BODIVA exchange first IPO

Banco BAI raised $94m in Angola’s first IPO

Equity trading has started on Angola’s BODIVA stock exchange eight years after it opened. The biggest private bank, Banco BAI, held an oversubscribed public offer and raised AOA (Angolan kwanza) 40.1bn ($94m).

The Bolsa de Divida e Valores de Angola (BODIVA) opened in 2014 and has since been trading Government and private  bonds. According to news reports, $2bn of bonds were traded in 2020.

“Buy” orders waiting

The first IPO is set to launch a privatization drive and a wave of listings, according to BODIVA CEO Walter Pacheco. It could also boost the image of President Joao Lourenco as an economic reformer ahead of Angola’s presidential and National Assembly general elections on 24 August.

Angola’s economic development plans include modernization and a drive to diversify the economy from reliance on oil and diamond exports, reduce the economic dominance of the Government, and attract foreign investment. The economy had been in recession for five years but is expected to grow by 2.7% in 2022.

According to Banco BAI, the 1.9m shares were priced at 20,640 kwanza each ($48.36 each). The pricing was at the top end of the 17,200-20,640 kwanza price range which had been published for the shares. The offer was oversubscribed nearly 1.6 times, according to Bloomberg, at a time when many share offers are being pulled from global markets due to lack of investor confidence and market turmoil. Foreigners were allowed to buy the shares.

On 9 June the bank’s shares were listed for trading on the Angolan bourse. According to this report on Bloomberg, when trading started there were 8 buy orders waiting at AOA 21,650 each, but no sellers. A BODIVA press release said that on 13 June there were 5 trades and the price climbed to AOA 22,704, up 10%.

BODIVA CEO Walter Pacheco said: “We come together today to witness the start of a new era for the financial system and the capital markets.”

The Banco BAI share sale was for only 10% of the shares, sold by two of its biggest shareholders, oil producer Sonangol and diamond company Endiama, both  state-owned.

Luis Lelis, CEO of Banco BAI, said: “This capitalisation opens strong opportunities for the future of BAI, to keep investing in our operations and in new business with more transparency and accountability.” (as reported by Reuters ). He said the bank may come back to market to raise another 10% of capital.

Launching privatizations?

Pacheco had earlier told Reuters that Government plans to sell its shareholdings in several companies including television and telecommunications provider TVCabo Angola, bank Caixa de Angola, upstream oil company ACREP and fuel retailer Sonangalp: “All these companies revealed, publicly or privately, their ambition to list capital with BODIVA. … The first IPO will be decisive to promote the market.

“He added: “The market did not advance earlier because it was necessary for the state to reduce its direct intervention in companies and in the economy.”

Pachecho had suggested that lenders Banco Caixa Geral Angola SA and Banco Millennium Atlantico would come to the market before the giant IPOs of Sonangol and Endiama. One of the biggest privatisations is likely to be an offer of 30% of the shares in Sonangol, which could take up to two more years to prepare and could also take place on an international exchange.

The state could sell off 62 companies and other assets, while other estimates suggest 20 more IPOs could follow in the next few years.

The market is busy with rumours of other potential listings and IPOs, including privately owned airline Fly Angola which resumed domestic flights in Angola last December after COVID-19 disruptions.

Luanda harbour, credit Depositphotos


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