Before I go any further you need to know that the new ZSE website goes one step further than traditional stock exchange websites in the sub-saharan region. It provides an insight (if you read between the lines) into what the future of the Zimbabwe Stock Exchange online communications strategy is :  that’s to allow full electronic communication  to be adopted by listed companies (but in a responsible manner).

Why and how? 

The advantages are clearly to lower the costs of communications for listed companies, to improve communications and to be environmentally responsive. It costs up to US$8,000 to publish a two page earnings release in the local press and that’s not the end of it. Costs of hard copy anything here are high in comparison with our regional peers.

Coming from a clean slate after the ZSE website was hacked some time back, there is a high degree of awareness from the Zimbabwe Stock Exchange that any transition to electronic communications has to be done responsibly. In a way that respects investors’ rights. Those three words “broad”, “immediate” and “non-exclusionary” are mentioned (words that underpin the SEC in the USA’s approach to permitting electronic communication) in the ZSE’s Social Media and Disclosure Policy. This is good news for corporate governance in Africa as I believe that the ZSE is set to be a leader in advancing the online investor relations profession from a position of influence.broker exchange

It could be worse. I have commented at length on the Kenyan situation where, according to legislation, electronic communication with shareholders ” by way of publication on a website” “deems” delivery of shareholder proxy voting materials to have taken place. It’s a bit like saying to a voter in a general election you can vote, but we are not going to tell you when, or give you the forms to do so.

But lets look further to see if Zimbabwe is ready to go the electronic shareholder communications route (the good route, not the bad route). In the USA in 2005 the default platform was hard copy (annual reports in PDF etc) with shareholders initially being able to “opt-in” to receive electronic shareholder proxy voting materials. This process went well and in 2008 the legislation was changed to make the electronic medium  default with shareholders “opting in” to receive hard copy annual reports. The issue of internet penetration was not lost on the SEC in the USA. Whether the 80%+ penetration rate was high enough to justify adopting electronic communication was hotly debated. In Zimbabwe, according to Techzim, a technology website, Zimbabwe’s internet penetration is 4.5m people and our mobile penetration rate is 100%. I estimate that there are around 200,000 individual investors on the Zimbabwe Stock Exchange and so it appears to be a no-brainer that the electronic communications platform is one to consider. The issue is doing in properly, like the 2005 – 2008 USA experience. It would be good if we could achieve that in the same time frame.

Join my Linkedin Group “Zimbabwe Stock Exchange Investor Relations” to follow our Zimbabwean investor relations story

View the new ZSE Data Portal

Sign up for email alerts from the Zimbabwe Stock Exchange

Like the new ZSE Data Portal on Facebook

Follow the ZSE on Twitter


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I am pleased to announce that the new Zimbabwe Stock Exchange Data Portal and website is now live.

My involvement in online investor relations in Zimbabwe over the past 5 years has been rewarding and the launch of the ZSE Data Portal the pinnacle of this journey. I look forward to taking our integrated communications services to more listed companies and want to urge investors to consider Zimbabwean listed companies as an investment opportunity. In the ZSE Data Portal stakeholders in Zimbabwe now have a comprehensive tool to make more informed investment decisions.

zse landing page on launch

www.africanfinancials.com has also joined hands with the ZSE to ensure that 100% of all annual reports released by Zimbabwean companies are not only viewable online, but also downloadable online for any investor, for free. This is a first for an African stock exchange and www.africanfinancials.com looks forward to similar relationships with other African stock exchanges lets sort out the basics.

Join my Linkedin Group “Zimbabwe Stock Exchange Investor Relations” to follow our Zimbabwean investor relations story

View the new ZSE Data Portal

Sign up for email alerts from the Zimbabwe Stock Exchange

Like the new ZSE Data Portal on Facebook

Follow the ZSE on Twitter


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In our African Online Investor Relations Survey conducted recently we asked 108 investors in African markets what their views were on information availability on companies listed in African capital markets. Participants were from 21 countries with South African and Kenyan respondents accounting for a combined 43% of responses. I am releasing summaries of the data and opinions received  over the next month or so, and will highlight key findings taken from some of the continent’s leading investors, business men and women regarding their experiences with digital investment information content and dissemination.

My  survey elicited opinions on 10 questions, ranging from the general standards of corporate governance in listed companies in Africa compared to their peers in more developed markets, as well as African listed companies’ efforts to use the Internet to promote investment in their shares, to whether African listed companies are putting enough information online for potential investors and whether social media can be used effectively to promote investment in African markets by linking companies directly with investors and stakeholders.

Question 01 – What is your view on the general standards of Corporate Governance in listed companies in Africa, versus their peers in more developed markets, for example the London Stock Exchange (LSE) and the New York Stock Exchange?

Over 75 percent of respondents believed that the general standards of corporate governance were inadequate, with 20 percent stating that standards in Africa are generally the same as their international peers.  Less than 5 percent believe corporate governance standards are generally higher than their international counterparts.

survey results q 1

Some believed that compromised standards of corporate governance in Africa are due in part to regulation still being in its infancy and a ‘new thing’ for Africa.  Others put it down to a difference in culture, whereby issues important to international peers may not be the same for African countries.  One contributor pointed out that while it was easier to think of standards as being low in Africa, one had to look at the more pronounced cases of investor losses due to poor risk management and malpractices in the west to form a different view.

