This imagery below, from the BBC website is an excellent image-based overview of the growth of the Internet from 1998. Africa lags yes BUT there is critical mass in African Internet users:-

Africa is also growing quicker than other markets, especially Kenya where new infrastructure is bringing down prices and increasing outreach.

From an African corporate perspective the Internet cannot be ignored in strategy going forward. Those getting in early will benefit in the long run. On the investment front Africa’s capital market regulators are fast asleep. I guess that when the commercial reality of what’s happening online hits them thats when they will do something. This is a pity. Its also a pity because I think that its only after the commercial benefits of an online strategy are known will the online investor relations space be taken seriously.

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Enrique of the Internet World Statistics sent me this email in his newsletter :-

“We are almost there, very soon the Internet will hit two billion users. Yes, almost2,000,000,000 with a big B, two billion people are using the Internet. An amazing accomplishment because in just 15 years (1995-2010), the Knowledge Society has conquered Planet Earth, and nothing will be the same ever again. “One small step for man, a giant leap for mankind”, like someone said before me, 41 years ago.

But today I am not going to discuss the Internet. Today, for the first time, we show our methodology applied to analyzing the Facebook World Stats. The results are very revealing regarding the power and worldwide force of this web platform that has grown to become by far the largest and most important social network in the Internet.

The results are summarized in a new statistics table and three bar charts, that you can view at Facebook World Usage, using data as of August 31, 2010. We have found useful to introduce a new Internet Metric that we shall call the Facebook Index. It corresponds to the percentage of Internet Users that are also Facebook Users, in any country or geographic region.

The statistics show that Africa’s Facebook Index (the percent of Internet users on Facebook) is just 1.7% compared with 43% in North America and 2.4% in Asia. Facebook is set to grow significantly in Africa and from a commercial perspective might provided an effective means of targeting specific sectors of the economy.

I do not have the breakdown of Facebook users of individual African countries but will get them and discuss the implications of this on investor relations and corporate strategy. Facebook is growing into a platform that cannot be ignored.

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8 ideas to improve African capital markets:-

IDEA 1 Obtain a private sector research grant to monitor the reporting of African stock exchanges and compare their standards of performance to those required by them of their listed company clients and or of international stock exchanges or international organisations of stock exchanges. Who should do this? A private sector organisation sponsored by a grant from a development finance agency.

IDEA 2 Make an appraisal of the Institutes of Directors in those markets that have stock exchanges and ask some qualitative and quantitative questions about the impact of those IODs in each market. The IODs that are immaterial by impact should be part of an initiative to align them with the South African IOD. The IODSA should actively engage its African peers by making more efforts to put its products and services online and to increase awareness. The IODSA should not get hung up about being seen to be in African markets and should enable local IODs to brand these initiatives with a domestic identity. Who should do this? The IODSA.

IDEA 3 Use the JSE SENS service as a disclosure platform for all African markets. But brand it according to each market so that the South African face of the product does not put noses out of joint politically. The platform should be made available for a nominal sum by the JSE as a gesture to counter its perceived arrogance of the JSE by other African markets. The study into rent seeking in idea 8 will set the parameters under which this initiative may be implemented. Who should do this? The JSE through the African Stock Exchanges Association.

IDEA 4 Provide a one year notice of the intention to de-list or demote those listed companies with low free floats (ones below prescribed limits) to a second tier board. Within this year consider the undertakings by those listed companies to restructure their shareholdings or de-list. Accentuate quality of listing rather than quantity to the regulators. The African Stock Exchanges Association or regional associations should set the lead in determining the standards. It may be important to agree the fundamental principles through which companies will be appraised.

IDEA 5 Implement a comprehensive market-wide survey of all listed company executives, asking them whether the stock exchanges that serve them are delivering value to the country and their company. Use the Internet to do this. Make submissions secure but anonymous. Issue a guideline on the things that the CEOs should consider given that they may not know what to expect of stock exchanges. The African Stock Exchanges Association or regional associations should set the lead. It’s important that the questions asked are standardised across markets. Who should do this? A private sector organisation financed by grant funding.

