Economy
Drop in Domestic Listings Shrinks Capital Raising in H1 2019
A latest Cross-Border IPO Index by Baker McKenzie for the first half of 2019 has revealed that capital raised by African issuers declined by 28 percent year on year to $341 million compared with $472 million in the same period on 2018.
The report, which reached this conclusion based on data sourced from Refinitiv, attributed the decline to the 80 percent drop in domestic capital raising in Africa, standing at only $85 million from four IPOs, compared with $419 million from the same number of IPOs in H1 2018.
According to the Index, the largest IPO to come out of the region so far in 2019 is Carbon Holdings Ltd, which is expected to raise as much as $250 million in London and Egypt sometime in June.
Egypt is generating buzz around its pipeline of IPOs with some speculating this could be the busiest year for listings in Cairo since the uprising in 2011.
Growing confidence in economic policies introduced since the currency float has boosted the EGX and is prompting companies to consider share sales. One large pipeline IPO is expected from Banque du Caire SAE in Q3 2019.
In a statement obtained by Business Post, the Head of Capital Markets at Baker McKenzie in Johannesburg, Mr Wildu du Plessis, stated that, “The drop in African IPO values in H12019 was mostly because of political and economic uncertainty on the continent.
“Investors wanting to raise capital in Africa are thinking twice and waiting for political and economic stability to return before going ahead.
“Also eroding investor confidence in Africa are the escalating global trade tensions, which have culminated in, for example, the so-called United States (US) China trade wars and the possibility of a “no deal Brexit” – both have the potential to impact African economies significantly.”
“In South Africa, capital raising has decreased substantially in recent years, also due to economic and political uncertainty. Political stability will hopefully begin to return now that country’s elections are over, but there is still a lot of work to do to stabilise the economy.
“The World Bank recently downgraded South Africa’s growth rates and I think there is at least another year of hard work before the economy starts to recuperate and capital markets in South Africa recover,” Mr Du Plessis added.
“However, there is good news in other jurisdictions in Africa. In addition to the healthy pipeline of IPOs in Egypt, there are also signs of life returning to Nigeria’s capital markets.
“Political instability was also to blame for a big collapse in capital raising in Nigeria in recent years, but the country looks to be recovering and, according to Baker McKenzie’s recent Global Transactions Forecast, there is a predicted return of IPOs in Nigeria in the next three years.
“A case in point, Airtel Africa announced recently that it is seeking to raise as much as $750 million in London and Nigeria, but the company has yet to release more information about when it plans to go public this year.
“Hopefully this is the start of a long upswing in capital raising activity in the country,” says Mr Du Plessis.
The top cross-border IPOs by African issuers were South African company Renergen Limited’s listing in Australia, which raised $7 million; and Egyptian company Carbon Holding’s pipeline dual listing in London and Egypt, which is expected to raise $250 million.
Both of these cross-border IPOs are in the energy and power sector. In terms of domestic IPOs, technology company BMIT Technologies PLC raised $55 million when it listed in Malta, real estate company ICON Properties PLC’s listing in Malawi raised $20 million, industrial company Skyway Aviation Handling Co raised $6 million when it listed in Nigeria and healthcare company Speed Medical SAE raised $3 million in a domestic IPO in Egypt.
A major deal that is excluded from African figures is Jumia Technologies’ debut on the NYSE, which raised $225 million in April. Jumia is a pan-African e-commerce start-up but its parent company, Jumia Group, is incorporated in Germany, so it is not included in the Africa report.
On the global scene, Baker McKenzie said capital raising in global IPO markets fell by 37 percent, with volume dipping 34 percent in the first half of the year compared to the same period in 2018.
A total of $69.8 billion was raised across 514 IPOs, which is the lowest for value and volume since 2016. The US Federal government shutdown, continuing trade tensions between the US and Beijing, the ongoing Brexit saga and the decline of mega IPOs all contributed to a slower market performance.
With fewer IPOs in the market, competition amongst exchanges is growing, as some listing locations make strategic changes to entice public offerings. The introduction of China’s Science and Technology Innovation Board looks set to shake up the market and challenge New York and Hong Kong for tech listings.
Baker McKenzie’s Head of Global Capital Markets, Koen Vanhaerents, said, “The global IPO market experienced quite a slow start to the year as significant political issues stifled activity, along with a change in investor sentiment towards risk – particularly among pre-revenue companies. While global activity experienced sharp declines, this is perhaps skewed slightly when compared to the stellar performance seen in the same period in 2018.
