Weekly Investor Update (June-WeekTwo-2024)

10 min Read June 14, 2024 at 5:00 PM UTC

Monday

Egypt’s Sahl raises $6m to digitize household utility payments

Cairo-based fintechSahlhas secured $6 million in Series A and seed funding rounds, led byAyady for Investment and Development, with participation from existing investors Egypt Pay, Delta Electronic Systems, andeFinance.Founded in 2020 by Ahmed Othman, Ibrahim Assal, and Abdullah Assal, Sahl is a bill payment platform enabling users to recharge prepaid cards and is among the few Egyptian companies directly integrated with multiple government entities.The newly raised funds will be utilized to enhance and expand Sahl’s services, with plans to extend its operations to Saudi Arabia following its regional launch in the UAE.

Sahl’s strategic vision is to dominate Egypt’s burgeoning EGP 2.5 trillion ($54 billion) digital payments sector by capturing a significant portion of collections on behalf of utility companies, which represents an annual EGP 250 billion segment. Since its founding in 2020, Sahl has emerged as a major player in the Egyptian fintech landscape, serving over 12 million customers monthly and reaching 15 million households in Egypt. The company’s growth and integration with multiple government entities underscore its pivotal role in facilitating digital payment transactions within the country.

Rally in banking stocks helps BRVM all share index to 5th weekly gain

The BRVM stock market closed positively for the fifth consecutive week with the main composite index reaching a new peak at 226.12 points, a 0.37% increase. The BRVM 30 and BRVM Prestige indices rose by 0.07% and 2.58% respectively, reaching 112.90 points and 108.48 points.Positive sentiments in themarketwere driven by shares such asSociété Générale CI(+4.61% at 20,295 FCFA),Bici CI(+16.21% at 10,000 FCFA), andSIB(+5.08% at 6,305 FCFA), amidst 17 rising values versus 17 falling.SIB andBOA Malihave disclosed their activity reports for the first quarter of the 2024 financial year, reporting net results up 6% (12.3 billion FCFA) and 0.14% (1.58 billion FCFA) respectively. Market capitalization increased by 0.37%, reaching 8.4 trillion FCFA ($13.8 billion).

Bicici stock has demonstrated the strongest performance in the banking sector since the year began. It marked the seventh consecutive weekly increase and secured the top spot in performance. This increase follows the company’s results for the fiscal year ending in December 2023 and the first quarter of 2024, propelling its stock to a 42.86% gain over seven weeks, reaching 10,000 FCFA, one of its highest levels in seven years. Oragroup follows closely with a performance of 10.56%, settling at 1,990 FCFA. Total transaction volume decreased by 39% to 2.19 billion FCFA compared to the previous week’s 3.59 billion FCFA.

Kenya’s stock exchange targets cross listings to end drought

TheNairobi Securities Exchange(NSE) aims to secure its first stock listing since 2020 this year, supported by a rebound in shares after a two-year decline that cut the main index by over 50% and deterred new listings. Its all-share index is Africa’s second top performer this year.The NSE targets at least five new trading debuts in 2024, including real estate investment trusts, exchange-traded funds, and equity offerings, according to Frank Mwiti, the newly appointed CEO. The exchange is in discussions with several potential issuers, including private equity funds and family-owned businesses.In its 2023 annual report, the bourse indicated plans to offer international investors access to the region’s growing economy and sectors such as technology, finance, and consumer goods through cross-listing regional companies.

Companies typically cross-list shares to access more capital and a wider pool of investors than available on a single exchange. However, the Nairobi Securities Exchange (NSE) has only two cross-listed firms: Umeme Ltd from the Uganda Securities Exchange (USE) and Bank of Kigali (BoK) from the Rwanda Stock Exchange (RSE). While cross-listing can enhance a company’s visibility and expand its investor base, low or no trading activity has made companies hesitant to issue shares in new markets. For example, Kenya’s investment firm Centum abandoned plans to cross-list on the RSE and the Dar es Salaam Stock Exchange (DSE) in 2016, citing the lack of liquidity in its cross-listed shares in Uganda.

Malawi’s vice president Saulos Chilima, nine others die in plane crash

The Vice President ofMalawi, Saulos Chilima, and nine other passengers have died in a plane crash, President Lazarus Chakwera announced on Tuesday.The aircraft went missing after failing to land at Mzuzu International Airport, located about 380 km (240 miles) north of the capital, Lilongwe. President Chakwera confirmed the wreckage of the plane had been found.“The search and rescue operation I ordered to find the missing plane that carried our vice president and nine others has been completed. The plane has been found. And I am deeply saddened and sorry to inform you that it has turned out to be a terribletragedy,” Chakwera stated.

Chilima, 51, had been seen as a potential contender for next year’s presidential election in Malawi. A somewhat controversial figure, he was arrested in 2022 on graft allegations, and accused of receiving kickbacks from a businessman in exchange for government contracts. Chilima consistently denied the charges. The national prosecutor dropped the charges last month, filing a notice for the discontinuation of the case.

IMF and Kenya reach initial agreement to access $1.1bn

Kenya has reached a staff-level agreement with the International Monetary Fund, potentially leading to the disbursement of about $976 million, theIMFannounced on Tuesday.If the IMF Executive Board approves a second review of Kenya’s Resilience and Sustainability Facility, the country would immediately access $120 million.The IMF also advised Kenya to revise its2024/25 budgetto incorporate additional revenue-raising measures. This recommendation comes in light of a deteriorated primary fiscal balance in the previous financial year and a shortfall in tax collection, which are expected to maintain high domestic borrowing needs.

