Angola’s first successful IPO may pave way for privatization of conglomerates – The North Africa Post

In a major development in Africa’s capital markets, Angola has launched its first initial public offering (IPO), which could lead to a slew of privatizations of some of the country’s biggest conglomerates.

In June, Banco BAI, Angola’s largest private bank, floated a 10% stake following the country’s first initial public offering (IPO), viewed by observers as an important step in the government’s modernization drive. The president of the southern African OPEC member, Joao Lourenco has undertaken ambitious reforms to transform the state-dominated economy and draw private investment. The state-owned oil and diamond companies Sonangol, Endiama and Endiama sold all their stakes in the bank during the BAI IPO. “The government has shown a commitment to fiscal orthodoxy, a commitment to a flexible currency. And that’s what investors like to see,” says Charlie Robertson, global chief economist at Renaissance Capital.

After Banco BAI successfully completed the Angola’s first IPO, raising 40.1 billion Angolan kwanzas (AOA) ($94 million), the country could be looking at a flood of listings and capital increases. As Angola prepares for general presidential and National Assembly elections on 24 August, the IPO and listing could boost President João Lourenço’s image as an economic reformer.

National economic plans include modernization and an attempt to diversify the economy away from dependence on oil and diamond exports, as well as reduce the government’s economic dominance and attract foreign investment. The economy is currently in recession for five year, but is expected grow by 2.7% in 2022.

According to reports, the government intends to sell its stakes within several companies, including TV and Telecoms provider TVCabo Angola as well as bank Caixa Angola and oil company ACREP, and fuel retailer Sonangalp.