Private Financing of Public Infrastructure, A way For West Africa (UGBS Public Lecture)

You are all invited to a very important Public Lecture to be delivered on Oct. 25th @ UGBS by Prof John Macomber, Professor of Finance at Harvard business School.  

ABSTRACT 

Africa and the world face three large trends:  rapid and massive urbanization; current and worsening resource scarcity; and the apparent inability of national governments to mobilize investment in urban infrastructure to get ahead of these problems.  At the same time, the world is awash in liquidity as trillions of dollars realize close to zero yield in the global capital markets.  How can thoughtful private investment and delivery of public infrastructure be attracted and channelled to address this “infrastructure paradox”?  This lecture provides an opportunity to discuss the broader opportunities available for private financing of public infrastructure, and then explore how these opportunities might be exploited and accomplished in western Africa.

Speaker profile

Professor John Macomber Lectures in Finance at the Harvard Business School, where his research and teaching focuses on exploring opportunities for private financing of public infrastructure in cities in the Global South.  He has undertaken field research in Latin America, Africa, and South Asia, and his sectors of interest include power, transportation, water/sanitation, and waste.   Prof. Macomber’s professional background is in construction and real estate before joining the HBS faculty.  He is a member of the Executive Committee of Harvard’s Center for African Studies.

NEWS RELEASE: AngloGold Ashanti Update on Unprotected Strike at South Africa mines

NEWS RELEASE: (Johannesburg)  –  AngloGold  Ashanti (AGA)  confirms that  its  mines  in  South  Africa remain  at  a standstill  amid the unprotected  strike  which  began  on 20 September  2012 at the Kopanang operation  and spread to the  remaining  five  operations  on  25  September  2012. Our priority remains to protect the safety of our employees and the communities in which we operate and we continue to work with the authorities to that end. AngloGold Ashanti has
safeguarded its own rights in relation to the strike by obtaining a court interdict to formally declare the work stoppage unprotected.
 “Clearly for South Africa’s gold sector, as for many others, there is a very clear trade-off between  investing  in the sustainability  of our business  and not putting  employment  at risk,” Chief  Executive  Officer Mark  Cutifani  said.  “If  the  current  unprotected  strike continues,  it compounds  the potential  likelihood  of a premature  downsizing  of AngloGold  Ashanti’s  South African operations.”
Our stance on the strike remains clear:
•  We are deeply disappointed that our employees have chosen to break their commitment to the current wage agreement and collective bargaining structures
•    We do not intend to reward broken commitments, violence and threats of intimidation
•  We remain  committed  to our employees  and the collective  bargaining  processes  as a way to resolve our differences with recognized unions and associations
•  We are open to consider ideas to bring forward negotiations and work together with our social partners to renew our commitment to, and delivery on, our social compact for the mining industry, as agreed in the Mining Charter
•  If striking employees return to work and engage in constructive discussion we will find a pathway to a sustainable and shared future
•  If the current unprotected strike continues, it compounds risks of a premature downsizing of AngloGold Ashanti’s South African operations
•  In a country where roughly one in four people do not have work, it is incomprehensible that strikers are engaged in activities that threaten jobs in a cornerstone industry that is central to South Africa’s growth aspirations, and where wage rates are highly competitive as compared to other labour intensive sectors in the country.

About AngloGold Ashanti’s South African Operations
AngloGold  Ashanti’s  South Africa operations  accounted  for approximately  32% of total group production during the first half of the year. Approximately  35,000 people are employed across AngloGold Ashanti’s South African operations. This figure is inclusive of contractors and those working on two major capital projects under way at the Moab Khotsong and Mponeng mines.
AngloGold  Ashanti  is a member  of the gold industry’s  collective  wage bargaining  unit at the Chamber of Mines and as such is committed to addressing demands regarding pay and other substantive issues through this framework. At present, the gold industry is in the second year of a two-year wage agreement with the latest increases, ranging from 8% to 10%, awarded to the workforce in July, under the agreement reached in 2011. A similar increase was awarded last year. South Africa’s annual Consumer Price Inflation is currently 5% in August.
SPONSOR: UBS South Africa (Pty) Limited
Released on 1st Oct. 2012

Week in Focus: How stocks performed on the Ghana Stock Exchange (GSE)

New week, new gains, new losses, the GSE did not show any clear direction. On Monday the Ghana Stock Exchange gained some ground as gains in CAL Bank and Mechanical Lloyd Company (MLC) offset losses in two other equities. The GSE-Composite Index closed at 1,036.48 points, from 1,035.97 points and the GSE-Financial Stock Index closed at 872.44 points, up 0.64 points from 871.80 points. A total of 0.35 million shares traded, a 51.39% decline from the 0.72 million shares traded at the previous session. The corresponding trade value was GHS0.10 million, 43.76% less than the previous session.
MLC dominated trading for the second successive session. Click for details.

