News Column

African Banker's World

February 20, 2014



Compiled by Alexa Dalby

FUNDS

Investors back new Africa IPO

Atlas Mara Co-Nvest, an African investment company started by former Barclays CEO Bob Diamond and Ugandan entrepreneur Ashish Thakkar, with former Ecobank CEO Arnold Ekpe as chairman, raised $325m in an initial public offering on the London Stock Exchange. The firm expects to focus on a financial services company with operations in Africa. Citigroup was sole coordinator and bookrunner. Atlas Mara will seek to generate returns through operational improvements at the target company and from possible complementary acquisitions. (See also Investment: Atlas Mara.)

SWFS

Zambia third country to launch

To stimulate investment in economic sectors other than mining, Zambia is set to launch a sovereign wealth fund. Zambia will be the third African country to launch its fund after Angola and Nigeria. It will be launched through the Industrial Development Corporation (IDC) to increase the worth of government assets. Financial backing will be from the state's seed capital and disbursements from 40 state-owned firms.

INFRASTRUCTURE

Housing plan for S Africa

The Standard Bank of South Africa (SBSA) in partnership with the European Investment Bank (EIB) is making available up to $41m to finance affordable housing developments in South Africa, part of a wider $204m engagement by the EIB, to support investment in affordable and social housing in South Africa. The new programme will be managed in South Africa by four local partners. The funds will be used to finance the development of affordable and social housing, including student housing. The facility agreed with SBSA has a tenor of up to 20 years. Under the initiative, the European Investment Bank will contribute up to half of a housing scheme's cost. Selected housing schemes are expected to be implemented by 2017 with around 6,500 construction jobs being created.

MARKETS

Bourse Africa is born

Global Board of Trade (GBOT), the first international multi-asset class exchange from Mauritius, which launched in 2010, will now be known as Bourse Africa. The change in the name symbolises the larger focus of the exchange towards Africa and the opportunities offered by the African financial and commodities markets. As a continuation of the strategy of product innovation, Bourse Africa, subject to regulatory approvals, is evaluating introduction of agro commodity futures, base metal futures, African equity index futures, interest rate futures, exchange traded funds (ETFs) and exchange traded notes (ETNs).

CARDS

MasterCard and Ecobank to serve 60% of Africa

Ecobank Transnational and MasterCard signed multi-country licensing agreement which will provide access to MasterCard's payment solutions for Ecobank's customers in a further 23 African countries, its largest multi-country licensing deal in Africa. Ecobank subsidiaries in 28 countries across sub-Saharan Africa are now licensed to issue and accept MasterCard prepaid, debit and credit cards. Ecobank's customers will have access to MasterCard's credit, debit and prepaid card products, whilst MasterCard will leverage Ecobank's pan-African footprint to provide its electronic payments to a wider customer base.

AfrAsia Bank launches rewards programme

AfrAsia Bank launched Africa's first rewards programme offering real time booking on over 450 airlines and at 200,000 hotels to its World and Titanium MasterCard cardholders. In collaboration with Infinia Services & Solutions and MasterCard, it enables cardholders to earn XtraMiles whenever they swipe their World or Titanium MasterCard credit cards. XtraMiles is a new currency that clients can collect not only on everyday spending, but also on bank deposits and investments held with the Bank.

BONDS I&M raises $41m

Kenya's medium-sized I&M Bank said the first tranche of its $115m medium term note was oversubscribed by 21.8%. The lender received bids amounting to $41m over and above the targeted $34m. Proceeds from the debt facility will be used to bolster the bank's capital adequacy and support expansion projects.

Gabon in debt exchange

Gabon issued $1.5bn of dollar bonds as part of an exchange and buyback of existing debt. The securities due 2024 were priced to yield 6.375%. It is selling notes abroad for the first time since 2007, and is reported to have raised $890m of new cash in the offering. The proceeds will be used on infrastructure. Dollar-bond sales from African governments and companies rose to a record $9.68bn in 2013 from $6.04bn in 2012.

Kenya plans Eurobond

East Africa's biggest economy is preparing to sell its inaugural Eurobond to raise as much as $2bn to fund infrastructure development such as power projects. State electricity company KenGen is also considering a bond offer and may sell an asset-backed bond linked to geothermal resources. Kenya is Africa's largest geothermal-power producer.

TECHNOLOGY

Barclays arms tellers with iPads

Barclays' African unit is equipping tellers with iPads and offering customers mobile apps as the bank tries to win back market share in the face of slowing growth in South Africa. Barclays Africa Group is trying to regain clients after being overtaken as the country's biggest mortgage lender by Standard Bank Group two years ago. Barclays Africa Chief Executive Officer Maria Ramos is spending $116m on refurbishing branches, installing cash machines and upgrading technology to recapture clients lost to FirstRand and Nedbank Group.

