Zimbabwe dual listings.

The Old Mutual Group has been operating in Zimbabwe for more than 100 years and is by far the best known dual listing. Old Mutual is a diversified international financial services group listed on the stock exchange in London , South African, Malawi , Namibia and Zimbabwe. The disposal of Old Mutual shares in London and/or South Africa is the most common way to get funds out or into the country at a free market exchange rate. This is normally done with the approval of the Ministry of finance to raise foreign currency to redeem loans. Other dual listings include Cargill Zimbabwe, a local subsidiary of the United States agriculture giant, African Banking Corporation (ABC) chaired by top ZANU-PF businessman Oliver Chidawu and in which the World Bank affiliate International Finance Corporation has a 10% shareholding; and Vulya Investments.

Dubai International Financial Centre 2012 Sukuk

The Dubai International Financial Centre 2012 Sukuk is one of the benchmark bonds in the GCC. As the price of oil has fallen and the credit crisis worsened, the spread has widened against LIBOR to 307bps. Prior to last summer and the credit crisis, when oil was significantly higher, the spread was only 44pbs.

The Suruk is interesting as it is very liquid. The high level of international interest in the USD 1.2bn Sukuk means some 67% of its investors are from outside the region.

DIFC Investments' 5-year al-Mudarabah Sukuk has a rating of 'A1' from Moody's and 'A+' from Standard & Poor's.

Access bank launches mobile banking in Kenya

Access bank is going mobile. Kenya's Central Bank Governor Njuguna Ndung'u launched of the country's first formal mobile banking service. In Kenya, people already use mobile phone chips in an informal way. The prepaid chips are used as a from of money transfer. A very exciting develop, especially as more people have mobile phones than have bank accounts!

Linkage Assurance Plc

Regular readers will know we are not too keen on the Nigerian insurance market. Well, Linkage Assurance Plc has just announced an increase in turnover of 258.49 percent. A cynic might say this could have been at the expense of margin. Not right.. Profit before tax attained a new high of N304.8 million against N76.4increasing 298.95 percent.

Democratic Republic of Congo considers first IPO

The government of Democratic Republic of Congo is planning to privatise some of its mining assets. Victor Kasongo, deputy minister of mines, said the government wanted to transform state-owned mining companies into commercial entities. New management would be drafted in to turn round such assets and then would then be floated through an initial public offering. In short, the first mining flotation should happen in less than 12 months. Sounds interesting.

Frontier Market's roadshow

In order to raise awareness of Frontier Markets and Danfonds activities in new Emerging Markets, we are holding a number of one on one's and presentations over the comming months. Please contact us for further details on +45 44209881.

Stockholm 9th Sept
London (City) 17th, 18th Sept
Jersey 19th Sept
London (Docklands) 22nd Sept
New York 24th, 25th, 26th and 27th Sept
London (West end) 29th Sept
London All day conference
Geneva 3rd Oct

A stock to die for...

FSG Limited, the biggest funeral services provider in Botswana, plans to raise 36 million pula through an initial public offering to finance the construction of cemeteries and expand into Zambia.

FSG will begin trading stock on the Botswana exchange Oct. 6, becoming Africa's first publicly traded funeral company.The Gaborone-based company will sell about 30 percent of its 120 million shares for 1 pula apiece prior to listing on the Botswana Stock Exchange. The company has 50 percent of the market.

Allocations to ME/Africa Funds rise to USD 733m in Q2

According to HFN, hedge funds focused on the Middle East and Africa had their highest total of new allocations in the second quarter of 2008. HFN have caluclated that total assets for hedge funds investing in Africa and the Middle East rose 18.78%in the second quarter, with new allocations of USD 733 million.

Ukrainian Parliament splintered

Ukraine has returned to political theater and stocks were suspended today to prevent further falls. We are looking for a semblance of stability in order for the market to stabilise... but the fundamentals are now looking interesting. First half results are showing impressive top and bottom line growth.

Ukrainian Parliament splintered two nights ago with Yulia Timoshenko's block siding with Party of Regions in passing a legislation to reduce Presidential powers. In short, the rift was caused by an attempt to shift power more from the president to parliament as well as the tension caused by the Russia - Georgia conflict.

Impressive financials coupled with low valuations in a market down over 50%! Watch this space.

GCC Financials

Banking and finance companies represent 40 percent of the 150 largest market capitalisation companies in the GCC region.

Al-Rajhi Bank has the highest market cap of US$32 billion. Kuwait Finance House has a market capitalisation of US$21.68 billion, and in third place is National Bank of Kuwait (US$18.7 billion).

Other large banks and financial companies include Samba Financial Group (US$16.26 billion), Emirates NBD (US$16.23 billion), SABB (US$14.22 billion), Qatar National Bank (US$13.96 billion), Riyad Bank (US$13.1 billion), Saudi French Bank (US$11.66 billion) and National Bank of Abu Dhabi (US$10.72 billion).