On Tuesday, the banking sector affected the market indices as marginal losses in two banking stocks drove the both indices downwards. CAL Bank and Ecobank Ghana (EBG) recorded negative price changes. The GSE-Composite Index decreased by 1.17 points to close at 1,035.31 points, bringing the year-to-date return to 6.84%. The financial stocks index closed at 870.25 points, a 0.25% decline from the previous closing of 872.44 points. Compared to the previous session, Tuesday’s trade volume and corresponding trade value were 56.32% and 14.96% respectively less. Ghana Commercial bank (GCB) led the market in terms of value with 29.51%, while SIC Insurance led in terms of volume, accounting for 25.64% of the shares traded. Furthermore Guinness Ghana brewery limited (GGBL) was the sole gainer and it moved up by a pesewa to a year-high of GHS2.40.

Positive price changes in three equities on Wednesday, edged up performance on the local bourse. The GSE-Composite Index climbed 1.47 points to close mid-week trading at 1,036.78 points whiles the financial stocks index returned 0.09% to close 0.78 points higher at 871.03 points.
Now let’s look at the stocks that moved the market. Trading was dominated by UT Bank (UTB) in terms of volume, with 37.47% of the trade volume, and Ghana Oil (GOIL) in terms of value, with 36.55% of the turnover. GOIL closed at record-high of GHS0.55, up GHS0.01 from GHS0.54 whiles TOTAL Petroleum and UTB also gained.

The stock market on Thursday, declined as fall of GOIL’s stock price forced the GSE-Composite Index down, 0.39 points to close at 1,036.39 points. The financial index was not affect and it stayed flat. The trade volume and value declined for the fifth successive session as 0.09 million shares were traded for GHS0.04 million, 20.26% less than Wednesday’s turnover of GHS0.05 million. Trading was dominated by UTB, accounting for 52.38% and 35.75% of the trade volume and trade value respectively.

Trading on the bourse yesterday ended the week in silence. Activities on the exchange kept the indices stable. The GSE-Composite Index and the GSE-Financial Stock Index remained stable at 1,036.39 points and 871.03 points respectively meanwhile, Friday’s turnover exceeded the previous session’s by a marginal 0.29%. New faces for the week, like Ecobank Transnational Inc. (ETI) trades accounted for 47.58% of the shares traded, while Standard Chartered Bank (SCB) led the market in terms of value, with more than 50% of the turnover. Due to low activity in the market at the end of the week, no price changes were recorded for the day.

Looking ahead: Next week could begin as an active week for ETI, GOIL and SG-SSB since more Bids orders awaits Offers in the market. On the other hand, more Offers await Bids for CAL Bank and Mechanical Lloyd Company and this can best be confirmed affect the Pre-market trades on Monday. I hope next week restore high activity in the market.
Keep Investing and following this blog for the best.

Sector by Sector Market Capitalization for 1st Half, 2012 on Ghana Stock Exchange

Courtesy: CBL Research

By the end of the first half of 2012, the most capitalized sector on GSE is the Mining and Oil Sector. This sector had a market capitalization of GHS 48,874.46 million, making 88.81%. This sector can boast of a mining giant,
 AngloGold Ashanti (AGA), a leading global gold producer, operating in 11 countries and listed on five (5) stock exchanges including the New York Stock Exchange (NYSE). Moreover, this sector
also have another giant, Tullow Oil plc (TLW), a leading independent oil and gas, exploration and production group that listed on GSE not so long and on other exchanges.
With a very huge gap, the Finance sector followed the Mining and Oil sector and had market capitalization of  GHS 4,618.64 million which is equal to 8.39%. It can also boast of a banking giant, Ecobank Transnational Inc. (ETI) (mostly described as a world class pan-African bank group) which dominates capitalization in this sector.
The third most capitalized sector is the FMCGs & Pharmacy sector. This sector had GHS 754.70 million and this represented 1.37% of the total GSE market capitalization.
Following the FMCGs & Pharmacy sector is the Manufacturing & Trading sector and this takes only 1.02% of the market with GHS 562.62 million capitalization. The Manufacturing & Trading sector can also boast of a giant such as Unilever Ghana (UNIL), a manufacturer of leading food brands, home and personal care.
The Agric-business sector on the exchange achieved a market capitalization of GHS 214.43 million and that’s less than 1% (actually 0.39%).
Finally, the ICT & Paper sector had market capitalization at the end of the first half as GHS 9.50 million, making 0.02% of GSE.

