South Africa’s Rand Merchant Bank makes $32m in investment banking fees in 9 months

South Africa’s Rand Merchant Bank (RMB) earned the most investment banking fees in sub-Saharan Africa (SSA) during the first nine months of 2018, with a total of $32.2 million or an 8.7 percent share of the total fee pool. RMB also leads in the completed Merges & Acquisitions (M&A) and Syndicated Loans fee rankings. This is according to Refinitiv, one of the world’s largest providers of financial markets data and infrastructure, in its Investment Banking Sub-Saharan Africa (SSA) region review for the first nine months of 2018.

The report showed that investment banking activity in SSA reduced in the first three quarters of 2018 as major economies in the region struggle.

“According to our most recent Sub-Saharan Africa Investment Banking Review for 2018, investment-banking activity in SSA decreased by 7 percent in the first nine months of 2018 compared to the value recorded in the same period of 2017,” noted Franita Neuville, Head of Advisory and Investment Management for Market Development for Africa at Refinitiv.

“This decrease could be due to a number of reasons including, but not limited to, loss of investment appetite from local and international investors, companies and countries becoming more inward looking, and political instability across SSA,” she added.

investment banking

For the first nine months of 2018, SSA investment banking fees reached an estimated $369.6 million, 7 percent less than the value recorded during the same period in 2017. In comparison, global investment banking fees were $76.6 billion.

SSA equity and equity-related issuance is down 43 percent year-on-year totaling $4.9 billion during the first nine months of 2018. Ghana’s IC Securities topped the Equity Capital Markets (ECM) underwriting fee ranking with its massive earnings as Financial Adviser for MTN’s Initial Public Offering (IPO) in Ghana. MTN Ghana’s $734.5 million IPO stand out as the biggest deal so far this year.

Citi led the Debt Capital Markets (DCM) underwriting fee ranking with a 14.1 percent share.

Generally, the region saw the lowest number of deals since 2009, pushing inbound M&A down 42 percent. Domestic and inter-SSA M&A totaled $2 billion, also down 64 percent year-on-year, as the lowest first nine months since 2002.

Outbound M&A, however, went up 5 percent to $4.4 billion, with South Africa’s overseas acquisitions accounting for 81.9 percent of SSA outbound M&A activity. Acquisitions by companies headquartered in Mauritius and Zimbabwe accounted for 15.3 percent and 1.5 percent, respectively.

SSA debt issuance raised a total of $30.8 billion in proceeds during the first nine months of 2018, up 39 percent from the value recorded during the same period in 2017. South Africa was the most active issuer nation with $9.3 billion in bond proceeds, which accounted for 30.3 percent of market activity, followed by the Ivory Coast and Angola.

Refinitiv, which released the Sub-Saharan Africa Investment Banking Review, is formerly Thomson Reuters Financial and Risk Business.