Archive for the 'Nigeria' Category

Airtel Africa confirms June $750m listing in London

Airtel Tanzania HQ (photo by Prof.Chen Hualin – Own work, CC BY-SA 3.0, creative commons by Wikipedia

Airtel Africa has confirmed that it is going ahead in June 2019 with its $750 million listing on the main market of the London Stock Exchange, as flagged up in January in our article. Owned by India’s Bharti Airtel, it is Africa’s second biggest mobile operator with operations in 14 countries and has 99m subscribers and 14.2m mobile money customers.

It said this week that it is aiming for a premium listing on the main market of the LSE, meaning it will float at least 25% of hits shares. It could offer up to 15% more shares through an overallotment option, according to a report in Financial Times which reports that the group says the exact number of shares to be sold and the indicative price range of the offer will be determined “in due course”.

Airtel will use the proceeds to cut the ratio of net debt to EBITDA (earnings before interest, tax, depreciation and amortization) to 2.5x, according to City AM. It also plans to expand data and mobile money services across Africa.

It is also considering a listing on the Nigerian Stock Exchange, according to reports.

Advisers and joint bookrunners appointed are JP Morgan, BofA Merrill Lynch, Citigroup, Absa, Barclays, BNP Paribas, Goldman Sachs, HSBC and the Standard Bank of Africa but the sole as its advisers. JP Morgan will be sole sponsor; BofA Merrill Lynch, Citigroup and JPMorgan will also act as joint global co-ordinators.

The amount to be raised in the listing is down from the figure of $1bn given by Reuters on 28 May quoting Airtel, and the $1.25bn figure in January and February.

For the year to 31 March it posted revenue of more than $3bn and operating profit of $734m. For more background on the shareholders and earlier capital raises, read our earlier report.

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MTN Nigeria shares soaring after $5bn listing

Telecommunications firm MTN Nigeria has had strong days of trading since it joined the Nigerian Stock Exchange in a listing by introduction on 16 May. As it moves closer to what the company may feel is “fair value”, chances of a future initial public offering (IPO) increase.

The $5.1bn listing of 20.4 billion (20,354,513,050) ordinary shares of MTN Nigeria Communications Plc (MTNN) at N90 per share on the Premium Board makes it the second biggest stock on the NSE after Dangote Cement plc and ahead of Nestle Nigeria plc, according to Bloomberg. It is the Nigerian unit of MTN Group Ltd, Africa’s biggest mobile-phone company.

Journalist Shola Lawal writing in Mail and Guardian newspaper described the scene: “At exactly 2.30pm, when the stock market closed on Thursday, MTN Nigeria’s chairperson Pascal Dozie and Ferdi Moolman, MTN Nigeria’s CEO, excitedly clanged metal sticks on a gong on the crowded trade floor at the Nigerian Stock Exchange (NSE) building. The room, filled with brokers in their maroon jackets, erupted in celebration.”

The shares were priced at N90 and have since climbed some 10% a day to reach N119.75 by close of business on 20 May. The main shareholders are only letting a few shares go until the share gets a higher price, according to an interesting interview by Kayode Omosebi, Team Lead, Financial Advisory at ARM Securities on CNBC. He estimates the stock will keep moving until it gets past N130 when more stock could become available, but his firm estimates “fair value” at N149.

Omesebi adds that interest has been wide including retail investors, and could spark a revival of interest in other equities. It will also widen liquidity across telecom stocks in Africa as investors will have a wider range of shares in South Africa, Kenya, Ghana and other markets.

The NSE listing is part of a settlement with the Federal Government of Nigeria after a $5.2bn fine was imposed for failing to meet at 2016 deadline to register SIM cards. In September 2018 there was a $2bn bill for back taxes, and the Central Bank of Nigeria said it has illegally repatriated $8.1bn between 2007 and 2015.

The initial plan was for a share offer or IPO, and MTN Chairman Dozie was not giving any timetable for when that will come: “We were to have an IPO but due to unforeseen circumstances we couldn’t. Half bread is better than none.”

