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Finance: London aims to stay the course in Africa

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Monday, 08 October 2018

Finance: London aims to stay the course in Africa

As African financial centres like Johannesburg and Casablanca grow and Brexit negotiations take over Britain’s agenda, will the City of London remain Africa’s financial capital? Africa is the final frontier for investors in search of yield. Cross-continental railway plans, state-of-the-art airports, eurobonds and power-generation projects across Africa all offer hefty potential returns for investors willing to take risks. And nowhere is better placed to take advantage of Africa’s opportunities than London, says Ibukun Adebayo, co-head of emerging markets strategy at the London Stock Exchange (LSE). “London is firmly the financial capital for Africa,” Adebayo says. The City (London’s financial centre) is the gateway for international investors that hope to access African investment opportunities securely. Proof of this most recently came in the shape of Vivo Energy’s initial public offering (IPO). In May, the downstream petroleum company – the only distributor of Shell products in Africa – floated just under 30% of its shares on the LSE. Appetite was high, and Vivo raised £548m ($742m). The offering was the largest UK-listed African IPO since 2005, when Telecom Egypt went to London to float 50% of its shareholdings. Next on the list, speculators say, is a dual listing by Nigerian heavyweight Dangote Cement and an IPO from South Africa-based telecom group Econet. In 2017, there were 61 African IPOs and follow-on equity deals on the LSE, with many choosing to list on the Alternative Investment Market (AIM), which allows smaller companies to float shares in a much more flexible regulatory system. There are now 110 African companies and 34 bonds listed on the LSE. Since the beginning of the year, Nigeria, Kenya and Egypt have issued a combined $8.5bn in debt on the LSE. “It’s been 80 years since Africa’s first listing on the LSE, and our connection is stronger than ever,” says Adebayo.

Source: theafricareport