In recent times, we have seen companies doing business in Africa list on international Stock Exchange commissions. The question that comes to mind is why? Why did Jumia, Zenith Bank, or SABMiller list on foreign Stock Exchange Commission, instead of considering the African stock markets?
This question has led to a different school of thoughts either supporting or debunking the reason behind their decisions. Some believe that the list on foreign markets can be attributed to the volatility that often exists on the trading platforms in Africa, while others believe they do it to raise business capital as it will be easier to do so on these foreign markets.
See also: Updates following MTN’s Listing on the Nigerian Stock Exchange
These companies are not limited to financial institutions, commerce or FMCG (Fast Moving Consumer Goods); the telecommunication sector is not left out. Unconfirmed sources state that Bharti Airtel, India’s second-biggest wireless carrier, plans to offer the shares of their African subsidiary (Airtel Africa) on the London Stock Exchange through an IPO. The deal is yet to be announced by the company but is said to be able to raise about $1 billion and trade next month if successful.
Well, the listing might be good for the company because of the market stability of the London Stock Exchange, when compared with different stock exchanges in Africa. Final details of the listing could change depending on investor and market demand. Airtel Africa has operations in 14 countries including Kenya, Tanzania, Nigeria, and Ghana. They raised $1.25 billion last year from investors, giving an equity value of about $4.4 billion. The IPO could be the biggest in London this year, with Airtel Africa considering an equity valuation of about $5 billion.
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