Failure in business

One respondent, who had worked overseas in finance and banking believed South Africa was way more advanced in terms of financial control measures, and another commentator praised South Africa for its transparent corporate governance.

There was still the belief held of some companies that shareholders should be kept in the dark and not expected to be involved in the day- to -day operations.  Directors can arguably take advantage, therefore, of the almost non-existent shareholder activism, which adversely affects the minority shareholder.

According to some respondents, there was still a general reluctance to engage stakeholders by listed companies, which stems from the ‘old way of doing things’ and it was mentioned that the spirit of corporate governance and the spirit of democracy go hand in hand.  The more democratic a country is, the more likely its listed companies will have better corporate governance.

There was general consensus that most companies who have written corporate governance do not strictly adhere to it.  It was suggested that some companies do not ‘understand’ investor relations, with the exception of Kenya, where it is taken seriously as one of the pillars of Regulation for the Capital Markets. I personally disagree with this but it is recorded here to correctly reflect the diverse range of views received.

Fingers were pointed at a lax regulatory environment and weak commercial laws in Africa, resulting in shareholders not being actively involved in the overall insight and operations of the companies. This is a recurrent theme in my blogs where I contend that it’s the regulators that should spur the a giant leap to the 21st century information dissemination practices.quote

There was criticism of the standard of reporting and disclosure in Africa compared to international peers, which was seen as slow and inconsistent.  Some respondents commented that most companies with websites do not keep them updated and their news is eclipsed by the media.  The practice of executives disclosing non-public information to analysts and portfolio managers over dinner and in private meetings still exists which contradicts the fundamental tenet of treating shareholders equally.  In addition, it was mentioned that the lengthy tenure of CEOs, sometimes as much as twenty years, does not comply with corporate governance guidelines and family businesses that have gone public often struggle with the transition. Africa’s highly illiquid markets foment these latter-mentioned issues.

In conclusion there is, I believe a fundamental disconnect between oft-quoted and adopted standards of corporate governance and good shareholder communications practices in African markets. Codes are too general and need to be beefed up to tell listed companies what they should be doing when and how.

My involvement in www.africanfinancials.com, Africa’s largest portal of African listed companies’ annual reports is testimony to my belief that promoting investment into African markets has to start with action and not rhetoric. Africa’s regulators should follow suit. Africanfinancials.com is Africa’s largest portal of free online annual reports. If you would like to contribute annual reports to this initiative give me a call on +263 4 703182. 

Sign up to receive releases of African annual reports from www.africanfinancials.com

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I am, in principle, against the sale of basic investment information in African markets. There are caveats however to this, and that’s when the information adds value. This is the case for the CASE Handbook, a well-known regional publication on 4 regional sub-Saharan markets that has hitherto not appeared online.

The Central African Stock Exchange (CASE) 2012 HANDBOOK, is now available for download through their new simple but functional website and includes Botswana in addition to Malawi, Zambia and Zimbabwe. A total 130 companies are profiled, up from 110 last year (2011).

In our illiquid sub-Saharan equity markets, meaningful market statistics and economic insight is sometimes hard to find, but the CASE handbook addresses this dearth of information in a unique way to provide a well-rounded snapshot of the 4 markets it covers.

Aurelius, the Romanesque commentator in the 2012 Handbook, provides his analytical insight to many of economic and financial markets, including:-

  • “Think out the box” economic indicators – the fuel consumption of each country in litres (you try and find that anywhere else), the Hard Boiled Egg Index (aka Burger Mac Index internationally), the number of entries into the Kariba International Tiger Fishing Competition etc. Off-the-wall ways of measuring economic (and social) activity should you view official economic statistics with disdain.
  • Full broker and registrar contact details: the 544-page handbook lists stockbrokers and custodial services in the four markets and, of course, is intended to inform rather than advise potential investors of company prospects in the year ahead.
  • Aggregated historical financial data on the listed companies with little-published liquidity statistics on their share trading.

The publication is well supported by sponsors which is testimony to the quality of its content and distribution.

The pdf version costs $60 through Paypal.

Sign up to receive news of the launch of the 2013 edition here

Marcus Aurelius (LatinMarcus Aurelius Antoninus Augustus; April 26, 121 CE. – March 17, 180 CE.), was Roman Emperor from CE 161 to 180. He ruled with Lucius Verus as co-emperor from 161 until Verus’ death in 169. He was the last of the “Five Good Emperors“, and is also considered one of the most important Stoic philosophers. During his reign, the Empire defeated a revitalized Parthian Empire; Aurelius’ general Avidius Cassius sacked the capital Ctesiphon in 164. Aurelius fought the MarcomanniQuadi, and Sarmatians with success during the Marcomannic Wars, but the threat of the Germanic tribes began to represent a troubling reality for the Empire. A revolt in the East led by Avidius Cassius failed to gain momentum and was suppressed immediately.

