Angola Plans More Listings After Banco BAI Share Sale

(Bloomberg) -- Angola's first initial public offering will test investor appetite before Africa's second-biggest oil producer lists more assets this year, Economic Coordination Minister Manuel Nunes Junior said.

Banco BAI, the nation's biggest lender, will list 10% of its shares that are currently controlled by the state on June 9. The government plans to sell stakes in at least three other companies through the stock market this year, Nunes Junior said in written responses to questions.

The offerings will include state holdings in lender Banco Caixa Geral Angola SA, Angola's petrol-station network Sonangalp and cable company TV Cabo Angola, he said. Privately-owned firms are also expected to follow suit, the minister said.

“Companies in the oil, construction and financial sectors have also shown an interest in listing their shares in the stock market,” Nunes Junior said. “They're in the preparation process to ensure they comply with all the regulatory requirements.”

The share sales would form part of Angola's biggest-ever privatization program, which has about 195 assets earmarked for disposal, and aims to attract overseas investors to diversify the oil-focused economy. The government has opted to sell some of these assets on the stock market to bring increased transparency to the process, said Nunes Junior.

Still, Angola has work to do before its stock market has enough liquidity to be able to compete with other exchanges. Banco BAI will be its first equity listing with only 10% of its shares, valued at about $97 million, being tended. The government has yet to determine a date for selling stakes in its two largest companies -- oil giant Sonangol and diamond firm Endiama.

“We recognize that the path toward a strong capital market with enough liquidity is demanding,” said Nunes Junior.

Stronger Growth

The minister, in charge of reviving Angola's economy which exited a five-year recession in 2021, said the government is revising its economic projections that may show “slightly stronger growth” for 2022. Its current forecast is for gross domestic product to expand 2.4% this year, up from 0.7% in 2021, according to the 2022 budget.

Angola's economy is benefiting from higher oil prices and growth in industries ranging from farming to construction, he said. While the nation's 2022 budget was based on an oil price of $59 per barrel, crude prices have fluctuated around $100 a barrel throughout April, driven higher by Russia's war on Ukraine.

“This gives us the opportunity to reinforce our cash reserves, providing us with greater security for the normal execution of our expenditure,” said Nunes Junior.

The war has however also pushed up the cost of commodities such as food, fertilizer and sunflower oil. That has meant Angola, which imports most of its consumer goods, is “exposed to more expensive imports and faces the risk of some pressure on domestic prices,” he said.

“The government has created a working group to assess the impact of the Russia-Ukraine conflict, including the impact on prices and inflation,” said Nunes Junior. The goal is to come up with measures to “mitigate these impacts” and alleviate surging costs for Angolan households, he said.