Browsing: Financial markets

The sufficiency of foreign exchange (FX) reserves has generally decreased from the previous year. Ten African Finance Markets Initiative (AFMI) nations will each get US$1.6 billion in IMF financing in 2022 to help them weather the effects of outside shocks.

While efforts to integrate financial markets across Africa are gaining traction, several nations are employing digital technologies to enhance market access, knowledge, and inclusion.

Note: 2021 scores may differ from those released in AFMI last year since they consider newly available data and methodological adjustments.

Conventional finance theory will advise that raising capital on the public markets can be an uphill task when an economy is slowing. A booming economy characterized by low-interest rates with increasing growth rates is the most conducive for an equity offering, more so an initial public offering. A further stroke of genius on the part of Volkswagen and Porsche is that the equity offering comprised preference shares.

The preference shares comprise 12.5% of the issued share capital of Porsche.

This is a stroke of genius in the sense that preference shares, by their nature, resemble fixed income security which would be in high demand in the current environment where interest rates are elevated or are on the upward path. The preferred share component of the IPO must have been appealing and contributed to the offering being oversubscribed.

Preference shares are shares that generally carry with them voting rights and accrue a fixed dividend rate like a fixed income investment instrument. Other features of preference shares vary according to the company laws of a particular jurisdiction. The nature of the offering also betrays the desire of management to retain management and strategic control of Porsche.