A study by Baker & Mckenzie global law firm shows that public listings on the stock market by African firms are expected to swell this year. This is in stark contrast with a sampling of eight stock exchange indices in Africa by Morgan Stanley Capital International which showed that they lost 14.51% of their value over the last one year.
While there have been several false dawns as far as capital markets across Africa are concerned, the forecasted trend, if actualized, could represent the highest IPO volume yet for the region. The news that 30 initial public offerings (IPO) by African-domiciled firms have been announced, a jump by a quarter from last year’s number, is welcome.
African stock markets are characteristically small and often dominated by a few large corporations. Trading in shares is less frequent and limited to a few firms. Many lack access to reliable and up-to-date information technology; liquidity and public confidence. Relevant policy departments must address these setbacks.