Companies

Sub- Sahara Africa Investment Banking analysis for H1 2014

by PATRICK ATUANYA & BALA AUGIE

July 21, 2014 | 12:36 am
  |     |     |   Start Conversation

Fees for Sub Saharan African Investment Banking services totaled $124.2 million during the first half of 2014, marking a 25 percent decline in fees, from the same period last year and the lowest first half total for fees in the region since 2010; according to latest data from Thompson Reuters deal intelligence and SSA investment banking analysis.

Fees from advisory on completed mergers and acquisitions (M&A) transactions dropped 31 percent to $26.2 million during the first six months of 2014, marking the lowest first half total for M&A fees in the region since 2003.

Debt capital markets underwriting fees totaled $13.0 million, 14 percent up from the same period last year, while syndicated lending fees fell 76 percent to $18.3 million.

Fees from equity capital markets underwriting increased 65 percent to $66.7 million, marking the highest first half total in the region since 2007.

Equity fees accounted for 54 percent of the Sub-Saharan African fees, the highest share of a first half fee, according to Thompson Reuters.

Citi topped the Sub Saharan African fee league table during the first half of 2014, with a 13 percent share of the fees. Investec and Rand Merchant Bank followed in second and third positions, respectively

Equity and equity-linked issuance in Sub Saharan Africa (SSA) totaled $2.9 billion during the first half of 2014, twice as much as the same period last year and the highest first half total since 2011.

Proceeds from follow-on offerings accounted for 55 percent of Equity Capital Market (ECM) activity, while initial public offerings (IPO) and equity-linked issuance accounted for 23 percent and 22 percent, respectively, the data showed.

“Energy & Power was the most active sector for equity issuance in the region, followed by Financials,” Keith Nichols, Managing Director, Africa, Thomson Reuters, said.

The largest IPO, and the second largest equity offering during the first six months of the year, was from Nigerian-based Seplat Ltd.

The oil company raised $540.5 million in a dual listing on the London and Nigerian Stock Exchanges in April.

Unity Bank was also among the top 10 largest equity offering with a total $242 million raised between May and June of this year.

Nigerian Banks are moving to shore up capital levels by taking advantage of surging equity markets to sell stock and boost tier one capital, as they aim to grow lending and assets.

Stock valuations close to record highs make it easier for lenders to raise funds through common equity, which dilutes existing shareholdings.

Nigerian equities have risen 4.12 percent year to date (July 16) with the main stock index closing at 43,030.27 points on Wednesday.

The total stock market capitalization of N14.2 trillion has surpassed the highs of 2008 reached before the home grown banking crises.

Sub-Sahara-chart

Seventy – five percent of deals involved a South African issuer.

The top four sectors for ECM issuance were Financials, Energy and Power, Consumer staples and Health care.

Rank Merchant Bank took the top spot in the Sub Saharan African Equity Capital Markets financial advisor league table during the first half of 2014, with 18 percent of the market.

Others in the top five include Citi- Bank, BNP Paribas, Morgan Stanley and Barclays.

Fees from equity capital markets underwriting increased 65 percent to $66.7 million, marking the highest first half total in the region since 2007.

For SSA Debt Capital Markets (DCM), total issuance reached $5.2 billion during the first half of 2014, an increase of 3 percent compared to the same period last year, and the highest first half total since 2011.

The African Development Bank (AfDB), headquartered in the Ivory Coast, raised a total of $2.7 billion, accounting for 53 percent of activity in the region.

This was followed by sovereign debt issuance from Zambia of $991.7 million, and emerging market corporate issuance from Nigerian based Zenith and Access Bank of $494.7 million and $400 million respectively.

Deutsche Bank took the top spot as Financial Advisor in the SSA Debt ranking for the first half of 2014 with $1.2 billion, or a 22 percent share. Barclays and Citi followed in second and third positions.

 

PATRICK ATUANYA & BALA AUGIE


by PATRICK ATUANYA & BALA AUGIE

July 21, 2014 | 12:36 am
  |     |     |   Start Conversation

Big Read |  

Analysis

What Nigeria must do before signing AfCFTA

Nigeria’s President Muhammadu Buhari last Wednesday gave a hint that he would sign the African Continental Free Trade Area (AfCFTA)...


MTN Banner ADS 2


Diamond

Newsletter Fixed income