The Capital Markets Union [Africa]

The growth of African capital markets is crucial for our continent's future. Our goal is to increase listings and optimise capital-raising on stock exchanges. First, low inflation and markets free of government interference will boost equity market growth and encourage private capital to flow where it's needed. Additionally, low trading costs are essential to promote liquidity. Market structures should offer completely unrestricted and free access to all investor types, including retail and foreign investors with reliable access to foreign exchange and low custodial fees. Government intervention in market forces should be minimal to maintain a fair market environment. High liquidity and accessible markets at low costs (through digital trading platforms) allow companies to attract diverse groups of shareholders. Strong investor relations practices enhance liquidity and engagement by ensuring that investors receive timely and relevant information. This builds trust and encourages investment. With higher trading volumes, shares will be more accurately valued, paving the way for more shares to be issued and the development of innovative financial products like ETFs. Companies can raise capital more easily, which boosts trading and liquidity. In time, more companies will list, offering investors the chance to directly participate in their country’s economic growth across diverse economic sectors. This cycle of rising markets, increasing listings, and raised capital strengthens the future of African economic growth in which our emerging demographic will share. #investorrelations #capitalmarkets #sustainability

The decline of African capital markets is a serious issue with many causes. The evidence is the declining number of listings and the complete absence of capital raising through stock exchanges. First, high inflation and heavy government borrowing block equity markets growth. This limits private capital investment. Next, the cost of trading shares is high, which stops people from buying and selling as often as they might. Market structures are also unbalanced. Foreign investors face limits, fx and tax costs are high, and there is too much regulatory interference. These issues lead to low liquidity, so companies have small, narrow groups of shareholders. Poor investor relations practices make things worse because investors don’t get enough information or access to easy cost-effective trading. This lowers overall trust and makes people less likely to invest. Due to low trading, shares are undervalued, and company-led share buybacks take even more shares off the market. This further limits trading and weakens liquidity. Finally, many companies decide to de-list, which reduces the number of options for investors. Markets go backwards. No listings, no capital raising, no investment. If these structural problems continue, they will hurt the health and future of African public capital markets. There is an anti-dote, of sorts. #investorrelations #capitalmarkets #sustainability

The African retail investor, the future powerhouse in capital creation across Africa, in 24 words:- ✅ Digital ✅ Savvy ✅ Ambitious ✅ Empowered ✅ Informed ✅ Analytical ✅ Mobile-first ✅ Opportunistic ✅ Entrepreneurial ✅ Resilient ✅ Global-minded ✅ Tech-driven ✅ Curious ✅ Networked ✅ Agile ✅ Data-centric ✅ Sustainable ✅ Engaged ✅ Visionary ✅ Risk-aware ✅ Goal-oriented ✅ Bold ✅ Inclusive ✅ Strategic #investorrelations #sustainability #capitalmarkets

In the vibrant city of Nairobi, Lumumba stood at the heart of his company’s investor relations team, with one goal: to tell his company’s story in a way that conveyed not just financial potential, but their mission and impact on Africa’s growth. Africa’s capital markets were evolving rapidly, and Lumumba saw that investors wanted more than numbers; they craved a meaningful connection. To meet this demand, he had to answer essential questions: 🦒 What do we offer, and why does it matter? 🦒 Who are we here to serve? 🦒 How do we fulfill our responsibilities to stakeholders? With support from CMU Africa, an initiative dedicated to uniting Africa’s markets through transparency, democratised investment information and shared purpose, Lumumba found his answers. Through AfricanFinancials and The Investor Mailing List, he was able to broadcast his company’s mission, connecting with investors across the continent who sought purpose-driven investments. After he crafted his message, Lumumba realised he was building more than investor relations—he was helping shape the future of African capital markets, one mission-driven story at a time. Have you met Lumumba? If not, don't worry: you will. At some point. #investorrelations #sustainability #Africa

Because of Africa's demographic, retail investors are going to be the powerhouse of African capital markets. It happened in the US and its going to happen in Africa. The value of unclaimed dividends in Nigeria:- 2014: ₦60 billion 2015: ₦80 billion 2016: ₦109.1 billion 2017: ₦130 billion 2018: ₦150 billion 2019: ₦158.44 billion 2020: ₦168 billion 2021: ₦177 billion 2022: ₦190 billion (USD423m) 2023: ₦190+ billion (USD212m) 𝗡𝗼𝘁𝗲: 𝗧he 2023 figure is an estimate based on available data up to that year. The recent significant devaluation of the Nigerian Naira is effectively a tax on retail investors +USD200m of spending power gone. Passive investor relations practices lead to outdated contact information, low investor awareness, and procedural blockers. Regulators can't fix this (they have not been able to). The investor/company interface can. We need unclaimed dividends to be sorted if Africa's capital markets are to reach their potential to raise capital. The solution lies in good investor relations practices and the application of stakeholder engagement sustainability principles. Here's where "sustainability" is relevant.... "Stakeholder engagement” under sustainability principles are crucial because companies proactively engaging with shareholders not only reduces unclaimed dividends but also buildstrust and loyalty among investors—many of whom are also, or should, or could be, valuable customers. #investorrelations #sustainability #unclaimedividends

