The listing of Jumia on the NYSE has elicited many discussions about how ‘African’ it is to qualify for the moniker of “first African tech IPO”.
The confusion over wether Jumia is African or not is caused by its focus on the continent as its primary market. By comparison, Coca Cola has had a long and storied presence on the continent. But no one calls it African. It has American beginnings and operates all over the world. pic.twitter.com/JhU3E0tJLv
— TMS Ruge (@tmsruge) April 13, 2019
London has been the listing home of many large African companies in the oil, gold, mining space for many years. It has also recently come to attract more banks, Eurobonds and Diaspora bonds. There are 119 African companies listed in London including top Nigerian banks while sovereign bonds of 11 African countries trade on the LSE.
Other recent listings have gone to foreign markets including:
- Vivo Energy’s LSE listing in 2018, which was the largest IPO of the year in London.
- In Nigeria, which is Jumia’s largest market, here’s an investor recap of all the listed ‘tech stocks’ on the Nigerian Stock Exchange which include Courteville, Triple Gee, NCR, eTranzact, CWG, Chams, and OMATEK.
- After spinning off Multichoice, Naspers plans to list its international internet assets on the Euronext Amsterdam Exchange with a secondary listing in Johannesburg. The assets include companies like PayU, Souq, Flipkart (which was sold to Walmart in 2018), Tencent, and Mail.ru. It only makes 4% of its revenue in South Africa and accounts for 23% of the Johannesburg All-Share SWIX exchange. By listing 75% of the company in Amsterdam, this will reduce its weight in the South African exchange. Safaricom is in a similar situation in Kenya, accounting for about 40% of the value of the Nairobi Securities Exchange, but as its revenue is currently all from Kenya, a listing move away is unlikely.
- Within Africa, the island nation of Mauritius is an attractive listing country and is considered a gateway to India and Africa for many venture funds. Listing there confers benefits including no capital gains or dividend taxes, and Mauritius can also grant residency to people who invest over $500,000.
Lost in the the #JumiaIsNotAfrican debate is how difficult many African countries make it to HQ multinationals. High capital gains tax, low IP protections, slow internet & comms, managed currencies, nationalistic ownership laws, uneven dispute settlement, etc are all barriers. https://t.co/f3O1HUsd15
— Sam Rosmarin (@SamRosmarin) April 15, 2019
Other foreign listings planned include:
- Airtel’s listing of its’ business in 14 African countries is expected to be another large London blockbuster.
- Kenya’s National Oil is a long-shot to be listed in London and Nairobi.
- Dangote Cement which accounts for about a third of the Nigerian Stock Exchanges market capitalization plans a secondary listing in London later in 2019.
- MTN is expected to list a share of its Nigeria subsidiary once a tax dispute matter is resolved.