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M&A transactions in Sub-Saharan Africa Hits US$4.8 billion in Q1, 2020

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  • M&A transactions in Sub-Saharan Africa Hits US$4.8 billion in Q1, 2020

April 15, 2020 – Refinitiv today released the 2020 first-quarter investment banking analysis for Sub-Saharan Africa. According to the report, investment banking fees in Sub-Saharan Africa reached an estimated US$128.2 million during the first quarter of 2020, down 15% from last year’s strong start.

Advisory fees earned from completed mergers and acquisitions (M&A) transactions generated US$33.5 million, down 38% year-on-year, while syndicated lending fees declined 47% to US$35.7 million. Equity capital markets underwriting fees more than tripled to reach US$36.7 million, a first quarter total only exceeded twice since our records began in 2000. Bond underwriting fees increased 20% to US$22.3 million, again the third highest first quarter fee total since our records began.

Almost one-quarter of fees in the region during the first quarter of 2020 were earned from government & agency deals. Almost two-thirds of all fees were generated in South Africa. JP Morgan earned the most investment banking fees in the region during the first quarter of 2020, a total of US$17.9 million or a 13.9% share of the total fee pool.

In the M&A space, the value of announced M&A transactions with any Sub-Saharan African involvement reached US$4.8 billion during the first three months of 2020, 48% less than the value recorded during the same period in 2019, and a four-year low. The number of deals declined 12% over the same period. Monthly M&A declined in value for two consecutive months, with March 2020 marking the lowest monthly M&A total since August 2009. Africatel Holdings’ US$1.0 billion sale of PT Ventures to Angolan Sonangol in January was the largest deal in the region during the first quarter of 2020.

Deals with a Sub-Saharan African target declined 74% by value to a seventeen-year low of US$1.7 billion, as domestic M&A within the region declined 86% from last year and the combined value of inbound M&A deals failed to pass the $1 billion mark, a level achieved in all but four years since the turn of the century. The largest Sub-Saharan African deal of the quarter was announced at the beginning of January – MTN’s sale of its tower businesses in Uganda and Ghana to AT Sher Netherlands Cooperatief for US$523 million. Deals in the materials sector accounted for 39% of Sub-Saharan African target M&A activity during the first quarter of 2020. South Africa was the most targeted nation, followed by Uganda and Nigeria.

Outbound M&A totalled US$1.8 billion during the first three months of 2020, 19% more than the value recorded at this time last year, despite a 27% decline in the number of deals.

With advisory work on seven deals with a combined value of U$993.0 million, JP Morgan holds to the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during the first quarter of 2020.

As to equity capital markets, Sub-Saharan African equity and equity-related issuance totaled US$727.8 million during the first quarter of 2020, 32% less than the value recorded during the same period last year and a three-year low. The number of deals recorded also declined by one-third to the lowest first quarter tally since 2013. One initial public offering was recorded during the first quarter. Malawian telecoms company, Airtel Malawi, raised US$28.7 million on the Malawi Stock Exchange in February. Goldman Sachs took first place in the Sub-Saharan African ECM underwriting league table during the first quarter of 2020.

In debt capital markets, The African Development Bank raised $3 billion in a “Fight Covid-19” social bond at the end of March to help alleviate the economic and social impact the Coronavirus pandemic will have on livelihoods and economies in the region. With this deal, and Ghana’s US$3 billion Eurobond in February, Sub-Saharan African debt issuance totalled US$8.9 billion during the first quarter of 2020, up 44% from the value recorded during the same period in 2019, and the second-highest first quarter DCM total in the region of all-time. BofA Securities took the top spot in the Sub-Saharan African bond underwriter ranking during Q1 2020 with US$1.2 billion of related proceeds, or a 14% 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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Insurance

Heirs Insurance Group Unveils Revolutionary Website for Seamless Insurance Experience

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Heirs Life Assurance- Investors King

Heirs Insurance Group has launched a website designed to revolutionize the insurance experience for its customers.

With a focus on simplicity, accessibility, and personalized service, the new website aims to streamline the process of obtaining insurance coverage and empower customers to make informed decisions about their insurance needs.

The website boasts a range of innovative features that make navigating insurance options easier than ever before.