Ethiopia to launch online trading

The Ethiopia Commodity Exchange (ECX) is preparing to introduce online trading that enables market players to participate directly in trade wherever they are. The government is implementing the online trade project in collaboration with Investment Climate Facility for Africa (ICF) in order to enhance the activities of ECX by creating a modern commodity trading platform which will introduce online trading and establish remote trading centres in key locations across Ethiopia. ICF is providing $2.2m of the $3.8m total project cost and the government, through the Ethiopia Commodity Exchange, is matching the remaining balance.

New security platform for S Africa

South Africa has built a technical platform for Enterprise USSD through cloud-based mobile messaging and payments company Infobip. Enterprise USSD allows banks and financial institutions to increase security of internet banking transactions via USSD (Unstructured Supplementary Service Data), a telecoms protocol which is used for a number of different purposes. USSD allows for the creation of security solutions, particularly in the authentication of financial transactions, where delivery of one-time pins (OTP) to end users is one of the pillars of security. It is a communications channel that offers interactive capabilities supported by all kinds of mobile phones, from basic handsets, to flagship smartphones and requires no mobile data connection. It is predominantly used for m-banking and m-payments, as well as customer care, polling and info services. (See also Special Report Banking Technology and Security.)

Access Bank launches software 'first'

Nigeria'sAccess Bank launched the country's first corporatefocused internet banking solution - Primus - to ease the complexities of daily supply chain and financial management of blue chip companies. The multi-transaction management software has been dubbed "a 21st century-game changer".

OUTLOOK

African bourses lure IPOs

African bourses are forecasting an increase in share sales in 2014 as a rally in stock markets helps end a drought of initial public offerings. The CÔte d'Ivoire's Bourse Regionale des Valeurs MobiliÈres, which trades securities from eight West African nations, is set for its first new listings since 2010 with two Senegalese companies. Mauritius may see 15 offerings in 2014: the Nairobi Securities Exchange is predicting five. The main indexes of Kenya, Nigeria and Ghana were among the world's 10 best performers in 2013. Kenya's all-share gauge led the African rally, adding 47% in 2013 to be the world's fifth-best performer.

INSURANCE

Prudential enters Africa insurance

The UK's biggest insurer by market value, Prudential, bought Ghana's Express Life, marking the UK company's entry into the African life insurance market. It acquired a majority stake from LeapFrog Investments and bought out a smaller investor, giving it 100% ownership. Prudential also has a fund-management business in South Africa, which oversees about $14.3bn in assets.

MOBILE MONEY

New service launches in CÔte d'Ivoire

Qash Services, a non-bank, nonGSM operator, is launching its mobile phone-based financial services in CÔte d'Ivoire, as Qash Mobile Banking. It is one of four independent companies with a mobile money agreement from the Central Bank of the West Africa Monetary Union (BCEAO). Qash Mobile Banking enables customers use their mobile phones like digital wallets to pay for goods and services, transfer money, withdraw and deposit cash, and top up mobile phones. Customers can also use their mobile phones, regardless of the mobile operator, as debit cards and manage funds directly from their handsets.

Loans on phones in Zim

Account holders of EcoCashSave, Econet Wireless's mobile savings platform, will soon be able to borrow money in a new service, EcoCashCredit. This would be done through partner banks including its own bank, Steward Bank, which is hosting the accounts. The savings accounts, which are open to subscribers on the mobile money transfer service, Ecocash, allow subscribers to save as little as one dollar without any charges and attract interest of 4% per annum.

REGIONAL

EAC links up

The Central Banks of three East African Community (EAC) member states - Kenya, Tanzania and Uganda - have formally linked their banking systems to ease financial transactions in the region. The new system will make cross-border payments easier, and facilitate safe and efficient transfer of monetary value within the region. It will be vital in promoting regional trade and enhancing economic integration. Rwanda and Burundi are expected to join the integrated regional payment system in future.

RETAIL

Capitec gains market share

JSE-listed low-cost bank, Capitec Bank, is gaining market share from South Africa's bigger banks, which include Standard Bank, Absa, FirstRand and Nedbank. In 2013, Capitec expected to open 75 branches by the end of the current financial year. This will bring its total in South Africa to 567 branches. Capitec was the only bank which increased the number of new customers while other banks suffered client losses, according to a survey. In September 2013, it posted an 18% surge in clients to 5.016m and overtook Nedbank as South Africa's fourth-biggest bank by market share.