IDEA 6 African stock exchanges should engage the IODSA with a view to adopting the GAI (the core governance modules) in African markets for all listed companies. The IODSA should offer a significant discount for this. The stock exchanges should merely be a facilitator and not get involved. Make compliance mandatory and governance disclosures in annual reports aligned to the results of these initiatives. The African Stock Exchanges Association or regional associations to set the lead.

IDEA 7 Come up with minimum standards of online disclosure – just the basics – and ensure that they are enforced by the directors of listed companies. Do not allow the publication of any annual report without a statement by the directors as to whether the minimum standards have been complied with – just yes or no statements of compliance. Who should do this? The African Stock Exchanges Association or regional associations to set the lead.

IDEA 8 – perform a basic review of which stock exchanges are rent seeking equities investment data and NOT conforming to the core objectives of ensuring that investment information is available in a broad, non-exclusive and immediate manner. Who should do this? A private sector organisation sponsored by a grant from a development finance agency.

Unfortunately the African Stock Exchanges Association appears to be a talk shop that appears to have little influence over its members but my points are nevertheless made. There is nothing to stop individual stock exchanges from pursuing these ideas separately.

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Imara, a pan-African corporate advisory, securities trading and asset management company released their results today. Imara’s commentaries be them from asset management or the group always provide an interesting insight into African markets. Imara’s annualreports are available here. Herewith an extract of their commentary on their results to 30 April 2010 below:-
Our performance this year is a sober reminder that African capital markets have not yet fully recovered from the impact of the global crisis and in hindsight the period under review has been difficult to accurately forecast. Although, the Group remains resilient, our headline results are disappointing. Revenue declined by 9% to P92.8 million, whilst attributable earnings decreased by 96% to P246 765. Although the profit for the year is below expectations, the Statement of Financial Position has strengthened with cash and cash equivalents improving by P21,89 million to P123,4 million with no borrowings.
This creates a strong foundation for a more profitable company going forward. In this respect, we have been able to protect shareholder wealth with shareholders’ equity having grown by P 8,64 million during the year.
In addition, we have been able to contain operating expenses in a difficult trading environment. Operating expenses have been contained to P82,27 million, almost P200 000 lower than the previous year. Although not apparent in this announcement, our core divisions of Stockbroking and Asset Management have generated strong revenue streams and funds under management have recovered significantly. Unfortunately, this improved performance has been partially reversed by a poor performance in the Corporate Finance division, which is partly attributable to timing issues on significant mandates which could not be closed in the year under review. However, these have now started to come through, and in addition, the group will benefit from the cost cutting measures taken in this division during the second half of this year. On the positive side, the Imara Funds have continued to grow with good inflows coming through and limited redemptions. Asset Management South Africa has become profitable this year and the flagship Imara Equity Fund SA has been well received and continues to perform well. We believe this division is now set to deliver long term growth and profitability. It is encouraging to report that income from associates has grown 12 fold to P1,92 million, a clear indication that our acquisition strategy is working and yielding positive momentum. We will continue to raise our stakes in these entities going forward with a positive impact on the Group and will continue to look for further expansion opportunities.
We remain cautiously optimistic about our future prospects. Annuity income streams continue to improve, albeit slowly, our acquisition strategy remains robust and is yielding positive returns, and the Group footprint continues to expand. Using the strong Statement of Financial Position as the spring board, we will continue to focus on improving performance in our existing footprint by extending our services and product range in individual markets, whilst also looking for opportunities in new markets. We believe the current uncertain world economies and severe slow down will continue well into 2011, so our expectation is for a quieter year ahead. We look forward to reporting better results in due course.
Philip Gray stood down as Chairman of the board at the Annual General Meeeting of the company on 26 September 2009. He subsequently resigned as a non-executive director on 14 March 2010. Roger Matthews also retired as a non-executive director at the Annual General Meeting of the company on 26 September 2009. Lethebe Maine was appointed as a non-executive director of the company on 25 November 2009. His appointment is still subject to formal approval by Non Bank Financial Institutions Regulatory Authority (“NBFIRA”) and the application is pending.
The dividend for the year has been passed.
For & on behalf of the Board of Directors
SM Ndoro       MJS Tunmer
Chairman       Chief Executive Officer
Transfer Secretaries:
Corpserve Botswana
First Floor, Block A, Unit 3, Plot 117
Millennium Office Park, GABORONE
Telephone 393 2244: email: corpserve@info.bw

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Consider this wording from the Companies Bill 2008 relating to shareholder communication:-

“Where the document or information is sent or supplied “by means of a website”, it is deemed to have been received by the intended recipient—

(a)       when the material was first made available on the website , or

(b)        if later, when the recipient received (or is deemed to have received) notice of the fact that the material was available on the website.”

