There are issues around the time and management demands of completing dual listings in Africa. Panellists at IFLR’s inaugural Africa Forum discussed the advantages and disadvantages of the process.
London Stock Exchange’s Africa primary markets head, Ibukun Adebayo, said some companies view dual listing as an additional cost, not just in terms of maintaining the listing, but also in supporting investors and road shows across multiple geographies.
However, others noted that companies understand the tangible benefits of global visibility and enhanced profile that an international listing offers and how these outweigh the costs.
Nonetheless, Adebayo pointed out that, whereas a few years ago fundraising would have been done through a single bank, now they are much more likely to involve multiple banks.
“Corporates are focused on reducing transactional risk and view this additional cost as necessary to give security that the transaction will take place and that they will be able to raise enough money from investors globally,” said Adebayo.
Alexander Keepin of Berwin Leighton Paisner agreed that dual listings increase the amount of time lawyers and companies have to spend dealing with regulators, particularly in terms of the ongoing compliance risk.
But, Keepin added, there are practical reasons for looking at dual listings in terms of getting access to additional investors, different valuation metrics being applied or supporting an economy in a country in which you operate which means that companies will continue to look at dual listings.
“I think a number of companies have identified this as an opportunity, which outweighs the cost,” added Keepin
In terms of ongoing obligations, companies need to be visibly transparent at all times, reporting at least twice a year.
“A company has a number of challenges once it comes to market, but it’s really a question of making sure that the behaviours of the company reflect that which the company aspires to,” said Adebayo.
“For overseas international listings, this means the company should introduce distinct changes of behaviour that reflect its increased status,” he added.
The second big challenge is continued communication with investors.
“An IPO is not the end of the process,” said Adebayo. “The London buy-side community is pretty unforgiving - money hasn’t been invested lightly so being fully engaged with them is very important.”