Data from PricewaterhouseCoopers (PwC) shows that Africa’s Equity Capital Market (ECM) transaction volume and value saw a significant improvement in 2017, compared to that of 2016.
“Capital markets in Africa saw a recovery in 2017 with the positive impact of commodity stabilization on economies such as Cote d’Ivoire and Nigeria, which emerged from five successive quarters of GDP declines, and resilience in the face of economic and political uncertainty in South Africa,” said PwC Capital Markets Partner, Andrew Del Boccio in a press release on Tuesday.
PwC’s 2018 African Capital Market Watch report revealed that 2017 saw the largest initial public offerings (IPOs) over the trailing five-year period, and a growth in the total value of equity capital market (ECM) transactions of 49% between 2016 and 2017 in US dollar terms.
From 2013, there have been 519 African ECM transactions resulting to a total of $52.7 billion capital raised over the previous five-year period. Overall transaction volume of ECM activity in 2017 was the second-highest since 2013, with 121 transactions, but saw the highest capital proceeds raised.
African ECM activity in 2017 is from businesses in sectors such as telecommunications, consumer goods and services, financials, and healthcare
A number of initiatives have taken place to deepen liquidity and provide investment opportunities for foreign and domestic investors alike, though levels of market capitalization for many of Africa’s exchanges remain low in a global context.
In recent years, some African regulators encourage companies in specific sectors to list shares on their domestic stock exchanges. Over the past year, financial services companies’ access to both debt and equity capital markets have been spurred by enhanced regulatory capital requirements.