Our latest look at capital market activities during 2017 and the five-year period 2013-2017.
In the African equity markets, 2017 was a year for the record books with the largest IPO and FO by value over the past five years.
IPOs in 2017; 134 IPOs between 2013 and 2017
IPO proceeds raised in 2017; $9.1bn proceeds raised between 2013 and 2017
FO proceeds raised in 2017; $43.6bn proceeds raised between 2013 and 2017
In non-local currency corporate bonds raised in 2017; $31.4bn raised between 2013 and 2017
Welcome to PwC’s 2017 Africa Capital Markets Watch, our fourth annual publication examining African equity and debt capital markets transactions.
Equity capital markets (ECM) transactions included in our report comprise capital raising activities, whether initial public offerings (IPOs) or further offers (FOs), by African companies on exchanges worldwide and those made by non-African companies on African exchanges.
Debt capital markets (DCM) transactions analysed this year include non-local currency debt funding raised by African companies and public institutions, whether high-yield (HY) or investment grade (IG).
2017 saw a significant improvement in overall ECM activity over 2016 and the impact of some global ECM trends in local markets. For instance, 2017 activity included a series of spin-off and Special Purpose Acquisition Companies' (SPAC) listings on the JSE and other exchanges, as owners tried to realise value and drive new investment opportunities.
Overall African ECM transaction volume and value improved in 2017 over 2016. In terms of value, 2017 saw the largest IPO over the trailing five year period, and an increase in the total value of ECM transactions of 49% between 2016 and 2017 in US dollar terms.
ECM activity, 2013-2017
African ECM activity in 2017 was largely driven by the financials sector for FOs, and consumer services sector for IPOs, although these sectors’ share of total FO value was amplified by the $2.9 billion rights issue by Barclays Africa in June 2017, and of the total IPO value by the IPO of Steinhoff Africa Retail Ltd (STAR), which accounted for 21% and 9% of total ECM proceeds during the year, respectively. Businesses in sectors such as telecommunications, consumer goods and services, financials, and healthcare continued to form a significant component of African ECM activity, reinforcing the growth trend away from resources sector; none of the top-10 IPOs in 2017 were companies in the resources sector.
Over the past five years, 387 non-local currency debt transactions have taken place by African issuers on international markets, raising $128.1 billion, of which 85% was in US dollars.
Non-local currency corporate issuances totaled $7.5 billion, an increase of 68% in terms of value, and 110% in terms of volume over the prior year, with several large first time issuers tapping into a market with sustained appetite for emerging market yields.
In comparison to 2016, 2017 saw an increase in total value of sovereign and supranational non-local currency debt issuances of 75%, with 2017 accounting for four of the top-10 largest sovereign issuances by value over the past five years.
Andrew Del Boccio
Partner, PwC South Africa
Tel: +27 (0)11 287 0827
Partner, PwC South Africa
Tel: +27 (0)11 797 5660
Partner, PwC Nigeria
Tel: +234 (1) 271 1700