By Miguel Gomes
LUANDA (Reuters) – BAI, Angola’s largest private bank, floated a 10% stake on Thursday following the country’s first initial public offering (IPO), viewed by observers as an important step in the government’s modernisation drive.
Under President Joao Lourenco, the southern African OPEC member has embarked on ambitious reforms to overhaul the state-dominated economy and attract private investment.
In the BAI IPO, state-owned oil and diamond companies Sonangol and Endiama completely sold their stakes in the bank.
The IPO priced at 20,640 kwanzas ($48.61) per share, the top of the range given in the prospectus and raising over $94 million, according to a Reuters calculation.
“This capitalisation opens strong opportunities for the future of BAI, to keep investing in our operations and in new business,” Luis Lelis, BAI’s CEO, told an event organised by the BODIVA stock exchange.
Charlie Robertson, global chief economist at Renaissance Capital, said the IPO was a crucial step.
“The government has shown a commitment to fiscal orthodoxy, a commitment to a flexible currency. And that’s what investors like to see,” he said.
BODIVA was founded in 2014. But with Angola’s economy dominated by state companies – a legacy of its socialist past – the exchange has mainly served as a market for government bonds, trading debt of around $2 billion in 2020.
The exchange hopes the BAI IPO will unlock a wave of new listings.
Angola plans to privatise dozens more state assets this year, with bank Caixa Angola and ENSA insurance among the next firms due to sell stakes.
The expected sale of a 30% stake in national oil champion Sonangol, seen as the crown jewel of the privatisation push, could take another two years.
Manuel Nunes Junior, state minister of economic coordination, on Thursday reaffirmed the government’s commitment to privatisations and said projected economic growth this year of 2.7% pointed to “an economic evolution”.
Marisa Lourenco, analyst at Control Risks, said it was an opportune moment for Angola to have held the IPO. “Investor appetite towards Angola is currently very positive, … and the potential reward is too great to ignore.”
($1 = 424.6100 kwanzas)
(Reporting by Miguel Gomes; Additional reporting and writing by Joe Bavier; Editing by Kim Coghill, Kirsten Donovan)
