Tuesday November 21, 2017

LXM EXPANDS AFRICAN RESEARCH NETWORK WITH AFRIFOCUS SECURITIES

LXM Group has announced today a new chaperoning partnership with South African research provider Afrifocus Securities, further expanding its market-leading foreign broker dealer (FBD) platform’s capabilities. This addition will increase LXM’s global coverage to 12 FBDs covering over 30 countries and 700 companies. Afrifocus, a member of South Africa’s JSE and ZARX exchanges, is a specialist in investment research covering mid-capitalisation stocks, an area that is often overlooked by regional competitors. Harold Warren, Global Head of Emerging and Frontier Markets at LXM, said: “We have had huge interest from investors in South African small and mid-cap companies in this area of our business and this is why Afrifocus’ targeted approach makes them an ideal partner. The partnership deepens LXM’s global capabilities of providing US and global institutional investors with access to respected and established research providers, as we continue our expansion across Africa and markets worldwide.” Eugene van Heerden, Head of Sales and Distribution at Afrifocus, said: “We look forward to working with LXM in our endeavours to develop strong relations with their established US origination network. Our domestic clients will now be able to tap into LXM’s large liquidity pool, facilitating trading across many global emerging and developing markets.“ The partnership will allow Afrifocus to expand its research capabilities by working and sharing information with other members in LXM’s FBD network, adding substantial value across those markets.   DOWNLOAD (PDF)
Wednesday November 08, 2017

LXM GROUP ADVISES ON WORLD-FIRST EQUITY OFFERING

LXM Group has supported the African Export-Import Bank (Afreximbank) in a ground breaking equity offering from a supranational bank. LXM acted as a sub placement agent in the offering to private shareholders. Utilising its strong US origination network and deep knowledge of the African banking sector, LXM Group played a key role in the introduction and investment of US investors who participated in the transaction. The private placement closed 28th September 2017 with subscription far in excess of the $100 million minimum target set to launch the Depositary Receipt programme (DR). The DR commenced trading on the Mauritius Stock Exchange on 4th October 2017. Harold Warren, Global Head of Emerging and Frontier Markets at LXM Group, said: “This is a ground breaking event for a supra-national bank and a first for Africa’s equity capital markets, typical of the work LXM is doing across our emerging markets division. LXM is proud of the quality and pedigree of the global institutional investors we introduced Afreximbank to both in London and the U.S, via our African investor network. We look forward to working with Afreximbank in the future as we continue to build on our successes of our emerging and frontier market business within Africa and the rest of the world.” The deal continues the trend of global investors, particularly US-based financial institutions, renewing their interest in opportunities across the African continent. LXM’s foreign broker dealer chaperoning business covers 17 African countries, partnered with 9 brokers.   DOWNLOAD (PDF)
Tuesday August 22, 2017

ANNUAL CONCORDIA SUMMIT TO ADDRESS THE UN SUSTAINABLE DEVELOPMENT GOALS

LXM Group is pleased to announce its continued sponsorship of the Concordia Annual Summit in New York. The Summit will convene over 2000 high-level influencers and decision makers through action-oriented programming that aims to build partnerships for social impact. This yearly nonpartisan forum takes place alongside the U.N. General Assembly and addresses the major issues impacting the global community, including the mounting refugee crisis, the rise of populism, investment in sustainable infrastructure, and the evolution of domestic health policy, among many others. The Summit will feature over 250 global experts and high profile contributors who are working collaboratively to create a more prosperous and sustainable future. Confirmed speakers include: Nicos Anastasiades, President of Cyprus, José María Aznar, Former President of the Government of Spain, Stephen Badger, Chairman of the Board of Directors, Mars, Paul Bulcke, Chairman, Nestlé, Kathy Calvin, President and CEO, United Nations Foundation, Carolyn Miles, President and CEO, Save the Children and General (Ret.) David Petraeus, Former General Director, Central Intelligence Agency. Sessions take the format of strategic dialogues, plenary sessions, roundtables and private meetings and seek to identify collaborative solutions to address the UN Sustainable Development Goals (SDGs). Concordia is a registered non-profit, nonpartisan organisation that builds meaningful partnerships for positive social impact. As equal parts convener, campaigner, and idea incubator, Concordia is actively fostering cross-sector collaboration to create a more prosperous and sustainable future. Concordia was founded in 2011 by Matthew A. Swift and Nicholas M. Logothetis. For more information please see: www.concordia.net
Tuesday June 27, 2017

