Wednesday, March 13,
2019 10:18 AM / PwC
Welcome to PwC’s Africa Capital Markets Watch 2018, our fourth annual publication examining both African debt capital markets (DCM) and equity capital markets (ECM) transactions, and fifth annual publication on ECM transactions.
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.
DCM transactions analysed include non-local currency debt funding raised by African companies and public institutions, whether high-yield or investment grade
African Capital Markets Activity Declines in 2018 Despite Landmark Transactions
The positive trend recorded in 2017 in overall ECM activity, in terms of increase in volume and value, was not sustained in 2018 despite strong market indications at the beginning of the year.
African ECM activity in 2018 declined year-on-year both in volume and value by 25% and 40% respectively. However, the year saw some landmark transactions such as the $819.3 million May 2018 dual listing of Vivo Energy Plc on the JSE and LSE, the largest Africa-focused IPO on the LSE since 2005, and the second largest IPO in Africa in the past five years in terms of proceeds raised.
Unbundlings, acquisitions and regulatory changes driving market activity in the financials sector
The financials sector continued to contribute significantly to overall ECM activity in 2018 with some significant IPOs and FOs across the continent, primarily driven by the unbundling of large financial services groups and increased capital requirements.
Rise in green bond issuances
The past few years have seen an increased focus on private sector initiatives to address sustainability and climate change through investments and financing, including the use of innovative products such as green bonds, the proceeds of which are required to be deployed into environmentally-friendly initiatives.