Marcus Aurelius’ Stoic tome Meditations, written in Greek while on campaign between 170 and 180, is still revered as a literary monument to a philosophy of service and duty, describing how to find and preserve equanimity in the midst of conflict by following nature as a source of guidance and inspiration. Wikipedia


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Africa’s time zones straddles those of the USA (6-8 hours behind us) and eastern markets (6-8 hours ahead). There is not much difference between the UK and African time zones – give or take a few hours. So lets take the example of a corporate action of a central African listed company, any company, being posted at 8am in the morning in a central African market. That’s 6am – 7am in the UK and +/- 12 noon in eastern markets. Remember that most African markets trade only once or twice a day and within restricted hours. Also remember that investors need time to digest what the release of market data needs – either by financial analyses or consultation with brokers

Who gets to see this information (posted at 8am) and do they have time to act on it if need be? Forget that markets are illiquid or that the announcement may not matter – I am providing an illustration of how to try to treat investors equally, so bear with me on this. One fundamental rule is that information that may affect the decision of an investor should not be released during stock exchange trading hours. Only after. Sounds fair and practicable.

So following on from the 8am release of the announcement… at 8am our time the investor in the USA is still asleep, fast asleep. The investor in the UK is drinking his tea or is in the bus. The investor in the Eastern hemisphere is having his siesta.

Here are some observations on releasing data at 8am:-

  • The corporate action that is posted at 8am in the morning does not give time to local investors to digest its meaning or consult with brokers. Trading is at 10am or thereabouts.
  • The USA investor is precluded from getting to hear of the information completely. He’s asleep when it arrives (midnight) and trading has closed when he wakes up and has his tea (6am his time – 2pm our time). So that’s a day wasted.
  • The UK investor gets the information as trading starts mid-morning in the as-yet-to-be-identified-central African stock market.
Clearly the scenario above is not optimal. So lets do this. Let’s publish the corporate action at 5pm Central African time the day before it is to appear in the traditional press (hardcopy) through accepted channels of disclosure. The results are as follows:-
  • The notice is outside (after) of trading hours in the Central African time
  • The US investor gets to hear of the event with enough time to consider the news, submit orders and take action
  • The UK investor doesn’t get the same level of comfort BUT he is afforded the opportunity to take action over the next 14 hours if need be – he gets to see the news as his day ends
  • The eastern-based investors will be asleep when the news is released as its close to midnight BUT as soon as he wakes up for his tea in the morning (midnight Central Africa time) he still has the opportunity to digest and take action if need be.
  • The investors in the Central African market or time zones get ample time to digest the information overnight and the next day.
I think this is what management consultants call a win-win situation?  The principles I discuss here are just as relevant to any website posting as to regulatory news postings. Linking these information releases with Twitter and Facebook etc. provides ample time for anyone around the world to take action.
This may seem theoretical to many of you and of no use, but if African markets are to be taken seriously on the global investment stage, the dissemination of information has to become or evolve into a professional practice that crosses the t’s and dots the i’s. This is just one example of how it should be done, in case you were wondering…..

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I came across this article from the SEC in the USA and fail to find any parallels in Africa. Can you assist? This sort of study would be right up ASEA’s street and mandate, especially given the burgeoning access to social media and investment information that Africa’s retail investors have the opportunity to enjoy.

How come its so important for one of the most advanced securities markets in the world to carry out this sort of research, but its not on the agenda for African markets? Drop me a line if you know why.

SEC Seeks Public Comment for Financial Literacy Study Mandated by Dodd-Frank Act

The Securities and Exchange Commission today published on its website a request for public comment on financial literacy and investor disclosure issues that it is studying as part of a review mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Section 917 of the Dodd-Frank Act directs the SEC to conduct a study of retail investors’ financial literacy and submit its findings to Congress by July 21, 2012.  The SEC is using qualitative and quantitative research, including investor testing, to help inform the study. To supplement its research, the SEC also is seeking public comment on financial literacy and investor disclosure issues.

Consistent with the Dodd-Frank Act’s specifications for the study, the SEC is seeking comment on methods to improve the timing, content, and format of disclosures to investors regarding financial intermediaries, investment products, and investment services.  It also requests comment on information that retail investors need to make informed financial decisions on hiring a financial intermediary or purchasing an investment product or service typically sold to retail investors, including mutual funds.  In addition, the SEC seeks comment on how to make investment expenses and conflicts of interest in investment transactions more transparent to investors.

“Many of the issues that the Dodd-Frank Act identified for Commission study directly affect individual investors.  As a result, we are especially interested in receiving comments from individual retail investors,” said Lori J. Schock, Director of the SEC’s Office of Investor Education and Advocacy.

The public comment period will remain open for 60 days, following publication of the request in the Federal Register. (Press Rel. 2012-12)

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I have done a quick review of African stock exchanges’ use of social media to connect with the broader investment public. I considered whether the stock exchange website had a feedback centre, email alerts, categorised email alerts, RSS, a watchlist function, client login, categorised RSS feeds, Facebook, Twitter and YouTube. 10 categories in all.

