by Travis Johnson, Stock Gumshoe | March 29, 2011 9:34 am
I didn’t expect to be adding to my Lonrho position this week, but when the news that they expected to uplist to the main board at the London Stock Exchange by the end of the month brought the shares down a little bit, I decided to add a small tranche to my holdings. Moving up to the “big board” in London should open Lonrho up to a universe of additional traders and institutional investors who are either forbidden to or disinclined to trade AIM stocks (AIM is the “junior market” of the LSE, filled mostly with teensy stocks and startups).
This is long-expected, and I don’t know that it will bring a boost to the shares when it happens (expected by the end of April, according to the company, though I don’t know what the approval process for that is) … but it certainly should be a positive for the long-term appeal of the stock and the liquidity in the shares. I was hoping that the other toe they were dipping in the water would get the first nod, that being an oft-discussed listing in Hong Kong, because I think Lonrho will have strong appeal for Asian investors who see China gobbling up everything they can in Africa, but I’ll be plenty happy to see them on the main board at the LSE if this works out.
Other than that, not a lot of news out of Lonrho lately — they’ve started flying in Angola but that operation is still tiny as of yet, they need more planes. They made a small investment in Kenya and Southern Sudan by buying a company called AFEX (they supply and staff secure camps — mostly for mining, I gather), and their executives have apparently been sniffing around in Ghana to add another oil supply port or terminal to their port portfolio (which consists entirely of their holding in Luba Freeport in Equitoreal Guinea so far), so that might be interesting, but otherwise they still seem to be spending most of their capital on expanding the agricultural businesses, including the Ocean Catch business that’s ramping up to supply more fish to Costco. So nothing earth shaking to change the valuation of the business at the moment, Lonrho will probably continue to trade on sentiment regarding Africa, the global agriculture trade, and mining expansion, but I think it’s a positive that they’ve grown enough to potentially re-list on the main board at the London Stock Exchange.
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