Weekly Investor Update (November-WeekFour-2024)

9 min Read November 22, 2024 at 5:00 PM UTC

Wednesday

Gabon’s New Constitution Extends Presidential Terms to Seven Years

Gabonese voters have approved a new constitution extending presidential terms to seven years from five, with 92% backing the measure in a referendum, according to Interior Minister Hermann Immongault.Voter turnout was reported at 54%. The new constitution is seen as a key step toward a return to civilian rule following the military coup that ousted President Ali Bongo in 2023.The new framework abolishes the prime minister’s role, introduces a vice-president position, and limits presidential terms to two seven-year terms. It also sets an age cap of 70 for presidential candidates and requires candidates to have both parents of Gabonese nationality.

The constitutional reform clears the way for military leader Brice Oligui Nguema, 49, to potentially contest the next presidential election scheduled for August 2025. Nguema, who ousted Bongo after his family’s 55-year rule, has emphasized returning to constitutional order. The reforms aim to reshape Gabon’s political system, signaling a departure from the long-standing dynastic rule that defined the nation’s governance.

Citigroup Sees South African Equities Outperforming Emerging Markets

Citigroup expects South African equities to recover from recent losses and outperform emerging market peers, supported by the pro-reform agenda of the country’s coalition government formed after May elections.George Asante, Citi’s head of African markets, highlighted South Africa’s focus on economic growth and lower interest rates as key drivers boosting investor confidence, even amid global headwinds like Donald Trump’s recent US election victory.The FTSE/JSE Africa All Share Index remains up 11% in dollar terms this year, outpacing MSCI’s emerging market equity index. A sentiment boost followed S&P’s recent upgrade of South Africa’s credit outlook to positive and the oversubscribed $3.5 billion Eurobond sale. While foreign investors have offloaded $6.1 billion in South African stocks this year, outflows slowed significantly in November.

Citigroup’s optimism reflects confidence in South Africa’s stable political environment and reform efforts. Lower interest rates and enhanced market clarity are expected to attract new investments, bolstering equities. Despite global uncertainties, South Africa’s progress toward sustainable growth and strong demand for its sovereign bonds position its markets favorably for continued recovery.

Qara Raises $2.6M to Expand Supply Chain Solutions in MENA

MEA-based supply chain tech startup Qara has secured $2.6 million in a funding round led by strategic investors. Qara’s digital ecosystem enables manufacturers to authenticate products, connect across the supply chain, and leverage AI for data-driven decisions.The funding supports Qara’s entry into Saudi Arabia under the National Technology Development Program’s (NTDP) Relocate Initiative, facilitating tech integration into the Kingdom’s rapidly growing ecosystem aligned with Vision 2030 objectives.Having already collaborated with 35 manufacturers to authenticate over 28 million products and connect with 50,000 supply chain users across Egypt, KSA, and Kenya, Qara aims to revolutionize B2B2C marketing, improve distribution efficiency, and safeguard brand integrity.

With tools like the “Asly” app, which combats counterfeiting and enhances customer trust through QR-based product verification, Qara addresses pressing supply chain challenges while driving digital transformation. By expanding into Saudi Arabia, Qara strengthens its foothold in the MEA region, empowering businesses with scalable and secure solutions that align with regional digital transformation goals and Vision 2030’s emphasis on innovation and technology.

JADA Raises $1M to Build Africa’s AI Workforce for Global Demand

JADA, a Lagos-based data and analytics talent hub, has secured $1 million in funding to train and deploy Africa’s next generation of AI and data professionals.Founded in 2024 by Massimiliano Spalazzi, former CEO of Jumia Nigeria, and Olumide Soyombo, co-founder of Bluechip Technologies, the startup aims to address the global AI talent shortage by training over 100 professionals annually.JADA will focus on experienced data professionals, offering a 4-month training program to upskill candidates in AI, machine learning, and generative AI. The startup uses an AI-driven selection process to screen applicants for technical, cultural, and background fit.