“With a strong pipeline, H2 2019 looks set to deliver a much more prosperous performance overall.”
EMEA outlook
The EMEA IPO market struggled during the first six months of 2019 due to uncertainties surrounding the UK’s exit from the European Union. Overall capital raised fell by 67 percent compared to the same period in 2018 to $9.2 billion while the number of IPOs fell by 61 percent to 47.
Cross-border activity was even more profoundly impacted with only three listings in EMEA and only one of those on the London Stock Exchange. Domestic activity levels helped the London Stock Exchange to retain the top spot for overall capital raising at $2.7 billion from 12 listings. Seven of these listings were from the financial sector and raised almost $2 billion, the largest of which was Network International’s $1.4 billion IPO.
Second to London was Borsa Italiana with $2.3 billion from seven listings, boosted by the $2.2 billion Nexi SpA listing. SIX Swiss exchange pulled in $1.9 billion from two IPOs, with Stadler Rail’s debut accounting for $1.3 billion of that.
The statement said despite its sluggish performance, EMEA is proving to be the region of choice for FinTech listings, particularly in the payments field, as the age of digitization and cashless transactions continues to explode, fuelling the need for innovation and technological growth. FinTech listings accounted for more than a third of capital raised and the largest listing was Nexi SpA’s IPO.
According to the Head of EMEA Capital Markets at Baker McKenzie’s, Mr Adam Farlow, “Europe’s market and economy continues to struggle under the weight of political volatility and a lack of clarity around Brexit, but all eyes look to October for more transparency and direction.
“We are hopeful that the market will subsequently settle and activity in London will recover. The demand is still there for access to the liquidity and exposure that comes with the London Stock Exchange.”
By Adedapo Adesanya
The Lagos Chamber of Commerce and Industry (LCCI) has noted that the N15.52 trillion allocation to debt servicing in the 2026 budget remains a significant fiscal burden.
LCCI Director-General, Mrs Chinyere Almona, said this on Tuesday in Lagos via a statement in reaction to the nation’s 2026 budget of N58.18 trillion, hinging the success of the 2026 budget on execution discipline, capital efficiency, and sustained support for productive sectors.
She noted that the budget was a timely shift from macroeconomic stabilisation to growth acceleration, reflecting growing confidence in the economy.
She lauded its emphasis on production-oriented spending, with capital expenditure of N26.08 trillion, representing 45 per cent of total outlays, and significantly outweighing non-debt recurrent expenditure of N15.25 trillion.
According to Mrs Almona, this composition supports infrastructure development, industrial expansion, and productivity growth.
However, she explained that the N15.52 trillion allocation to debt servicing underscored the need for stricter borrowing discipline, enhanced revenue efficiency, and expanded public-private partnerships to safeguard investments that promote growth.
She added that a further review of the 2026 budget revealed relatively optimistic macroeconomic assumptions that may pose fiscal risks.
“The oil price benchmark of $64.85 per barrel, although lower than the $75.00 benchmark in the 2025 budget, appears optimistic when compared with the 2025 average price of about $69.60 per barrel and current prices around $60 per barrel.
“This raises downside risks to oil revenue, especially since 35.6 per cent of the total projected revenue is expected to come from oil receipts.
“Similarly, the oil production benchmark of 1.84 million barrels per day is significantly higher than the current level of approximately 1.49 million barrels per day.
“Achieving this may be challenging without substantial improvements in security, infrastructure integrity, and sector investment,” she said.
Mrs Almona said the exchange rate assumption of N1,512 to the Dollar, compared with N1,500 in the 2025 budget and about N1,446 per Dollar at the end of November, suggests expectations of a mild depreciation.
She said while this may support Naira-denominated revenue, it also increases the cost of imports, debt servicing, and inflation management, with broader macroeconomic implications.
The LCCI DG added that the inflation projection of 16.5 per cent in 2026, up from 15.8 per cent in the 2025 budget and a current rate of about 14.45 per cent, appeared optimistic, particularly in a pre-election year.
She also expressed concern about Nigeria’s historically weak budget implementation capacity, likely to be further strained by the combined operation of multiple budget cycles within a single year.
Looking ahead, Mrs Almona identified agriculture and agro-processing, manufacturing, infrastructure, energy, and human capital development as key drivers of growth in 2026.
