Thomson Reuters on Monday released its investment banking analysis for the Sub Saharan Africa region for 2012.
According to the report, Investment banking fees in Sub Saharan Africa reached US$307.9 million during 2012, a 27% decline from 2011 when fees reached US$421.0 million. Equity capital markets issuance reached US$4.8 billion during 2012 to finish 15% down on 2011 (US$5.6 billion). Sub Saharan African debt issuance reached US$11.8 billion from 29 issues during 2012, a 4% decline from 2011.
Keith Nichols, Managing Director, Africa, Thomson Reuters, commented: “The value of M&A transactions involving Sub Saharan African targets reached US$25.0 billion. This marked an increase of 18% from 2011 (US$21.2 billion). Around 48% of Sub Saharan African M&A activity during 2012 involved a South African target.”
Mr. Nichols added: “The next most targeted nations were Nigeria (28%) and D.R. Congo (7.2%). South Africa and The United Kingdom were the most acquisitive nations during 2012, accounting for 39% and 22% of Sub Saharan African target M&A, respectively. The Materials and Energy & Power sectors were most active, together accounting for 63% of activity during the year.RBC Capital Markets topped the 2012 Announced Any Sub Saharan African Involvement M&A Ranking with US$2.9 billion, while Goldman Sachs took second place with US$2.5 billion.”
In respect to Sub Sahara Africa investment banking fees, Mr. Nichols pointed out that these fees reached US$307.9 million during 2012, a 27% decline from 2011 when fees reached US$421.0 million. Year-on-year fee declines were seen across all asset classes except for loans, where fees nearly doubled from 2011.
Fees from syndicated lending totalled US$83.8 million during 2012, accounting for 27% of the overall Sub Saharan African investment banking fee pool. Fees from M&A advisory saw the biggest year-on-year decline, falling 60% from US$221.1 million during 2011 to US$87.7 million in 2012. Equity capital markets underwriting fees totalled US$71.3 million during 2012, down 15% from the previous year (US$84.1 million), while fees from debt capital markets declined 11% to total US$65.1 million for the year.JP Morgan topped the Sub Saharan African fee rankings for 2012, with a 10.5% cut of the fees. Citi and Bank of America Merrill Lynch followed in second and third positions, respectively.
Mr. Nichols noted that Equity Capital Markets (ECM) issuance reached US$4.8 billion during 2012 to finish 15% down on 2011 (US$5.6 billion). This marked the slowest year for Sub Saharan African ECM activity since 2005. Follow-ons accounted for 65% of ECM activity during the year, while IPOs accounted for 7%. South Africa was the most active nation during 2012, while Financials was the most active sector. Morgan Stanley topped the 2012 Sub Saharan African Equity Capital Markets ranking with 22% of the market.
He concluded: “Sub Saharan African debt issuance reached US$11.8 billion from 29 issues during 2012, a 4% decline from 2011. Government & Agencies was the most active sector during 2012, accounting for 85% of the market. Issuance from the Financials sector accounted for 32% of the market. Barclays took the top spot in the Sub Saharan African Debt ranking for 2012 with a 15% share. JP Morgan and Citi followed in second and third places, respectively. The largest Sub Saharan bond issued during 2012 was a South African government bond worth US$1.5 billion.”
