Economy

Africa Records Zero IPOs in H1 2021

Published

5 years ago

23/06/2021

A new report has revealed that in the first half of 2021, African exchanges did not record any cross-border Initial Public Offerings (IPOs).

However, the continued global demand for special purpose acquisition company (SPAC) IPOs reached African shores in the period under review, with a cross-border listing from a South African SPAC issuer, African Gold Acquisition Corporation, into the New York Stock Exchange.

In the new Baker McKenzie analysis, H1 IPO Snapshot: Unfolding Trends for 2021, it was noted that globally, the continued demand for SPAC deals, as well as current high liquidity and investor enthusiasm, caused capital raising to surge to new highs in H1 of 2021, with the bulk of companies preferring to list their IPOs locally.

A total of 1,263 deals valued at $294 billion are expected to be completed by June 30, 2021, with domestic IPOs accounting for 77 per cent of all listings during this time.

Commenting on the lack of cross-border IPOs as a form of capital raising in Africa, the Head of Africa at Baker McKenzie, Mr Wildu du Plessis, explained that, “Issuers and investors in Africa are waiting for economic and legal certainty and effective regulation to be implemented, combined with the need for deeper liquidity before they go ahead with capital raising in the continent.

“It is also worth noting that the region tends to lag the global pattern by a few cycles, so we could see a similar rising demand for African IPOs in future years, possibly boosted by the launch of the African Continental Free Trade Area at the beginning of this year.”

Regarding the SPAC listing by African Gold Acquisition Corporation, Mr Du Plessis explained that SPACs are formed to raise capital through IPOs, with the capital raised then used to acquire existing companies (or invest in existing businesses) the identities of which are not disclosed or even known at the time of the IPO.

Even though some indication is given at the time of the IPO as to which industries will be targeted, investors in these SPACs are essentially asked to invest in a somewhat uncertain future.

The African Gold Acquisition Corporation has noted it could potentially target any industry, but it will mainly focus on target companies with operations in the gold mining sector.

African investors and issuers with interests in the mining sector in Africa will be watching this SPAC closely, with the possibility that this could ignite a growing trend for this type of capital raising in Africa down the line.

Mr Du Plessis explained that while cross-border IPOs are currently not used as a way to raise capital on the continent, the next few years could possibly see increased capital raising activity for companies in industries particularly hard hit during COVID-19, including hospitality and transportation.

The technology sector is also expected to dovetail into life sciences, and this could result in a move towards capital raising via IPOs for technology companies with operations in Africa. New and innovative technologies (particularly among biotech, fintech, edtech, software AI and health tech) continue to emerge at an unprecedented pace, expedited by COVID-19 and the need to digitally innovate business operations to survive in a virtual environment could boost regional capital raising transactions.

“Further, no matter where businesses are in the world or what industry they operate in, Environmental Social and Governance (ESG) has become one of the hottest topics for businesses, their boards, their customers and their employees.

“While in previous years, some viewed the inclusion of ESG elements to be at the expense of returns and efficiency, among other things, this has rightly shifted to viewing ESG strategy as a prerequisite to business success. ESG is fast becoming an essential element for successful transactions in Africa,” Mr Du Plessis said.

Top exchanges

The Nasdaq and the NYSE were the top exchange destinations in H1 2021, raising over $160 billion across 519 IPOs. Over 80 per cent of IPO issuers were US-based.

Continued growth in Mainland China domestic listings bolstered the performance of the Shenzhen and Shanghai exchanges. Other strong performers included the ASX, TSX (mainboard, TSXV and NEX Board), Japan Exchange Group, KRX and HKEx (mainboard and GEM).

Euronext Amsterdam was boosted by two cross-border megadeals, worth over USD 1 billion each, bringing capital raising for Euronext to over USD 4 billion for the first time since 2018.

