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Refinitiv Releases Sub-Saharan Africa Investment Banking Review for Q1 2019

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Global Banking - Investors King
  • Refinitiv releases Sub-Saharan Africa Investment Banking Review for Q1 2019

Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, today announced that Sub-Saharan African investment banking fees reached an estimated US$93.5 million during the first quarter of 2019, 24% less than the value recorded during the same period in 2018 and the lowest first quarter total in 5 years.

Citi earned the most investment banking fees in Sub-Saharan Africa during the first quarter of 2019, a total of US$16.5 million or a 17.6% share of the total fee pool. Citi also topped the Any Sub-Saharan African Involvement Announced M&A Financial Advisor League Table with a 71% share of the market.

Deals involving a Sub-Saharan African target increased 71% in value to US$6.0 billion, driven by Naspers’ US$5.1 billion spin-off of its pay-TV unit MultiChoice.

South Africa’s overseas acquisitions accounted for 57% of Sub-Saharan African outbound M&A activity, while acquisitions by companies headquartered in Mauritius accounted for 43%.

Standard Bank Group topped the Sub-Saharan African Equity Capital Markets league table during the first quarter of 2019 with a 49% share of the market.

JP Morgan took the top spot in the Sub-Saharan African bond ranking during the first quarter of 2019 with US$944.4 million of related proceeds, or a 16% market share.

Summary of the findings:

INVESTMENT BANKING FEES 

Sub-Saharan African investment banking fees reached an estimated US$93.5 million during the first quarter of 2019, 24% less than the value recorded during the same period in 2018 and the lowest first quarter total in 5 years.  Fees from completed M&A transactions totalled US$36.9 million, a 31% increase year-on-year.  Equity capital markets underwriting reached US$11.6 million, down 70% from the first quarter of 2018 to a 2-year low, while fees from debt capital markets underwriting fell 53% to a 3-year low of US$14.0 million. Syndicated lending fees increased 20% year-on-year to US$30.1 million.  Completed M&A fees accounted for 39% of the overall Sub-Saharan African investment banking fee pool during the first quarter of 2019. Equity and Debt capital markets generated 12% and 15%, respectively, while syndicated lending fees accounted for 33%. Citi earned the most investment banking fees in Sub-Saharan Africa during the first quarter of 2019, a total of US$16.5 million or a 17.6% share of the total fee pool.

MERGERS & ACQUISITIONS

The value of announced M&A transactions with any Sub-Saharan African involvement reached US$8.8 billion during the first quarter of 2019, up 41% from the same period last year.  Deals involving a Sub-Saharan African target increased 71% in value to US$6.0 billion, driven by Naspers’ US$5.1 billion spin off of its pay-TV unit MultiChoice.  Inbound M&A, involving an acquirer from outside of the region, was down 81% year-on-year to a 16-year low of US$540.1 million, while outbound M&A increased 24% to an 8-year high of US$2.2 billion. South Africa’s overseas acquisitions accounted for 57% of Sub-Saharan African outbound M&A activity, while acquisitions by companies headquartered in Mauritius accounted for 43%.  Citi topped the Any Sub-Saharan African Involvement Announced M&A Financial Advisor League Table during the first quarter of 2019 with a 71% share of the market.

EQUITY CAPITAL MARKETS

Sub-Saharan African equity and equity-related issuance totalled US$1.1 billion during the first quarter of 2019, 61% less than the value recorded during the first three months of 2018.  Eight follow-on offerings totalled US$1.0 billion and accounted for 98% of total ECM activity in the region by value, while a single IPO accounted for the remaining 2%.  Icon Properties was the only initial public offering in the region during the first quarter of 2019, raising US$20.4 million on the Malawi Stock Exchange in January. Standard Bank Group topped the Sub-Saharan African ECM league table during the first quarter of 2019 with a 49% share of the market.

DEBT CAPITAL MARKETS

Sub-Saharan African debt issuance totalled US$5.9 billion during the first quarter of 2019, down 52% from the value recorded during the same period in 2018 and the lowest first quarter total since 2016.  Ghana and The Ivory Coast were the most active issuer nations with US$3.0 billion and US$1.2 billion in bond proceeds, respectively.  Ghana raised US$3.0 billion with its Eurobond issue in March, the largest bond offering in the region so far during 2019. JP Morgan took the top spot in the Sub-Saharan African bond ranking during the first quarter of 2019 with US$944.4 million of related proceeds, or a 16% market share.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Crude Oil

Nigeria’s Crude Oil Production Falls for Second Consecutive Month, OPEC Reports

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Crude Oil

Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.

