Refinitiv today released the first quarter 2022 investment banking analysis for the Sub-Saharan African. According to the report, an estimated US$97.3 million worth of investment banking fees were generated in Sub-Saharan Africa during the first quarter of 2022, down 9% from the same period in 2021 and the lowest first quarter total since 2014.
The value of announced M&A transactions with any Sub-Saharan African involvement reached US$7.0 billion during the first three months of 2022, 13% less than the value recorded during the same period in 2021 and a four-year low, despite an 11% increase in the number of deals. Sub-Saharan African equity and equity-related issuance totalled US$496.9 million during the first quarter of 2022, compared to just US$18.4 million during the same period last year. Sub-Saharan African debt issuance totalled US$9.4 billion during the first quarter of 2022, down 30% from the value recorded during the same period in 2021, although historically high with only 2018 and 2021 registering higher first quarter totals.
INVESTMENT BANKING FEES
Equity capital markets underwriting fees declined 1% to US$8.8 million, the lowest first quarter total in twelve years. Debt capital markets fees declined 16% from last year’s record start to US$40.7 million, while syndicated lending fees declined 81% to US$6.3 million. Advisory fees earned in the region from completed M&A transactions reached a three-year high of US$41.4 million, an increase of 163% compared to the first three months of 2021. Seventy-nine percent of all Sub-Saharan African fees were generated in South Africa during the first quarter of 2022, and 33% were earned from deals in the High Technology sector. Goldman Sachs earned the most investment banking fees in the region during the first quarter of 2022, a total of US$11.4 million or an 11.7% share of the total fee pool.
MERGERS & ACQUISITIONS
Deals worth US$5.2 billion involved a Sub-Saharan African target, a 10% increase from the first quarter of 2021. While domestic deals declined 17% from last year, inbound deals involving a non-Sub-Saharan African acquiror increased 44% to US$3.0 billion, the highest first quarter total in five years. Meanwhile, Sub-Saharan African outbound M&A totalled US$776.0 million, less than half the value recorded during the same period last year and with a 15% decline in the number of deals. High technology was the most targeted sector by value in Sub-Saharan Africa during the first quarter of 2022, while the financial sector saw the highest number of deals in the region. South Africa was the most targeted nation, with US$2.5 billion in M&A announcements, equivalent to 48% of total activity recorded in the region. With advisory work on deals worth a combined U$1.8 billion, Goldman Sachs held the top spot in the financial advisor ranking for deals with any Sub-Saharan African involvement during Q1 2022.
EQUITY CAPITAL MARKETS
All proceeds were raised by follow-on issuance with MTN Nigeria Communications and South African coal exporter Thungela Resources among those in the region raising new equity funds from follow-ons. No convertible or initial public offerings were recorded in the region. Issuers in Nigeria raised more in the equity capital markets than any other Sub-Saharan African nation during the first quarter of 2022, a total of US$277.1 million, while South African issuers raised a combined US$219.9 million. Morgan Stanley took first place in the Sub-Saharan African ECM underwriting league table during the first quarter of 2022 with a 23% market share, followed Java Capital with 13%.
DEBT CAPITAL MARKETS
The number of issues declined 43% from last year at this time. South African was the most active issuer nation during the first quarter of 2022, accounting for 59% of total bond proceeds, followed by Nigeria (22%) and Ivory Coast (14%). Issuers is the technology sector accounted for 56% of proceeds raised during the first three months of 2022, while government & agency issuers accounted for 27%. Citi took the top spot in the Sub-Saharan African bond bookrunner ranking during the first quarter of 2022, with US$1.7 billion of related proceeds, or an 18.1% market share.