My review was cursory as I wanted to get a general feel for whether certain aspects of social media were being adopted by Africa’s stock exchanges. The spider diagram above summarises the % incidence of basic interactivity & social media indicators on stock exchange websites. The long and the short of this quick review is that social media is not seriously on any agenda of African stock exchanges. This, when Africa’s new Facebook statistics show a total of 37.7m users as at 31 December 2011. This, when the African Stock Exchanges Association is theoretically lacking strategic direction and when it’s raison d’etre is being eroded by regional stock exchange associations. There is ample scope for these organisations to seriously consider the extent of the opportunity offered by social media and other online platforms, especially in coal-face investor education initiatives.

Here are the various country scores representing how many of the 10 main indicators above appeared on African stock exchange websites – 100% is all of them appeared, 10% is only one appeared:-

Interestingly the Stock Exchange of Mauritius does not score highly but the exchange does have a very comprehensive website – just little interactivity. Zimbabwe’s website is currently being re-developed and it will be interesting to see where this emerging exchange fits into the overall ratings above.

Traditional capital markets regulators will argue that it is not the role of regulators to engage directly with investors. This may have been applicable in the past and certainly the prospect of African stock exchanges doing so now is scary given the absence of resources in this area. The fact is the conversation about these sorts of things needs to start happening now and a framework set out for the future.

There is no better platform than one to one communication to educate investors and an educated investor is a protected investor – and a protected investor is what African stock exchanges should be developing by the thousands, every day. But its not happening. OK the sky is not going to fall because of it, but there may be long term downsides to not engaging retail investors in African markets even if its just to provide them with corporate actions, annual reports and price sheets everyday.

My message is that these media are sitting ducks for someone to do something progressive for a change rather than lag behind the rest of the world.

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There are a few grey haired individuals in the Imara Group that have been trudging around African markets for many many years. So many years in fact that they have been responsible for the establishment of many of them. It’s no wonder then that Imara excels on a number of fronts not least of which is their asset management.

Imara’s asset management side, headed by John Legat, excelled recently at the inaugural asset managers awards. To celebrate their success, which is long overdue I replicate their press release below:-

Imara, the pan-Africa financial services group, has taken two of the top investment accolades in the first annual Africa Fund Manager Performance Awards.

Its Imara African Opportunities Fund won recognition as the year’s best Africa equity fund with a fund size of more than USD50 million while the Imara African Resources Fund claimed honours as the top Africa Equity Fund with a fund value of less than USD50 million. The Imara Zimbabwe Fund was also nominated for the same award.

The awards were presented at a gala dinner on October 11 in Cape Town.

Imara Group CEO Mark Tunmer commented: “It is an honour to feature so prominently in this inaugural awards programme for Africa fund managers.

“We’re delighted a well-established favourite like our African Opportunities Fund, with positions across numerous sub-Saharan jurisdictions, and a more focused specialist Resources Fund, a relative newcomer to our range, have done so well. We were also delighted that our popular Zimbabwe Fund made the short list for an award.

“Awards recognition has a wider significance for our continent and industry. By spotlighting superior investment returns out of Africa, awards such as this contribute to the global re-rating of sub-Saharan Africa as an investment destination.

“Strong performance by managers and markets will accelerate capital market development and help drive sustained progress by our continent.”

Harare-based John Legat, head of Imara’s asset management division, is manager of the Imara African Opportunities Fund while Bruce Williamson manages the Imara Africa Resources Fund.

John Legat noted: “We view awards recognition such as this as an endorsement of the Imara approach to equity investment in sub-Saharan markets. We have extensive on-the-ground representation across Africa and conduct in-depth research and face-to-face interviews to ensure portfolio construction is backed by thorough understanding of challenges and opportunities in all jurisdictions.”

  • Imara is an independent, Botswana-listed investment banking group that prides itself on objective decision making in the service of its clients. The company is mid-sized and has offices in Angola, Botswana, South Africa and the UK and associate offices in Malawi, Mauritius, Zambia and Zimbabwe. Imara has also partnered with Chapel Hill Denham in Nigeria, NIC Capital in Kenya, Namibia Equity Brokers and Mac Capital in Dubai.The Group is an active participant in Africa’s financial markets and maintains an extensive research coverage of regional equities. Funds under management exceed US$450m and assets under administration exceed US$1.77 billion.Imara provides a range of specialised financial products and services that can be broadly categorised as:
    • Asset management (institutional and private client)
    • Corporate finance and advisory services
    • Securities
    • Trust and administration services

    Imara Group subsidiaries are regulated by: NBFIRA in Botswana, the FSA (UK), the FSB, JSE, SAFEX (South Africa), SEC, ZSE and Reserve Bank of Zimbabwe, the FSC (Mauritius) and the Reserve Bank of Malawi.


Tel: 011 444-0650
Mobile: 083 447 6648

Email: carol@cleardistinction.co.za

Mark Tunmer
Tel: 083 788 9037

Africa Equity Fund of the Year over $50m – Imara African Opportunities Fund Limited – “The Imara fund’s strong 12 month return of 25.87% with average volatility versus its peers made it the clear winner in this category, with the next best fund returning 12.23%”

Africa Equity Fund of the Year under $50m – Imara African Resources Fund – “Imara’s African Resources Fund achieved a 41.94% return to make it the stand-out pan-African strategy in this category”

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The US’s regulatory regime for listed companies is very transparent and easy to understand and I regularly point to it in highlighting the extent to which our African capital market regulators have under achieved. Edgar has not been to Africa. Edgar would like Africa as he would be kept busy by investors assessing investment opportunities and risk in Africa.