Top industries

The financial sector led in terms of value (USD 124 billion raised) and volume (455 deals), most notably due to the number of SPAC IPOs, with over 350 SPACs going public to raise $103 billion. Technology and Healthcare came in second and third in the rankings for both value and volume, as the COVID-19 pandemic helped to drive investments into these sectors, particularly in China.

Other Trends

In addition to the rise in SPACs in the US, other regions may also be moving to attract SPAC activity. In London, Lord Hill’s review of the UK’s listing regime was published in an effort to help the LSE gain a more competitive edge against other exchanges post-Brexit.

One recommendation is to remove the automatic suspension of SPACs. Euronext, Hong Kong and Singapore are also exploring SPACs due to investor demand.

In the US, headwinds are building for SPACs. The US capital markets landscape is expected to shift in the coming months, due to the new US administration and SEC chair.

Various regulatory and disclosure changes are considered likely, including an increased focus on ESG reporting requirements (including DEI disclosures), closer scrutiny of SPACs and more enforcement proceedings by the SEC.

Economy

Unlisted Securities Index Rises 0.91%

Published

13 hours ago

23/05/2026

Adedapo Adesanya

By Adedapo Adesanya

A 0.91 per cent growth was recorded by the NASD Over-the-Counter (OTC) Securities Exchange on Friday, May 22, after the share prices of four securities ended in green.

According to data, FrieslandCampina Wamco Plc went up by N15.61 to N179.67 per share from N164.06 per share, Newrest Asl Plc grew by N6.11 to N67.26 per unit from N61.15 per unit, Food Concepts Plc appreciated by 17 Kobo to N2.75 per share from N2.58 per share, and Nitrox Industrial Gases Plc added 6 Kobo to sell at N25.50 per unit compared with the previous day’s N25.44 per unit.

At the close of business, the market capitalisation chalked up N23.22 billion to settle at N2.561 trillion versus Thursday’s N2.538 trillion, and the NASD Unlisted Security Index (NSI) increased by 38.81 points to 4,281.28 points from 4,242.47 points.

During the session, the price of Central Securities and Clearing System (CSCS) Plc was down by N3.13 to N71.07 per share from N74.20 per share.

The activity chart showed that the volume of securities transacted by the market participants decreased yesterday by 81.6 per cent to 590,339 units from the 3.2 million units recorded on Thursday, as the number of deals shrank by 28.6 per cent to 30 deals from the 42 deals recorded a day earlier, while the value of securities increased by 0.5 per cent to N95.3 million from the preceding session’s N94.8 million.

Great Nigeria Insurance (GNI) Plc closed the day as the most active stock by value on a year-to-date basis, with a turnover of 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 61.2 million units traded for N4.1 billion.

The most active stock by volume on a year-to-date basis was GNI Plc, with the sale of 3.4 billion units for N8.4 billion, followed by Infracredit Plc with 2.3 billion units valued at N6.5 billion, and Resourcery Plc with 1.1 billion units exchanged for N415.7 million.

Economy

Stock Investors Gain N344bn amid Decline in Transactions

Published

13 hours ago

23/05/2026

Dipo Olowookere

By Dipo Olowookere

The Nigerian Exchange witnessed a decline in transactions on Friday despite closing higher by 0.22 per cent on the back of sustained bargain-hunting.

During the last trading session of the week, investors transacted 711.9 million equities valued at N29.1 billion in 62,386 deals compared with the 1.1 billion equities worth N31.0 billion traded in 62,448 deals in the previous day, indicating a decline in the trading volume, value, and number of deals by 35.28 per cent, 6.13 per cent, and 0.10 per cent, respectively.

Fidelity Bank closed the day as the most active stock with the sale of 198.1 million units for N4.6 billion, Access Holdings traded 69.7 million units worth N1.8 billion, Mutual Benefits exchanged 42.7 million units valued at N197.4 million, Japaul transacted 33.9 million units worth N134.4 million, and Zenith Bank sold 24.4 million units valued at N3.2 billion.