Oscar Onyema, Chief Executive Officer of NSE, said in a press release: “Having MTN Nigeria listed in our market is a testament of the exchange’s commitment to building a dynamic and inclusive market and creating channels for sustainable investment. This listing will promote liquidity for MTN Nigeria, enhance its value and increase transparency, as our platform remains one of the best avenues for raising capital and enabling sustainable growth for national development”.

Analysts also hope that the listing will encourage international oil companies and two other key telecoms firms, Airtel and Globacom.

Mail and Guardian quotes Ugo Obi-Chukwu, founder of leading financial literacy website, Nairametrics: “The last time we had any major listings was in the early 2000s and it was the Government that stimulated those listings… This will open the floodgates for more listings and possibly renew an interest in the stock market.”

The premium board is “a listing segment for the elite group of issuers that meet The Exchange’s most stringent corporate governance and listing standards. This Board features Dangote Cement Plc, FBN Holdings Plc, Zenith International Bank Plc, Access Bank Plc, Lafarge Africa Plc, Seplat Petroleum Development Company Plc and United Bank for Africa Plc,” according to the NSE.

Work starts on African exchanges linkage project

Africa’s stock exchanges, regulators, central banks, stockbrokers and clearing systems are working together on the African Exchanges Linkage Project (AELP), set to create trading and information links between the 7 leading securities exchanges.

Participating exchanges at the first capital markets stakeholders’ roundtable were the West African regional exchange Bourse Regionale Valeures Mobilieres (BRVM), Casablanca Stock Exchange, The Egyptian Exchange, Johannesburg Stock Exchange, Nairobi Securities Exchange, The Nigerian Stock Exchange and the Stock Exchange of Mauritius.

The linkage project is a joint initiative by African Development Bank and African Securities Exchanges Association. It aims to facilitate cross-border trading and settlement of securities, unlock pan-African investment flows, promote innovations and diverse investments, and address lack of depth and liquidity in Africa’s financial markets. For more background, see our recent article.

The project is backed by $980,000 grant through the African Development Bank Korea-Africa Economic Cooperation Trust Fund (KOAFEC).

Karim Hajji, ASEA President and chief executive of the Casablanca Stock Exchange, said according to the press release: “Regional integration is a high-priority continental agenda. By organically linking 7 exchanges in Africa which collectively have a market capitalization of over US$1.4 trillion, the AELP will stimulate intra-African flows and provide opportunities for investors and trading participants in over fourteen African countries.

“With the expected outcome of boosting liquidity in African capital markets, the AELP will unlock the powerful potential of African markets to access and redistribute domestic capital for economic development.”

Pierre Guislain, African Development Bank’s Vice-President, Private Sector, Infrastructure and Industrialization, said: “The partnership between us and ASEA complements the Bank’s interventions towards deep and resilient capital markets in Africa. The African Exchanges Linkage Project will contribute to a wider financing pool for African corporates and SMEs and help close Africa’s infrastructure deficit, estimated at US$67–107 billion annually. Indeed, the continent needs deep, liquid and linked capital markets that will enable accelerated mobilization of domestic resources and incentivize private financing of infrastructure”.

Participating partners at the workshop on 24 April at African Development Bank’s headquarters included:
• Regulators Le Conseil Régional de l’Epargne Publique et des Marchés Financiers, Autorité Marocaine du Marché des Capitaux, Securities and Exchanges Commission of Nigeria, and the Capital Markets Authority of Kenya.
• Central bank – Banque Centrale des Etats de l’Afrique de l’Ouest,
• Stockbrokers and exchanges associations – Association Professionnelle des Sociétés de Bourse, Association of Stockbroking Houses of Nigeria, Kenya Association of Stockbrokers and Investment Bankers
• Clearing systems – Association Professionnelle des Banques Teneurs de Compte Conservateurs, Maroclear, Central Securities Clearing System – Nigeria, Central Depository and Settlement Corporation Ltd. – Kenya
• Investment banking – Afrinvest West Africa.

Pierre Guislain of African Development Bank and Karim Hajji of African Securities Exchanges Association and Casablanca Stock Exchange

Africa’s eurobond outlook 2019

A good overview of Africa’s  $92bn eurobond market, with a summary of 2018 and 5 key themes for 2019, written by Gregory Smith, Director and Fixed Income Strategist for Emerging Markets at Renaissance Capital, is available on LinkedIn.