INAUGURAL CONCORDIA EUROPE SUMMIT HELD IN ATHENS

LXM Group was proud to sponsor the inaugural Concordia Europe Summit in Athens, which was held on the 6th and 7th June 2017. The event welcomed as featured speakers the former Vice President of the United States, Joe Biden, along with the Greek Prime Minister, Alexis Tsipras, and Non-Executive Chairman of Goldman Sachs International and former President of the European Commission, José Manuel Barroso.   In numbers: 700+ Summit Participants 600+ News Stories Generated 11 Current & Former Heads of State & Government Attended 36 Speakers & Conversation Leads #1 Trending Hashtag in Greece   The Summit took the format of Strategic Dialogues which featured 25-35 select individuals, including current and former heads of state, CEOs of leading corporations and heads of multilateral organizations, who discussed particularly pressing global problems; these included among others the future of Europe, the political economy of the EU, the refugee crisis and EU-US relations. These Strategic Dialogues were supported by partnership announcements, fireside chats and keynote remarks by regional heads of state or government that anchored the greater discussions throughout the Summit. This was the first major European event for Concordia, a nonpartisan nonprofit organization that enables public-private partnerships to create a more prosperous and sustainable future. The event convened over 400 leaders from the public, private, and nonprofit sectors and provided attendees with an opportunity to participate in meaningful discussions on how public-private partnerships can address pressing issues facing the continent and beyond, including the mounting refugee crisis, the future of the European Union and regional investment in achieving the U.N. Sustainable Development Goals (SDGs). For more information please see the Concordia website and the Post Summit Report.

