Sub-Sahara investment banking fees $157 mn for 3 months

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.
Uganda attracted 51% of activity, followed by South Africa with 43%, and most of the action was into oil and gas, which China the biggest acquirer, accounting for 26% of the total, followed by South Africa and Luxembourg. Most of the action was in energy and power.
Busisa Jiya, Investment Client Specialists Manager MEA at Thomson Reuters, commented: “The momentum from 2010 has carried on into the first quarter of this year in Sub-Saharan Africa as deal flow remained strong with investors attracted to African assets. Big deals in energy and power helped to make the first quarter a buoyant one for the M&A and debt capital markets”.
A total of $1.9 billion was issued in equity markets in Q1, double the same period in 2010 of which the majority was convertible bonds with $1.4 bn issued, including the biggest issue, a $621.1 mn convertible bond offering from South-Africa based Steinhoff Finance Holding. Most of the equity (58%) was issued in South Africa, followed by Mauritius (29%) and Nigeria (10%)
Fees for investment banks in equity markets totaled $29 million, the strongest Q1 since 2007. There were no initial public offers (IPOs or share offers) during the period Jan-Mar.
Activity on the debt capital market in Sub-Saharan Africa rose 86% to $7.2 bn ($3.9 bn in Q1 2010). The top Sub-Saharan bond during Q1 was $1.7 bn issue by South Africa’s ESKOM Holdings. Investment banking fees from debt capital markets were the strongest Q1 on record at $42 mn.
Barclays Capital topped the rankings with $3.5 mn in fees for work in equity capital markets (ECM) and $13.9 million in debt capital markets for debt transactions totaling $1.7 bn in the first quarter. Investec topped the M&A fee ranking during the first quarter with US$26.4 million. Goldman Sachs topped the M&A ranking for “any Sub-Saharan involvement” with $3.9 bn, with Standard Chartered coming in second with $2.9 bn. BNP Paribas and Citi tied for first spot for Sub-Saharan equity capital markets underwriting during the first quarter of 2011, followed by Macquarie Group.
Thomson Reuters Deals Intelligence is part of Thomson Reuters Investment Banking division and brings up-to-the-minute market intelligence to clients and the financial media through a variety of research reports including Daily Deals Insight, weekly Investment Banking Scorecard, monthly Deals Snapshots and industry-leading quarterly reviews highlighting trends in M&A and Capital Markets.


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