Many of my articles attributed to the SEC refer to the Form 8 – K whose content for every listed company is available on Edgar. I have provided a brief overview of that the Form 8 K is used for below thanks to the SEC’s recent news digest, which by the way, are published from 1956 onwards. Who said that historical information was irrelevant?

Form 8-K is used by companies to file current reports on the following events:

  • 1.01 – Entry into a Material Definitive Agreement.
  • 1.02 – Termination of a Material Definitive Agreement.
  • 1.03 – Bankruptcy or Receivership.
  • 2.01 – Completion of Acquisition or Disposition of Assets.
  • 2.02 – Results of Operations and Financial Condition.
  • 2.03 – Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
  • 2.04 – Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
  • 2.05 – Cost Associated with Exit or Disposal Activities.
  • 2.06 – Material Impairments.
  • 3.01 – Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
  • 3.02 – Unregistered Sales of Equity Securities.
  • 3.03 – Material Modifications to Rights of Security Holders.
  • 4.01 – Changes in Registrant’s Certifying Accountant.
  • 4.02 – Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
  • 5.01 – Changes in Control of Registrant.
  • 5.02 – Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officer.
  • 5.03 – Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
  • 5.04 – Temporary Suspension of Trading Under Registrant’s Employee Benefit Plans.
  • 5.05 – Amendments to the Registrant’s Code of Ethics, or Waiver of a Provision of the Code of Ethics.
  • 5.06 – Change in Shell Company Status.
  • 6.01 – ABS Informational and Computational Material.
  • 6.02 – Change of Servicer or Trustee.
  • 6.03 – Change in Credit Enhancement or Other External Support.
  • 6.04 – Failure to Make a Required Distribution.
  • 6.05 – Securities Act Updating Disclosure.
  • 7.01 – Regulation FD Disclosure.
  • 8.01 – Other Events.
  • 9.01 – Financial Statements and Exhibits.

8-K reports may be viewed in person in the Commission’s Public Reference Branch at 100 F Street, N.E., Washington, D.C. To obtain paper copies, please refer to information on the Commission’s Website at http://www.sec.gov/answers/publicdocs.htm. In most cases, you can view and download this information by using the search function located at http://www.sec.gov/edgar/searchedgar/companysearch.html.

The thing that stands out about this is the ready accessibility of any or all regulatory filings to the investment public through the regulator in the USA – a key investor protection tool. An informed investor is an educated investor as the Americans say.

Not in Africa.

Just try looking for Egyptian annual reports online. Isn’t it amazing that the Egyptians could record and celebrate their existence for thousands and thousands of years accurately and for free, but in the modern day environment you can’t locate up to date Egyptian annual reports online for free.

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The Nairobi Stock Exchange sells a broad array of data and generates close to US$100,000 a year from this activity which accounts for approximately 2.5% of total revenues. There are 7 authorised data vendors whose deposits held at the NSE total about US$8,500. These data vendors re-package the NSE data into products and services that theoretically “add-value” to the users thereof. Data vendors in most cases re-charge for this data or package it in a way that they are able to generate revenues therefrom eg portal sites, that generate advertising revenues by virtue of their website traffic.


For the larger media firms such as Thompson Reuters and Bloomberg the value add to investors is significant as the data is bundled into global databases and other products.

There is a bigger question here for the NSE and that’s whether the foregone benefits of wider information dissemination exceed US$100,000 of revenue every year? “A bird in the hand is worth two in the bush”? At the moment it would seem that its easier to justify the 100-grand-in-the-hand. Is the NSE rent seeking from data that it should not be?

The products below show what you can buy – you can buy this information from the NSE using your cell phone! Which IS progressive, but is it really necessary? As a shareholder or an active investor, is it acceptable for me to pay for basic investment data? How many people does NSE have to sell to, to add to the “bottom line” and is the “bottom line” becoming more and more important for the NSE now that it is de-mutualising? Are the long term interests of Kenya’s capital markets being prejudiced by virtue of the fact that the  NSE is a monopoly on investment data and is selling it?

An alternative view is that this investment data should only be consumed by those that understand it and can afford it and through registered investment professionals i.e brokers. Yes, there are the ignoramus investors out there being misguided all the time as a result of their ignorance, but that’s the nature of the industry (look at World markets and they are supposed to be filled with educated people). From a regulators perspective, one could argue that  no-one really understands the markets so who cares? My retort to this response is consider the power of 4 million ignoramuses (those with access to internet in Kenya and with shares but no knowledge) being misguided by their ignorance and able to express this ignorance on a global platform 24/7. Phew!! An example? IPOs whose share prices rocket to stratospheric levels and then collapse: no shortage of evidence of this in Kenya.

Is this sort of ignoramus behaviour acceptable to the regulators whose core obligation is to protect investors?  “An informed investor is a protected investor” I believe.

