In another blow to investors who have been waiting patiently for its stock market to launch so they could tap into its obvious growth story, Reuters reported this week that Angola‘s much-delayed stock market will not open this year.
The reason given by authorities is that many of the country’s companies do not meet the requirements needed to participate on a bourse.
The announcement from state news agency Angop, is the latest set-back for investors looking to tap into one of Africa’s fastest-growing but most impenetrable economies.
The Luanda bourse, a potential entry point for foreigners, has been in the pipeline for more than eight years.
“It is clear that the commercial, business and legal situation does not allow us to say that in 2011 we can have a stock market already,” Angop quoted Minister of State Carlos Feijo as saying.
“The opening of the stock market implies the existence of companies that have a set of requisites, and the government has some doubts that a large part of the Angolan companies have them,” he added.
Ever since the end of a long civil war in 2002, Africa’s number two oil producer has made noises about a bourse and has even got as far as building the Luanda Stock Exchange.
However, the building has stood idle while the government has failed to introduce laws to allow trading and foreign share ownership.
The government has said it plans to list a subsidiary of the vast state oil monopoly, Sonangol.
State diamond firm Endiama, leading commercial bank BFA and telecoms group Unitel have also been considered prime candidates for a stock market listing.
It would thus seem that private equity type deals into that market will have to be the point of entry for investors for a while yet.
Article produced by the Imara Africa Securities team. Imara is an investment banking and asset management group renowned for its knowledge of African markets.