G LO B A L LY L I S T E D
LO C A L LY V I S I T E D
FUNDAMENTAL EQUITY ANALYSIS
I
n this section of the Investor we analyze firms that operate in Sierra Leone whilst simultaneously listed on Global Equity Markets.
The Sierra Leone Stock Exchange is relatively new and as yet does not provide a platform for a dual listing to many of these firms.
Here at The Investor, we are quite bullish about such prospects and believe it will be a matter of time. With global firms increasingly
buying into the idea of local participation and globalization as a means of viable market entry amidst resource nationalism, we have
compiled a watch list of these firms, tracking their performances on a daily basis and understanding what value the Sierra Leone operations feed into their global portfolio and earnings. The Investor will be reviewing the equity fundamentals of these firms every quarter. In the last edition we reviewed London Mining PLC (LOND: LN). In this quarter we review Standard Chartered PLC (STAN: L)
There are more listed mining companies operating in Sierra
Leone than any other sector. This is quite understandable considering the country is mineral rich and still highly unexplored.
Investors are moving in for the most obvious assets such as diamond, gold and iron ore. However Sierra Leone is rich in other
minerals and the mining policy needs to address the various
other alternatives.
A massive area, which is perhaps under explored in Sierra Leone, is the Rare Earth Elements (REE) space. We are yet to see
areas of mining policy that will incorporate these valuable minerals. A little research on REE show that such unexplored assets
will turn out to be the most precious minerals for Sierra Leone
in the long run and therefore policy makers should formulate
investment awareness that will enable world class companies to
partake in the exploration of these mineral assets.
Perhaps if the minimum paid up requirement levels were to
be critically reviewed as was done in Nigeria several years ago,
my guess is that we would witness an era of mergers and consolidation within the banking sector, which is long overdue.
Currently there are about twelve banks operating within a
very small economy where the bank account penetration rate
is quite low. Banks in Sierra Leone traditionally rely on the
high treasury rates set by the central bank. This is beginning to
emerge as quite a handy tool the central bank will be keeping
close to its arsenal. Treasury rates have dramatically lowered to
a level which theoretically speaking, should force banks to be
much more competitive. The effect of the decreased treasury
rate changes is yet to be seen. At The Investor, we are forecasting consolidations within twenty-four months, as the sector
will naturally crowd out.
Banking stocks are limited to four, with three listed in European markets. Access bank is listed on the Nigeria Stock Exchange
and Rokel Commercial Bank stocks floated on the Sierra Leone
Stock Exchange.
A critical look at the selection of stocks will also give entrepreneurs and investors an idea of the enormous opportunity that
exists in other industry sectors that are quite obviously missing.
It is quite surprising that the privately owned indigenous banks
have not opted for a local listing to rival Rokel Commercial
Bank for the prestige and public relations of their competitors.
In a perfect world, the markets are supposed to reflect both
macro and micro activities. On both levels in Sierra Leone, one
can clearly see that there is lack of diversification and therefore
liquidity.
Mr. Herbert M’cleod, Chairman Standard Chartered, Sierra Leone-
Sir John Peace, Chairman Standard Chartered PLC
consequi-
Albert Saltson, CEO Standard Chartered Sierra Leone Leoneo