Angola Delays Stock Markets Plans to 2016, Futures Follow

Angola pushed back plans for the start of stock-exchange trading by a year to 2016, with a futures and commodities market in Africa’s second-biggest oil producer set to begin a year later.

“There might be a window of opportunity to start earlier depending on how things go” in developing the bourse, Archer Mangueira, the chairman of the country’s Capital Markets Commission, said in a June 28 interview at the London Stock Exchange. Two months ago, Mangueria said it would begin operations in 2015. The MSCI Frontier Markets Index rallied 8 percent this year, with gauges in Ghana, Kenya and Nigeria among the world’s 10-best performers.

Angola expects its stock exchange to have a market value of 10 percent of gross domestic product within 18 months of its start up, he said in April. Angola’s largest banks, which include Banco Angolano de Investimentos SA and Banco de Poupanca e Credito SA, as well as mobile-phone companies Unitel SA and Movicel Telecomunicacoes Lda., are expected to list on the exchange, Mangueria said.

Angola, which is seeking to boost foreign investment after a 27-year civil war that ended in 2002, forecasts economic growth of 7.1 percent this year from 7.4 percent in 2012. Crude accounts for three-quarters of budget revenue, according to the International Monetary Fund. The formerly Marxist nation ranks 157th out of 176 countries on Transparency International’s 2012 Corruption Perceptions Index.

Financial Products

The “commission is already working on the definition of standardized contracts” for trading in futures and commodities products, Mangueria said.

Angola delayed the start of its secondary market for bonds to the first quarter of next year, he said.

“This is an estimation,” Mangueira said. “We might make some adjustments based on whether the legal instruments are fully developed and implemented, technological infrastructure is in place, and employees are trained.”

The publicly traded market for Angolan notes was scheduled to start by the end of September, Mangueira said last month. The market, which will use electronic trading, will add to Treasury bills already bought and sold among financial institutions and help develop a yield curve, he said at the time.

London Partnership

Angola sold $1 billion of dollar bonds to selected investors maturing in 2019 at a yield of 7 percent in August, according to data compiled by Bloomberg. After the bonds rallied in 2012, yields on the notes have risen 138 basis points, or 1.38 percentage points, this year to 6.46 percent, as of 4 p.m. in Luanda.

The country’s Capital Markets Commission visited London’s bourse to establish contacts and connections and to partner with them on training, Mangueira said.

“We have signed an agreement with the LSE so that our staff can receive training in the area of negotiation and post-negotiation systems,” he said. “LSE has high-value expertise that we could learn and use to develop a securities market academy in Angola, which is a priority.”

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