January 2020 / South Africa

January 1 2020

Rwanda Stock Exchange Closes 2019 with $1.6 Bn Mark, Targets 20% Growth

It was a successful and memorable year for Rwanda Stock Exchange (RSE) – the country’s youngest market in the region. The Stock market, which just opened in 2011, has been growing steadily – despite being surrounded by a small economy with a GDP of less than $10 billion. At exactly 12 noon Kigali time on Tuesday, December 31, Faustin Byishimo – Division Head of Business Development at I&M Bank Rwanda which is among the 8 listed companies on Rwanda Stock Exchange, rung the bell as the market business for 2019 ended. Franked by Rwanda Stock Exchange CEO Celestin Rwabukumba and his entire staff, Byishimo immediately dropped the bell before speaking to journalists who attended the closing event. “As an investor, this was the best choice. To invest on this market means quick returns and safety,” he said. Shortly after, Rwabukumba took to the stage to outline the market’s performance for the past 8 years – which he termed a “great milestone”. As the RSE turns 8 years, it has raised $761 million through primary market and $306 million traded on the secondary market. “It is a very big milestone for a small market like this in a GDP of less than $10 billion. It’s already 10% of the GDP,” Rwabukumba said. Asked on what has triggered this milestone performance, Rwabukumba responded that: “Well, I think it the need for people who have invested before, people who want to save and companies that want to raise money and government which wants to raise money through the market and the need for the economy to raise long-term finance.” He added that all this “was possible due to our 20,000 active investors.” Of these, he added, 83.6% were local, 13.8% regional while International investors accounted for 2.6%. As the year clocks its end, Rwanda Stock Exchange boss told journalists at the closure of the business that within 8 years of its existence, the Rwanda bourse listed 8 companies, 36 debt instruments with a $3.3 million market capitalization. The Exchange also has 12 members including 10 trading members and 2 non-trading members. In the Stock Exchange world, a trading member is the one who settles the trade in the clearing corporation or clearing house through a clearing member, while a non-trading member a ‘Sub-Broker’ or a non-trading member is any person who is not a Trading Member of a Stock Exchange but who acts on behalf of a Trading Member as an agent or otherwise for assisting investors in dealing in securities through such Trading Members. Bank of Kigali the biggest investor During the review of Rwanda Stock Exchange performance in the past 8 years, Celestin Rwabukumba said that Bank of Kigali – the country’s biggest financial institution in terms of assets, outpaced other listed companies as the most performing investor. He, however, admitted that there is still a small margin of Small and Medium Enterprises joining the market. “It’s worldwide. I don’t it’s particularity for Rwanda. What happens for the SMEs or retail investors is that they always thing that the Stock Market is for big people. The Stock Market requires a few things that you must be careful about,” he said. “Most SMEs don’t have good governance. Good governance and accountability are the big issues for companies coming to the market. You need to have good corporate governance, good management system,” he added. 20% annual growth Meanwhile, despite a milestone achievement registered, Rwabukumba said that Rwanda Stock Exchange targets to increase the number of people joining the market every year. According to Rwabukumba, “Going forward, we want to be the main place for raising money for long-term finance in this country. So that is our objective and we would like to see every household owning an investment product in Rwanda,” “In the next one year, we want to atleast increase 20% every year of people who are joining the market and because of technology, this can even be 100%,” he said.
Read More »
January 15 2020

Ethiopia to build new $5bn airport in 2020

Addis Ababa — Ethiopian Airlines will start constructing a new $5bn airport later in 2020, its CEO was quoted as saying on Wednesday, as the rapidly expanding carrier outgrows capacity at its base in Addis Ababa. The airport, which will cover an area of 35km², will be built in Bishoftu, a town 39km southeast of the capital, and have the capacity to handle 100-million passengers a year, the state-run Ethiopian News Agency quoted Tewolde Gebremariam as saying. “Bole Airport is not going to accommodate us; we have a beautiful expansion project. The airport looks very beautiful and very large but with the way that we are growing, in about three or four years we are going to be full,” Tewolde said. Bole International Airport in Addis Ababa has a capacity of about 19-million passengers annually.
Tewolde noted that the price tag of the new airport was higher than the $4bn cost of building the still-to-be-completed Grand Ethiopian Renaissance Dam on the Nile, with the projected passenger numbers topping those at Dubai’s international airport. He did not give details of how the construction would be funded, nor who would build the new airport. The Ethiopian Broadcasting Corporation quoted Tewolde as saying construction will start in the next six months. State-owned Ethiopian Airlines, which competes with large Middle East carriers to connect long-haul passengers, has built a patchwork of African routes from its hub in Addis Ababa to fly customers towards expanding Asian markets. It has 116 aircraft in its fleet and its net profit rose to $260m in its 2018/2019 financial year from $207.2m a year earlier.
Read More »
January 21 2020

ANC empowers municipalities to buy their own electricity

South Africa's governing political party, the African National Congress (ANC), has approved plans to allow municipalities to buy their own electricity as well as the expansion of the current Independent Power Producer (IPP) programme. According to the Business Day, this was tabled in a report, from the commission on state-owned enterprises (SOEs) and the economic growth strategy at the party’s two-day lekgotla, which ended on Monday.   Additionally, the report endorses plans to ease the regulation of businesses to generate their own power. This development comes as the national power utility, Eskom, is struggling to avoid loadshedding. Business Insider reported that Eskom spends as much as R27 to buy one kilowatt-hour (kWh) of electricity from private diesel turbines to keep lights on, while the average selling price is roughly R1 per kWh.
Read More »
January 21 2020