She said that unlocking these sectors would require decisive execution—scaling irrigation and agro-value chains, reducing power and logistics costs for manufacturers, and aligning education and skills development with private-sector needs.
The LCCI head stressed the need to resolve issues surrounding the Naira for crude, increase the supply of oil to local refineries to boost local refining capacity and conserve the substantial foreign exchange used for fuel imports.
“Overall, the 2026 Budget presents a credible opportunity for Nigeria to transition from recovery to expansion.
“Its success will depend less on the size of allocations and more on execution discipline, capital efficiency, and sustained support for productive sectors.
By Dipo Olowookere
The Nigerian Exchange (NGX) Limited witnessed Santa Claus rally on Wednesday after it closed higher by 0.12 per cent.
Strong demand for Nigerian stocks lifted the All-Share Index (ASI) by 185.70 points during the pre-Christmas trading session to 153,539.83 points from 153,354.13 points.
In the same vein, the market capitalisation expanded at midweek by N118 billion to N97.890 trillion from the preceding day’s N97.772 trillion.
Investor sentiment on Customs Street remained bullish after closing with 36 appreciating equities and 22 depreciating equities, indicating a positive market breadth index.
Guinness Nigeria chalked up 9.98 per cent to trade at N318.60, Austin Laz improved by 9.97 per cent to N3.20, International Breweries expanded by 9.85 per cent to N14.50, Transcorp Hotels rose by 9.83 per cent to N170.90, and Aluminium Extrusion grew by 9.73 per cent to N16.35.
On the flip side, Legend Internet lost 9.26 per cent to close at N4.90, AXA Mansard shrank by 7.14 per cent to N13.00, Jaiz Bank declined by 5.45 per cent to N4.51, MTN Nigeria weakened by 5.21 per cent to N504.00, and NEM Insurance crashed by 4.74 per cent to N24.10.
Yesterday, a total of 1.8 billion shares valued at N30.1 billion exchanged hands in 19,372 deals versus the 677.4 billion shares worth N20.8 billion traded in 27,589 deals in the previous session, implying a slump in the number of deals by 29.78 per cent, and a surge in the trading volume and value by 165.72 per cent and 44.71 per cent apiece.
Abbey Mortgage Bank was the most active equity for the day after it sold 1.1 billion units worth N7.1 billion, Sterling Holdings traded 127.1 million units valued at N895.9 million, Custodian Investment exchanged 115.0 million units for N4.5 billion, First Holdco transacted 40.9 million units valued at N2.2 billion, and Access Holdings traded 38.2 million units worth N783.3 million.
By Adedapo Adesanya
Nigerian food and beverage company, Rite Foods Limited, has extended warm Yuletide greetings to Nigerians as families and communities worldwide come together to celebrate the Christmas season and usher in a new year filled with hope and renewed possibilities.
In a statement, Rite Foods encouraged consumers to savour these special occasions with its wide range of quality brands, including the 13 variants of Bigi Carbonated Soft Drinks, premium Bigi Table Water, Sosa Fruit Drink in its refreshing flavours, the Fearless Energy Drink, and its tasty sausage rolls — all produced in a world-class facility with modern technology and global best practices.
Speaking on the season, the Managing Director of Rite Foods Limited, Mr Seleem Adegunwa, said the company remains deeply committed to enriching the lives of consumers beyond refreshment. According to him, the Yuletide period underscores the values of generosity, unity, and gratitude, which resonate strongly with the company’s philosophy.
“Christmas is a season that reminds us of the importance of giving, togetherness, and gratitude. At Rite Foods, we are thankful for the continued trust of Nigerians in our brands. This season strengthens our resolve to consistently deliver quality products that bring joy to everyday moments while contributing positively to society,” Mr Adegunwa stated.
He noted that the company’s steady progress in brand acceptance, operational excellence, and responsible business practices reflects a culture of continuous improvement, innovation, and responsiveness to consumer needs. These efforts, he said, have further strengthened Rite Foods’ position as a proudly Nigerian brand with growing relevance and impact across the country.
Mr Adegunwa reaffirmed that Rite Foods will continue to invest in research and development, efficient production processes, and initiatives that support communities, while maintaining quality standards across its product portfolio.
“As the year comes to a close, Rite Foods Limited wishes Nigerians a joyful Christmas celebration and a prosperous New Year filled with peace, progress, and shared success.”
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