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RenCap Says It Increasing Market Share in Africa Equity

Russian billionaire Mikhail Prokhorov
Russian billionaire Mikhail Prokhorov whose Russian investment bank controls Renaissance Capital Africa. Photographer: Andrey Rudakov/Bloomberg

Jan. 23 (Bloomberg) -- Renaissance Capital Africa, a unit of the Russian investment bank controlled by billionaire Mikhail Prokhorov, said it’s winning market share in equities trading as it chases competitors such as Standard Bank Group Ltd.

“In 2011, our market share by volumes traded on the Nigerian Stock Exchange was 12 percent and Standard Bank’s was 17 percent but in 2012 we caught up,” Clifford Sacks, chief executive officer of RenCap Africa, said in an interview in Johannesburg on Jan. 21. In Kenya, RenCap went from third largest in equities in 2011 to second last year, he said.

RenCap, which doesn’t disclose detailed financial results, began operations in sub Saharan Africa in 2006. Sacks, who had been joint CEO in South Africa for Bank of America Corp.’s Merrill Lynch unit, joined RenCap as Africa CEO in January 2011. With a population of one billion people and faster growth rates than many developed nations, banks including BNP Paribas SA, Citigroup Inc. and Standard Chartered Plc are expanding in Africa to boost profit.

“RenCap has lifted the standard of research in Africa,” Thabo Ncalo, a portfolio manager at Stanlib Asset Management Ltd. in Johannesburg, who uses RenCap’s services in the continent, said today. “Their network across Africa helps them mop up everything.”

Executive Departures

In South Africa, RenCap increased the value of its trading services on the Johannesburg Stock Exchange by 14 percent last year, according to exchange data. Still, the bank lost three senior executives in the past month following Russian Onexim Group’s acquisition of all of Renaissance Capital, and last year the investment bank closed operations in China and India and faced more competition in South Africa and Russia.

Shareholders remain “very committed to the South African markets and sub Saharan Africa,” John Hyman, joint CEO of Moscow-based Renaissance Capital, said on Jan. 7.

In its core Russian market, the investment bank lost market share to state-backed competitors VTB Capital and OAO Sberbank and on equity trading to Otkritie Financial Corp. In addition to the closing of Asian operations, RenCap shut sales, trading and research operations in Kazakhstan and Ukraine amid companywide cost cutting.

“We had a good year in Africa in 2012 and from a revenue perspective we hit our targets, although the industry’s costs weren’t as well contained as we would have liked,” Sacks said.

To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net

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