Definitive has said in new report that an estimated $387.5 million worth of investment banking fees were generated in Sub-Saharan Africa during the first nine months of 2021, a 15 per cent increase from the same period in 2020. The report said “While debt capital markets underwriting fees increased 148 per cent to $117.8 million, the highest year-to-date period since our records began in 2000, fees from equity capital markets underwriting, M&A advisory and syndicated lending all declined from the first nine months of 2020. Equity fees declined 17 per cent to $50.7 million, while syndicated lending fees declined 4 per cent to $148.2 million.
“Advisory fees earned in the region from completed M&A transactions reached $70.8 million, down 3 per cent from last year to the lowest first nine-month total since 2013. Fifty-eight percent of all Sub-Saharan African fees were generated in South Africa during the first nine months of 2021, and 23 per cent were earned from deals in the financial sector. Standard Chartered earned the most investment banking fees in the region during the first nine months of 2021, a total of US$33.1 million or an 8.5% share of the total fee pool. Boosted by the $44.1 billion Naspers/Prosus share swap in May, the value of announced M&A transactions with any Sub-Saharan African involvement reached $78.3 billion during the first nine months of 2021, more than four-times the value recorded during the same period last year and the highest first nine-month total since our records began in 1980. The number of deals increased 4% from last year to a three-year high of 584. M&A involving a Sub-Saharan African target reached $61.8 billion, again lifted by the share swap to an all-time record first nine-month total, while the number of deals increased 8 per cent over last year. Inbound deals, involving an acquiror outside of Sub-Saharan Africa, increased 86 per cent to $9.6 billion, while Sub-Saharan African outbound M&A more than doubled to US$11.5 billion. With advisory work on deals worth a combined $52.1 billion, Morgan Stanley held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first nine months of 2021.
“Sub-Saharan African equity and equity-related issuance reached $971.2 million during the third quarter of 2021, the highest quarterly total in more than two years. Despite the strong third quarter, total proceeds raised during the first nine months of 2021 was down 42 per cent from last year at $1.2 billion, the lowest first nine-month total since 2005. Pepkor Holdings, Lighthouse Capital and retail pharmacy chain Dis-Chem Pharmacies were among those in the region raising new equity funds from follow-on offerings during the third quarter. There have been no initial public offerings in the region so far during 2021. Investec and Goldman Sachs share first place in the Sub-Saharan African ECM underwriting league table during the first nine months of 2021.
“Sub-Saharan African debt issuance totalled $37.2 billion during the first nine months of 2021, up 149 per cent from the value recorded during the same period in 2020 and the highest first nine-month total since our records began in 1980. The number of issues increased 33 per cent over the same period. $15.2 billion worth of the bond proceeds were raised during the third quarter alone, with both Prosus and the Federal Government of Nigeria raising US$4.0 billion. Government & Agency issuance accounted for 55 per cent of proceeds raised during the first nine months of 2021, while the financial sector accounted for 24 per cent. Citi took the top spot in the Sub-Saharan African bond book runner ranking during the first nine months of 2021, with $6.0 billion of related proceeds, or a 16 per cent market share”.