From simple and intuitive navigation menus to personalized insurance recommendations, the website is designed to guide customers through every step of the insurance process quickly and efficiently.

According to Ifesinachi Okpagu, the Chief Marketing Officer of Heirs Insurance Group, the new website embodies the company’s commitment to delivering exceptional customer service.

“Today’s customers want simplicity, and this new website delivers on that request,” Okpagu said. “We are empowering customers to take control of their lives, their businesses, assets, and their most cherished people.”

One of the key features of the website is its personalized insurance experience, which takes customers through a short journey to help them identify the best insurance plan for their needs.

Whether customers are looking for coverage for their home, car, business, or loved ones, the website provides tailored recommendations to ensure they find the right insurance solution quickly and easily.

With its user-friendly interface and innovative features, the new website from Heirs Insurance Group sets a new standard for the insurance industry, making it easier than ever for customers to protect what matters most to them.

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Banking Sector

Safaricom, Access Holdings Forge Partnership to Revolutionize Remittance Corridor in Africa

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Access bank

Safaricom, the leading telecommunications company in Kenya, has entered into a strategic partnership with Access Holdings, spearheaded by Aigboje Aig-Imoukhuede.

The collaboration aims to revolutionize the remittance corridor between East and West Africa, marking a significant step towards enhancing financial inclusion and empowering millions of individuals across the continent.

The partnership comes on the heels of Access Holdings’ recent acquisition of the National Bank of Kenya Limited, signaling the company’s ambitious expansion into the East African market.

Leveraging Safaricom’s extensive network and expertise in mobile money through M-Pesa, which currently dominates the mobile money market in Kenya, the alliance seeks to create seamless and efficient channels for remittance transactions.

Aigboje Aig-Imoukhuede, the driving force behind Access Holdings, expressed enthusiasm about the collaboration, highlighting its potential to transcend traditional boundaries and foster greater economic connectivity between East and West Africa.

He highlighted the fusion of collective expertise and resources between the two entities, underlining their shared commitment to driving financial inclusion and empowerment across the continent.

The partnership holds promise for addressing the challenges faced by millions of Africans in accessing affordable and reliable remittance services.

By connecting more than 60 million customers and 5 million businesses across eight countries, the collaboration aims to facilitate over $1 billion in daily transaction value, significantly boosting the flow of remittances within and outside Africa.

With the first phase of the collaboration focusing on key markets such as Nigeria, Kenya, Ghana, and Tanzania, stakeholders anticipate a transformative impact on the remittance landscape, paving the way for greater intracontinental trade and economic integration in line with the objectives of initiatives like the African Continental Free Trade Area (AfCFTA).

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Banking Sector

EFCC Urged to Repatriate Recoveries to NDIC for Depositors’ Relief

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The Nigeria Deposit Insurance Corporation (NDIC) has made a fervent plea to the Economic and Financial Crimes Commission (EFCC) to expedite the repatriation of recovered funds to its coffers to facilitate the timely reimbursement of depositors affected by bank failures.

During a recent meeting between the Managing Director of NDIC, Bello Hassan, and the Executive Chairman of the EFCC, Ola Olukoyede, at the NDIC headquarters in Abuja, Hassan stressed the importance of enhanced collaboration between the two agencies in recovering depositors’ funds lost due to bank failures.

Hassan emphasized that the return of recoveries made by the EFCC on behalf of the NDIC would significantly contribute to the prompt reimbursement of affected depositors.

He commended the EFCC for its unwavering efforts in combating corruption and financial crimes, highlighting its crucial role as a key member of the Taskforce on Implementation of the Failed Banks Act chaired by the NDIC.

The NDIC boss also highlighted the existing partnership between the two organizations, which led to the establishment of the NDIC Help Desk at the EFCC in 2022.

He disclosed that several high-profile cases referred to the EFCC were currently under investigation.

In response, Olukoyede reiterated the EFCC’s commitment to collaborating closely with the NDIC to combat financial crimes and safeguard the integrity of the Nigerian banking sector.

He pledged to intensify efforts to repatriate recovered funds promptly, acknowledging the interconnectedness between criminal activities and bank failures.

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