Africa’s equity market poised for a strong showing in 2016


Africa’s equity capital markets are set for a strong 2016, this is according to research conducted by Baker & McKenzie.

Fifteen IPOs are already in the pipeline, and if they proceed they are likely to raise 1.5 billion dollars more than last year’s 21 African IPOs. 

“The main rationale for that is that African companies do present good opportunities for value. As much as there are headwinds that have come through our way, not all markets have been affected,” said Wildu du Plessis, Partner at Baker & McKenzie.

Du Plessis added that with what his organisation was seeing on the ground, there is expectation that there will be a lot of activity for 2016.

He also said the capital was coming from a number of sources

There is foreign entrance and local companies listing, if you look at the trend for the last five years involving African countries listing. 

“There are also interesting moves in the East African region where the community is trying to harmonise their laws which will lead to a capital base in that region,” he said.

Du Plessis said the region had growth potential.

“There is growth potential in East Africa but this will depend on the pace of integration by the countries especially on banking laws and security laws in capital markets,” he added.

“One of the things on track this year is the Dar es Salaam Stock Exchange wanting to self-list. If this succeeds, it will go a long way to put the wave that will give an impetus in that region.”

He also warned that growth in the region was going to be informed by reforms , market conditions and type of the deals.