AfDB targets larger share of $5trn ETFAs for Africa’s capital markets

President of African Development Bank (AFDB) Dr. Akinwumi Adesina has unveiled collaborative plans with the London Stock Exchange Group’s Africa Advisory Group (LAAG) with a view to attracting a bigger share of the $5 trillion global Exchange Traded Fund Assets (ETFAs) under management into African capital markets.

The development finance banker, who stated this while ringing the bell on Wednesday to open the London Stock Exchange (LSE) for trading, lauded the prospects of continued collaboration with the LSEG.

He said: “My ringing of the bell here today marks the beginning of a new exciting, strategic, and impactful engagement between the African Development Bank and London Stock Exchange to jointly expand wealth creation in Africa and the UK.”

Adesina disclosed that the synthetic synchronization of £1 billion issued by the bank had attracted global institutional investors to look at infrastructure in Africa, noting further that the AfDB’s team is “excited about the recent listing of Kenya’s Acorn Holdings, the country’s first green bond in January 2020.”

On the Africa Investment Forum held by the development finance institution late last year in South Africa, the banking chief noted that the forum played a valuable role as an innovative marketplace for attracting investments into the continent as it facilitated the convergence of investors and corporates, removing the bottlenecks to investments and enabling a free flow of long-term capital.

Specifically, the AfDB president disclosed that the 2019 edition of the forum, held in Johannesburg, South Africa, saw investor interest secured in deals valued at $40.1 billion. Mozambique featured strongly in the 2019 edition, with state oil and fuel company Empresa Nacional de Hidrocarbonetos (ENH), tabling the largest deal worth $24.6 billion.

In his remarks at the bell ringing event, chairman of London Stock Exchange Group Don Robert welcomed the president of the AfDB, pointing out that

“deep and sustainable capital markets are key to supporting African companies and infrastructure.”

Commenting on the importance of the AfDB team’s visit to London Stock Exchange, Chinelo Anohu of the Africa Investment Forum, said it was part of the bank’s efforts to expand and deepen its relationship with foreign investors.

The bank had on Tuesday become a formal member of LAAG, an advocacy group which serves as a platform to enhance the development of African capital markets, boost trade and investment flows between the UK and Africa.

Currently, 112 African companies are listed on the London Stock Exchange, with a market capitalization of £125 billion.