Africa Equity

It was a rough day for stocks on Wednesday, but a great day for equity capital markets, with two convertible bonds launched and priced — the first since the UK’s vote to quit the European Union was revealed on June 24. They came on top of a roaring reception for Melrose Industries’ announcement of a £1.7bn rights issue for an acquisition in the US.

Two South African rights issues are under way - one from a position of strength and one to deal with weakness - as the Johannesburg Stock Exchange rallies after the shock of Brexit last Friday.

Investec, the South African-UK bank and asset manager, raised £138.3m on Thursday with a 5% capital increase, conducted as an accelerated bookbuild by JP Morgan.

Cleopatra Hospital Co has raised E£360m ($40m) with an IPO that its vice-chairman said was a sign of renewed investor confidence in Egypt’s capital markets and healthcare sector.

Barclays made a convincing start to its plan of reducing its stake in Barclays Africa on Wednesday night, with a successful block trade that netted $4bn of demand from what bankers on it said was a very high quality group of institutions.

A consortium including Bob Diamond’s Atlas Merchant Capital is still pursuing a potential bid for Barclays Africa, even after Barclays sold a 12% stake in it in a block trade on Wednesday night, and a senior regulator said a private equity bid would not be welcome.

Barclays has this evening executed a R13bn ($900m) accelerated bookbuild in shares of Barclays Africa Group, its separately listed South African subsidiary, as the first stage in its already announced plan to divest the bank. The trade was covered in 35 minutes and multiple times oversubscribed.

Just two working days after Numis’s dashing block trade in Saga stock on Thursday last week, Credit Suisse brought another sparky, sole-managed deal to the market on Monday night, with a £1bn sale of SABMiller shares for Jan Kulczyk, the Polish billionaire.

Steinhoff International, the South African furniture maker and goods retailer that has been on an acquisition spree, raised €1.1bn on Thursday with a convertible bond that bucked the recent trend of deals that have struggled, partly because it was the kind of simple, traditional structure investors like.

Spar Group, the South African grocery and home improvement wholesaler, raised R2.2bn ($143m) of new capital in a successful accelerated bookbuild on Tuesday night.

Standard Chartered and Lonmin both begin new chapters in their stories today, with fresh capital from rights issues. In both cases the underwriting banks had to work for their fees, as the stories required explaining and each deal ended in a rump placement today.

Ethos Private Equity sold in a block trade on Tuesday night its last shares in Transaction Capital, the Johannesburg-listed commercial finance company.