The Capital Markets Union (CMU) [Africa] and AfricanFinancials are helping young retail investors by providing free, essential information on listed companies. This open access lets investors learn by doing, encouraging them to understand the basics of investing. As the World Economic Forum highlights, retail investors are vital, and financial education needs to connect with young people. Accurate, timely information is key to making informed investment choices, and CMU [Africa] and AfricanFinancials are making this possible. With direct access to company data (and company managements), retail investors will explore how and why to invest, empowering them to shape their financial future. Listed companies play a central role, supporting a fair and responsible market system that drives this growth. It's all about supporting responsible free market capitalism. #Investorrelations #Sustainability #FinancingAfrica

African listed must meet and exceed responsible online investor relations standards if they are to garner respect and trust from all investors. Ask Warren Buffett. He knows both sides of the coin. Berkshire Hathaway stands out as a benchmark in corporate governance and transparency, embodying best practices in investor relations and shareholder communication. Its commitment to ethical disclosure and long-term value creation has set a high standard for listed companies worldwide. The company’s success demonstrates the importance of clear, consistent communication with investors, making it a model for African listed companies aiming to build trust and attract committed, long-term shareholders, both internationally and locally. #investorrelations

𝗩𝗜𝗘𝗪 𝘁𝗵𝗶𝘀 𝟭𝟭-𝘆𝗲𝗮𝗿 𝗼𝗹𝗱 𝗮𝗿𝘁𝗶𝗰𝗹𝗲 𝗯𝗲𝗹𝗼𝘄....the content may be old but its still relevant - The topic: Issuer-Paid Research. Our question? Is this An Undiscovered Strategic IR Tool for African Listed Companies? In Africa's public equity capital markets, listed companies struggle to gain the attention of traditional equity research analysts. This challenge is exacerbated by limited resources within brokerage firms and a scarcity of analysts, leading to insufficient coverage. For brokers, providing detailed analyses is often unprofitable due to low trading volumes and commissions because of the absence of critical mass in investors. Issuer-paid research offers a viable solution for listed companies to bridge this gap. By funding their own research reports, companies effectively communicate their investment potential to a broader audience. This approach could be particularly beneficial in Africa's illiquid markets, where companies often struggle to attract investor attention. While some investors may question the objectivity of issuer-funded research, transparency and adherence to best practices can mitigate these concerns. Internationally, issuer-paid research is permissible, with varying regulations: 📈 United States: The Financial Industry Regulatory Authority (FINRA) requires explicit disclosure when research is issuer-funded to address potential conflicts of interest. 📈 United Kingdom: The Financial Conduct Authority (FCA) has proposed reforms to allow asset managers greater flexibility in paying for investment research, aiming to enhance competition and align with global standards. 📈 France: The Autorité des Marchés Financiers (AMF) is advocating a charter to establish best practices in issuer-sponsored research, focusing on transparency and objectivity. We believe and support African companies adopting issuer paid research and international best practices to ensure credibility and transparency in their communications. The most well-prepared research reports are ineffective if they don't reach the right audience however. Proactive distribution is essential. For listed company executives, it's time to recognise the benefits of issuer-paid research, allocate appropriate budgets, and collaborate with research analysts or brokers to enhance visibility. The Investor Mailing List (Africa), an initiative by AfricanFinancials, boasts over 36,000 subscribers and will play a crucial role in disseminating these reports to a diverse investor base. 𝘐𝘧 𝘺𝘰𝘶'𝘳𝘦 𝘢 𝘭𝘪𝘴𝘵𝘦𝘥 𝘤𝘰𝘮𝘱𝘢𝘯𝘺 𝘦𝘹𝘦𝘤𝘶𝘵𝘪𝘷𝘦 𝘪𝘯𝘵𝘦𝘳𝘦𝘴𝘵𝘦𝘥 𝘪𝘯 𝘦𝘹𝘱𝘭𝘰𝘳𝘪𝘯𝘨 𝘵𝘩𝘪𝘴 𝘧𝘶𝘳𝘵𝘩𝘦𝘳, 𝘱𝘭𝘦𝘢𝘴𝘦 𝘳𝘦𝘢𝘤𝘩 𝘰𝘶𝘵 𝘵𝘰 𝘥𝘪𝘴𝘤𝘶𝘴𝘴 𝘩𝘰𝘸 𝘪𝘴𝘴𝘶𝘦𝘳-𝘱𝘢𝘪𝘥 𝘳𝘦𝘴𝘦𝘢𝘳𝘤𝘩 𝘤𝘢𝘯 𝘣𝘦𝘯𝘦𝘧𝘪𝘵 𝘺𝘰𝘶𝘳 𝘰𝘳𝘨𝘢𝘯𝘪𝘻𝘢𝘵𝘪𝘰𝘯. #investorrelations #capitalmarkets #investing