Overall there are 20 African eurobond issuers with the largest issuers South Africa, Egypt and Nigeria, also Africa’s 3 largest economies.

About 2018, he wrote: “Despite the tough markets 2018 was a record year for African sovereign issuance and saw a growing preference for euro-denominated eurobonds, and longer maturity eurobonds. The $25.8 billion issued by African countries in 2018 makes up 28% of the current stock of African eurobonds. Angola, Egypt, Ghana, Ivory Coast, Kenya, Nigeria, Senegal and South Africa each issued 30-year paper.”

Source: Renaissance Capital

As highlighted previously, there were 2 upgrades in credit ratings for Eurobond issuers during 2018. S&P upgraded Ghana and Republic of Congo. However, Moody’s downgraded 5 countries: Angola, Kenya, Gabon, Tunisia and S&P and Fitch joined in downgrading Zambia.

Key trends Smith focuses on for 2019:

  1. International market turbulence is the top trend. It will be good news for many African countries if the US dollar gets weaker internationally and the US Federal Reserve holds back from raising US interest rates as much as previously anticipated. But there are global downside risks to issuers, including lower global growth impacted by strained US-China relations.
  2. Will key issuers make enough progress with economic reforms? Reforms such as lower deficits and adequate foreign exchange reserves are needed to support economic growth and make the debt sustainable. If markets get tough in 2019 (see previous), reforming economies do best. Check Smith’s list of 10 African Eurobond issuers busy with reform programmes under guidance of the International Monetary Fund (IMF) and the 2 issuers, Zambia and Republic of Congo, still talking but not ready to start IMF programmes.
  3. Policymakers’ skills at managing their debt, particularly as a period of heavy bond repayments begins in 2022 and remains high until 2025. Strong debt management skills include “economic policy coordination, an understanding of debt risks, a debt strategy, good data management, regular public reporting, good investor communication, a skilled team that can negotiate good terms with potential global lenders” as well as redeeming some debt ahead of maturity by longer term issues
  4. Elections in eurobond issuers this year (in approximate date order): Nigeria, Senegal, South Africa, Mozambique, Tunisia and Namibia.
  5. This year is unlikely to see as many eurobonds issued as last year. “Those most likely to issue in 2019 include Egypt, Angola, Ghana, and Kenya”.

For deeper analysis and more details and charts, see the original posting on LinkedIn here.

 NB Gregory Smith points out his views are for information, they do not constitute investment advice.

SEC Nigeria leads FSD Africa programme to boost capital markets regulators

Left to right: Reginald Karawusa (Director, Legal and Enforcement, SEC), Laure Beufils (Deputy High Commissioner), Mary Uduk (ag Director General, SEC), Evans Osano (Director Financial Markets, FSD Africa), Richard Sandall (Senior Advisor, DFID Nigeria).

Funding organization FSD Africa is launching a 3-year programme to improve skills of Africa’s capital market regulators. The Securities and Exchange Commission SEC Nigeria is the first capital-market regulator after signing an agreement worth £450,000 ($585,200) on 28 September.
The programme will also be rolled out in Ghana, Kenya, Mozambique, Rwanda, Tanzania, Uganda, Zambia and Zimbabwe. FSD Africa is a non-profit funded by UK Aid, which is Department for International Development (DFID) and the British Government.
FSD Africa will provide funding over 3 years to build the capacity of regulators, providing technical assistance, encouraging closer collaboration among regulators and conducting research to support the development of new policies and regulations.
Evans Osano, Director Financial Markets at FSD Africa, says (emailed press release): “This partnership will unlock capital by improving investor and issuer confidence, reducing transaction costs and reducing the complexity and approval times for capital issuance. The programme will also support greater collaboration and knowledge sharing with other African capital market regulators.”
FSDA Director Mark Napier says: “Well-functioning capital markets can play a vital role in support of inclusive economic growth by channelling long term finance into infrastructure and other large-scale projects that create jobs and improve access to markets. Strengthening regulatory capacity in capital markets is an essential pre-condition for building investor confidence.”
Mary Uduk, Acting Director General of SEC Nigeria, says the collaboration will facilitate access to capital for private and public issuers and enhance the competitiveness of the Nigerian capital market as a global investment destination. SEC Nigeria is contributing £22,000.
According to a report in the local news Independent the project will promote regulation of financial technology; fund an audit of institutional capacity and implementing the recommendations; and back collaboration and knowledge sharing between regulators.
Laure Beaufils, Deputy High Commissioner, British Deputy High Commission Lagos, commenting on the programme, added that capital markets have an essential role to play to help unlock capital that can be invested in the real economy and that can contribute to job creation and inclusive growth.

