African equity market raises $11bn in 2014 – PWC

Business

An international accounting firm, PricewaterhouseCoopers (PwC), on Monday said that 11 billion dollars was raised from African equity capital market (ECM) in 2014.

The African bourse contribution to the continent’s economy is contained in PwC’s inaugural publication entitled IPO Watch Africa 2014, obtained in Lagos.

According to the report, 2014 has witnessed the highest level of activity in ECM over the previous five years, with a significant increase in both transaction volume and capital raised during the period.

The report also said that the 11 billion dollars raised in 2014 across the continent was almost equal to the combined money raised in the whole of 2012 and 2013, amounting to 11.1 billion dollars.

It said that Initial Public Offers (IPO) activity during the period under review increased to 1.7 billion dollars from 0.8 billion dollars achieved in 2013.

The report also added that 1.2 billion dollars of Further Offers (FO) capital was raised by African companies on international exchanges since 2010.

“FOs in this context include those companies seeking to expand their investor base by way of a secondary listing, as well as those raising further funds from existing international listings,” it said.

A breakdown of market based activities in Africa showed that the Johannesburg Stock Exchange (JSE) retained its position in 2014 as the most active African market in terms of both total ECM transaction volume and proceeds.

The report said that the Tunis and Nigerian Stock Exchanges held the second position on the continent in terms of volume and proceeds raised, respectively.

It noted that 2015 would be a positive year for ECM activity in Africa due to strong performance posted in 2014.

“This is driven largely by a combination of expectations for continued exit by private equity investors, reforms to certain capital markets legislation, and growing investor confidence in and familiarity with African markets,” it said.

Mr Darrell McGraw, PwC Nigeria Capital Markets Partner, said that recent movements in commodity prices and relative depreciation of local currencies against the dollar might affect the Nigerian capital market.

McGraw said that “there are some headwinds that may affect the momentum of the capital markets in Nigeria and other territories heavily involved in resources”.

He, however, said that “Nigeria has already recorded an IPO in January 2015, and has a strong pipeline of listings likely to be brought to market later this year”.

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