimedia Foundation formed the worlds first mobile and Internet partnership to expand the reach of Wikimedias projects through channels on Orange mobile and web portals in Europe.

This new partnership will be gradually launched throughout 2012 across 20 African and Middle Eastern countries where Orange operates, with the first markets launching early in the year. The initiative is part of the Wikimedia Foundation’s mobile strategy that aims to reach the billions of people around the world who access the internet solely through mobile devices.

Any customer with an Orange SIM and mobile internet enabled phone will be able to access the Wikipedia site either through their browser or an Orange widget. They can access the Wikipedia encyclopaedia services for as many times as they like at no extra charge as long as they stay within Wikipedias pages.

“Wikipedia is an important service, a public good — and so we want people to be able to access it for free, regardless of what device they’re using,” said Sue Gardner, Executive Director of the Wikimedia Foundation. “This partnership with Orange will enable millions of people to read Wikipedia, who previously couldn’t. We’re thrilled to be Orange’s partner in this important endeavour.”

Marc Rennard, Group Executive Vice President of Orange, Africa, the Middle-East and Asia, commented, In countries where access to information is not always readily available, we are making it simple and easy for our customers to use the worlds most comprehensive online encyclopaedia. It is the first partnership of this kind in the world where we are enabling customers to access Wikipedia without incurring any data charges; and shows Oranges ability, once again, to innovate in Africa and the Middle East, and bring more value to our customers.

Stephanie Hospital, Executive Vice President, Orange Audience & Advertising division, commented, “Since we first partnered with the Wikimedia Foundation two years ago, we have remained committed to helping them spread knowledge to as many people in the world as possible. We’re proud to once again be the Wikimedia Foundation’s first partner in Africa and the Middle East.”

Discover the presentation of the partnership : www.orange-innovation.tv/orange-and-wikipedia

Invest in Africa aims to encourage long-term investment across the continent to help build and develop local capacity, boost domestic job markets, develop skills and stimulate economic growth.

The programmes call to action will be supported through a unique partnership with English Premier League football club, Sunderland AFC.

As the initial Founding Partner establishing Invest in Africa, Tullow plans to secure five further Founding Partners from the international businesses community focused on Africa.  These Partners will help to evolve and shape the programme in years to come.

Speaking at the launch, Tullow Chief Executive Aidan Heavey said: Tullow is investing in Africa for the long term and we want more businesses to do the same. Africa has been good to us, and we have been successful, but we want that success to bring growth for local people and economies too.  Africas a great place to invest and this partnership with Sunderland AFC will allow us to get the message to a global audience. There are some great opportunities out there and we want other companies who share our vision to join us.

Niall Quinn, Director of International Development, Sunderland AFC said: We are genuinely excited about this ground-breaking opportunity to bring Sunderland into new territories and the global appeal of the Premier League is something that we can harness as a powerful tool for change through our innovative partnership with Invest in Africa.

Africas passion for football is both heart-warming and inspirational and as a football club with community, people and international aspirations firmly at its core, there is a natural synergy between us and this wonderful continent. We look forward to growing and developing the partnership in the coming months.

Ike Duker, Executive Chairman of Tullow Ghana Ltd added: While we are delighted to be at the forefront of this innovative and exciting new business programme, this is not just about Tullow. This is an initiative that can help to build stable, investment friendly environments to allow businesses to grow across Africa, create jobs and enable Africas people to share in the wealth and prosperity that come with it.

Further details about the initiative including the additional partners which join the campaign will be announced at the end of the Premier League season.

Distributed by the African Pres Organization for Tullow Oil plc.

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The goal for Orascom with the new company is to split certain aspects of its investments and to enable the company to push into Egypt’s media sector.

“Following receipt of approvals from the Egyptian Financial Supervisory Authority and the Egyptian Stock Exchange, or EGX, the current suspension of trading … shall be lifted on Sunday, Jan. 22,” Orascom Telecom said in a statement posted on the London Stock Exchange.