Yesterday, the industrial goods index rose by 0.53 per cent, the consumer goods sector jumped 0.28 per cent, the banking industry improved by 0.25 per cent, and the energy counter soared by 0.18 per cent, while the insurance space shed 0.18 per cent.

At the close of business, the All-Share Index (ASI) gained 536.98 points to finish at 249,712.37 points compared with the previous day’s 249,175.39 points, and the market capitalisation grew by N344 billion to N160.077 trillion from N159.733 trillion.

Aluminium Extrusion and DAAR Communications expanded by 10.00 per cent each to sell for N9.90 and N2.09, respectively, RT Briscoe surged by 9.93 per cent to N14.06, Learn Africa increased by 9.79 per cent to N12.90, and Red Star Express advanced by 9.56 per cent to N34.95.

On the flip side, Trans-Nationwide Express depreciated by 9.92 per cent to N5.72, Livestock Feeds dipped by 9.64 per cent to N8.90, The Initiates crashed by 8.65 per cent to N33.80, Ellah Lakes drowned by 8.64 per cent to N10.05, and Neimeth lost 6.36 per cent to trade at N10.30.

Economy

Naira Slips by N3.15 Against Dollar to Trade N1,375/$1 at Official Market

Published

13 hours ago

23/05/2026

Adedapo Adesanya

By Adedapo Adesanya

The Naira weakened against the United States Dollar by N3.15 or 0.23 per cent to N1,375.46/$1 from N1,372.31/$1 in the Nigerian Autonomous Foreign Exchange Market (NAFEX) on Friday, May 22.

It was also a similar situation for the domestic currency against the Pound Sterling in the official market yesterday, as it lost N9.46 to sell for N1,849.72/£1 compared with the preceding session’s N1,840.26/£1, and against the Euro, it depreciated by N6.26 to close at N1,597.04/€1, in contrast to Thursday’s exchange rate of N1,590.78/€1.

At the GTBank FX desk, the Nigerian Naira tumbled against the Dollar during the session by N2 to trade at N1,381/$1 versus the previous day’s N1,379/$1, and at the parallel market, it remained unchanged at N1,390/$1.

Analysts at Cowry Asset Management Limited, in their weekly financial outlook, have projected the Naira will remain under soft pressure in near term due to continuous FX demand.

“Looking ahead, the Naira may remain under mild pressure in the near term due to persistent FX demand, though rising external reserves could help cushion volatility,” they noted.

Meanwhile, the Central Bank of Nigeria (CBN) this week reiterated that it would continue with its current policy direction to sustain the fight against inflation and stabilise the exchange rate.

This comes as the FX market has changed significantly under the ongoing reforms introduced by the apex bank, with increased market liquidity reducing the need for heavy intervention by the CBN. Its intervention currently accounts for only about 1.2 to 1.3 per cent of total market turnover in 2025, a development he said reflects the growing strength of the market.

Turnover has risen sharply from about $100 million in 2023 to roughly $550 million presently, with transactions occasionally climbing to as high as $1 billion in a single day.

A look at the cryptocurrency market showed that it was down on Friday as Mr Kevin Warsh was sworn in by President Donald Trump as the chairman of the US Federal Reserve, replacing Mr Jerome Powell, who will continue as a governor in the US central bank.

The appointment was made in the hope that he would lead the central bank to cut interest rates, but the Iran war has sent oil prices soaring and re-ignited what had been cooling inflation.

Ethereum (ETH) depreciated by 5.5 per cent to $2,010.90, Dogecoin (DOGE) lost 5.2 per cent to trade at $0.1001, Cardano (ADA) fell by 5.0 per cent to $0.2389, Solana (SOL) slipped by 4.9 per cent to $82.69, and Bitcoin (BTC) slid by 3.3 per cent to $74,950.02.

Further, Ripple (XRP) went down by 2.9 per cent to $1.32, Binance Coin (BNB) declined by 2.6 per cent to $641.61, and TRON (TRX) shrank by 1.2 per cent to $0.3606, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) remained unchanged at $1.00 each.