SOUTHERN EUROPE TEAM - GREECE: EXITING THE LABYRINTH

Greece suffered a difficult 2015 and 2016, characterised by a number of internal shocks including the shutdown of systemic banks and the imposition of capital controls, uncertainty caused by a referendum and national elections, further austerity and bank recapitalisations. In the wider Greek debt crisis, 2017 now looks set to provide the necessary springboard for sustainable economic growth and renewed optimism. The successful conclusion of Greece’s second bailout review on 15th June has ended months of uncertainty. It has paved the way for the International Monetary Fund to re-join the country’s bailout programme via a maximum $2bn standby agreement, and prepared the required framework for debt relief that may be finalised within a year. The agreement ends the stand-off between the IMF and the European Union and provides for the disbursement of €8.5bn. It should be considered a key step in rebalancing the economy on a sounder footing and offering additional clarity on necessary debt relief. The first disbursement of €7.7bn will take place in early July, of which €6.9bn will go towards debt servicing and €0.8bn to state arrears, while another €0.8bn will be disbursed for arrears clearance after the summer. Payment of state arrears will have a positive effect on the economy, whilst Greece’s liquidity needs remain relatively small until mid-2019. Why was Greece lost in the labyrinth? Whilst the eschatology of Greece may have shifted focus from death to resurrection, the post-mortem examination bears many contradictions. Contrary to popular belief:
  • Greeks are by far the hardest working people in Europe and ranked fourth globally
  • Greeks worked on average 2,042 hours a year, more than the average worker in both the UK (1,674 hours) and Germany (1,371 hours).
  • Greece also ranked fifth out of 148 countries for availability of scientists and engineers.
However, despite this work ethic and evident quality of human capital, Greek workers produced less than half of the economic output of their American counterparts, and just over half of their German partners. Source: OECD data (2015). Such failure to realise potential, and proximity to ending it all together, are underpinned in the country’s bureaucracy, lack of innovation and ease of doing business. Successive governments during the crisis have sought to remedy such problems via unprecedented fiscal consolidation and reforms. The latter, being truly structural rather than cosmetic, arguably form a singularity in Greece’s economic progress, enabling its rich human capital to compete with its European partners and attract foreign investment. Key indicators are starting to improve Whilst progress has been far from linear, the economy appears to be slowly exiting the labyrinth of economic depression, as statistics have begun to prove. Exports have more than doubled since 2008. Tourist numbers continue to break annual records, with more than 30mn expected this year, nearly three times the local population. In addition, interest from foreign investors in tourism and real estate has ballooned. At the same time, the massive fiscal adjustment has started bearing fruits by closing a competitiveness gap which has been entrenched for decades. Unemployment levels dropped to a five-year low in March 2017, whilst the primary surplus rose to 4.2% of GDP versus a target for 0.5%. This rapid adjustment is most evident in the current account balance, which stands at -0.6% of GDP versus                          -15.1% just before the crisis in 2008. Most importantly, the Greek economy returned to growth in the first quarter of the year, with output growing by 0.4% compared to the initial 0.1% contraction provided in flash estimates. This economic expansion was driven by consumption and notably, fixed capital formation, which has dropped to record low levels (circa 11% of GDP versus a 21.5% average over the last 67 years). This realignment of the Greek economy is increasingly supported by the Greek diaspora which has begun returning to the country in the form of capital rather than in person. It is marked by the deployment of significant investment in a large number of sectors from financial institutions to food, hospitality and real estate. In order to fuel both the government coffers and investors’ interest, the Greek government is now proceeding quickly with large-scale privatisations. Recently these have attracted strong investment interest from European, US and Asian investors, which at times is characterised by fierce competition for the same assets that failed to attract a single investor just a few years ago. According to the Foundation for Economic and Industrial Research, the large scale privatisations are expected to add some 4% to GDP and reduce unemployment by 2.5%. These include the privatisation of 14 regional airports, the development of the former Hellenikon Airport and the privatisation of Piraeus Port. The design of a virtuous circle at a government level is ambitious but simple – offer privatisations at attractive levels to investors linked to necessary capital expenditure outlay, encourage capital to flow back into the country, create thousands of new jobs, boost economic activity and thereby attract further investment at healthier levels. Nearly there, but still a way to go However, the circle remains incomplete due to the lack of a strong banking sector. In this context, during the last two years the Greek government, under the auspices of the European Central Bank and Single Regulatory Mechanism, has proceeded quickly in adopting legislation for Greek banks to tackle the €100bn non-performing exposure issue. To this end, the SSM has established aggressive targets to reduce NPEs by circa 40% by the end of 2019. Work-out legislation, which has now been adopted, forms the necessary framework to tackling this burden. It is intended that lower NPEs will translate to healthier bank balance sheets, renewed depositor confidence and credit expansion, which will fuel investments in the country and increase disposable income. Considered within this wider context, the importance of the conclusion of the second bailout review must not be understated. By removing near-term risks related to repayments to creditors in July, the stage is now set for a discussion on the debt relief agreement after the elections in Germany, and subsequently Greece’s inclusion in the ECB’s quantitative easing programme. Recent comments from European Commissioner for Financial Affairs, Pierre Moscovici, that Greece has met EU conditions to satisfy the suspension of excessive deficit procedures (fiscal deficit has fallen below 3% target), also sets a positive tone. Whilst many corners still obstruct line of sight, now is the time for investors to start looking seriously at Greece again, as the country edges ever closer to the labyrinth’s exit. Petros Mylonas, Head of Southern Europe at LXM Group This article appeared in International Finance Magazine on 23rd June 2017.