Sub-Saharan Africa investment banking fees reached $527,9-million during 2017, 0,1% less than the value recorded during 2016.
This is according to Thomson Reuters’ the 2017 investment banking analysis for the sub-Saharan Africa region, which also found that fees from completed M&A transactions totalled $94,5-million, a 19% down year-on-year, while equity capital markets underwriting fees fell 16% to $144,8-million.
Syndicated lending fees also declined, falling 5% from this time last year to $180,9-million. Fees from debt capital markets underwriting saw an increase from $47,9-million during 2016 to $107,7-million during 2017 — the highest value since our records began in 2000.
Debt capital markets’ underwriting fees accounted for 20% of the overall Sub-Saharan Africa investment banking fee pool, the highest first half share since 2012. Both completed M&A and equity capital markets generated 18% and 27% of the total fee pool respectively, while syndicated lending fees accounted for 34%.
Citi earned the most investment banking fees in sub-Saharan Africa during 2017, with a total of $43,9-million or an 8,3% share of the total fee pool. Investec topped the completed M&A fees while Java Capital led the ECM underwriting fee ranking and Citi the DCM underwriting fee ranking with a 16,6% share. Standard Chartered ranked first for syndicated loans fees.
Sneha Shah, MD: Africa at Thomson Reuters, says: “The value of announced M&A transactions, with any sub-Saharan Africa involvement, reached $32,4-billion during 2017 — the lowest since 2012. Inbound M&A also reached a three-year low of $14,4-billion with the US, the UK and Switzerland leading investments. Outbound M&A also declined 44% to $7,8-billion in 2017.”
Domestic and inter-sub-Saharan Africa M&A totalled $5,8-billion, down 1,9% year-on-year. South Africa’s overseas acquisitions accounted for 65,6% of sub-Saharan Africa outbound M&A activity, while acquisitions by companies headquartered in Mauritius and Seychelles accounted for 31,7% and 2,6% respectively.
Exxon Mobil also agreed to buy a 25% stake in a Mozambique liquefied natural gas project from Italy’s Eni SpA for $2,8-billion.
“The deal was the largest to be announced in the region during the year and helped to boost the value of deals in the Energy and Power sector to $6,4-billion,” adds Sneha. “It is also worth noting that five out of the top 10 deals recorded this year were announced in Q1 — making it the strongest quarter of the year – accounting for 36% of the total M&A activity in the region.”
Goldman Sachs topped the 2017 any sub-Saharan Africa Involvement Announced M&A Financial Advisor League Table with a 15,1% share of the market.
In equity capital markets, sub-Saharan Africa equity and equity-related issuance stands at its second highest volume since 2007, totaling $9,6-billion during 2017, 11% more than the value recorded during the same period in 2016. Barclays Africa Group’s follow on offering topped the ECM deal list, followed by Steinhoff Africa Retail Ltd IPO, Vodacom Group and Sibanye Group as the top deals for 2017.
“Looking back at the quarterly activity, despite having the lowest number of deals, Q2 saw the highest level of activity with $4,2-billion in M&A transactions,” says Sneha.
Follow-on offerings accounted for 71% of the ECM activity in the region by value, while IPOs and convertibles accounted for 18% and 11%, respectively. Morgan Stanley topped the sub-Saharan Africa ECM league table during 2017 with a 19% share of the market.
Sub-Saharan Africa debt issuance raised a total of $28,5-billion in proceeds during 2017. This is a 27% increase from the value recorded during the same period in 2016. The Ivory Coast was the most active issuer nation with $10,3-billion in bond proceeds, which accounted for 36% of market activity, followed by South Africa and Nigeria.
Citi took the top spot in the Sub-Saharan Africa bond ranking for 2017 with $5,8-billion of related proceeds, or a 20,3% market share.