Despite facing liquidity challenges since 2022, Kenya issued a $1.5 billion Eurobond in February to partly buy back a Eurobond maturing in June. Although the issuance came at a high cost, it alleviated investor concerns about a potential default, restored foreign investor confidence in the economy, and strengthened the Kenyan shilling against the dollar. The IMF noted that fiscal adjustments in the 2024/25 budget could further improve the situation. Kenya’s current deal, which is for a total of $3.6 billion, was agreed in April 2021. The current review is the seventh under the program.

Nigeria’s largest bank deepens East Africa presence with new buyout

Access Bank Plc, Nigeria’s largest lender by assets, has completed the acquisition of African Banking Corporation of Tanzania (ABCT) Limited, a subsidiary ofAtlas Mara Limited, through a majority equity stake, initially announced in July 2023.The company plans to merge ABCT with the consumer, private, and banking businesses ofStandard Chartered Bank Tanzania, which it is also set to acquire. This merger will form Access Bank Tanzania.The new Tanzanian unit brings Access closer to its vision and is significant for its near-term strategy of targeting local, regional, and international revenue opportunities in areas such as trade and payments for East African customers.

This acquisition marks Access Bank’s fourth deal with Atlas Mara, following prior acquisitions in Mozambique, Zambia, Botswana, and Tanzania. Access Bank has been expanding its presence in East Africa, starting with the agreement in January 2024 to acquire an 80% stake in Finance Trust Bank in Uganda, aiming to combine the technological resources of both banks. In March 2024, Access Bank revealed plans to fully acquire the National Bank of Kenya for around $99.6 million. Additionally, Access Bank had previously acquired a bank in Kenya in 2019.

Kenya’s largest insurer Britam to tap $5bn Congo insurance market

Britam Holdings, Kenya’s largest listed insurer, is eyeing entry into the underserved insurance market of the Democratic Republic of Congo later this year. The company, with operations across seven African economies, is primarily seeking acquisition opportunities in Congo, though establishing a greenfield operation is also under consideration, according to CEO Tom Gitogo.Congopresents an attractive opportunity with its sizable population of about 100 million people and low insurance penetration rates. The ratio of gross directinsurancepremiums to gross domestic product is below the continent’s average of 2.6% and a global average of 7.4% as calculated byDeloitte LLP.The country’s insurance market, estimated by Congo’s national investment promotion agency to be as large as $5 billion, offers significant growth potential forBritam. Initially, Britam plans to launch life and general insurance products in the Congolese market, with the potential introduction of asset management services later on.

Despite being Africa’s second-largest nation by area and a major source of copper and cobalt, the Democratic Republic of Congo remains one of the world’s poorest countries. The nation liberalized its insurance industry around a decade ago, allowing competition against the state-owned monopoly, Société National d’Assurances. Mayfair Insurance Co., a closely held company, expanded its operations to Congo in 2020, as stated on its website. Additionally, other Kenyan insurers, such as Jubilee Holdings Ltd. and CIC Insurance Group Ltd., have shown interest in tapping into the Congolese market. With its vast resources and growing economy, Congo presents significant opportunities for insurers seeking to capitalize on its potential.

YC-backed Elevate secures $5m to expand into South Africa, Turkey

Elevate, a San Francisco-based fintech company has secured a $5 million equity-debt pre-Series A round led by Dubai-basedNegma Ventures. Elevate currently offers US-based banking services to non-US residents from Bangladesh, Egypt, the Philippines, and Pakistan.The new funds will support the company’s expansion into South Africa, Turkey, and countries in South Asia and Southeast Asia. CEO Khalid Keenan emphasized strong anticipated demand in the third quarter from Indonesia and Malaysia, followed by Vietnam and Thailand.Key metrics supporting this expansion include the region’s growing digital adoption and the significant number of unbanked or underbanked individuals seeking accessible financial services.

Since its launch in early 2024, Elevate has rapidly gained traction, attracting over 150,000 users globally. This underscores the strong demand for its banking services among freelancers and remote workers. The Philippines, a significant hub for remote work, has 1.5 million Filipinos on online freelancing platforms and an additional 1.3 million in the BPO sector, predominantly serving US companies. In 2023, the Philippines surpassed major countries like India, the United States, and Brazil to become the top country for workers on Deel, a prominent remote work platform. The Asia-Pacific region, including the Philippines, alongside Europe, the Middle East, and Africa (EMEA), has emerged as the fastest-growing area for remote work.

Ivorian banking firm SIB to double capital base to $33m

Société Ivoirienne de Banque(SIB), the Ivorian subsidiary of the Moroccan groupAttijariwafa, plans to increase its capital by 10 billion FCFA ($16.3 million) to comply with newBCEAOregulations that set a higher threshold for capital requirements, effective from January 1, 2027.SIB ended the 2023 financial year with a net result of 43 billion FCFA, reflecting an annual growth of 8.5%, driven by a 14% increase in net banking income (NBI) to 94 billion FCFA. The bank’s total assets grew by 7% to 1,606 billion FCFA.Shareholders will receive a gross dividend of 550 FCFA per share, amounting to 27.5 billion FCFA. As of January, over half of the thirty banks in the Ivorian market had capital below 20 billion FCFA – the new capital base requirement.

A wave of banking recapitalization is gaining momentum across Africa. In Nigeria, the Central Bank of Nigeria’s new rule mandates that commercial banks with international authorization must have a minimum capital of N500 billion ($344.83 million). Over 20 lenders in Nigeria need to raise additional capital within two years to meet this new threshold. Kenya is also considering similar measures to strengthen its banking sector. This trend underscores a regional push to bolster financial stability and resilience, ensuring that banks are better capitalized to withstand economic fluctuations and support sustainable growth.

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.