African companies get a boost from the London Stock Exchange.
The London Stock Exchange (LSE) is currently holding a road show in Africa and will visit seven countries it considers to be “growing financial hubs across the continent,” according to LSE's Director of Emerging Markets and International Markets Ibukun Adebayo.
“Following our road show events in Johannesburg and Nairobi, we will also host events in Lagos, Abidjan, Cairo and Casablanca," said Adebayo.
The roadshow is seeking to bolster the current 115 listings drawn from the continent (total market capitalization is approximately £165 billion) while the market capitalization of international companies on LSE’s markets is approximately £3 trillion which positions London Stock Exchange Group (LSEG) as one of the world’s most internationalized equity markets.
The LSE declined to comment on whether any new fresh partnerships had signed-up as a result of the ongoing trip but pointed out the exchange is banking on partnerships with African exchanges, including those in Nigeria and Kenya, for dual listings.
A final roadshow is planned for New York to showcase companies to African investors there as part of a United Nations initiative, said Adebayo.
The initiative rides on the backdrop of the launch of the second edition of the LSE’s "Companies to Inspire Africa" report launched this past January which identifies Africa’s most inspirational and dynamic private, high-growth companies to a global market. “The report’s findings will be revealed in Abidjan, Cairo, Casablanca and Lagos in the coming months,” said Adebayo. “We see opportunity for growth across a number of sectors. London Stock Exchange has a strong history of supporting African companies from the oil and gas, and mining sector, for example. However we are seeing a wave of ‘green’ businesses gain traction across Africa, and this may be an area of growth in future.”
There are 360 companies from 32 different countries across the continent represented in the report, boasting an impressive average compound annual growth rate of 46%, up from 16% last year. On average, each firm employs over 350 people, with an average compound annual employee growth rate of 25% according to an LSE communiqué. Another very encouraging fact is that 23% of the senior executives of the featured companies are female, almost double compared to the 12% listed in last year’s report and nearly matching the proportion of women sitting on the boards of Fortune 500 companies.
The growth rates and sector diversity of the firms featured highlight their potential to transform the African and wider economy and become the big global job creators of tomorrow. According to Adebayo, "consumer services, industry and agriculture are the three biggest sectors, between them making up over 50% of the companies featured. Technology/telecoms and financial services together represent over 25%."
“At LSEG, we are determined to help realize that potential. From the building of the great US railways in the 19th century, to global oil and gas exploration in the 20th century, to creating a worldwide low-carbon economy today, we have always been at the forefront of financing the great global economic shifts of the day. Sitting at the heart of global financial markets, LSEG has a connection with Africa stretching back to the 1930s,” said David Schwimmer, CEO of LSE during the launch of the report.
Some of the firms touted in "Companies to Inspire Africa" by LSE as the continent’s “most inspirational and dynamic private, high-growth companies” include:
• South Africa: Ad Dynamo International, Coega Dairy, Compuscan.
• Nigeria: Afriland Properties, Alpha Mead Group, ARM Life.
• Kenya: Acorn Group, BitPesa, Cellulant Kenya, Chandaria Industries, D.light.
• Ivory Coast: Azalai Hotel Abidjan, Cipharm SA, Clinique Procréa, Agriex Côte d’Ivoire.
• Angola: Aldeia Nova, Angola Energy Greentech, Kora Angola, WEZA.
• Egypt: Cairo Three A, Carbon Holdings, Eagle Chemical Group, Sambo Metals.
• Morocco: 10 Rajeb, Bricoma, Damandis Maroc, Ama Detergent, Medafrica Systems.
So why should African firms seek to register at the LSE?
“London is a resilient market with a track record of world-class standards of regulation, a unique balanced approached to governance and proven levels of sustained liquidity in a central time zone. Issuers can gain access to a high-quality advisory community and sell-side research coverage with deep Africa experience. LSEG is also a strong funding partner to companies globally, offering access to the deepest pool of international investor capital in the world,” said Adebayo.
Companies that have announced plans to list on the LSE include the National Oil Corp. of Kenya and Econet Wireless Zimbabwe Ltd.
Currently the LSE has strong relationships with African bourses, including Casablanca Stock Exchange, and the Nigerian Stock Exchange. These partnerships aim to support the development of financial market infrastructure in Africa, enabling companies to grow through raising finance.