111 African Companies Worth USD 149 Bn On The London Stock Exchange – Now There’s A Huge Trend To It
January last year, JPMorgan, an American multinational investment bank and financial services company headquartered in NYC, said that it is planning to expand its presence on the African continent – apparently to foster Africa-London IPOs.
According to what CEO Chase Jamie Dimon told Bloomberg TV, the bank’s expansion will not just cater to those African countries but as well serve the American multinationals entering.
Now, the company, which is the sixth-largest bank in the world and first in the United States, is hiring in Africa in order to meet up with the rising number of African companies seeking to list on the London Stock Exchange.
The development which comes despite the incertitude of Brexit, comes at a time when businesses on the continent are fast-growing, enough to get London IPOs underway. JUMIA’s listing on the New York Stock Exchange is one proof.
According to Barry Meyers, the managing director of JPMorgan’s U.K capital markets and Sub-Saharan Africa business, international investors have developed an interest in and are now more open to the “African growth story” more than ever. He also revealed that more companies are expected to go public in the next one year as “African businesses seek to tap deeper pools of capital.”
African businesses are well-represented in London, a link which dates back to the 1930s when African Explosives and Industries became the first company from the continent to list its shares on the exchange – the firm is still listed there today.
The cumulative worth of African companies on the London market stands at USD 149 Bn, second only to the Johannesburg Stock Exchange. There are 111 African companies listed in total, a feat which beats any other international exchange. What’s more, in the past decade, African companies have raised USD 26 Bn in London for new and extended issues.
JPMorgan’s interest in Sub-Saharan Africa, alongside the employment opportunities it is creating, comes in the wake of a USD 3.5 Bn share listing by Airtel Africa Ltd., which happens to be London’s third-largest IPO this year. Earlier this year, London Stock Exchange officials made a series of presentations and sales pitches in order to inspire more issuance.
The firm is currently branched in South Africa and Nigeria, the latter of which sued it for USD 875 million on the grounds of negligence in transferring funds from a disputed 2011 oil deal to a company under the beck and call of former oil minister of Nigeria, Dan Etete.
Kevin Latter, the head of JPMorgan’s Sub-Saharan African operations, said that interest is at an all-time high in South Africa, where deal flow has been hampered by a contracting economy.
He reports that South African companies are now frequently talking with investors more than ever, and the country’s seemingly significant political stability is playing a great role in this.
“There’s a renewed interest in South African corporates because they are well run, well managed, cheap and have regional proximity to what’s going to be the biggest consumer growth area in the next 20 years,” he said. “Yes, growth is now, but it’s predictably low.”
Latter revealed to Bloomberg that JPMorgan has seen consistent growth over the past few years, and has 180 regional staff to show. As the future looks bright for African companies, the investment bank will continue investing in people steady on the trail of growing its capabilities in South Africa and other parts of Sub-Saharan Africa.
“Our own strategy and how we are running our own business reinforces what we believe the landscape to be for other international and South African corporates,” Latter added.