Africa Investment Capital Available Through Frankfurt Stock Exchange Listings
FSE Listings Inc Response to Listing South African, Nigerian, Congo, Zambia, and Zimbabwe assets on the Frankfurt Stock Exchange
The number of Companies Trading On the Frankfurt Stock Exchange is 10,743 as of Match 31st 2010.
Number of Companies per Region suggest of the 10k+ companies less than 6% are from Africa. 89% of the Frankfurt listings are foreign companies accessing capital from Europe.
Africa and FSE Listings
Africa related to the 4 regions outlined is one of the least represented sections of the globe that have listed directly; however, many of the North American and European listed companies are listed with African Assets in both commodities and resources. The graph produced by the Deutsche Boerse AG is not exactly a clear representation of assets so much as where the companies are incorporated.
The Frankfurt Stock Exchange(FSE: Deutsche Boerse AG) is a member of the World Federation of Stock Exchanges. (Please review: www.world-exchanges.org/member-exchanges/member-exchanges.) Due to the FSE being a member of the World Federation of Stock Exchanges, it is conceivable that assets listed within the Frankfurt Stock Exchange can be dual listed into many of the other exchanges in the world. Ideally in the event the local market becomes a member of the World Federation of Stock Exchanges, FSE listed companies could have secondary listings in South Africa, Angola, etc.
The FSE is the third largest financial market in the world, and the center of European Financial Markets. The German economy has been growing in strength regardless of European Union woes, and remains a stable market to springboard valued projects and assets into the public markets and global financial markets.
The reality is that any company can list that has had 250,000 euro’s invested in capital with the business plan and structure to go public. At FSE Listings Inc in partnership with a few Equities firms who would prefer to remain unnamed, we help facilitate the listing process for African companies, or companies with African assets. A good example would be Greenwave Bio Ltd, 3G0 (ISIN GB00B688NW04, WKN A1CTRX).
The assets and interests of Greenwave Bio Ltd have been focussed on Guano deposits as organic fertilizers within Mozambique and Angola. A relatively different model than the usual Oil and Gas projects. Angola is very strong in the mineral sector and could easily raise the required exploration funds and mining capital costs from the European markets.
In addition, the European markets have an interest in ICT within Africa, and therefore, telecommunications, Internet Service Providers, etc, are all of interest.
Land development projects, such as private hospitals, rental properties, malls, Casinos, and other major economic projects carry weight in international markets for raising capital especially if there are strong Government marketing budgets and incentives for investors.
It is our opinion that listing African companies on the Frankfurt Stock Exchange is actually a key economic development strategy as it gives foreign investors vehicles of which they can invest and trade or benefit from dividends within the region. The retail and institutional investors that may not be part of current Government efforts to attract investment could come through the foreign markets where by the end result or benefit end up in African jobs, projects, and assets.
In the spirit of giving African Entrepreneurs the power to own their own business and control their own assets, the cost of listing is between 60,000 and 100,000 euro depending on the firm they list with, of which, they can control the assets within their own public entity of which they can raise capital into.
Many of the entrepreneurs who list often sell their assets into a public company based on the promise of capital being raised, diluting their firm for the potential of work, contracts, and building a firm. Many of these start-up companies unfortunately give control away when they option their assets into someone else’s listed company. In addition, other peoples firms often carry unforeseen liabilities that could otherwise create liens against your unencumbered assets.
Worse than going directly into someone else’s company is going public on an exchange that requires rigorous requirements in capital, trading, and assets, of which it could take years to list such as the ALTX, JSE, ASX, PSE, AIM, etc. The cost on these exchanges can range from 250,000 pounds sterling and up, the requirement of one of the big five auditing firms, and share trading performance clauses, cost annually more than some successful and growing companies can handle let alone new start up companies.
The FSE truly gives the entrepreneurs a way to enter the capital markets with a fair market clearance for a start-up venture of 250,000 euro capital-in invested and around 2500 – 5000 euro per annum in fees. The FSE is the springboard to raise the capital whereby the start-up firms can consider going to other markets with proper capital and a larger investor base that ensures market trading and liquidity prior to listing. Companies such as FashionTV, a popular nightclub and promotional firm with location globally including South Africa, listed on the Frankfurt Stock Exchange April 30th 2010, which gives you a fair idea that the market is open for entrepreneurs of all sectors and divisions of commerce.
If Angolan companies are looking to raise foreign capital, build a vehicle of which they can receive investment in Euro and value their firm in Euro, then the FSE Listings route is advisable. In addition, the process can be quick for qualified companies, taking 3-8 weeks to be listed and trading.
Companies that should be listing from Angola have a business plan, the capacity to raise the first 250,000 euro into their own company, and feel that there may be an appeal to European investors within their sector. To qualify this, they can contact info@fselistings.com with their business plans, and we will vet through the potential with seasoned asset assessment professionals.
A new stock exchange within the African Market is always a welcoming sign. Preferably these markets will be open to not only the higher tier companies, but will offer a mechanism for small businesses to list who have the potential to go international. A good example of this challenge being demonstrated is with the state owned oil company opening gas stations in Portugal to show its international abilities. This mechanism should be available to Angolan entrepreneurs with ideas and business that can reach outside of their market, capital however is required. Listing these companies and ideas help them to achieve this either by local investment from listing or foreign investment.
With South Africa as an example, it is often cheaper for South African assets to be listed on Canadian, US, German, and Australian markets prior to being listed on the JSE or ALTX. In addition, the companies often can raise substantially more capital in the foreign markets. The benefit to the JSE and ALTX is the loyalty of these companies and their founders who take secondary listings on their local markets once they are qualified and capital is raised. I believe that the Frankfurt Stock Exchange is a great mechanism for achieving the same for Angolan companies, and future Secondary listings on the local exchange. If anything, the foreign listings will allow for capitalized well traded companies to be listed locally in the future, building a relatively strong local market for a growing African country. Maybe the next big African listed company will not be an “Anglo” but “African” company in its name.
As my colleague who is our African representative said the other day, the Government’s efforts to help foreign investment should not be left up to Government only. The reality is the Government should make the policies and mechanisms to enable the ease of capital investment into the Country and market the Country, the entrepreneur needs to be able to market themselves and accept the investment. The most difficult part for Foreign Investors is finding the best way to make the investment. Listing on the Frankfurt Stock Exchange can be that answer for companies within Africa. It is local to the investor and benefits the foreign assets and country, if anything, African companies should get subsidized to list overseas and go on investor roadshows as the funds come back to the Country that sponsors them. As far as we know, FSE Listings Inc in Johannesburg South Africa is the only representative and firm in Africa helping companies list on the Frankfurt Stock Exchange. This is a growing business and opportunity, if one is interested in talking with him, he can be reached at +27 76 4558546 or +27110836116.
FSE Listings Inc.
Info@fselistings.com
www.fselistings.com
Countries we are interested in help listing, click the appropriate link and fill in your company form for our corporate reviewal:
