News and developments on African capital markets, includes: African securities, African stock exchanges/stock markets, African equities, African bonds, African private equity/venture capital, and African social impact investment
Senegal has successfully re-priced its yield curve by issuing a more liquid 10-year $500 million Eurobond carrying a coupon of 8.75%. The bond was priced at 97.57 when it was bid on 6 May, the equivalent of a yield of 9.125%.
Fee income from investment banking in sub-Saharan Africa more than doubled to US$157 million during Q1 of 2011, compared to same period in 2010. Of this $80 mn (51%) was earned on merger and acquisition (M&A) activity, according to a leaflet and press release from Reuters Deals Intelligence.
Rebels in Cote d’Ivoire made rapid advances towards Abidjan yesterday (30 March), where fighting could be fierce. Prices rallied yesterday on the €2.3 Eurobond and Bloomberg reported a 7% climb to 42.688 cents in the dollar nominal value, while cocoa prices fell $70.
Rebel advances in Cote d’Ivoire are boosting the price of the country’s €2.3 bn Eurobond, which are in default since 1 Feb, in London trading. According to Bloomberg today (30 Mar), the advance boosted the dollar-denominated bonds to their highest in at least 2 months as they climbed 4.2% to 39.875 % of face value last night.
Flows into South African bonds turned positive in the last few days, although money is still being moved out of equities. For much of 2011 (year to date) investors had followed the global trend of less appetite for emerging markets and there have been outflows from South African bonds and equities after 2010 saw record inflows.
Leading investors and institutions are to discuss transactions and trends in Africa’s capital markets during the Africa investor 2011 Analysts’ and Fund Managers’ Forum to be held in London. The one-day meeting will be held in association with Thomson Reuters, at their headquarters in London on 24 March.
Cote d’Ivoire has formally reneged on $2.3 billion of Eurobonds, becoming the first nation to default since Jamaica in January 2010. The default comes after it was unable to pay $29 million of interest which had become due and after a 30-day grace period had expired. However, the market appears to have faith the crisis will eventually end.
The Nigerian Stock Exchange reported on 19 January that a total volume of 93.3 billion shares valued at N797.6 billion (3.2% of gross domestic product) were traded in 2010, with volume down 9% and value up 16% compared to 2009 when 102.8 billion shares were traded, valued at N685.72 billion (2.9% of GDP).
Citigroup expects to see strong demand for Nigeria’s $500 million debut Eurobond despite volatility in global capital markets. It plans roadshow this week.
Kenya’s Capital Markets Authority has cut the cost of trading bonds from 0.04% per cent (KSh400 for every KSh1 million transacted) to 0.035% (KSh350 for every KSh1 mn) in order to pass on the lower costs due to automated trading on the Nairobi Stock Exchange. Banks say they still want an Over-The-Counter market to trade bonds alongside the NSE.