Whether African regulators like it or not, the growth of social media is changing the landscape for everyone. Social media is full of ignoramuses. In the absence of wide and engaging education efforts by the regulators (now) there is significant scope for the ignoramus market to completely dominate (over-positively or over-negatively) the general public’s perception. In that situation the regulator can’t do anything its too late. So they have to be pre-emptive. One could argue that the listed companies should bear some responsibility for educating investors and enabling them to make informed investment decisions – but that’s a different conversation.

My view is this:-

- the NSE should review the products below and make free the ones that are not well subscribed. Charge the top data vendors for the value add data / systems / feeds. Don’t charge for anything else (the basic products) but make it freely available to anyone who wants to sign up.

- engage the market as widely as possible with an online shareholder education course (linked to social media) – charge US$20 for it (enable payment by M-Pesa) and if you get 3,000 people signing up then that’s US$60,000 of the US$100,000 that you might have forgone above. Investors become more “informed” and “protected”. These education initiatives deal specifically with irrational exuberance in IPO situations and ignoramuses are learning things rather than buying data.

There’s a degree of intuition needed here in deciding the way forward for the NSE and I don’t have the stats to be able to say much more. The fact is that they have been selling data now for some time and know what the market does and doesn’t want. They need to reflect on this and amend their strategy to achieve both objectives.

Why is this relevant?

Well with the World melting at the moment, with Africa being seen as the last investment frontier, and with foreign investment at risk, there should not be any barriers to getting hold of timely information. The bigger picture is that the way the web is developing, all of this information is going to be available for free anyway in the future to almost everyone, by phone,iPad, PC, whatever and its only the likes of Thompson Reuters and Bloombergs that can justify the need to pay to re-package packaged real time data on account of their professional investor bases.

All of this debate is all so terribly over-intellectual isn’t it?

BUT, ask yourself whether 10 years ago you would have predicted that so much information and functionality could be available on the web FOR FREE. So really at the end of the day the future for African capital markets is whether the regulators that run them have a vision, a long term vision that embraces how the web is changing the world. A vision that does not involve US$100,000 now, vs benefits that are intangible and in the future and for the greater good. Like investor education. Mmmmm….

Daily FIX Log File (flf)Contains all the day’s trading activity (both equity and debt) in electronic form. Kshs.50000(monthly subscription)+/- US$6,480 p.a.
End of Day Listed Equity Securities Data (eded)Listed equity data, which is published no sooner than sixty (60) minutes after the close of trade on each trading day.Available in excel format Kshs.7200(monthly subscription)+/- US$936 p.a.
Historical daily Price lists for bond data (hdpl-bond-market)Historical daily market reports for equity and debt data. Available in excel format.Data Available From 24th Feb 2011 to 13th Oct 2011 Kshs.30(per day’s price list)+/-US$71 p.a. Buy
End of Day Listed Debt Securities Data (eddd)Listed debt data, which is published no sooner than sixty (60) minutes after the close of trade on each trading day. Available in excel format Kshs.7200(monthly subscription)+/- US$940 p.a.
Historical daily Price lists for equity data (hdpl-equity-market)Historical daily market reports for equity and debt data. Available in excel format.Data Available From 4th Jan 2010 to 13th Oct 2011 Kshs.30(per day’s price list)+/- US$71 p.a. Buy
Historical weekly Price lists for equity data – weekly market statistics (hwpl-equity-market)Historical weekly market reports for equity and debt data. Available in excel formatData Available From 4th Jan 2010 to 16th Sep 2011 Kshs.100(per weekly report)+/- US$56 p.a. Buy
Historical weekly Price lists for debt data – weekly bond statistics (hwpl-bond-market)Historical weekly market reports for equity and debt data. Available in excel formatData Available From 4th Jan 2010 to 2nd Sep 2011 Kshs.100(Per weekly report)+/- US$56 p.a. Buy
Historical monthly trading equity volumes (hmev)Historical trading volumes per month in excel formatData Available From 2010 to 2010 Kshs.1000(cost per annum)+/- US$11 p.a. Buy
Historical monthly trading equity deals (hmed)Historical equity traded deals per month in excel formatCurrently No Files Kshs.1000(cost per annum)+/- US$11 p.a. Buy
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Historical monthly foreign investors trading data (hfid)Historical monthly trading summary of foreign investors. Information consists: purchases, sales, total turnover, percentage to total equity market turnoverAvailable in excel format.Data Available From 2009 to 2010 Kshs.3000(cost per annum)+/- US$33 p.a. Buy
Historical Annual equity turnovers (historical-annual-equity-turnovers)Historical equity traded turnover per year in excel formatData Available From 1992 to 2011 Kshs.1000(cost per annum)+/- US$11 p.a. Buy

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By L.S.M Kabweza

Some two weeks ago, we got pointed to the news that AICO Africa Limited had announced an online investor relations initiative. AICO is listed on the Zimbabwe Stock Exchange the holding company of Seed Co Limited, Olivine Industries and the Cotton Company of Zimbabwe Limited. Looking at the AICO website right now, you can easily see the value of the online investor relations concept itself as a PR/IR tool; no fancy design, just a lot of useful information neatly packaged.