Unclaimed dividends are largely as a result of stock exchanges setting low minimum trading lots. While intended to make shares more accessible, these low values discourage investors from responsibly managing their finances. The amounts are too small to the investors, a hassle to manage and easy to forget or not care about for listed companies. High fixed transaction fees further penalize these small trades, and without automatic digital crediting of dividends, these issues continue to disadvantage the very stakeholders they aim to help. In Nigeria, for example, unclaimed dividends were worth over USD 230 million before currency devaluation reduced small investors' savings in USD terms. High inflation across African markets further erodes investor value when dividends remain unclaimed (and therefore unspent). What happens to unclaimed dividends? Here’s a summary of unclaimed dividend retention periods by African country: 🦒 Nigeria: Companies must retain unclaimed dividends for 12 years before they become statute-barred and are forfeited to the Federal Government. 🦒 South Africa: Companies are required to hold unclaimed dividends indefinitely, as there is no specific forfeiture period mandated by law. 🦒 Kenya: Companies must transfer unclaimed dividends to the Unclaimed Financial Assets Authority after three years. 🦒 Ghana: Companies are obligated to hold unclaimed dividends for 12 years before transferring them to the Registrar of Companies. 🦒 Egypt: Companies are required to hold unclaimed dividends for five years before transferring them to the Investor Protection Fund. 🦒 Morocco: Companies must retain unclaimed dividends for five years before transferring them to the Caisse de Dépôt et de Gestion. 🦒 Zimbabwe: Companies are required to hold unclaimed dividends for 12 years before transferring them to the Investor Protection Fund. 🦒 Tanzania: Companies must retain unclaimed dividends for 12 years before they are forfeited to the company. 🦒 Botswana: Companies typically hold unclaimed dividends for three years before they may become the property of the company, as stipulated in their constitutions. 🦒 Eswatini: Companies are required to hold unclaimed dividends indefinitely, as there is no specific forfeiture period mandated by law. 🦒 Uganda: There is no centralized agency for unclaimed dividends; companies are responsible for holding unclaimed dividends indefinitely, as there is no specific forfeiture period mandated by law. 🦒 Mauritius: Companies are required to hold unclaimed dividends indefinitely, as there is no specific forfeiture period mandated by law. 🦒 Zambia: Companies must retain unclaimed dividends for 15 years before they are transferred to the Securities and Exchange Commission and deposited in an investor fund for purposes of investor protection and market development activities. The transfer of unclaimed dividends to the investor protection funds makes most sense. #investorrelations #capitalmarkets

The Minimum Standards of Online Investor Relations, created by AfricanFinancials, are similar to the UK's AIM Rule 26, setting clear guidelines for good communication practices. Both give a basic structure to ensure transparency and consistency in investor relations. AIM Rule 26 requires AIM-listed companies to share specific information, while AfricanFinancials' standards offer voluntary guidelines tailored to African markets. Why is this a thing? Well here's the thing: we reviewed 100 corporate and investor relations websites across Africa and found the following: 𝟲𝟰/𝟭𝟬𝟬 sites show directors' names and profiles, meaning 36% do not have a complete governance section. 𝟲𝟮/𝟭𝟬𝟬 have easy navigation, so over a third lack clear navigation. 𝟱𝟰/𝟭𝟬𝟬 have complete PDF archives; about half are missing important documents. 𝟯𝟵/𝟭𝟬𝟬 include a "sustainability section," leaving 61% without one. 𝟯𝟴/𝟭𝟬𝟬 have a full list of corporate announcements, meaning 62% do not. 𝟮𝟲/𝟭𝟬𝟬 provide dividend information; 74% do not. 𝟮𝟱/𝟭𝟬𝟬 use email alerts, but only 2% use them effectively for investor relations. 𝟮𝟯/𝟭𝟬𝟬 show share prices and charts, so 77% do not. 𝟭𝟱/𝟭𝟬𝟬 publish investor transcripts, leaving 85% without. 𝟭𝟰/𝟭𝟬𝟬 have published at least 4 news releases in the last three months; 86% are not current. These gaps in functionality and outdated content may not directly harm a company’s reputation, but they do mean investors will look elsewhere for the information they need. Today, a company’s website is the first place people check for fact and investors expect accurate, up-to-date details, and if they can’t find it on the corporate website, they will find it somewhere else. They become loyal to someone else. So... Companies should take charge of their story online to avoid misinformation—especially as AI increasingly relies on corporate websites as a primary source of information.They are not only telling their own story if they get their digital presence right they are telling Africa's story: we need to remember that. #investorrelations #communication #capitalmarkets