Some African IPOs – August 2018

Uganda – CIPLA-Quality Chemicals IPO closes 24 August
CIPLA-Quality Chemicals Ltd opened its initial public offer (IPO) on 13 August and will close on 24 August, aiming to list on the Uganda Securities Exchange on 24 September. The pharmaceutical company aims to raise $45 million through offering a 18% stake via 657,179,319 shares at UGX256.50 per share, according to Reuters. The company manufactures drugs that include anti-retroviral, anti-malarial and Hepatitis B medicines and its products are sold in Cameroon, Comoros, Kenya, Namibia, Tanzania, Uganda and Zambia.
India’s Cipla Limited, Uganda’s Quality Chemicals and the Government of Uganda set up the company as a joint venture in 2005, and TLG Capital and Capitalworks Investment Partners invested in the company in 2009, holding stakes worth 12.50% and 14.40% respectively. Lead transaction advisor was reported to be Renaissance Capital in Kenya and Crested Capital in Uganda is the lead sponsoring broker.
it ends a 6-year listing drought as the previous IPO in Uganda was Umeme in 2012.

CIPLA-Quality Chemicals in Kampala (file photo)

Egypt – Giza Spinning & Weaving probably Q4
The IPO of garment maker Giza Spinning & Weaving is set for the fourth quarter, probably November. According to reports, the aim is to sell a 40% stake to finance investment of EGP250m ($14m) into expanded production of garments and yarn. The company employs around 4,800 and was set up in 1979. It is the biggest garment exporter in Egypt by volume and the sixth largest by dollar value, with 87% of production exported to the USA and Europe in 2017. Beltone Financial will be the global coordinator and book runner and a roadshow will run in October, according to Bloomberg.

Uganda – MTN under pressure to list
MTN Group Ltd, which has 55% of the mobile market in Uganda with about 10.9m subscribers, is seeking to renew its 10-year licence in October. Godfrey Mutabazi, executive director of Uganda’s telecom regulator, says that selling shares on the local bourse isn’t a pre-condition for the granting of a new 10-year contract, but Uganda wants “Ugandans to be part of the company,” according to this Bloomberg report.

MTN Ghana – IPO closed 31 July
The IPO of Scancom PLC, the name of telco MTN in Ghana, closed on 31 July as par of bids for a local licence. It was selling 35% of the company, in line with discussions with the regulator. Details are to be announced soon and trading could begin from 5 September. It is set to be the largest listing on the Ghana Stock Exchange and shares could also be bought using the MoMo Wallet mobile-money platform. MTN has more than 221m customers across 22 markets in Africa and the Middle East. It had agreed with telecom regulators in Ghana and Nigeria to list its local units, and the offer was set to raise GHS3.5bn ($725m).

MTN Nigeria “not yet applied”
MTN had not yet applied for a listing by 9 July, according to a news report which quoted the Securities and Exchange Commission. Previously it had been reported that the listing could go live in August, when Reuters reported on pre-IPO documents in February 2018. It said that MTN planned to list by July and raise at least $400m to cut debt in its Nigeria unit, which was valued at $5.23bn. The Nigerian pledge to list cwas part of a settlemetn whcih also included a $1bn fine in 2016.

Airtel – London or Johannesburg in 2019
Airtel is reported to be aiming to raise up to $1.5bn by listing 25% of the equity in its Africa unit in early 2019, according to this report on Bloomberg, as part of plans to reduce its debt by $4.6bn over three years. Airtel is India’s top wireless operator. It also was reported to be planning to sell part of its stake in a $14.6bn company owning tower infrastructure, formed when Bharti Infratel Ltd merges with Indus Towers Ltd. It is owned by billionaire Sunil Mittal and is hoping to keep its Moody’s credit rating at Baa3. It sold about 8,300 towers in 7 African countries for some $1.7bn in 2015 and in 2016 sold its towers in Tanzania for $179m and sold its Burkina Faso and Sierra Leone units for some $1bn the same year. In 2010 it paid an enterprise valuation of $10.7bn for the African assets of Kuwait Mobile Telecommunications Co, also known as Zain.

