Angola Bourse Will Rank 3rd in Sub-Saharan Africa Market Value, Imara Says
A proposed stock market in Angola, which vies with Nigeria to be Africa’s top oil producer, will rank “at least third” in sub-Saharan African market capitalization, Imara Asset Management said.
Angola’s stock exchange will trade shares in companies worth a total of $40.7 billion, a similar size to Nigeria’s stock market, Anthony Lopes Pinto, an analyst for Botswana-based Imara, said yesterday in an interview from Angola’s capital, Luanda.
“Based on the country’s GDP, we estimate that Angola has the potential to support a stock market ranking of at least third in sub-Saharan Africa,” Pinto said.
Angola postponed opening an exchange in 2009 because of the global financial crisis and is expected to start one in 2011. The southern Africa country is rebuilding after a 27-year civil war that ended in 2002 and is beginning to open up its economy. The country received its first credit rating in May to pave the way for the sale of an international bond.
Pinto said Nigeria’s market capitalization of about $39.6 billion is about half of its peak because of a banking crisis and is expected to rebound past Angola’s anticipated debut. South Africa’s top 165 stocks have a market capitalization of more than $600 billion.
Up to 50 companies, including about 20 banks, may list on the Angola exchange, he said.
Political Decision
Pinto said a building in Luanda has been renovated to house the planned stock exchange and employees are being trained.
“They’ve got everything in place and it’s a political decision from the highest office that will approve it, you know, and we’re waiting for that to happen,” he said.
Imara is one of 12 companies that have applied to Angola’s Capital Markets Commission for brokerage licenses.
Pinto said the delay had been due to concerns about pressure on the kwanza, lower oil prices and volatility in international financial markets. Markets are now more stable, the price of crude has increased to around $75 a barrel from around $50 in February 2009 and the kwanza has settled at around 93 to the dollar, he said.
The government devalued the currency in October 2009 to 85 to the dollar from 78 and it then weakened gradually until May this year.
Pinto said the proposed bourse’s largest local company will be Unitel, Angola’s leading mobile phone provider that is 25 percent owned by Portugal Telecom SGPS SA and valued at $2.9 billion.
Banco de Fomento, Angola’s biggest non-state bank, may have the largest market capitalization of the listed banks at about $2 billion, he said.
To contact the reporter on this story: Colin McClelland in Toronto cmcclelland1@bloomberg.net.
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