Highest level of activity in Africa’s ECM in 2014


The IPO Watch Africa 2014 report indicated that 2014 saw the highest level of activity in African equity capital markets (ECM) over the previous five years, and a significant increase in both transaction volume and capital raised during 2014.

“The performance of African markets was strong in 2014, with an increase in equity capital market activity of 40 per cent in terms of volume of offers and 100 per cent in terms of capital raised when compared with prior year activity,” said Nicholas Ganz, PwC Africa capital markets leader.

“We noted a few instances of management following a dual-track approach aimed at maximising value for existing shareholders, and consistent with the growth in other forms of capital raising activity across Africa.”


The report, which analyses equity capital market transactions that took place between 2010 and 2014 on exchanges throughout Africa, also revealed that during 2014, IPO activity increased overall in number from 20 to 24 IPOs, and doubled in terms of capital raised to 1.7 billion US dollars.

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A significant share of capital was raised in markets outside of South Africa, with Johannesburg listings accounting for only 32 per cent and 44 per cent of total IPO capital raised in 2013 and 2014, respectively.

Further offers (FO) activity also increased during 2014 by 50 per cent in terms of the volume of transactions and doubled in terms of capital raised to 9.3 billion US dollars from 4.6 billion US dollars in 2013.

Coenraad Richardson, PwC South Africa capital markets partner, said, “While IPO activity across the continent increased its share vis-à-vis the JSE, FOs remained dominated by capital raising in South Africa, which accounted for 87 per cent of proceeds in 2014.”

“This is a reflection of the depth and stability of the South African-listed company and investor base, underpinned by a securities exchange regulatory framework ranked number one in the world by the World Economic Forum’s 2014-2015 Global Competitiveness Report.”

The Johannesburg Stock Exchange retained its position in 2014 as the most active African market in terms of both total ECM transaction volume and proceeds, while the Tunis and Nigerian Stock Exchanges held the second position on the continent in terms of volume and proceeds raised, respectively.

Darrell McGraw, PwC Nigeria capital markets partner, added, “Due to recent movements in commodity prices and relative depreciation of local currencies against the US dollar, there are some headwinds that may affect the momentum of the capital markets in Nigeria and other territories heavily involved in resources.”

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“That said, Nigeria has already recorded an IPO in January 2015, and has a strong pipeline of listings likely to be brought to market later this year,” he stated.

According to the report, building on the strong performance of last year, 2015 is expected to be a positive year for ECM activity in Africa.

“This is driven largely by a combination of expectations for continued exits by private equity investors, reforms to certain capital markets legislation, and growing investor confidence in and familiarity with African markets,” it said.