Orascom Telecom’s board in April approved a move to nearly double the company’s capital to 14 billion Egyptian pounds ($2.4 billion), from 7.5 billion Egyptian pounds, and to split the company.

In March, Russian mobile operator VimpelCom stated that its shareholders approved its $6 billion deal to acquire the telecom assets of Egyptian billionaire Naguib Sawiris. The deal with Sawiris’s Wind Telecom secures a more-than-50 percent stake in Orascom Telecom, the Arab world’s biggest mobile-telephone operator by subscribers, and Italy’s Wind Telecom.

Trading in OT shares has been suspended since November 24 pending the completion of its demerger. The company had missed several previous deadlines for the split because of various reasons, including pending regulatory approvals.

Source: African Brains

Coupled with the perceived cheap valuation of the counters, the prevailing low interest rate regime is likely to push up investors’ appetite for shares this year on the Botswana Stock Exchange, analysts reckon.

In a market report, stockbrokers Motswedi Securities say after recording modest growth in 2011, the local bourse is likely to perform better this year because investors will look to buy more shares.

Since the 2009 recession, the Bank of Botswana has deliberately kept interest rates at their lowest possible level in a bid to boost economic activity, a development that has made money markets or fixed income investments less attractive.

On the other hand, analysts believe most stocks on the BSE are still underweight and that now would be the best time to take positions on the market.

“Looking ahead into 2012, after ending the year at a weighted average Price to Earnings ratio of 9.8x from the levels of 10.8x by the end of 2010 and levels of 12.6x by the end of 2008, the market is relatively underweight at the moment and we expect demand for shares to improve across the board as value investors take advantage of the market’s cheap valuations,” reads the report.

“We foresee the lower interest rate environment to continue weighing on banks due to depressed margins. However, it is encouraging to note that most banks have taken initiatives to diversify their revenue lines away from interest income.” Motswedi’s top picks for the year include counters such as ABCH, Barclays, FNBB, FSG, Furnmart, NAP and Turnstar. “Investors should also be on the lookout for Choppies which, is expected to list on the 26th of January,” the research note says.

However, the report predicts that volatility in commodity stocks will continue into 2012 amid uncertainties surrounding the European sovereign debt crisis.

In 2011, liquidity improved on the local bourse on the back of increased demand for local assets from both domestic and foreign institutional investors as around 458.7million shares valued at P1.1billion were traded.

The last time the market traded turnover in excess of P1 billion was in 2008 when P1.2 billion worth of shares were traded. In the previous year, around 296.7 million shares valued at P962.8 million were traded on the BSE.Against this backdrop, the Domestic Companies Index (DCI) finished the year up by 8.70 percent to 6,412.94 points, its highest year-end finish since the 2008 financial market turmoil that saw the market end the year more than 16 percent down.

The Foreign Equity Main Board, on the other hand, was painted red, with most of its listed companies ending the year in negative territories tracking performances from their primary markets amid continued European sovereign debt crisis.

“Despite these conditions, the Foreign Companies Index (FCI) managed a 1.79 percent gain for the year, lifted by gains in Blue and Discovery Metals,” says the Motswedi report. Security giant G4S jumped the most for the year, up by 88.1 percent to end the year at 600 thebe. G4S, which is regarded as a defensive stock on the local market, had an impressive performance during the year under review after the ten for one share split.

Next in line was regional banker ABCH that soared by 85.7 percent to 455 thebe. Despite some selling pressure on the stock towards year-end, the pan-African bank remained one of the best performers during the year.

On the downside, CIC Energy was the biggest shaker in 2011, losing 70.6 percent of its value to end the year at 1,250 thebe. A-Cap Resources tumbled by 48.8 percent to end 2011 at 167thebe while Firestone, which marked its first year-end on the Foreign Main Board, was the third biggest loser, falling 47.5% to end at 176 thebe.Olympia Capital led shakers on the domestic main board, plunging 48.9 percent to end the year at 23 thebe.