Investing in Angola: Learn about the Capital Market

Angolan Companies IPO on the Way to the Angolan Stock Exchange: What to Expect and How to Invest Safely

In the coming months, several important companies on the Angolan scene will be heading for the stock exchange, including ENSA, Standard Bank, BODIVA, BFA and Unitel.
But what does this transition mean for the market and for us investors? And what good practices should we follow before investing in companies that are making their initial public offering (IPO)?
Shares are securities that represent partial ownership of a company. By buying shares, investors become shareholders, acquiring the right to participate in profits (through dividends) and, in some cases, in company decisions, depending on the number of shares held. Owning shares is a way of earning from the growth of the company and the appreciation of the shares on the market over time.
Public Offering of Sale (OPV): What Does It Mean?

A public offering for sale (IPO), or "offer for sale" (OFS), is a process whereby shareholders of a private company sell some or all of their shares to the public. Investing in an IPO allows investors to buy shares at an initial price and potentially profit from the increase in their value over time. For example, a share bought for 10,000 Kz during an IPO can increase to 30,000 Kz, 50,000 Kz or even more, depending on the company's performance. In this way, shares in companies that carry out IPOs can represent an excellent opportunity for long-term investments, provided they are chosen carefully.

1. business model Understand how the company generates revenue, who its competitors are and what competitive advantages it has. This understanding helps to predict whether the company will be able to grow and prosper over the years.
   
2. Financial Reports: Analyze the financial reports for the last five years to check the company's appreciation or devaluation trajectory. Companies with a consistent upward trend may indicate safer investment opportunities.
 
3. Company reputation: The company's image on the market and among consumers is also important, as a good reputation can increase demand for your actions in the future.
  • The company's future performance is uncertain and can vary according to internal and external factors.
  • The distribution of dividends is subject to approval by the General Meeting, on a proposal from the Board of Directors.
  • Share prices are volatile and can fluctuate over time.

Investing in IPOs can be an interesting opportunity, but it requires knowledge and detailed analysis to minimize risks and maximize potential gains.

What are Treasury Bonds and Notes?

Bonds are a way for the issuer to raise capital without having to resort to bank loans, and for the investor, they offer a stable source of income.
Bonds are considered a safe instrument for the following reasons:
  1. PredictabilityBecause it is a loan, we know in advance how much we will receive in return, because the interest is fixed, the payment takes place on predefined dates, as well as the return of the capital invested by the maturity date, regardless of how the economy or the market is behaving. This is why we call bonds "fixed income instruments".
  2. Solid issuers: As a rule, bonds are issued by institutions with a strong payment capacity. This reduces the risk of default.

In Angola, there are 2 main types of bond on the market
capitals

Treasury bonds

They are issued by the state to finance the public debt. Within treasury bonds
Angolan, we find some specific typologies, such as:

  • OTNR's: Non-adjustable Treasury Bonds
  • OTX: Index-linked Treasury Bonds
  • OTME's: Treasury Bonds in Foreign Currency
  • Eurobonds: securities issued in a currency other than that of the country in which the
    issue.

They are issued by private companies to finance projects or expand their operations. These
bonds may have different payment terms and conditions, depending on the institution and your financial profile.

Every investment should be chosen according to the investor's profile and financial objectives.
Bonds tend to be long-term investments, ideal for conservative and moderate investors looking for stability and predictable returns. Unlike other economies, in Angola bonds are the most widely issued and traded financial instruments on the capital market.

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