This new initiative is being carried out by Big Law Management Consultants. The company is doing similar work for other listed companies in Zimbabwe and the region. Some of their clients include Innscor, Econet Wireless, African Sun, Edgars Stores, OK Zimbabwe, FBC and Truworths.

We contacted the Big Law CEO, Rob Strangroom, to get some information about the company and the work they do. Big Law is one of the few companies working on a problem that is widespread in Zim and other similar countries. The problem is that companies, listed or not, don’t seem to see the power of the internet as a business platform even as internet penetration increases rapidly across the continent.

Below is a question and answer we did with Rob Stangroom. He discusses the whole online investor relations concept. How Big Law started and how it has worked out. There are a couple of tips in there as well for business executives, PR and Web professionals.

Big Law’s history?

Big Law was founded by Graham Young, a computer programmer, me a CA and Tafadzwa Manhindi – from a banking background. From a capital markets advisory background I realised how little information there was online on listed companies – stock exchanges weren’t delivering and neither were brokers and neither were portals that purported to have comprehensive timely information. With the oft repeated statements of how much potential Africa had from an investment perspective I was surprised that no-one was actively promoting investment online. Whose responsibility was it?

The answer is listed companies’ as part of their corporate governance obligations:-

This quote from Standard Boardroom Practice, prepared by the Institute of Directors, London, revised 1971 is still appropriate (or perhaps more appropriate) in modern times:

“Although the process of encouraging shareholders to take an interest in the affairs of the company may be a rather slow one, directors should not be discouraged. It is their duty to make the maximum use of the methods open to them of keeping the shareholders informed.”

But what motivates listed company directors to take these governance issues seriously? Not a lot because they are not aware that “the methods open to them of keeping shareholders informed” now includes the Internet – something they don’t understand – too many grey hairs + they are very busy. Just look at the stats. The capital market regulators are similarly unable to take the online agenda and make it a priority or incorporate it into the rules. In the absence of liquid markets, stockbrokers don’t have the resources to make full information available either. So it’s up to listed companies to decide what to do to promote investment – after all they have obligations to do so so it would seem like an easy decision. But it’s not.

Take my survey if you have not and you will get some insight into the issues.

The key issue though is that with the proper software it is easy to manage communication with retail investors and stakeholders – it’s this aspect that saves time and money and makes the process automated low cost and therefore worthwhile. It’s what you call a “retail shareholder” strategy but one that also benefits institutional shareholders since they also have better access to information.

What’s would you say is the Big Law’s core product/service? What did AIC bring to the market and how has this fared?

Our core service is to ensure that comprehensive, timely investment information is published online to enable investors both local and foreign to make informed investment decisions. We have brought awareness of best practices globally to the market and I can say that without a doubt our clients have the best investor relations websites of any stock market in sub-Saharan Africa – this is because they are connecting individually with investors and perpetuating a secure two way relationship – just register on one of our client sites e.g. Seedco, to see the communications module each and every registrant gets

Big Law has corporate clients in Zim, Malawi, Botswana and Zambia. What was the experience expanding into these markets? What were the major setbacks doing so?

Major setbacks are that executives don’t know that they don’t know. Raising awareness of the benefits of communicating responsibly online is very time consuming and costly. A good website will generate very meaningful commercial feedback and enhance corporate reputation.

Executives don’t take smaller investors seriously because they think that it’s costly and time consuming to engage them. With an effectively structured website this is not true. Communication is automated but intervention is possible when needed. Shareholders are also potential customers, suppliers, employees etc… stakeholders if you were, so responsible communication to everyone and anyone online grows “corporate reputation”. This is what you call integrated communication and it’s possible because the Internet has changed the World making information instant to everyone

Major milestones/achievement made in recent months and since founding (e.g. reaching a certain number of clients, new markets, new methods…)

We are launching the website of a prominent stockbroker shortly which will innovatively disseminate investment data on our clients. We professionally podcasted the whole analyst presentation of AICO and Seedco. We launched Edgars new website – a good mix of a corporate website and an investor relations website

Our major milestone can be summarised in this feedback from a global investment bank


By way of introduction, my name is <>, and I work at Deutsche Bank providing investor relations guidance and information on global best-practices to companies that have ADR and GDR programs with us. I just wanted to say I saw your new website, and the Investor Relations section is terrific! I spend a lot of time working with companies from emerging markets and promoting the value of a comprehensive, informative, and well-designed and organized website and investor relations sub-section as a major tool in attracting and keeping international institutional investors. It is great to see you are ahead of the curve, I’m really impressed!

Which companies are your competition locally and on the continent?

On the investor relations side we are unique because we fulfill a specific niche – we are not a website company and not a typical PR firm – we are an online communications consultancy concentrating on the basics – timely, comprehensive information. We have branched out to corporate websites as a logical extension to what we do but it’s not our core business.

I guess the typical PR companies and typical website companies are our competition but the PR side is weak online and the website companies weak on PR – there’s space for a company in between and we are that company.

What differentiates your product from competing services on the market?

