The Angolan Debt and Securities Exchange (Bodiva) is this year expected to receive two new companies, from the construction and banking sectors, the chief executive of the institution, Walter Pacheco told Lusa.
Created in 2015, Bodiva manages a market where several instruments are traded, mainly Treasury Bonds, as it was only last year that the equity market was opened, with two banking companies (BAI – Banco Angolano de Investimento and Caixa Angola).
Pacheco said that there were several companies in the process of preparing to list on the stock exchange, two of which are more advanced (in the construction and banking areas) and may be listed during the course of this year.
“We are monitoring seven companies that are at different stages of preparation, two of which are more advanced,” he said, without many details. However, he revealed that they are private, one from the construction area and another from the banking sector, and stressed that the stock market is more appetising for large companies.
He also explained that to enter the stock market, companies had to meet requirements in terms of information to be provided to investors, from the regulatory point of view (prospectus) and of the operation itself (preparation of the transaction and marketing).
On the stockmarket listing of BAI and Caixa Angola he said that it exceeded expectations in the primary market, having lost some dynamism in the secondary market.
“[In the primary market] we had a surplus of demand and a deficit in supply. In BAI it was around 160% and in Caixa Angola around 200%, which means that many investors stayed out and this created some pressure on the price,” he noted.
“When there is a shortage, the price increases and the volume of transactions in the secondary market drops significantly, we have this difficulty in the secondary market at this time,” he added.
For Walter Pacheco, Bodiva needs more product offerings: “We need to give people alternatives, more companies to be listed and other ways for companies to finance themselves. Not only shares and Treasury Bonds, but also corporate bonds that replace the use of bank credit.”
However, for Bodiva’s share index to be launched there is still a way to go.
“If we did a ‘Luanda Stock index’ now, it would only be representative of the banking sector, when you create an index you want it to be representative of the country,” Bodiva’s CEO said.
“We are expecting to have at least five companies from at least three different sectors,” which will be “much closer to being representative of the country,” which he believes will happen in two to three years. Construction, mining and the oil sector are some of the examples he gave.
Walter Pacheco considered that it is necessary to capture more investors, which will happen as more companies enter.
“We had 25,000 investment accounts open in 2021. With the BAI process we went to about 63,000 accounts at the end of 2022, because we had more product offer. We have to increase the supply of products, increasing the supply increases demand and the number of investors”, he stressed.
A process that also involves promotion internally and externally, through partnerships with other exchanges.
In comparison to other African exchanges, Bodiva is still small, in view of the size of the Angolan economy, Pacheco noted.
“The Angolan economy is one of the four or five biggest in sub-Saharan Africa, but we are a little behind if we compare it to Kenya, Nigeria or South Africa, which is already at another level,” Pacheco said, explaining that Angola started much later.
“But we are feeling a genuine interest from companies to finance themselves on the stock exchange and this will, in a way, create a very good dynamic for growth. And Angola is starting to gain an increasingly better reputation, we have a good window of opportunity to make Bodiva take a leap of opportunity,” he said.
Bodiva reached a turnover of 1.54 trillion kwanzas in 2022, which represents US$3.4 billion (€3.1 billion) and of this 1.5 percent related to shares.
“It is a relatively small amount, but we think it will grow quite a bit this year,” he concluded.
The presidents of the board of the Cape Verde and Mozambican Stock Exchange and the executive chairman for Africa of IIBank will be present at the Bodiva Forum, held today in Luanda, under the theme, “The Growing Market,” and will debate, “The Growth of the Equity Market in the SADC Region,” and “The Stock Exchange Market and Sustainable Financing.