S Sudan to focus on retail

New South Sudanese lender Liberty Commercial Bank plans to expand its retail business with the help of foreign investors and is looking for a partner in Dubai to tap rising trade with the Gulf. It was launched last year with one branch and funded by South Sudanese and Kenyan

INTRA-AFRICA

Ecobank may seek Lusophone licences

Ecobank Transnational chief executive Thierry Tanoh (above) said it may seek banking licences in two more Portuguese-speaking countries on the continent this year. Ecobank already has operations in Portuguese-speaking Cape Verde, Guinea-Bissau and SÃo TomÉ and PrÍncipe. The bank does not operate in Mozambique and only has a representative office in Angola. Ecobank plans to continue to expand organically, particularly in East Africa. Its profits increased 65% to $250m in the nine months to September 2013.

BNDES opens in Johannesburg

Brazil's development bank BNDES opened in Johannesburg, to develop markets in the Portuguesespeaking Mozambique and Angola. It sees an opportunity in Africa for financing Brazilian capital goods, and provision of engineering and construction services for large projects like hydroelectric dams and ports. The bank will lend at market rates and offer longer loan periods than other banks. It expects to disburse $500m to Brazilian companies for investment in Africa this year.

FNB crosses borders

South Africa'sFirst National Bank plans to expand its retail operations to Ghana and Nigeria to boost growth. FNB will try to get a banking licence in Ghana, build up the brand organically and then make a small to mid-sized acquisition to build scale. In Nigeria it was reported that the group had narrowed its interest to Keystone and Mainstreet.investors. Liberty says it has already attracted $15m in funding from investors and wants to open 10 branches by 2018.

PTA gets AfDB boost

The African Development Bank (AfDB) approved a financial package of $20m in additional equity and a $50m line of credit to finance projects in the Eastern and Southern African Trade and Development Bank (PTA Bank) member states. It will allow PTA Bank to finance a mix of small- and medium- scale enterprises as well as regional infrastructure projects and contribute to mobilising financial resources for development of the Tripartite Free Trade Area (TFTA) region. AfDB's subscription of new equity in PTA Bank is expected to play a catalytic role and hence encourage more institutional shareholders to boost the bank's capitalisation. (See also Star Interview with Admassu Tadesse.)

FINANCIAL INCLUSION Banking the unbanked in Nigeria

Sterling Bank inaugurated agent banking along central bank guidelines on the delivery of banking services through additional financial access points such as existing retail stores, petrol stations, post offices or via technology such as Point of Sale devices and mobile phones. Sterling will offer the unbanked ease of account opening, implementation of mobile money product, partnership with over 50 microfinance banks on a number of financial inclusion initiatives such as ATMs, co-branding of debit cards and provision of shared e-payment platforms. Skye Bank has intensified efforts to provide financial services to the unbanked through a range of product offerings by customising products for their specific banking needs. The bank's customer loyalty programme, Skye Dreams, has been enhanced with additional benefits for customers, who win points based on the number of transactions they carry out.

MARKETS

ZSE retains SADC top spot

The Zimbabwe Stock Exchange has maintained its position among SADC's top performing bourses.

Finance and Economic Development Minister Patrick Chinamasa said, "It is encouraging to note that the Zimbabwe Stock Exchange remained within the regional top five (best performers) on a year-to-date return basis, after Ghana, Malawi, Nairobi and Uganda. The ZSE main industrial index gained 398% to November 2013 and market capitalisation stood at $5.5bn. Reduced net foreign purchases and increased foreigner investor sales translated into declining portfolio investment.

STOCKS

Kenyan foreign ownership rises

Foreign ownership of shares at the NSE has shot to a seven-year high, totalling nearly a quarter of market value, reflecting renewed international investors' confidence in Kenya's economic prospects.

New stock market data shows foreign investors were holding 22.4% shares as at the end of September 2013. The NSE-listed companies whose foreign shareholding is highest include Total Kenya with 94.18%, British American Tobacco with 77.21%, CfC Stanbic with 75.07%, Standard Chartered Bank with 74.97% and BOC Kenya with 73.99%, representing the oil, banking and manufacturing sectors.

ECOLOGY

Africa's first green bank opens

Committed to environmental sustainability in South Africa, Nedbank has launched Africa's first 100% green bank, in Cape Town. It uses an innovative hybrid power installation that runs independently off the national grid and generates more electrical power than it uses by fully offsetting its energy usage via renewable energy sources. The bank draws energy from solar and wind sources, then converts it to standard mains electricity which is fed into the national grid, effectively cancelling out its own consumption. Nedbank estimates that the installation will help lower South Africa's total Co2 -eqt emission to approximately 71 tonnes per year - equivalent to 25,000 litres of petrol. Nedbank says its green bank is also economically viable, as set-up cost will be recouped within two years. n


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Source: African Banker


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