Top 10 stock exchange listings in Africa in 2016
New data from professional services firm PricewaterhouseCoopers (PwC) has found that 2016 saw the lowest volume in IPO activity in Africa since 2013, although there has been an overall upward trend over the five year period.
Over the past five years, there have been 110 IPOs by African companies on both African and international exchanges, raising $6.5 billion, a 7% increase in capital raised over the preceding five-year period.
PwC’s Africa Capital Markets Watch found that 20 IPOs took place across the continent in 2016, down from 30 in 2015, and 25 in 2104.
During 2016, eight of the top 10 IPOs by proceeds were launched on domestic exchanges in North Africa or on the Johannesburg Stock Exchange (JSE).
However, the JSE continues its dominant role in African capital markets activity.
Since 2012, capital raised from IPOs by companies on the JSE of $2.7 billion represents 42% of the total African IPO capital, and 34% of the total number of transactions with 37 IPOs.
Read: How the JSE has changed over time
Over the five-year period, the JSE was followed in terms of volume of IPO transactions by Tunisia’s Bourse de Tunis with 23 issuances, and the EGX in Egypt with 10 issuances.
In terms of value over the past five years, the next-largest value of IPO proceeds raised was on the EGX at $1.1 billion, followed by the Nigerian Stock Exchange at $751 million, the bulk of which relates to the 2014 Seplat dual listing in London and Lagos.
On average during this period, money raised per IPO was $59.4 million, with a relatively higher average of $74.1 million for listings on the JSE and $50.8 million for those on other African exchanges.
In 2016, these averages were noticeably higher, with average proceeds of $117.6 million for JSE listings and $76.1 million overall.
Top 10 African IPOs by value in 2016
The composition of top 10 African IPOs by value in 2016 was more geographically diverse than that of the previous year, which was mostly concentrated in South Africa, Egypt and Morocco.
While the top 10 remains weighted towards financial services companies, 2016 listings within this sector included fewer pure property companies and REITs and a greater proportion of banks and private equity houses than in the previous two years.
Other sectors represented in the top 10 in 2016 echo trends from previous years, including large companies specialising in food, personal care and health-related products.
South Africa
The report pointed out that South Africa, managing its own internal political discord, avoided both recession and credit downgrades in 2016, while the rand regained ground and relative stability towards the end of the year.
However, rising debt levels and continued low private sector confidence still loom and create pessimism for local investment, with many large South African corporates seeking to raise funds to diversify their investments offshore.
In 2016, capital raised from IPOs by companies on the JSE in US dollar terms increased by 25% as compared to 2015, a statistic driven both by the comparatively stronger rand and three large listings by Dis-Chem, the Liberty Two Degrees real estate investment
trust (REIT) and one of South Africa’s largest private equity firms, Ethos.
2016 was also a record year for the JSE’s AltX, which saw the secondary listing of the fledgling Mauritian private equity investor, Universal Partners, contribute to an AltX listings value of more than six times that of the prior year.
According to PwC’s 2016 Africa Capital Markets Watch, since 2012, capital raised from IPOs by companies on the JSE of $2.7 billion represents 42% of the total African IPO capital and 34% of the total number of transactions with 37 IPOs.
PwC also noted that developments in 2016 and since the year end also paved the way for two new exchanges in South Africa to begin trading in 2017, with the licensure of ZAR X and 4AX by the South African Financial Stability Board (FSB).
Read: How many M&A deals are expected in South Africa in 2017
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