Kenya – National Oil Corporation aims at Nairobi and London in 2019
The Government of Kenya plans to raise up to KES103bn ($1bn from a dual listing of shares in state-owned National Oil Corporation in Nairobi and London, according to this news report in Business Daily. NOC needs the money to exercise its rights to buy back shares before production at the Turkana oil field, discovered in 2012.
Petroleum principal secretary Andrew Kamau told the Business Daily that the contract for the concession of oil blocks in the Turkana oil fields to existing operators has a clause allowing the government to exercise a back-in right, which essentially means buying back a percentage of the ownership before production kicks in. “When you sign a contract you have a right to buy back some share, before production. The percentage we can buy back is 15 in one block and 20 in the other. The listing should raise enough money for the purchase,” said Mr Kamau, without indicating whether the State would exercise its rights for the entire stake under the clause. The two blocks are owned by British firm Tullow (50%), Africa Oil (25% and Total (25%). The Government and Tullow was to start small scale crude production of about 2,000 barrels a day in 2018, with full production due from 2021 after building a $2.1bn pipeline to Lamu on the coast, according to Reuters.

London – Intercement delays to 2019
Intercement is to delay its $1.8 billion IPO on the London Stock Exchange from the second half of 2018 to early 2019, according to reports. It makes cement and related products in Brazil, Portugal, Argentina, Mozambique, Cape Verde, Paraguay, South Africa and Egypt and was founded in 2008.

For fuller analysis of recent and upcoming IPOs across Africa, see the website of the Enko Africa Private Equity Fund, a $63.4m fund focused on pre-IPO opportunities across Africa.

Africa-focused Vivo Energy soars after £548m IPO on London SE

Africa’s £1.98 billion ($2.68bn) megalisting Vivo Energy (VVO) soared in its first 2 days of trading on the London Stock Exchange (dual-listed on the Johannesburg Stock Exchange) at the close of last week. After a successful initial public offer (IPO) of shares at 165.00 pence per share for 323.3 million shares, 27.7% of the company, it listed on the LSE on 10 May and traded up 11% on Thursday to 183.20p, before soaring as high as 198.10p on Friday 11 May and then closing at 185.0p.

Vivo raised £548m ($742m) in the share offer, which was the largest UK-listed African IPO since 2005, when Telecom Egypt raised about £650m, and the biggest IPO in London so far this year.

It listed on the Premium Segment of the LSE Main Market. Global coordinators of the deal were Citigroup, Credit Suisse and JP Morgan.

According to the LSE press release, Christian Chammas, CEO of Vivo Energy: “We have been extremely pleased with the investor response to our offer, in what has been a challenging period for the wider markets. Vivo Energy’s differentiated business model, strong track record, exposure to Africa and the growth opportunity it represents has been well understood by investors. We are excited about the momentum in the business and are looking forward to delivering further growth and success as a London listed company.”

In an article in Financial Times Chammas described Vivo as offering international investors exposure to a diverse group of mostly fast-growing African economies with rapidly expanding urban populations: “We are at the heart of the growth story, the growth of Africa’s population and consumer demand.”

Vivo is a retailer and marketer of Shell-branded fuels and lubricants in Africa, operating about 1,800 service stations across 15 African countries, with Morocco its biggest market. It is expanding fast, and is second in Africa after Total. It is owned 55% by oil trader Vitol Group SA of Switzerland, and 44% by private equity group Helios Investment Partners and 1% by management. Last year earnings before interest, depreication and amortization (EBITDA) was $326m. In December it announced a ZAR3.5bn ($256m) share swap transaction with Engen, South African unit of Malaysia’s Petroliam Nasional Bhd, which would add 9 more countries and 300 more service stations, which was awaiting regulatory approval.

