Africa is Firmly Planted for Investor Success

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Standard Africa Holdings, the majority shareholder in Stanbic Holdings has completed the acquisition of additional shares in the company.

Have you ever wondered how palm trees survive hurricanes? The palm tree survives seemingly unscathed where other trees have broken branches or even snap in half. Its survival secret is hidden on the inside.

Unlike traditional trees, palm trees are not made of wood but rather spongy tissue that contains malleable cells. These form cylinder-like rings, which give the trunk incredible strength while allowing the palm tree to bend up to 50 degrees without snapping. The canopy of large leaves also acts as large feathers to further withstand the onslaught of fierce winds.

For me, Africa’s investment story is like a palm tree.

Overcoming the winds of change

Our continent has faced many storms and onslaughts over the past two years. Although the worst of COVID-19 has passed, 2022 saw the effects from the pandemic replaced by new challenges.

The Russia/Ukraine conflict and high inflation have caused asset volatility, higher commodity prices, global supply chain disruptions, and an ever-increasing risk of a recession.

As a consequence of the political and economic instability, global volatility has caused severe pressure on worldwide economies, with Africa being no exception.

But just like the palm tree, our resilient continent is starting to bend back and stand up straight again. Fortunately, many investors are also seeing this.

An African success story

At Standard Bank, we believe that what separates the sceptical investor from the confident one when it comes to investing in Africa is one simple thing: Foresight. As the African proverb goes, “There are no shortcuts to the top of the palm tree.”

With in-depth research, the right vision, and an understanding of Africa’s investment environment, there are immense opportunities for local and global investors to act upon. It simply requires looking at Africa with the right lens.

This is where our Standard Bank Global Markets plays a role. We are able to connect investors or clients to this continent through our in-depth knowledge of our markets and world-class skills.

A reflection of this is Standard Bank Group’s recent achievement of a record half-year earnings of R15.3 billion, with a 33% increase in headline earnings.

Contributing to this was the bank’s Corporate and Investment Banking (CIB) division, which recorded its highest ever revenue and headline earnings for a six-month period.

In fact, CIB added the most to banking operations’ headline earnings at R7.4 billion, a 16% increase from June 2021.

Contributing to this continued growth was our Global Markets (GM) business unit, which forms part of the CIB division. Our GM contribution includes:

• Supporting trade by providing liquid currency markets
• Creating investment solutions for global investors to participate in and support economic growth across the continent
• Creating risk management solutions to support sound and targeted investments
• Creating funding alternatives for infrastructure and development initiatives in changing risk environments

Reaching new heights

As the largest Global Markets franchise in Africa, our vast footprint provides an onshore presence in 20 African countries. With product capabilities that compare to leading international banks, we can connect our clients to unique opportunities while providing exceptional risk management to ensure financial ambitions are turned into investment impact.

This has been clearly demonstrated over the past two years, where despite extreme volatility, Standard Bank’s GM unit has been able to successfully manage risk, lock in high asset prices, and deal with business disruptions for our clients.

Our recent financial success is evidence that our team has the ability to leverage our experience, knowledge, and deep pools of liquidity to create exceptional risk management strategies and provide appropriate and market-leading solutions to clients across the continent.

By putting our clients at the heart of everything we do, the GM team is confident that investing in Africa will help them capitalise on the immense growth opportunities this continent has.

At the end of the day, as a bank, we are committed to driving Africa’s growth. Combined with our confidence in the continent’s resilience and ability to bounce back, and intimate knowledge of the continent’s investment landscape, it is with confidence that we look towards Africa’s future and work towards reaching new record-breaking heights.

Guido Haller, Standard Bank’s Head of Global Markets


 

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