JADA’s mission challenges Africa’s current role in low-level AI tasks by cultivating a skilled AI workforce capable of leading global projects. By targeting businesses in Europe and the Middle East, JADA leverages Africa’s cost, language, and geographical advantages, positioning the continent as a key player in addressing the global AI skills gap. With seasoned leadership and a clear revenue model, JADA is poised to redefine Africa’s place in the global tech ecosystem.

BOA Benin Doubles Shares After Capital Increase Amid Challenges

The regional stock exchange BRVM has listed 20,280,524 new shares for Bank of Africa Benin (BOAB), doubling its total shares to 40,561,048. This follows a capital increase through reserves and premiums incorporation.BOA Benin’s capital has grown from 20.28 billion CFA to 40.56 billion CFA, with a market capitalization now at 178 billion CFA. It is the 11th most valuable stock on the BRVM, representing 1.8% of the exchange’s equity market.However, BOA Benin has struggled in 2024, starting the year at 6,360 CFA per share but losing 30.9% of its valuation, placing it 38th in year-to-date performance. This share addition strengthens BOA Benin’s equity and liquidity, enabling the bank to pursue its growth objectives within WAEMU.

BOA Benin’s capital expansion highlights its strategy to enhance resilience despite recent market underperformance. Its current valuation positions it as a significant player on the BRVM, reflecting investor interest despite challenges. The BRVM continues to provide a platform for financial integration in francophone Africa, with listings like BOA Benin fostering liquidity and regional growth. As economic dynamics evolve, maintaining investor confidence will be key for BOA Benin’s long-term success.

South African Insurer Sanlam Buys Stake in Ninety One for $276M

South African insurer Sanlam will acquire a 12.3% stake in asset manager Ninety One for 5 billion rand ($276 million), according to a joint announcement. The deal, subject to shareholder and regulatory approval, will involve Sanlam transferring around 400 billion rand of assets to Ninety One.Sanlam’s CEO, Paul Hanratty, stated that the insurer aims to become a key investor in Ninety One’s private and specialist credit strategies. Ninety One, led by CEO Hendrik du Toit, manages over 3.3 trillion rand in assets. Du Toit highlighted the partnership’s potential to unlock “substantial cash flows” from global private markets.This collaboration reflects a growing trend of alliances between asset managers and insurers to enhance access to capital and expand fee-based revenue streams. Similar deals have been pursued by global firms like Apollo, Blackstone, and KKR, which leverage insurance-linked assets to drive growth in private markets.

The Ninety One-Sanlam deal highlights the strategic synergies between asset managers and insurers. Asset transfers from Sanlam will bolster Ninety One’s portfolio, enhancing its reach in private credit markets. For Sanlam, the investment provides exposure to fee-generating strategies, aligning with its growth objectives. The move mirrors global trends where asset managers partner with insurers to access stable capital, diversify earnings, and strengthen their market positioning. Partnerships like these underscore the increasing interdependence between asset and insurance sectors, driven by shared goals of scalability and long-term asset growth.

Senegalese Unit of Bank of Africa Half-Year Results Show Steady Growth

Bank of Africa Senegal (BOAS) has released its financial results for the first half of 2024, showcasing a mixed yet overall positive performance in the face of a slower-than-anticipated economic environment. Despite challenges, the bank has demonstrated resilience through strategic management of its resources and risks.Customer deposits increased by 3.4% to 593,353 MFCFA, signaling growing customer trust and liquidity strength. Net banking income (NBI) grew by 3.6% to 23,757 MFCFA, driven by a 6.3% increase in commissions and a slight rise in net interest margins (+0.8%).Operating expenses were well-controlled, increasing only by 2.2%, improving the cost-to-income ratio from 44.1% to 43.5%. The credit risk cost improved to -0.7%, indicating better asset quality management. Meanwhile, net profit increased by 9.2% to 10,308 MFCFA, highlighting the bank’s profitability and operational resilience.