According to another article in the Financial Times: “People close to the deal said that investor appetite was strong and the listing was more than two times subscribed. The transaction could unlock other African-focused IPOs that had been waiting until a company successfully tested the market.”

Nigeria’s Dangote Cement, which operates across more than 10 African countries, could be planning to raise between $1.2bn and $2bn by floating 10%-15% of the business, according to chairman Aliko Dangote. In May it announced the appointment of non-executive directors Mick Davis (former Xstrata chief executive) and Cherie Blair (lawyer and wife of former UK prime minister Tony Blair).

Another potential large African listing on the London Stock Exchange in 2018 is Liquid Telecom, which describes itself as: “the leading independent data, voice and IP provider in eastern, central and southern Africa. It supplies fibre optic, satellite and international carrier services to Africa’s largest mobile network operators, ISPs and businesses of all sizes. It also provides payment solutions to financial institutions and retailers, as well as award winning data storage and communication solutions to businesses.”

In March Africa-focused mobile phone tower firm Helios Towers, dropped plans for an IPO because of weak investor appetite. Regional rival Eaton Towers had also been considering a listing.

Vivo Energy (photo credit Vitol)

London Stock Exchange financing African growth

African companies listed or trading on the London Stock Exchange have a total market capitalization of over $200 billion ($271bn), and in the last 10 years have raised more than $16 bn on London’s markets. The 108 African companies is more than any other international market, according to a press release from the LSE.

There are 9 African sovereign bonds listed in London, from: Gabon, Ghana, Namibia, Nigeria and Zambia

According to Tom Attenborough, Head of International Business Development, London Stock Exchange, in an LSE press release: “The success of Vivo Energy’s IPO is a strong statement of international investor interest in building exposure to Africa. As a London-listed company, Vivo Energy, will gain access to the world’s most international market, as well as an unrivalled source of deep liquidity and new investors.

“London is a strong partner to African companies seeking to attract international investment.”

Paternoster Square with London Stock Exchange at right (credit: Wikipedia)

  • Also this month, May 2018, Angola launched a $3bn Eurobond on LSE, the country’s biggest international bond and the first international issuance since 2015.
  • In April the LSE Group, the Nairobi Securities Exchange and non-governmental organization FSD Africa signed a memorandum of understanding to explore the launch of LSEG’s business support and capital-raising programme, ELITE. In May, the first Kenyan company, Olsuswa Energy, joined the programme. So far 850 companies have joined the ELITE programme.
  • In November 2017, the LSE, Casablanca Stock Exchange and the Bourse Régionale des Valeurs Mobilières (BRVM) signed an agreement to roll out ELITE across West African markets, in a signing ceremony presided by Amadou Gon Coulibaly, Prime Minister of Côte d’Ivoire.
  • In June 2017, Nigeria raised $300m through its first Diaspora Bond on LSE, a retail bond aimed at Nigeria’s global expatriate community seeking to invest in their home country’s development. It was the first bond of its kind from sub-Saharan Africa.
  • In March 2017, LSE published its first “Companies to Inspire Africa” report, identifying hundreds of the fastest-growing and most dynamic private businesses across Africa. Vivo Energy is the first company in that report to follow up by listing on LSE.
  • In March 2016, LSEG established an Africa Advisory Group, bringing together 12 distinguished business leaders, policymakers and investors from across Africa, to discuss the challenges and opportunities presented by the development of the continent’s capital markets.
  • In November 2014, London Stock Exchange Group and The Nigerian Stock Exchange signed a capital markets agreement to support African companies seeking dual listings in London and Lagos. The agreement followed the implementation earlier in 2014 of a unique new cross-border settlement process between the UK and Nigeria.
  • In June 2014, LSEG signed a strategic agreement with Casablanca Stock Exchange to share its expertise on the full exchange business chain, from listing to trading, and from clearing to settlement and custody with a commitment to position Casablanca’s capital markets and financial infrastructure as a regional hub.
  • In April 2014, Nigerian oil and gas group Seplat was the first Nigerian company to simultaneously dual list equity shares in London and Nigeria and raised $500m in an IPO.

LSEG market infrastructure technology, supplied by Millennium IT of Sri Lanka, is deployed in more 12 African markets, including Botswana, Casablanca, Namibia and Johannesburg stock exchanges.