This all encompassing legality provides a legal exit for listed companies not interested in providing basic shareholder rights. What common law rights do shareholders have that may overrule this sort of requirement? Will companies honestly adopt this as an easy exit?

In the US the Shareholder Communications Coalition is an advocacy organization dedicated to improving the ability of individual investors to vote their shares and communicate with the publicly traded companies in which they invest. The Coalition also seeks to educate individual investors about their rights as shareholders and the importance of participating in corporate elections. Efforts are underway to restore the direct communications links between shareholders (yes each one individually) and listed companies. The same is happening in Nigeria where corporate governance failures in public capital markets have crippled a nation.

Kenyan regulators are not taking a long term view. Not concentrating on the corporate governance issues.

Is anyone aware of any other Nation that has similar shareholder communications legislation?

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I like following the SEC in the USA for a number of reasons: they are active and progressive on a number of fronts, not least of which is that its easy to follow what they are doing. Shareholder education and active regulatory intervention are the parts that interest because niether are prevalent in the majority of African markets. And they should be. Anyway herewith the latest article lifted from their website notified to me by “push technology”.

“The Securities and Exchange Commission today announced the award of $1 million to Glen Kaiser and Karen Kaiser of Southbury, Connecticut, who provided information and documents leading to the imposition and collection of civil penalties in SEC v. Pequot Capital Management, Inc., et al. This is the largest award paid by the SEC for information provided in connection with an insider trading case.

The SEC staff previously investigated alleged insider trading in Microsoft Corp. securities by hedge fund adviser Pequot Capital Management, Inc., its chief executive, Arthur J. Samberg, and David E. Zilkha, a Microsoft employee who accepted an employment offer at Pequot, but closed its investigation without action. In late 2008, Karen Kaiser, the ex-wife of Zilkha, and her husband, Glen Kaiser, discovered key evidence that ultimately led to the filing of a settled enforcement action against Defendants Pequot and Samberg alleging they engaged in insider trading. Among other documents and information the Kaisers provided the SEC was a key email communication between Zilkha and another Microsoft employee that was not turned over to the SEC in the first investigation. Without admitting or denying the allegations in the SEC’s complaint, Pequot and Samberg consented to the entry of injunctions and orders requiring the payment of civil penalties totaling $10 million (as well as the payment of disgorgement and prejudgment interest totaling over $17 million and an investment advisory bar as to Samberg and censure as to Pequot).

The SEC approved the award earlier this week pursuant to Section 21A(e) of the Securities Exchange Act of 1934, which authorized the Commission, in its discretion, to grant an award of up to 10% of the penalties paid in a case to a person who provided information leading to the imposition of those penalties, but only in insider trading cases. That provision has since been repealed by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which added new Section 21F to the Securities Exchange Act, authorizing the Commission to award bounties to parties who provide information leading to recovery of monetary sanctions in a broader range of cases, not limited as before to civil penalties recovered in insider trading cases.

On the same day the Commission filed the settled complaint against Pequot and Samberg in the above matter, it also issued an order instituting administrative and cease-and-desist proceedings against Zilkha in connection with the conduct described above. That matter is pending before an SEC administrative law judge.

