Stanbic IBTC Capital and Chapel Hill cornered some of the most lucrative deals on the Nigerian Stock Exchange for the first half of 2019. A review of the Nigerian Stock Exchange’s X-Compliance report reveals both companies were on most of the major transactions on the stock market as financial advisers/issuing house.
Big Deals: By far, the largest deal this year on the Nigerian Stock Exchange was the listing of Nigeria’s largest telecommunication firm, MTN. The company listed 20.3 billion shares at N90 per share in a transaction worth over N2 trillion.
As financial advisers, Stanbic IBTC Capital would have raked in thousands of dollars as advisory fees.
Sources inform Nairametrics transaction related fees can range between $50k to $300k depending on the number of hours and quality manpower used to put in work.
The MTN transaction took months if not years of hard work to consummate, so we expect Stanbic to have earned a significant amount of fees.
Coronation Securities, the stockbroking arm of Coronation Capital is also thought to have earned a significant amount of fees from trading MTN shares.
Analysts with knowledge of the trade claimed, the sold most of Access Bank shares in the trade.
Stanbic also reportedly earned significant fees from trading MTN stock.
Another major deal this year was the merger between Access Bank and Diamond Bank Plc. Chapel Hill Denham Advisory Limited; and Union Capital Markets Limited acted as Financial Advisers to the transaction.
The merger is termed one of the largest in the history of banking in Nigeria, catapulting Access Bank to the largest bank in Nigeria by asset base.
As financial advisers, Chapel Hill also raked in lucrative fees from the transaction.
Some of the services, rendered include helping them prepare for regulatory approvals, setting terms for the mergers, valuations of shares, etc.
Coronation Securities Limited acted as stockbrokers to this transaction which also involved the listing of 6,617,253,991 ordinary shares.
Chapel Hill was also on the Access Bank’s Application for the Listing of N15,000,000,000, 5- Years 15.5% Fixed Rate Senior Unsecured Green Bonds Due 2024 as Financial Advisers/Issuing House. Again, coronation acted as Stockbrokers to the transaction.
Other notable transactions include the NSP-SPV PowerCorp Plc N8.5 billion 15 year 15.60% Series 1 Guaranteed Fixed Rate Senior Green Infrastructure Bonds. This transaction had United Capital Plc; Stanbic IBTC Capital Limited; Vetiva Capital Management Limited; and Zenith Capital Limited as Financial Advisers with
On the Top Ten Stockbrokers data for the second quarter of the year published by the NSE, Stanbic IBTC Stockbrokers topped the list with a transaction value of about N148 billion or 22% of the total transaction value.
At 1% of fees, Stanbic may have earned about N1.48 billion this quarter alone. Fees are officially 1.3% max
APT Securities, Rencap and Coronation Securities came 2nd, third and fourth respectively.
Combined, their total transaction value was about N173 billion
Why it matters: Transactions in the Nigerian Capital market are hard to come by and when they do the value is often modest. Thus in a very thin market it is critical to maintain leadership and take a huge chunk of the pie.
Stanbic IBTC is one of the most recognised names when it comes to financial advisory in Nigeria. However, the likes of Chapel Hill, Vetiva and Coronation Capital are making inroads in a highly competitive space.
Traditional Banks such as First Bank and Zenith Bank also have a claim in the market with FBN Quest and Zenith Capital respectively. However, they will have to be more aggressive.
Analysts who spoke to Nairametrics suggest, Stanbic’s relationship with South Africa helps them corner most deals from that market, while Chapel Hill and Coronation rely hugely on relationships with decision makers in large corporations to close deals.
Whilst this report focussed on deals on the Nigerian Stock Exchange, these firms still raked in lucrative fees from private transactions as well as those quoted on the FMDQ OTC.