Sub-Saharan Africa investment banking deals in Q1

Mergers and acquisitions (M&A) in sub-Saharan Africa in Q1 of 2018 at $4.7 billion were 63% down on a year earlier, according to investment banking analysis for sub-Saharan Africa by Thomson Reuters, but there were $2.7bn in equity follow-on issues and $13bn in debt issues. Rand Merchant Bank topped the ranking of investment banking earnings, gaining $10.3 million, 9.3% of the total $117.6m earned during the quarter.

Completed M&A generated 20% and equity capital markets 37% of the total fee pool. Thomson Reuters says equity and related issuance was at its highest since 2007.

Fees from completed M&A totaled $23.4m, a 57% decrease year-on-year, while equity capital markets underwriting reached $43.1m, the best start since 2007. Domestic and inter-SSA M&A totaled $483m, down 81% year-on-year and the lowest annual start since 2006. Inbound M&A is down 73%, driven by the lowest number of deals since 2004, while outbound M&A is on a six-year high, up 91% to $1.6bn. Most (93%) of the outbound M&A was by South African companies, while acquisitions by companies headquartered in Mauritius accounted for 6% and in Seychelles for 1% respectively. Citi topped the financial advisor table for Q1 2018 for announced M&A with “any sub-Saharan Africa involvement” with 7% market share.

The biggest deal of Q1, according to Thomson Reuters, was Milost Global Inc’s US$1.1bn leveraged buyout transaction to acquire the entire share capital of Primewaterview Holdings Nigeria through its African subsidiary Isilo Capital Partners, announced on 10 January.

All the equity capital markets activity in the region was follow-on offerings, with 14 transactions. It is the first time there were no primary equity issues since 2012. The biggest was a follow-on offering by PSG Group, followed by offers from Sanlam and Lafarge Africa. Standard Bank Group tops the SSA equity capital markets league table in Q1 2018 with a 26% share of the market, followed by Investec at 12% and PSG Capital Ltd at 11%.

Sneha Shah, Managing Director for Africa at Thomson Reuters, said: “The most active Sub-Saharan Africa equity capital markets sectors for Q1 2018 were financials followed by materials, real estate, industrials, retail, and consumer staples.”

The most active debt issuer nation was Côte d’Ivoire with US$4.6bn in bond proceeds, 36% of market activity, followed by Nigeria and Senegal. Citi took the top spot in the SSA bond ranking for Q1 2018 with 24% market share. Syndicated lending fees declined, falling to $12.7m down 66% from Q1 2017. ING ranked first for syndicated loans.

Fees from underwriting in debt capital markets were $38.4m, the top value since Thomson Reuters started keeping these records in 2000, and up from $19.4m during Q1 2017.

More hires at leading Africa and frontier investment bank Exotix Capital

A leading emerging and frontier markets investment bank, Exotix Capital, continues to add senior hires in key African markets. Exotix has offices in London, New York, Dubai, Lagos and Nairobi and is a licensed stockbroker on both the Nigerian and Nairobi stock exchanges – and in July rated #1 with 24% market share in Nairobi. The hires, which take immediate effect, add to the strengthening of the team in recent months and new appointments across business lines and geographies to harness growing investor interest in the world’s highest-growth economies.

The past year has seen significant growth for Exotix across Africa’s equity capital markets both in clients and market share. In Kenya, Exotix has been steadily increasing month-on-month this year. In June the firm launched a Research, Analytics and Data division, by Paul Domjan, the former Chief Executive of Roubini Global Economics and Founder of Country Insights.

It has also been expanding its investment-banking reach in Africa, with particular focus on the energy, financial and consumer sectors. On 3 October, Exotix was one of the three deal managers, alongside JPMorgan and Morgan Stanley, for the tender offer by Guaranty Trust Bank on its $400 million 2018 Eurobond.