For further information, please see Litigation Release Number 21540 (May 28, 2010). [SEC v. Pequot Capital Management, Inc., et al., Civil Action No. 3:10-CV-00831-CVD (United States District Court for the District of Connecticut] (LR-21601)”

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SA joins Africa in Imara’s new institutional package Imara, the Pan-African financial services group, is breaking with global
investment industry conventions by packaging South Africa with the rest of Africa for purposes of institutional securities trading.
The new one-stop African trading capability has been launched to offshore institutions by Simon Reid, Johannesburg-based head of institutional trading at Imara Africa Securities.
Imara is close to fund managers and large investors in London and New York and expects strong support. “Major international institutions diversified some time ago into African frontier markets,” said Reid, “but traditionally African markets are packaged ‘ex-South Africa’.
However, unlike most financial groups, Imara not only has a strong South African presence, but extensive on-the-ground representation across sub-Saharan Africa. “We can therefore offer a one-stop proposition that enables major institutions to trade in African securities through our desk whether the targeted markets are in Johannesburg, Harare, Nairobi, Lusaka, Gaborone or Mauritius. When the Angolan stock exchange opens in Luanda will be open there as well. “We’ve already spoken to leading international institutions and we’re confident the convenience of this approach is well appreciated and will be well supported.”  Simultaneously, Imara Africa Securities is marketing its Africa-wide trading service to local institutions to take advantage of an upsurge in institutional position-taking in African markets. “South African institutions are showing greater interest in sub-Saharan frontier markets,” noted Reid. “South African corporates have broad exposure across Africa, but major institutions have not followed suit; at least, not until now. “Imara’s research into African markets enjoys an international reputation. Our South African clients therefore have the reassurance provided by rigorous research backed by on-the-ground transactional support as we already deal broker to broker in many African markets. “These factors support the local trend toward increased institutional positiontaking in the rest of Africa. We therefore anticipate increased volumes from both local institutions and their offshore peers.”
The Botswana-registered Imara group has offices and partners in Blantyre, Dubai, Edinburgh, Gaborone, Harare, Johannesburg, Lagos, London, Luanda, Lusaka, Mauritius, Nairobi and Windhoek. Activities include asset management, financial planning, stockbroking and corporate advisory services.

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Our latest monthly reconciliation shows 1,652 listed companies in Africa:-

There is an article below that misses a number of points about African stock markets. It is so generic as to be meaningless. I have submitted my comments below the text of the article (forgive the acerbic tone):-

Africa has ‘too many bourses, too little liquidity’ , June 28, 2010, By Ellis Mnyandu

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Africa should consider rationalising the number of securities exchanges that are on the continent in order to boost the appeal of Africa’s markets as a viable investment destination.


This view was expressed by Maria Ramos, the group chief executive of Absa – South Africa’s largest retail bank.

“I think we probably need to rationalise the number of stock exchanges on the continent,” she said during a panel discussion at the Fortune Global Forum in Cape Town. “We are currently sitting with 23. Looking at these markets there is not enough liquidity to sustain all of them.”


Ramos said there had been an ongoing dialogue for quite some time about what needed to happen to integrate financial markets on the continent. But so far there had been no discernible steps to turn the dialogue into tangible real action.


The call for integration comes at a time when developing markets are under the spotlight as the global financial crisis pushes investors to look for investment returns elsewhere to offset sluggish returns in the slow-growing developed world.

Developed economies like the US and Europe have bore the brunt of the global financial crisis, putting developing economies such as South Africa, Brazil, China and India on investors’ radar screens.

But a key hurdle for investors looking to put money into Africa is the continent’s disparate securities exchanges, some of which barely see meaningful trading in each of the days that they are operating due to a lack of liquidity. MANY LISTED COMPANIES SHOULD NOT BE  LISTED – THE FAULT OF THE REGULATORS HERE. EITHER YOU HAVE A PROPER MARKET OR NONE AT ALL.

Although an integrated operational framework might bring such benefits as transparency for investors (IMPLICITLY AGREEING THAT THE INFORMATION DISSEMINATION PRACTICES OF THE EXISTING EXCHANGES ARE POOR), a key challenge might come from regulation.

There would also be an issue of regional harmonisation – bringing east Africa, southern Africa, west Africa and north African bourses under a single framework. Currently some exchanges have tended to band together by each region.POLITICS – WHY DO PEOPLE CONTINUE TO FLOG THIS HORSE? A FRAMEWORK OF WHAT – REGULATION SETTLEMENT, INFORMATION DISSEMINATION?

