|Overall, African equity capital market (ECM) activity in 2019 declined sharply both in volume and value from 2018, with 2019 posting the lowest proceeds raised in ten years.
The general slowdown in equity markets was largely driven by a series of macro-economic factors including an ECM deceleration in global markets, caution in the period leading up to key local elections, which took place in both Nigeria and South Africa in 2019, and more specifically in South Africa, growing political gridlock and economic stagnation.
The report also includes IPO and FO activity on international exchanges or non-African companies on African exchanges.
African Equity Markets
The decline was mainly related to activity in South Africa, where ECM activity dropped by 69% in terms of value and 46% in terms of volume compared to 2018, and where Africa’s largest bourse saw no capital raised through IPOs in 2019.
African IPO Market
In terms of IPO volume, the JSE and the Botswana Stock Exchange recorded 64 IPOs and 10 IPOs, respectively, while the Ghana Stock Exchange, Bourse Régionale des Valeures Mobilières (BRVM) and the Dar es Salaam Stock Exchange each had 9 IPOs. The Egyptian Exchange accounted for the largest proportion of the IPO proceeds raised on North African exchanges, at 60% or $2.2 billion raised from 23 IPOs.
African FO Market
Over the past ten years, a total of 712 FO deals were recorded on African exchanges and by African companies on international exchanges with a total of $71.1 billion raised.
Egypt accounted for the next-largest amount of FO volume and value at 10% and 6%, respectively, followed by Nigeria with 4% of both FO volume and value.
African Inbound, Outbound, Domestic and Cross-border Activity, 2010-2019
African Debt Markets
South African corporate issuers accounted for 52% of non-local currency corporate debt issued between 2010 and 2019, including energy utility, Eskom, which accounted for the largest cumulative non-local currency debt value raised by a single issuer over the past decade at $5.5 billion, largely intended to fund the company’s capital expansion programmes, such as the construction of its coal-powered Medupi and Kusile power stations.
Alice Tomdio, PwC Africa Capital Markets Director, says: