Sub-Saharan African Investment Banking fees decline 12% to $380.8mn -Refinitiv

Refinitiv, one of the world’s largest providers of financial markets data and infrastructure has revealed that the Sub-Saharan African investment banking fees reached an estimated US$380.8 million during the first nine months of 2019.

The data provider revealed this in the Sub-Saharan African investment banking review. It said that this is 12% less than the value recorded during the same period in 2018 and the lowest first nine month total in four years.

According to Refinitiv, double-digit declines were recorded for both equity and debt capital markets underwriting fees with equity seeing the biggest decline, down 66% to US$28.8 million for the lowest first nine month total since 2003.

It reckoned that bond underwriting fees fell 38% to a three-year low of US$57.3 million. Also, syndicated lending fees fell 17% year-on-year to US$131.2 million, while advisory fees from completed M&A transactions increased 71% to US$163.5 million.

The firm also revealed that equity fees accounted for just 8% of the overall Sub-Saharan African investment banking fee pool during the first nine months of 2019.

This is down from 20% last year and the lowest year-to date share since our records began in 2000.

It stated that syndicated lending and debt capital markets fees generated 34% and 15% respectively, while M&A advisory fees accounted for 43%.

It was observed that Standard Bank Group earned the most investment banking fees in Sub-Saharan Africa during the first nine months of 2019, a total of US$36.4 million or a 9.5% share of the total fee pool.

Meanwhile, the value of announced M&A transactions with any Sub-Saharan African involvement reached US$64.6 billion during the first nine months of 2019.

This more than double the value recorded during the same period last year and the highest first nine month total since 2010, Refinitiv remarked.

It however revealed that deals involving a Sub-Saharan African target increased 137% in value to US$24.5 billion, driven by an US$8.8 billion offer for Anadarko Petroleum’s African assets by French energy giant Total SA.

It said the deal pushed inbound M&A, involving an acquiror from outside of the region, up 82% year-on-year to US$14.8 billion.

On the other front, intra-regional activity in Sub-Saharan Africa increased 341% to US$9.7 billion, while outbound M&A decreased 74% to a decade-low of US$2.5 billion.

It stated that the deals in the energy & power sector accounted for 42% of Sub-Saharan African target M&A activity during the first nine months of 2019.

South Africa was the most targeted nation, followed by the Republic of Congo and Botswana.

Citi topped the Sub-Saharan African involvement announced M&A financial advisor league table during the first nine months of 2019 with a 66% share of the market.

In addition, Sub-Saharan African equity and equity-related issuance totaled US$1.6 billion during the first nine months of 2019, 63% less than the value recorded during the same period in 2018.

This came with eighteen follow-on offerings totaled US$1.5 billion and accounted for 95% of total ECM activity in the region by value, while three IPOs accounted for the remaining 5%.

It cited that Mozambique’s Hidroelectrica de Cahora Bassa, a hydropower generation company, supplied the largest initial public offering in the region during the first nine months of 2019, raising US$53.7 million in July.

Also in that line, ICON Properties raised US$20.4 billion in January, while Skyway Aviation Handling Co raised US$6.2 million when it listed in Nigeria in April.

Standard Bank Group topped the Sub-Saharan African ECM league table during the first nine months of 2019 with a 42% share of the market.

Likewise, Sub-Saharan African debt issuance totalled US$19.9 billion during the first nine months of 2019, down 33% from the value recorded during the same period in 2018 and the lowest year to-date total since 2016.

South Africa and the Ivory Coast were the most active issuer nations with US$6.9 billion and US$4.0 billion in bond proceeds, respectively.

South African raised US$5.0 billion with its largest Eurobond sale to date in September. It is the largest bond offering in the region so far during 2019.

JP Morgan took the top spot in the Sub-Saharan African bond ranking during the first nine months of 2019 with US$2.8 billion of related proceeds, or a 14% market share, Refinitiv stated.

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