Thomson Reuters, a global source of intelligent information for businesses and professionals recently released the Investment Banking Sub-Saharan Africa (SSA) region review for the first half of 2018.
“The most notable feature of the Sub-Saharan Africa Investment Banking fees verified in the first half of 2018 is that investment banking fees were 12% less than the value recorded in the first half of 2017. This year, they only reached an estimated US$241 million,” said Sneha Shah, Thomson Reuters Managing Director for Africa.
“Fees from completed Mergers and Acquisitions (M&A) transactions totaled US$33.7 million, a 60% decrease year-on-year and the lowest first half since 2005. On the other hand, Equity Capital Markets (ECM) underwriting fees reached US$71.2 million, the highest value since 2007,” adds Shah.
Rand Merchant Bank (RMB) continues to lead the chart on most investment banking fees received this year in SSA with a total of US$27.4 million or a 11.4% total fee pool. RMB also leads completed M&A and Syndicated Loans fee rankings in H2 2018.
Standard Bank, also known as Stanbic, leads the Equity Capital Markets (ECM) underwriting fee ranking with a 25.1% share of the market and CITI leads the Debt Capital Markets (DCM) underwriting fee ranking with a 15.7% market share.
In comparison, the total Sub-Saharan Africa fees from DCM underwriting fees accounted for 27% of the overall SSA investment banking fee pool, the highest since 2003. Completed M&A and ECM generated 14% and 30% of the total fee pool, respectively, and Syndicated Lending fees accounted for 30%.
Two of the top three largest M&A deals in the first half of 2018 took place in Nigeria with the largest being Milost Global Inc $1.1 billion leveraged buyout transaction to acquire the entire share capital of Primewaterview Holdings Nigeria Ltd.
South Africa’s overseas acquisitions accounted for 74.9% of SSA outbound M&A activity, while acquisitions by companies headquartered in Mauritius and Zimbabwe accounted for 21.9% and 2.5% respectively.
The Ivory Coast continued to be the most active issuer nation in bond proceeds at US$6.3 billion or 26.7% of market activity, followed by South Africa and Angola.