2014 recorded the highest level of activity in African equity capital markets (ECM) over the previous five years, and a significant increase in both transaction volume and capital raised during 2014 compared to the prior year, according to a report issued by PwC today.
PwC’s inaugural publication entitled, IPO Watch Africa 2014, has found that US$11bn was raised in 2014 in the African equity markets across the continent, almost equal to the combined money raised in the whole of 2012 and 2013, which totaled US$11.1bn.
During 2014, IPO activity also increased overall in number from 20 to 24 IPOs, and doubled in terms of capital raised to US$1.7bn from US$0.8bn in 2013.
The report analyses equity capital market transactions that took place between 2010-2014 on exchanges throughout Africa, as well as transactions by African companies on international exchanges.
Nicholas Ganz, PwC Africa Capital Markets Leader, says: “The performance of African markets was strong in 2014, with an increase in equity capital market activity of 40% in terms of volume of offers and 100% in terms of capital raised when compared with prior year activity. We noted a few instances of management following a dual-track approach aimed at maximising value for existing shareholders, and consistent with the growth in other forms of capital raising activity across Africa.”
The report shows a significant share of capital was raised in markets outside of South Africa, with Johannesburg listings accounting for only 32% and 44% of total IPO capital raised in 2013 and 2014, respectively, a notable departure from its more prominent position in prior years.
Coenraad Richardson, PwC South Africa Capital Markets Partner, notes a counterpoint in respect of further offers (FOs), “While IPO activity across the continent increased its share vis-à-vis the JSE, FOs remained dominated by capital raising in South Africa, which accounted for 87% of proceeds in 2014. This is a reflection of the depth and stability of the South African listed company and investor base, underpinned by a securities exchange regulatory framework ranked number one in the world by the World Economic Forum’s 2014-2015 Global Competitiveness Report.”
Overall, FO activity during 2014 increased by 50% in terms of the volume of transactions and doubled in terms of capital raised to US$9.3bn from US$4.6bn in 2013.
African Eyenew.com