Iamgold bids for Euro Resources

Botswana Stock Exchange listed and Toronto-based Iamgold has made a bid of BWP 1.20 a share for Euro Resources, which has a royalty agreement on its Rosebel mine. Euro Resources, a French company, was up 26% on the back of the announcement.

Clearly, this clears up the capital structure and obviously Iamgold knows what the mine is worth, so it looks like its good news for everyone.

Bank of Georgia

Bank of Georgia, the country's leading universal bank, released announced first half net profit increased 86.2% year on year. The bank’s ROAE was 17.3% and CAR was 25.8%. It will be interesting to see how this impresive growth was affected in the second half by the troubles.

We understand that on September 1, the Central Bank of Georgia sold more dollars in August than in any other month in at least nine years. The US$187.2 million that was sold amounted to almost 13% of Georgia's US$1.5 billion reserves. .

Zambian Breweries (Zambrew)

Zambian Breweries is diversifying into soft drinks.

The company has announced plans to invest USD 60m over the next 2 years on re-designing Northern Breweries. Zambrew will invest a USD 20m will of this in soft drink production facilities. These will consist of a 42 000 bottles per hour packing line.

Globacom rumours

Nigerian entrepreneur Mike Adenuga Jnr is rumoured to be implementing his plan to build a pan-African telecoms giant by acquiring Telkom of South Africa.

The idea is that if Globacom can do a deal based on Telkom's 50% stake in Vodacom. Globacom cannot bid for the Vodacom shares directly, as Vodacom's other 50%-owner, Vodafone, has the first right of refusal. So it can only access Vodacom by acquiring Telkom outright.

Telkom, so far, has claimed it has not entered any discussions. That said, rumours suggest Telekom's CEO and Adenuga had now met. Talk is that Globacom proposes that the new entity, to be called Vodaglo would be equally owned by Globacom and Telkom.

The question now is whether Telkom's shareholders, which include the South African government's 39%, would be interested in the bid by Nigeria's second-largest cellular operator.

Alka Banerjee on frontier markets

Alka Banerjee, vice president of Global Equities, Standard & Poor's Index Services was recently inteviewed on what distinguishes a frontier market from an emerging market.

She replied "there is as yet no real defined number or threshold that can actually tell you that this is frontier versus this is emerging. The frontier markets concept came into existence in the mid-1990s when the IFC decided to focus on markets which were typically not part of the regular emerging markets—those that had established stock exchanges, had a trading history, but were very small and illiquid."

When Banerfee was asked if frontier markets provide a new level of noncorrelated returns? she replied "they absolutely provide diversification. Emerging markets have over the years become far less of a diversification strategy than they were 10 years ago—or even five years ago. Now emerging markets tend to correlate upwards of 85 to 95 percent with developed market performance. It varies across markets, but the correlation numbers for frontier markets can be in the range of 40 to 60 percent, which is a huge diversification."

Hippo Valley Estates

The beligered Hippo Valley Estates in Zimbabwe is starting to attract attention as a post Mugable play. The listed sugar plantation covers 124 square kilometres, and the company employs around 5,000 people. Hippo Valley Estate has a capacity of 300,000 tonnes of sugar per year but is currently producing below that. In 2004, parts of the estate were listed for confiscation by the government of Zimbabwe as part of its land reform project. The company has had a bad time of it ever since the advent of farm invasions that started in 2000. Still, Zimbabwe and the Hippo Valley have the right conditions for agriculture, so hopefully things will look brighter for the company once the country returns to a more normal political path.

Africa: New Emerging Markets

Iraqi soveriegn debt

Iraq's $2.7 billion issue, the 5.8 percent 2028's, has gained 45 percent since August 2007, according to Merrill Lynch & Co. The bond currently trades at a 484 basis point pick up to US treasuries.

Merrill's make light of the fact that the spread is narrower than for a number of Ohio banks including National City Corp. and KeyCorp, suggesting Baghdad may be safer for bond investors than Cleveland!

Co-Operative Bank of Kenya Ltd.

Undetered by the fate of Safaricom's share price, Co-Operative Bank will launch its Initial Public Offering on Friday 17 October. The KES 10bn IPO follows a major restructuring and conversion from a co-operative. 77% of the company will be owned by its 3,805 societies. The balance of 23% will be held by individual members. 51,000individuals have now been allocated one share each. The bank serves the 7m-member co-operative movement in Kenya.

The bank recently announced a half-year profit of KES 1.7bn, moving

Dominican electricity sector

The Dominican electricity sector faces problems arising from to the inability of Dominican state-owned distribution companies to pass through the increasing cost of privately generated electricity to end users. Accross the whole country power generation has fallen and blackouts are now the norm. Total electricity production in the country currently only stands at 1,311 MW, implying an energy production deficit of 700 MW. To make matters worse, Corporación Dominicana de Empresas Eléctricas Estatales had a transformer explode last week.

The whole sector is clearly on our 'default watch'.