Preparing the way for the Angolan Stock Exchange – PLMJ

Angola´s commercial renaissance continues, says Luís Miguel Nunes of PLMJ, with the moves towards the creation of the country’s Stock Exchange intended to further promote internal investment

Angola is facing a window of opportunity to develop. “The country is changing so fast, more so than we might have anticipated even a year ago, and part of this development programme is evident in the creation of the country’s Stock Exchange,” says Luí­s Miguel Nunes, who leads PLMJ-MG’s partnership with offices in Luanda, Angola.

Though the Angolan Stock Exchange may not yet be fully functioning the legislative package detailing the relevant framework and tradeable products is nonetheless awaiting legislative approval, he says, while the Capital Markets Commission is already operating.

“There has been a strong willingness to look outside of the country for guidance, and to work with recognised international bodies not only to help create the regulatory framework but also to structure the Exchange and regulatory institutions themselves,” says Nunes.

“The Angolan Capital Markets Commission is heavily influenced by both the Lisbon and São Paulo Stock Exchanges, and both have been working with the Angolan authorities to help create the necessary legal and regulatory structures. The Stock Exchange structure has clearly been inspired and influenced by the São Paulo legal system.”

With an election due in September, there is little likelihood however that the legislative package will be approved before then, but the consensus nonetheless is that the framework should be approved, and the Stock Exchange will be up and running by the end of the year, says Nunes.

“The government, and opposition, are both very committed to the stock exchange, and this is evidenced by the establishment of the first brokers, and the first fund structures. The commercial framework is already changing in advance of the Stock Exchange opening.”

Investment opportunities

While no companies have publicly declared an intention to float on the new Angolan Stock Exchange, when it does open, the anticipation is however that there will be some interesting prospectuses issued in both the short and medium-term, says Nunes.

“There are doubtless some very attractive potential investment opportunities, including both local Angolan companies and the Angolan subsidiaries of international companies operating in the country.”

Notable among these, he highlights some of the major Angolan banks, insurance and telecoms companies. But there are also a large number of domestic and foreign owned oil and gas, and construction, operators active in the country that might also utilise the Exchange, he suggests.

“We are anticipating that the Stock Exchange will ultimately be used by international companies looking to put their Angolan partners on an equal footing or to open up their ownership to local investors, as well as inevitably to open up Angolan companies to foreign investors.”

Angola is now the largest oil producer in sub-Saharan Africa, but much of the operating profits of companies are often invested abroad, he says. Portugal particularly has seen the arrival of Angolan banks, and Angolan investors are also now prominent among some of the country’s major companies.

“The stock exchange presents however an opportunity to keep some of this money in the country. The intention is to create a solid, reputable, way to invest locally, and the creation of the Stock Exchange as an institution is a first step to this,” explains Nunes.

Angola has come a long way in a very short time, he says. For instance, their Minister of Finance was recently nominated as among the most successful in Africa, but undoubtedly Angola still has issues and it may take decades to fully reconcile the development of the country.

“There is still a clear need for considerable investment in the country’s infrastructure and utilities, and there are undoubtedly interesting investment opportunities, but investors need to be sure that they are aware of the historical, cultural and dynamics of the country, and it helps to deal those with a track record of operating in the country.”

Preparing the way for the Angolan Stock Exchange – PLMJ

Garcia-Sicilia

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