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Crude Oil

Oil Prices Edge Higher Amidst Fear of Middle East Conflict

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Crude Oil

Amidst growing apprehensions of a potential conflict in the Middle East, oil prices have inched higher as investors anticipate a strike from Iran.

The specter of a showdown between Iran or its proxies and Israel has sent tremors across the oil market as traders brace for possible supply disruptions in the region.

Brent crude oil climbed above the $90 price level following a 1.1% gain on Wednesday while West Texas Intermediate (WTI) hovered near $86.

The anticipation of a strike, believed to be imminent by the United States and its allies, has cast a shadow over market sentiment. Such an escalation would follow Iran’s recent threat to retaliate against Israel for an attack on a diplomatic compound in Syria.

The trajectory of oil prices this year has been heavily influenced by geopolitical tensions and supply dynamics. Geopolitical unrest, coupled with ongoing OPEC+ supply cuts, has propelled oil prices nearly 18% higher since the beginning of the year.

However, this upward momentum is tempered by concerns such as swelling US crude stockpiles, now at their highest since July, and the impact of a hot US inflation print on Federal Reserve rate-cut expectations.

Despite the bullish sentiment prevailing among many of the world’s top traders and Wall Street banks, with some envisioning a return to $100 for the global benchmark, caution lingers.

Macquarie Group has cautioned that Brent could enter a bear market in the second half of the year if geopolitical events fail to materialize into actual supply disruptions.

“The current geopolitical environment continues to provide support to oil prices,” remarked Warren Patterson, head of commodities strategy for ING Groep NV in Singapore. However, he added, “further upside is limited without a fresh catalyst or further escalation in the Middle East.”

The rhetoric from Iran’s Supreme Leader, Ayatollah Ali Khamenei, reaffirming a vow to retaliate against Israel, has only heightened tensions in the region.

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Commodities

Geopolitical Uncertainty Drives Gold Prices Higher Despite Fed Rate Cut Concerns

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gold bars - Investors King

As tensions simmer in the Middle East and concerns loom over Federal Reserve policy, gold continues its upward trajectory, defying expectations and reinforcing its status as the ultimate safe-haven asset.

The latest surge in gold prices comes amidst escalating geopolitical tensions in the Middle East.

Reports suggest that the United States and its allies are bracing for potential missile or drone strikes by Iran or its proxies on military and government targets in Israel. Such a significant escalation in the six-month-old conflict has sent shockwaves through financial markets, prompting investors to seek refuge in gold.

Despite initial setbacks earlier in the week, gold resumed its blistering rally, buoyed by the specter of geopolitical uncertainty.

On Wednesday, the precious metal witnessed its most significant decline in almost a month following a hotter-than-expected US inflation readout.

This unexpected data led traders to recalibrate their expectations for Federal Reserve interest rate cuts this year, causing the yield on 10-year Treasuries to surge above 4.5%.

However, gold’s resilience in the face of shifting market dynamics remains remarkable. Even as concerns mount over the Fed’s rate-cutting trajectory, the allure of gold as a safe-haven asset persists.

Prices hover just shy of a record high reached earlier in the week, propelled by robust buying from central banks.

Market analysts interviewed by Bloomberg anticipate further gains in gold prices, citing continued geopolitical tensions and strong momentum in the market.

The precious metal’s near-20% rally since mid-February underscores its enduring appeal as a hedge against uncertainty and inflationary pressures.

At 9:54 a.m. in Singapore, spot gold rose 0.3% to $2,341.58 an ounce, signaling continued investor confidence in the metal’s resilience.

The Bloomberg Dollar Spot Index, meanwhile, remained relatively unchanged near its highest level since November.

Silver, often considered a bellwether for precious metals, held steady after reaching a three-year high, while platinum and palladium also registered gains.

As the world navigates through a complex web of geopolitical tensions and economic uncertainties, gold remains a beacon of stability in an increasingly volatile landscape.

Its ability to weather market fluctuations and maintain its allure as a safe-haven asset reaffirms its timeless appeal to investors seeking refuge amidst uncertainty.

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