Trade and Industry Minister Rob Davies echoed the call for integration, noting that Africa had rather small domestic markets in individual countries. There was a long-standing observation that there was a larger potential with markets that had groups of countries behind them, he said on the sidelines of the forum. RHETORIC REGURGITATED FROM THE PREVIOUS 10 YEARS EXPERIENCE. LETS COME UP WITH SOMETHING NEW! DEAR MALAWI – YOU HAVE A “RATHER SMALL” MARKET!!

“The debate is about how we get there,” Davies said. THE DEBATE IS ABOUT HOW WE MAKE MARKETS MORE LIQUID:-





In South Africa the JSE Limited operates Africa’s largest bourse, the Johannesburg Stock Exchange, which is among the top 20 securities exchanges in the world and its size dwarfs that of other African bourses such as those of Malawi, Libya and Mauritius.


The 11th annual Fortune Global Forum, which ends today, brought together heads of state, ministers, and the chief executives of the world’s biggest companies to discuss business, economic and social opportunities arising from the increasing role of emerging markets in the global economy.

It is the first time that the forum has been held in Africa.

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We have recorded across the board declines in investor traffic in the 23 websites we manage.

We had speculated that the World Cup (I have put in a link here to FIFA as they need help on the traffic to their website – its now up from 20,000,000 a minute to 20,000,001 a minute) might increase traffic. How naive we were. There’s another side though.  A more interesting one – the long term effects of the enhancement of Africa’s image. I think that African leaders are cursing themselves for not taking their soccer more seriously and realising that an event such as this is the biggest PR event they could possibly ask for.

Consider Ghana. The most deserving African nation of anything good. A decent democracy. A nice people. An expensive airport. They did not deserve the idiocy of soccers rules that saw them out of the World Cup. Barack Obama visited them. Ghana is king in Africa. I love Ghana.

But their online investor relations is way behind the rest of Africa? An opportunity lost? Yes. Definitely.

That said, with only the final to go, traffic to our investor websites is picking up again.  We are going to watch the Ghana section of Africanfinancials.com closely to see if soccer helps investment. By the way the Dutch are going to win. Spain were lucky.

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I do not believe that African markets are ready yet for social media in investor relations. Unless its for the likes of Safaricom or other regional heavyweigths. Ones with the resources to manage this properly in the African context. I believe that there’s risk in dealing with an ignorant investment community, one that has ready access to the Internet.
The absence of investment in shareholder education by Governments in Kenya, Nigeria and most of the other markets in which there has been significant growth in retail investors is the cause of my worry.
We haven’t yet got past the basics. There’s a lot wrong with listed companies’ attitudes and practices for any savvy retail shareholder to get their teeth into should they wish to shout.
I may change my mind as our services evolve. I just cannot see listed company executives grasping this, not until the current crop of grey haired techno-phobes give way to their upwardly mobile successors.
That said I have to say that the incessant focus on social media and investor relations in international markets is very interesting. Especially when all the technical jargon is summarised down to easily understandable content and tips. There’s good stuff online so I thought I would share some with you in the presentation below.
Got an African slant on the content presented below – let me know…

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My business partner just spoke to a bloke in the online sales and marketing game – very different to our business but he said some meaningful things – he said the secret to making sales online was trust, likability and knowledge (knowledge in the sense that people believe you know what you are doing).  He has been struggling a little in the online health industry (a massively competitive market).  Anyway he said his experience over the last few years this was the most important thing he ever learnt – “width in inches, depth in miles”!  I thought that said it all!!!

The same thing applies to an online IR programme. Exchange the likability for transparency and you have the same principles that should form the foundation of a communication platform.  Specialise in building an online community from every aspect of your business’s interaction with investors, employees and stakeholders. Width in inches, depth in miles.

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The annual reports of African telcos, most of which appear here, provide interesting insights into African telco markets and the growth drivers within them. Zain has just released its annual report viewable here.  A good read and insight into African telco markets.

African Is Cool has two mobile telco clients: Econet Wireless and TNM Malawi. Online investor relations solutions are particularly powerful for telcos because they typically have a broad range of shareholders through which integrated communications enhances brand and corporate reputation.

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