Economy

Africa, Middle East to Record 70% Drop in Financial Deals 2018

Published

8 years ago

28/03/2018

By Dipo Olowookere

A new report has warned that the financial sector M&A in Africa and the Middle East will experience a drop of about 69.5 percent in 2018 to $9 billion from $29.5 billion recorded in 2017.

The report, conducted by Baker McKenzie’s Global Transactions Forecast in conjunction with Oxford Economics, explained that the higher amount in 2017 was the result of one megadeal that inflated 2017’s deal total: the $14 billion merger of the National Bank of Abu Dhabi and First Gulf Bank.

In 2019, the Forecast predicts deal activity in the region’s financial sector to increase slightly to $10.3 billion before dropping to $6.6 billion in 2020.

According to the Head of the Financial Industry Group at Baker McKenzie in Johannesburg, Mr Wildu du Plessis, “The decrease in M&A in the financial services sector in Africa is due mainly to economic and political instability, a lack of diversification, the risk of corruption and generally poor business climates across the region.”

He explained further that, “The willingness and ability of governments to reform their legislation so that it is more investor friendly, and to deal with bloated fiscal balances, is key to future growth in sector.

“In addition, growth in financial services in Africa is dependent on investment in technology and innovation as financial services organisations such as banks and insurance companies look to upgrade their IT systems and find news way to grow their customer bases.”

Globally, the Forecast anticipates that M&A values in the financial sector will rise to $616 billion in 2018, up 25 percent from $462 billion in 2017.

The Forecast shows that ultra-low interest rates, tech enabled disruption and regulatory pressure, all of which have squeezed profitability and increased costs, have created an environment which will drive M&A activity across the global financial sector throughout 2018 and beyond, Baker McKenzie said in an emailed statement to Business Post on Wednesday.

One recurring theme across banks, insurers and asset managers is the challenge of upgrading legacy systems designed for the age before artificial intelligence and machine learning, and before the tech titans based in Silicon Valley and increasingly China were targeting profitable financial services products using state-of-the-art digital technology.

Part of the solution to this challenge will come from fintechs, which bring their expertise in digital customer experience and new tech solutions that enable the incumbents to tackle old problems such as payment methods and swift product recognition matched to client needs.

Most established financial institutions are fully aware of the enormity of the task of developing these upgrades internally, preferring to acquire or partner with fintechs as a means of survival.

“Legacy IT systems constrain the ability of incumbent banks to innovate as these system are incompatible with the demands of artificial intelligence and big data,” says Jeremy Pitts, global chair of Baker McKenzie’s Financial Institutions Group. “New entrants have a serious advantage, so alliances between incumbent banks and fintech start-ups are often the best solution.”

“The same demand for technology innovation and the upgrading of legacy IT systems is driving deal activity in the financial sector in Africa. However, the opportunities presented by the rapidly developing financial services sector are driving outbound, and not inbound, investment. Our recent Technology Sector Forecast showed that the growing need for technology innovation in the financial sector in Africa has seen domestic banks make significant investments in offshore technology companies,” notes du Plessis.

“The expanding middle class in Africa also presents many opportunities for growth in the financial sector. Increased access to mobile and online banking, as well as the development of fintech, has meant that previously unbanked and uninsured populations on the continent are now able to access financial products and services.

“The vast potential for future growth is spurring the financial sector’s investment in technology companies. This increasing demand will most likely lead to solid growth in the sector beyond the next few years,” du Plessis adds.

Economy

Unlisted Stock Investors’ Wealth Shrinks N30bn

Published

8 hours ago

05/06/2026

Adedapo Adesanya

By Adedapo Adesanya

The NASD Over-the-Counter (OTC) Securities Exchange recorded a loss of 1.13 per cent on Thursday, June 4, shrinking the market capitalisation by N30.03 billion to N2.630 trillion from N2.660 trillion on Wednesday.

Similarly, this brought down the NASD Unlisted Security Index (NSI) by 50.19 points to 4,396.08 points from the 4,446.27 points recorded a day earlier.

The loss was influenced by the overpowering of the bulls by the bears, after the bourse closed with two price gainers and three price losers, led by FrieslandCampina Wamco Nigeria Plc, which slumped by N20.03 to sell at N190.38 per unit compared with midweek’s N210.41 per unit. Food Concepts Plc declined by 25 Kobo to trade at N2.50 per share versus the previous day’s N3.00 per share, and Acorn Petroleum Plc crumbled by 2 Kobo to end at N1.32 per unit, in contrast to the preceding session’s N1.34 per unit.

For the gainers, Central Securities Clearing System (CSCS) Plc added N2.93 to close at N78.34 per share compared with the previous price of N75.41 per share, and Afriland Properties Plc gained 80 Kobo to settle at N16.80 per unit versus N16.00 per unit.

There was a slip in the volume of transactions yesterday by 46.8 per cent to 280,714 units from 527,221 units, as the value of trades dropped 66.5 per cent to N21.8 million from the preceding session’s N64.2 million, and the number of deals fell by 8.7 per cent to 42 deals from 46 deals.