Ecobank Ghana (EBG) held lion’s share of trade value – Market records worst performance

CBL: The Stock Market recorded its worst day-on-day performance today, as the major indices (GSE Composite Index & GSE Financial Stock Index) fell, following losses in three equities. The GSE-Composite Index returned -0.96% as it fell 10.04 points from 1,040.70 points to 1,030.66 points. The GSE-Financial Stock Index closed at 883.00 points, from 893.32 points.
CAL BANK was dominant in terms of volume traded, accounting for

21.44% of the 0.12 million shares traded, while Ecobank Ghana (EBG) held the lion’s share of the trade value, accounting for 42.68% of the GHS 0.13 million realized. Compared to the previous session, trade volume and value declined by 46.23% and 57.14% respectively.

Enterprise Group ltd (EGL) was the only gainer and was up GHS0.01 to close at GHS0.29. Ecobank Transnational Inc. (ETI) and SIC Insurance Co. however, declined by the same margin, to close at GHS0.12 and GHS0.32 respectively. PBC Ltd, a produce buying company, slipped by GHS0.03 to close at a year-low of GHS0.21.
Coutesy: CAL Brokers Ltd

1st Quarter Analysis of the Manufacturing sector on the Ghana Stock Exchange

The Manufacturing sector on the Ghana Stock Exchange (GSE) include stocks like that of Unilever Ghana Ltd. (UNIL), PZ Cussons Ghana Ltd. (PZC), Aluworks Limited (ALW) and the Pioneer Kitchen Limited (PKL). PKL is no more listed on the GSE with effect from 26th March 2012 due to a sanction from the exchange for refusing to observe the continuing listing obligation including failure to hold annual general meetings. This move by the GSE reduces the market capitalization and that of the manufacturing sector by about GHS 2 million (about $1.25 million).
This sector on the exchange is dominated by Unilever Ghana Ltd; with a market capitalization of GHS 509.37 million (about $312.50 million), making it the most capitalized in the manufacturing sector.

UNIL
Unilever Ghana Limited (UNIL) manufactures and markets consumer goods throughout Ghana some of which includes toilet soaps, personal products, detergents, and consumable food products.
UNIL: 1st Quarter Chart on GSE: (courtesy; Bloomberg & GSE) 
This year, UNIL began trading at GHS 6.64 (03.01.12) per share on the exchange and saw price hikes to close at GHS 8.15 as at today with a Year-High of GHS 8.15 and a Year-Low of GHS 6.63. An investment made in UNIL exactly one year ago would yield 31.34% profit.  UNIL records a Price/Book value of 8.0428 in the most recent Quarter with Earning per share and Price/Earnings ratio of 0.5081 and 16.0388 (trailing 12 months) respectively.

PZC
PZC 1st Quarter Chart on GSE: (courtesy; Bloomberg & GSE) 
PZ Cussons Ghana Ltd. (PZC) is another company in the manufacturing sector on the GSE. This company is the manufacturer of over-the-counter pharmaceutical preparations, cosmetics and beauty products. PZC began trading on the exchange in 2012 with a share price of 0.24p (03.01.12) and since then, there was no price change. The 1st quarter did not favour PZC in terms of price change although it traded some volumes of share in the quarter. With a market capitalization of GHS 40.32 million, PZC recorded a dividend yield (trailing 12 months) of GHS 1.5694 and as reported by Bloomberg, an enterprise value of GHS 38.54 million.
ALW
ALW: 1st Quarter Chart on GSE: (courtesy; Bloomberg & GSE) 
Aluworks Ghana Limited as the name implies works with aluminum. It is an aluminum rolling mill with produces semi-finished and finished aluminum sheet in coil, circles, flat sheet and corrugated roofing sheets. This company was incorporated on February 24, 1978 and currently has a market capitalization of GHS 6.44 million making it the lowest in the manufacturing sector on the exchange since PKL has been suspended. ALW began the quarter and the year with a 0.13p share price (03.01.12)  and later dropped to 0.12p to 0.9p and now closed at 0.07p per share. With an obvious Year-High of 0.13p and a Year-low of 0.07p/share, ALW has a Price/Book of 0.2355, Earning per share (trailing 12 months) of -0.0977 and an Enterprise value of GHS 28.04 million.
The Manufacturing Sector as a whole did not performed so well despite the driving and dominating strength of UNIL in the sector. Investors should follow closely activities in this particular sector and look for the opportunities.