Sub-Saharan Africa deals intelligence analysis Q1 - Thomson Reuters

22nd Apr 2017 | Source: APO

INVESTMENT BANKING FEES Sub-Saharan African investment banking fees reached an estimated US$78.7 million during the first quarter of 2017, 21% less than the value recorded during the first three months of 2016 and the lowest opening quarter total since 2014. Fees from completed M&A transactions totalled US$42.5 million, a 26% down year-on-year, while equity capital markets underwriting fees fell 42% to a five-year low of US$11.2 million. Syndicated lending fees also declined, falling 53% from this time last year to US$6.5 million. Fees from debt capital markets underwriting doubled from US$9.3 million during the first quarter of 2016 to US$18.6 million during the first quarter of 2017. Debt capital market underwriting fees accounted for 24% of the overall Sub-Saharan African investment banking fee pool, the highest first quarter share since 2010. Completed M&A and equity capital markets fees generated 54% and 14%, respectively, while syndicated lending fees accounted for 8%.

Morgan Stanley earned the most investment banking fees in Sub-Saharan Africa during the first quarter of 2017, with a total of US$14.6 million or a 18.5% share of the total fee pool. Morgan Stanley topped the completed M&A fee ranking, while Standard Bank was first for ECM fees. Standard Chartered topped the DCM underwriting fee ranking with an 23.6% share and Eastern and Southern African Trade and Development Bank ranked first for syndicated loans fees.

MERGERS & ACQUISITIONS - The value of announced M&A transactions with any Sub-Saharan African involvement reached US$10.1 billion during the first quarter of 2017, the highest opening quarter total in six years. Inbound M&A reached a 7-year high of US$6.4 billion, more than 5-times the value recorded during the first three months of last year, with the United States, China and Switzerland leading investments. Domestic and inter-Sub-Saharan African M&A totalled US$1.5 billion, up 130% year-on-year. Outbound M&A declined 40% to US$794.6 million during the first quarter of 2017. South Africa's overseas acquisitions accounted for 59% of Sub-Saharan African outbound M&A activity, while acquisitions by companies headquartered in the Seychelles and Mauritius accounted for 23% and 18%, respectively.

Exxon Mobil Corp. agreed to buy a 25 percent stake of a Mozambique liquefied natural gas project from Italy's Eni SpA for US$2.8 billion. The deal was the largest to be announced in the region during the first quarter and helped boost the value of deals in the Energy & Power sector to US$4.2 billion.

Bank of America Merrill Lynch topped the Q1 2017 Any Sub-Saharan African Involvement Announced M&A Financial Advisor League Table with a 28% share of the market.

EQUITY CAPITAL MARKETS - Sub-Saharan African equity and equity-related issuance totalled US$660.7 million during the first quarter of 2017, 28% less than the value recorded during the same period in 2016. Three initial public offerings from South Africa's Long4Life, Sea Harvest Holdings, and Premier Food & Fishing raised a total of US$249.8 million on the Johannesburg Stock Exchange.

IPOs accounted for 38% of the ECM activity in the region by value, while follow-on offerings and convertibles accounted for 48% and 14%, respectively.

Java Capital topped the Sub-Saharan African ECM league table during the first quarter of 2017 with a 29% share of the market.

DEBT CAPITAL MARKETS - Sub-Saharan African debt issuance raised a total of US$7.4 billion during the first quarter of 2017, double the value recorded during the same period in 2016. The Ivory Coast was the most active issuer nation with US$4.7 billion in bond proceeds, which accounted for 64% of market activity, followed by Nigeria and South Africa.

Standard Chartered took the top spot in the Sub-Saharan African bond ranking for Q1 2017 with US$1.3 billion of related proceeds, or a 17.2% market share.