Great Nigeria Insurance (GNI) Plc ended the session as the most traded stock by value on a year-to-date basis with 3.4 billion units worth N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units sold for N6.5 billion, and CSCS Plc with 64.7 million units traded for N4.4 billion.

GNI Plc also finished the day as the most traded stock by volume on a year-to-date basis with 3.4 billion units valued at N8.4 billion, followed by Infracredit Plc with 2.3 billion units exchanged for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.

Economy

McNichols, Eterna, Aradel Crash Stock Market by 0.37%

Published

8 hours ago

05/06/2026

Dipo Olowookere

By Dipo Olowookere

The domestic stock market crashed by 0.37 per cent on Thursday as a result of the decline in the price of shares of McNichols, Eterna, Aradel Holdings, and others.

Business Post reports that investor sentiment remained weak after the Nigerian Exchange (NGX) Limited ended the session with 25 price gainers and 31 price losers, indicating a negative market breadth index.

McNichols lost 10.00 per cent to trade at N7.74, ABC Transport slipped by 9.88 per cent to N6.20, Eterna shrank by 9.85 per cent to N29.75, Aradel Holdings depreciated by 9.51 per cent to N1,749.90, and NPF Microfinance Bank contracted by 8.45 per cent to N5.20.

On the flip side, International Energy Insurance gained 10.00 per cent to close at N6.60, Omatek improved by 9.73 per cent to N2.03, Abbey Mortgage Bank surged by 9.68 per cent to N8.50, Cutix expanded by 9.66 per cent to N3.18, and John Holt grew by 7.79 per cent to N14.90.

As for the sectorial performance, the industrial goods and banking indices chalked up 0.54 per cent and 0.31 per cent, respectively. But the energy sector depleted by 4.90 per cent, the insurance counter tumbled by 0.58 per cent, and the consumer goods index slumped by 0.03 per cent.

As a result, the All-Share Index (ASI) dipped by 905.30 points to 242,227.31 points from 243,132.61 points, and the market capitalisation stumbled by N581 billion to N155.359 trillion from N155.940 trillion.

During the session, investors traded 588.5 million equities valued at N27.9 billion in 57,352 deals compared with the 923.0 million equities worth N42.3 billion transacted in 69,332 deals on Wednesday, showing a drop in the trading volume, value, and number of deals by 36.24 per cent, 34.04 per cent, and 17.28 per cent, respectively.

The most active equity yesterday was Access Holdings with 109.7 million units sold for N2.6 billion, FCMB traded 35.6 million units valued at N384.2 million, NGX Group transacted 28.1 million units worth N3.9 billion, Zenith Bank exchanged 26.9 million units for N3.3 billion, and Sterling Holdings recorded a turnover of 22.5 million units worth N176.1 million.

Economy

Naira Slips 0.1% to N1,358/$1 at Official FX Market

Published

8 hours ago

05/06/2026

Adedapo Adesanya

By Adedapo Adesanya

A 0.1 per cent or N1,49 loss was recorded by the Nigerian Naira against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Thursday, June 4, closing at N1,358.75/$1 compared with the previous day’s N1,347.26/$1.

In the same vein, the Naira depreciated against the Pound Sterling in the official FX market during the session by N5.39 to trade at N1,828.06/£1 versus Wednesday’s closing rate of N1,822.67/£1, but gained N6.75 against the Euro to sell at N1,574.83/€1 versus the preceding session’s N1,584.39/€1.

At the black market and GTBank FX desk, the local currency traded flat against the Dollar during the session at N1,375/$1 and N1,372/$1, respectively.

Data from the Central Bank of Nigeria (CBN) showed that NFEM interbank FX turnover contracted to $128.117 million in 121 deals on Thursday from $133.731 million the previous day.

On the positive side, Nigeria’s external reserves moved closer to a 2009 high of $50 billion, enhancing analysts’ confidence about the local currency outlook in the second half of 2026.

This improvement has been helped by heightened global uncertainty, which has reduced the incentive for importers and corporates to demand FX, as cautious trade weighs on import needs. Analysts estimate a $40 billion net FX position for the year, a projection anchored in oil windfall gains.

As for the cryptocurrency market, prices extended steep weekly losses as the broader artificial-intelligence trade that has driven global risk assets since 2026 faltered.

The sell-off was led by equity and currency markets, with semiconductor stocks, Asian indexes and several regional currencies sliding in a broad risk-off shift.

Persistent outflows from US spot Bitcoin ETFs and a rare BTC sale by Strategy have removed a key source of support, leaving markets focused on Friday’s US jobs report for clues on Federal Reserve policy and the fate of the AI trade. The most valued coin slipped 3.6 per cent to $61,914.58.

Cardano (ADA) plunged by 17.6 per cent to $0.1630, Solana (SOL) declined by 7.0 per cent to $65.69, Ethereum (ETH) slipped by 6.9 per cent to $1,666.13, Dogecoin (DOGE) went down by 6.5 per cent to $0.8445, and Ripple (XRP) crashed by 6.5 per cent to $1.11.

Further, Binance Coin (BNB) slumped by 4.3 per cent to $581.45, and TRON (TRX) dropped 1.9 per cent to sell at $0.3261, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) gained 0.01 per cent each to sell at $0.9990 and $0.9998, respectively.