African IPOs set to rise by a quarter in 2015: law firm - CNBC Africa

African IPOs set to rise by a quarter in 2015: law firm

IPO

by Reuters 0

Shares on many African bourses have offered enticing returns in the past five years. PHOTO: Risk SA

This is according to international law firm, Baker & McKenzie.

Shares on many African bourses have offered enticing returns in the past five years, but investors have complained about a limited number of initial public offerings (IPOs), high fees and poor liquidity.

Baker & McKenzie, a leading law firm by deal count for mergers and acquisitions involving emerging markets, said 30 firms were preparing to list this year, up from 24 in 2014.

(READ MORE: Nairobi bourse hits record high on its IPO)

Last year, the number of IPOs had already risen by a third to the highest level since the global financial crisis, raising a total of more than two billion dollars.

Firms in the real estate, financial and energy sectors were expected to be most active and most new listings would be on markets in Egypt, Kenya, Morocco, Nigeria, South Africa and Tunisia, the law firm said.

“While there have been several false dawns for capital markets across Africa’s diverse economies and making predictions is notoriously difficult, we do see a more sustainable trend developing,” Koen Vanhaerents, global head of capital markets at Baker & McKenzie, said in a report seen by Reuters on Friday.

Improved corporate governance, better regulation and expanding economies were creating a more sound footing for African capital markets, he said.

(WATCH VIDEO: Cross-border African IPOs on the rise)

Some listings, especially in sub-Saharan Africa, would be driven by private equity exiting investments, the report added.

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