The new appointments are
Serge Marston, currently Head of EMEA sales at NEX Markets, Serge Marston from NEX Markets as Non-Executive Director on Exotix’s Executive Management Board
Chiamaka Ezenwa, formerly at Morgan Stanley in London and FBN Capital in Lagos, as the new Head of Investment Banking West Africa
Mbithe Muema, previously with African Alliance Kenya, is appointed as Head of Equity Sales in Nairobi

CEO Duncan Wales says in a press release: “We are excited to have Serge, Chiamaka and Mbithe on board to help us take full advantage of the opportunity presented by our unique place in the world’s most exciting economies. Serge brings unparalleled expertise from his experience at the cutting edge of financial innovation.”

Marston is Head of EMEA sales at NEX Markets, a division within NEX Group that provides electronic trading technology services in the fixed income and foreign exchange markets. As Non-Executive Director he will work closely with CEO Duncan Wales and Chairman Mark Richards. Prior to joining NEX, he spent 19 years at Deutsche Bank in a variety of roles, most recently as Co-Head of Fixed Income, Currencies & Commodities, and e-Commerce Sales in the Global Markets division. NEX Group is a key shareholder of Exotix.

Ezenwa will be working with Andrew Moorfield (Natural Resources) and Fabrizio Ferrero (Financial Institutions), co-heads of Investment Banking at Exotix, and Esili Eigbe, Head of Equities, Africa, based in Lagos, to expand business in West Africa. She had previously spent 6 years at Morgan Stanley in London with primary focus on equity capital markets for Sub-Saharan Africa, the UK and Northern Europe, and the past 4 years in Lagos at FBN Capital, the investment-banking subsidiary of FBNH, Nigeria’s largest bank by total assets, most recently as Head of Equity Sales. She has originated and executed a variety of transactions across jurisdictions for international and Nigerian corporations.

According to Ferrero: “Chiamaka’s appointment enhances our investment bank offering in West Africa and overall in Sub-Saharan Africa through her extensive experience and relationships in the local markets. I am confident she will be a valuable addition to our team and further expand Exotix Capital’s investment banking footprint in the region.”

Muema was previously Head of Institutional Sales at African Alliance Kenya, where she was largely responsible for building the company’s local client base in the Nairobi office. She will lead Equity Sales further boosting Exotix’s position. She had previously worked at Renaissance Capital and Equity Bank as a research analyst and is currently on the board of the Konza Technopolis Development Authority in Kenya in a non-executive role, where she steers the business development committee. She will work closely with Eigbe and Debbie Rees, Global Head of Equity Sales.

Eigbe commented: “Mbithe has the necessary experience of markets in the region to support our commitment to expand Exotix’s business in Kenya and the wider region.”

Earlier in October Exotix appointed Matthew Pearson, former Head of Equities at ICBC Standard Bank, as Global Head of Equities, joining the firm’s Executive Committee, and Christopher Dielmann, formerly Research Analyst in the International Monetary Fund’s Strategy, Policy & Review Department, as Senior Economist with responsibility for markets including Egypt, Kenya, Nigeria, Bangladesh, Pakistan and Vietnam.

Other new additions to the team include Rafael Elias, formerly Head of Emerging Markets Research and Strategy for Fixed Income at Cantor Fitzgerald, returning to Exotix to continue his core focus on Latin America as Corporate Credit Analyst, and Rex Nowell, who has successfully directed independent research sales and account management teams in the Americas, Europe and Asia for the past 20 years, most recently for Roubini Global Economics, joining Exotix in New York as Managing Director for New Client Development.

Exotix has also been expanding financials research with the hire of three new analysts last month inlcuding Temitope Ode, previously an analyst at Sankore Global Investments and before that at Goldman Sachs, joining Exotix’s Lagos office to cover financial companies. Faith Mwangi, formerly Senior Research Analyst at Genghis Capital, covering banking and media, and prior to that Investment Analyst at Standard Investment Bank, covers financials in East Africa after joining in August.

Exotix Capital says it “provides the most comprehensive and integrated cross-asset platform to penetrate the full capital structure in frontier and emerging markets.” Its analysts cover over 160 companies, more than any other frontier-markets firm, in emerging Europe, the Middle East, Africa, Asia and the Americas. It is specialist in equity and fixed-income markets and the Exotix advisory team provides the full range of investment-banking services to companies, financial institutions, investment funds and governments. These include strategic advisory assignments from debt capital to private equity fund raising.

Serge Marston, Chiamaka Ezenwa and Mbithe Muema