Liquid Telecom to launch South Africa’s first wholesale 5G network this year

The pan-African telecoms company has indicated its wholesale 5G network will be arriving in major South African cities early this year

Liquid Telecom is taking full advantage of being one of the only companies in South Africa to have access to the 3.5 GHz spectrum, launching their 5G network before many competitors can get their hands on a licence.
The South African regulator, the Independent Communications Authority of South Africa (ICASA), has yet to announce a spectrum auction for 5G, creating an interesting dynamic for telcos in Africa’s southernmost nation.
Liquid Telecom has 56 MHz worth of spectrum in the 3.5 GHz band, which it is using for its 5G network rollout.
The only other players currently with a licence for this spectrum are state-owned Telkom, which has so far revealed nothing of its 5G ambitions, and rain South Africa, who launched a 5G network in Johannesburg and Tshwane but is only offering wireless access services so far.
As for other competitors, like MTN and Vodacom, they will have to wait for the allocation of the remaining 116 MHz of spectrum – presumably some time next year – giving Liquid Telecom a substantial advantage in the nation’s mobile 5G race.
“Our wholesale operating partners can exploit our new ultra-fast 5G roaming network to build the next generation of communications and make innovation possible, anytime, anywhere,” said Liquid Telecom CEO Nic Rudnick. “5G will facilitate real-time remote collaboration, improved business efficiency and lower costs – ultimately driving growth in the South African economy.”
Liquid Telecom’s 5G network means the company is poised to take advantage of a host of 5G-ready handsets which will hit the South African market next year, while its key competitors remain stalled by the regulator.

The pan-African telecoms company has indicated its wholesale 5G network will be arriving in major South African cities early this year

Liquid Telecom is taking full advantage of being one of the only companies in South Africa to have access to the 3.5 GHz spectrum, launching their 5G network before many competitors can get their hands on a licence.
The South African regulator, the Independent Communications Authority of South Africa (ICASA), has yet to announce a spectrum auction for 5G, creating an interesting dynamic for telcos in Africa’s southernmost nation.
Liquid Telecom has 56 MHz worth of spectrum in the 3.5 GHz band, which it is using for its 5G network rollout.
The only other players currently with a licence for this spectrum are state-owned Telkom, which has so far revealed nothing of its 5G ambitions, and rain South Africa, who launched a 5G network in Johannesburg and Tshwane but is only offering wireless access services so far.
As for other competitors, like MTN and Vodacom, they will have to wait for the allocation of the remaining 116 MHz of spectrum – presumably some time next year – giving Liquid Telecom a substantial advantage in the nation’s mobile 5G race.
“Our wholesale operating partners can exploit our new ultra-fast 5G roaming network to build the next generation of communications and make innovation possible, anytime, anywhere,” said Liquid Telecom CEO Nic Rudnick. “5G will facilitate real-time remote collaboration, improved business efficiency and lower costs – ultimately driving growth in the South African economy.”
Liquid Telecom’s 5G network means the company is poised to take advantage of a host of 5G-ready handsets which will hit the South African market next year, while its key competitors remain stalled by the regulator.
Read More »
January 24 2020

AfDB targets larger share of $5trn ETFAs for Africa’s capital markets

President of African Development Bank (AFDB) Dr. Akinwumi Adesina has unveiled collaborative plans with the London Stock Exchange Group’s Africa Advisory Group (LAAG) with a view to attracting a bigger share of the $5 trillion global Exchange Traded Fund Assets (ETFAs) under management into African capital markets.
The development finance banker, who stated this while ringing the bell on Wednesday to open the London Stock Exchange (LSE) for trading, lauded the prospects of continued collaboration with the LSEG.
He said: “My ringing of the bell here today marks the beginning of a new exciting, strategic, and impactful engagement between the African Development Bank and London Stock Exchange to jointly expand wealth creation in Africa and the UK.”
Adesina disclosed that the synthetic synchronization of £1 billion issued by the bank had attracted global institutional investors to look at infrastructure in Africa, noting further that the AfDB’s team is “excited about the recent listing of Kenya’s Acorn Holdings, the country’s first green bond in January 2020.”
On the Africa Investment Forum held by the development finance institution late last year in South Africa, the banking chief noted that the forum played a valuable role as an innovative market-place for attracting investments into the continent as it facilitated the convergence of investors and corporates, removing the bottlenecks to investments and enabling a free flow of long-term capital.
Specifically, the AfDB president disclosed that the 2019 edition of the forum, held in Johannesburg, South Africa, saw investor interest secured in deals valued at $40.1 billion. Mozambique featured strongly in the 2019 edition, with state oil and fuel company Empresa Nacional de Hidrocarbonetos (ENH), tabling the largest deal worth $24.6 billion.
In his remarks at the bell ringing event, chairman of London Stock Exchange Group Don Robert welcomed the president of the AfDB, pointing out that “deep and sustainable capital markets are key to supporting African companies and infrastructure.”
Commenting on the importance of the AfDB team’s visit to London Stock Exchange, Chinelo Anohu of the Africa Investment Forum, said it was part of the bank’s efforts to expand and deepen its relationship with foreign investors.
The bank had on Tuesday become a formal member of LAAG, an advocacy group which serves as a platform to enhance the development of African capital markets, boost trade and investment flows between the UK and Africa.
Currently, 112 African companies are listed on the London Stock Exchange, with a market capitalization of £125 billion.
Read More »