AFRICA MONEY-Angolans build stakes in Lisbon to profit in Luanda
LISBON Nov 29 (Reuters) - For most investors, buying distressed bank stocks in a recession-hit Euro zone economy may sound like a bad idea.
Angolan investors in Portugal's banks certainly do not think so, having built up hefty stakes in lenders that are also key players back at home in Luanda - where the booming banking sector is quickly luring international competition.
Portugal's banks may not look too appealing as they desperately seek capital in a bailed-out country, but their units in former colony Angola have made them attractive to high-profile investors from Africa's second-biggest oil producer.
Armed with capital from an economic boom, Angolan state oil firm Sonangol last month raised its stake in Millennium BCP to 15.08 percent, confirming its status as the top stakeholder in Portugal's largest listed bank by assets.
In July, Isabel dos Santos - daughter of President Jose Eduardo dos Santos and Africa's second-richest woman, according to Forbes magazine - doubled her share in Banco BPI, another top-three Portuguese bank, to nearly 20 percent.
Part of the rationale is to invest profits from an economy that is set to grow 8 percent in 2012, with oil output expected to keep expansion strong in the next few years.
"Because Angola has capital, it makes sense to invest overseas, but it is unusual, as not that many African countries invest in European companies," said Victor Lopes, economist for Sub-Saharan Africa at Standard Chartered.
INFLUENCE AT BARGAIN PRICES
Rock-bottom prices in Portugal's stock market add to the rationale. Banking shares have trading near historic lows this year, pressured by a liquidity squeeze and austerity under the country's 78-billion-euro ($101 billion)international bailout.
Linguistic and cultural ties, still strong nearly four decades after Angola's independence, also help.
But the underlying logic is to gain exposure to the units built by the Portuguese banks over the last decade in Angola's high-potential banking market.
"The sector continues to show innumerable opportunities for growth, shown by a banking penetration level with just 22 percent of Angolans holding bank accounts," global auditing firm KPMG said in a study published this week.
The study showed that total assets in the sector grew over 20 percent in 2011, with deposits jumping by more than a third and loans to clients rising 23 percent.
BPI's Angolan unit, BFA, is among the five banks that control around 80 percent of the market, while Millennium Angola is slightly smaller but also posting strong growth.
"For Angolan investors it is clearly interesting to have stakes in Portuguese companies that are heavily involved in Angola," Standard Chartered's Lopes said. "It gives them a say, influence in sectors at home - that is a key factor."
The increase in influence was seen when Sonangol oversaw a management change at BCP in January. Manuel Vicente, then Sonangol CEO and now Angola's vice-president, said the new cycle would "add value to the Angolan and Portuguese companies".
The Angolan government has forced overseas banks to sell up to 49 percent of their units to local partners, paving the way for Sonangol and Isabel dos Santos to buy large minority stakes in Millennium Angola and BFA in a country which does not yet have a stock market.
With the Angolan financial sector so promising, further competition from abroad is rising, with Africa's largest lender, Standard Bank, implementing a rapid expansion plan and several foreign players waiting for licences.
FULL SHOPPING CART - OIL, TV, SUPERMARKETS
The Angolan investors' strategy is not restricted to banks.
Sonangol has long expressed its desire to transform its indirect stake in Portuguese oil and gas firm Galp, which has stakes in Angolan oil blocks, into a direct holding. It is widely expected to reach this goal as Italy's Eni sells down its stake.
Isabel dos Santos was on Tuesday appointed to the board of Zon Multimedia, Portugal's leading cable TV provider, in which she has built a stake of 28.8 percent.
The operator's Angolan venture, ZAP, launched three years ago, has signed 400,000 subscribers to provide tough competition to South Africa's Multi-Choice network. Analysts at Barclays said ZAP could reach a million customers in three years.
Dos Santos has also partnered with Portuguese conglomerate Sonae to open five hypermarkets in Luanda. With Angola's growth seen leading to the creation of a middle class, food retail is another hot prospect, attracting investment from Africa's biggest grocer, Shoprite.
"As Angola is opening its economy to foreign investment, our bigger companies and investors have turned abroad because this can give know-how in key sectors," said a senior source in the financial sector, who asked not to be named. "They have to invest overseas to be stronger back at home." ($1 = 0.7746 euros) (Reporting by Shrikesh Laxmidas and Sergio Goncalves; editing by Ron Askew)
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