It’s holistic – it’s not about the website, it’s about how our clients use it and that’s where we are actively involved on an ongoing basis in appraising that. I have a very strong financial sector background and my partner Graham has a very strong database and programming background. Even though we sign up clients, we concentrate on improving awareness at all times – this is no different to any investor relations department overseas – the core objective of an IR officer is to ensure that investor relations is on the agenda for the CEO and the board.

What is your view on the readiness of companies to use the internet as a platform for investor relations and attracting new investment?

There are significant barriers – the cost of the internet etc but penetration is high and growing and if costs come down there will be explosive growth. Those companies starting to use the internet effectively early on will benefit when this growth kicks in. They will also be wiser as these tools evolve over time.

On the investor relations side executives don’t appreciate that without information and access to management investors do not even consider investment – it does not matter how bad things may seem, companies need to provide the facts and let the investor decide – at least he will be able to assess risks and not be in the dark.

No facts = maximum risk assessment – not even on the agenda. Some facts means a qualified risk assessment + the listed company is at least on the radar of the investor. Listed companies need to treat shareholders equally – all of them and this point is frequently overlooked.

However an example here of how local companies are realising the advantages :

Analyst presentations are where all of the key questions are asked of management. Foreign investors effectively do not have access to the raw information of these fora. AICO and Seedco are the first listed companies to professionally podcast their whole investor presentation including the q and a section. In developed markets this is the defacto (as required by regulation – here the regulation does not apply) so here our services our world class and up with best practices worldwide. If companies want to be serious about promoting investment then they have to adopt best practices worldwide. This is so much appreciated by foreign investors.

Any major setbacks getting corporate clients to appreciate the value of the service?

The underlying state of the listed companies in Zimbabwe – many have going concern issues and are seriously struggling – but the catch 22 is that they need investment – yes a website will not necessarily find investors but it only takes one investor to change the fortunes of a listed company so why not “use all the channels available”. Publish all of the information online and enable investors to make educated assessments and at least put companies on investors’ radar.

Few listed companies take their communication corporate governance obligations seriously, few realise that communicating with investors benefits all areas of business.

What are your views on social media as a platform for investor relations? How can (listed and not) use platforms like LinkedIn and Facebook as platforms for business? Are local companies using these tools effectively?

Facebook; approach with caution. Companies need to have the underlying integrity to communicate and content to communicate and the ability to respond immediately and honestly to the market. Get this right and then the platforms are highly recommended but start with the basics and learn as you go along. Include senior management right from the start otherwise there is no buy in.

How has been the feedback from the clients?

Excellent. Directors can rest in peace that their communications use all available channels and that their core corporate governance obligations (the wishy washy stuff that nobody understands – e.g. listed companies should communicate responsibly with the market). For some of our brand strong clients the commercial value of the feedback through our website has been very valuable – business deals etc.

Any major plans for the coming months, year?

  • Promote awareness of the need for online investor relations in Zimbabwe.
  • Promote use of social media in investor relations more.
  • Use stockbrokers websites to effectively market our client investment stories.
  • Try to get listed subsidiaries of listed holding companies like to take their online investor relations seriously. Why is it that holding companies overseas treat investors to the best online investor relations but in Africa they don’t – same group, same corporate governance practices. Why is the value of an investor in Africa worth less than in the UK?
  • As above for listed companies that are dual-listed – eg Hwange.
  • Promote podcasts as a key reporting and transparency tool – this has to be adopted by listed companies in Zimbabwe if they want to be taken seriously then they have to get up to speed.
  • We are launching a unique website product for estate agents.
  • We are launching a professional website product for small business.

Source: TechZim.com

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African Information Solutions (“AIC”) is pleased to announce the online investor relations initiative of Seed Co Limited.

Seed Co Limited is AIC’s 23rd launched listed company client and the 6th in the agricultural sector, which clients have an aggregate market capitalization of US$2.1bn. Seed Co is the leading producer and marketer of certified crop seeds in Southern Africa and is a subsidiary of the AICO Africa Limited Group.

Seed Co Limited, listed on the Zimbabwe Stock Exchange (market capitalization US$252 million) has 6 dedicated research stations and operations in 15 countries. Seed Co is Africa’s largest proprietary seed breeding, production, processing and distribution group. Seedco’s website is content rich with full information on its seed varieties online accessible by crop or by country.

David Amira, an equities analyst at Lynton Edwards Securities, a registered stockbroker said this of Seedco’s marketing and investor relations initiatives online:-

“Seedco’s business model is tried and tested, and the group has successfully launched forays into foreign markets, making it a truly African seed company. A focus on research and development produces top quality brands, something which not only provides Seed Co with a competitive advantage, but furthers the fight for food security in Africa.”

Morgan Nzwere, Seedco’s Group CEO provided key insights in Seedco’s online strategy:-

“As the leading producer and marketer of certified crop seeds in Southern Africa, we recognize our stakeholders’ requirement for regular and timely, agricultural, business and investor information. Accordingly, our interactive communication tools on our new website will be used as a key communications tool in our stakeholder outreach initiatives in future”

View Seedco’s online investor presentation here.

View Seed Co’s website here.
Listen to the full podcast of the analyst presentation here




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