The results indicate a cautiously optimistic outlook for BOA Senegal’s stock. The 9.2% rise in net profit and improved operational efficiency could boost investor confidence, potentially driving the stock price higher. However, the near-stagnant credit growth (-0.2%) and the overall slower economic growth in Senegal might temper significant upward momentum. Investors seeking steady growth in financial institutions within emerging markets might find BOA Senegal appealing. The bank’s ability to improve profitability amidst challenging macroeconomic conditions reflects strong fundamentals and strategic leadership.

PE Firm Harith Leads $360M Buyout of African Infrastructure Fund

A consortium led by South African private equity firm Harith General Partners has acquired an infrastructure fund with stakes in key assets, including Lanseria International Airport and Kelvin Power Station, for 6.5 billion rand ($360 million). The fund, launched in 2007, also holds stakes in Anergi, which operates Johannesburg’s Kelvin power plant, and fiber assets through Remgro CIVH.The deal provides an exit for investors in the Pan African Infrastructure Development Fund, which includes South Africa’s Government Employees Pension Fund, Absa Bank, and Old Mutual. Harith is partnering with Mergence Investment Managers and Zungu Investments.The acquisition occurs amid subdued private equity activity in Africa. Harith CEO Sipho Makhubela emphasized the consortium’s role in Africa’s energy transition and infrastructure development. Africa faces an annual funding gap of $170 billion for critical projects, according to the African Development Bank.

The buyout reflects Africa’s growing need for private capital to bridge infrastructure gaps as governments face financial constraints. Harith’s portfolio expansion underscores private equity’s critical role in addressing the continent’s infrastructure and energy challenges. By investing in transportation, energy, and telecom assets, the consortium strengthens its position as a key player in Africa’s infrastructure and sustainable energy transition efforts.

Xi Jinping Visits Morocco as China Expands Footprint in African Nation

Chinese President Xi Jinping made an unannounced visit to Morocco on his way back from the G20 summit in Brazil, signaling Beijing’s commitment to enhancing ties with Africa. Xi was welcomed in Casablanca by Crown Prince Moulay El Hassan and Prime Minister Aziz Akhannouch, with Moroccan state media highlighting the visit’s focus on advancing the nations’ strategic partnership.China has been expanding its economic footprint in Morocco, leveraging the country’s trade agreements with the US and EU. This year, Zhejiang Hailiang Co. announced a $288 million investment to build a plant producing new-energy materials, including lithium-battery foil.Morocco is also set to host its first electric battery gigafactory in Kenitra, through a partnership between La Caisse de Dépôt et de Gestion and Gotion High-Tech Co. The factory will produce lithium-ion battery cells and packs, bolstering Morocco’s role in China’s supply chain for European markets and aligning with Beijing’s broader push to deepen ties with developing nations.

Xi Jinping’s visit underscores China’s strategic use of economic and industrial partnerships to strengthen ties with Africa. Morocco’s role as a hub for renewable energy materials and battery production aligns with China’s global ambitions, leveraging Morocco’s access to European and US markets. The collaboration also highlights Beijing’s push to counterbalance the US-led global order by enhancing partnerships with key developing nations. The investments in energy infrastructure and manufacturing could significantly impact Morocco’s industrial growth and its position in global supply chains.

This material has been presented for informational and educational purposes only. The views expressed in the articles above are generalized and may not be appropriate for all investors. The information contained in this article should not be construed as, and may not be used in connection with, an offer to sell, or a solicitation of an offer to buy or hold, an interest in any security or investment product. There is no guarantee that past performance will recur or result in a positive outcome. Carefully consider your financial situation, including investment objective, time horizon, risk tolerance, and fees prior to making any investment decisions. No level of diversification or asset allocation can ensure profits or guarantee against losses. Articles do not reflect the views of DABA ADVISORS LLC and do not provide investment advice to Daba’s clients. Daba is not engaged in rendering tax, legal or accounting advice. Please consult a qualified professional for this type of service.