Bank of Africa Senegal Closes IPO Offer as Demand Exceeds Supply

Posted October 27, 2014

Bank of Africa Group’s Senegalese unit closed an initial public offering on the same day it opened as demand for the securities outstripped supply.

“We received much more than we were expecting,” Omo-Dele Egue, the head of Actibourse, the lead arranger for the IPO, said by phone from Dakar today. “The operation has been closed,” he said, without giving details on the oversubscription.

The sale started yesterday and was scheduled to continue until Nov. 21 as the Dakar-based lender, which has 30 branches in the West African nation, bolsters capital levels and plans to expand existing operations. BOA Senegal offered 200,000 new shares that will be listed on the Abidjan-based Bourse Regionale des Valeurs Mobilieres, or BRVM. The securities were priced at 30,000 CFA francs ($58), with 15 percent reserved for employees at a discount.

“The price is cheap compared with other financial stocks listed on the market,” Hugues Adou, an investment adviser at Abidjan-based brokerage SGI Africaine de Bourse, said by phone yesterday. “It’s positive for the bank because it would cost them more if they rather borrowed money to increase the capital base. The proceeds will help the bank to expand.”

The listing will be the second on the BRVM since 2010, which helped spur “enthusiasm” for the offer, said Actibourse’s Egue. Total SA’s Senegalese unit is seeking to raise 3.48 billion CFA francs by offering 8.9 percent of its domestic business in a sale set to continue until Nov. 7. The 39-member BRVM Composite Share Index gained 4 percent this year. The Niger unit of Bamako, Mali-based BOA rallied 44 percent this year, its Benin subsidiary rose 30 percent and the Ivory Coast business climbed 21 percent.

BOA Senegal’s IPO shares sold rapidly because of gains posted by the parent company’s other units, Egue said. The Mali business may list on the bourse next year, he said. West Africa’s regional stock market serves Benin, Ivory Coast, Niger, Mali, Togo, Guinea Bissau, Burkina Faso and Senegal. Source: Bloomberg