Citigroup targets rapid Africa, Middle East growth in 2018

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Citigroup expects 2018 to be its best year for investment banking in the Africa and the Middle East in at least a decade, a senior executive at the U.S. bank said.

The Citigroup Inc (Citi) logo is seen at the SIBOS banking and financial conference in Toronto, Ontario, Canada October 19, 2017. REUTERS/Chris Helgren

Nigeria and Egypt will be the main growth drivers in Africa as bond sales, mergers and acquisitions and public share sales are all expected to pick-up, said Miguel Azevedo, Citigroup’s head of investment banking, Middle East and Africa. Saudi Arabia and the United Arab Emirates are expected to be main growth leaders in the Middle East.

“The pipeline in the Middle East and Africa is as good as we have seen since the global financial crisis of 2008,” he told Reuters in an interview, adding that emerging markets represented a larger weight of Citi’s earnings than for others.

“GDP growth for advanced economies this year is between 2.5 and 3 percent, while for emerging markets it is between 4.5 and 5 percent. For investment banking, the growth should maybe be even more,” Azevedo said.

“In the Middle East and Africa, getting deals done would depend on market stability, but swings in global stocks in recent days represented a correction and were not “enough to put any of these transactions off”.

 

Nigeria, which has low debt levels, is expected to return to the bond markets in 2018. Nigerian companies were also forecast to issue bonds and launch initial public offerings, Azevedo added.

Nigeria issued a $3 billion two-part international bond in November, a deal managed by Citigroup and Standard Chartered.

Egypt’s outlook was also positive after the 2016 currency devaluation and IPOs were slated in sectors such as industrial and manufacturing and financial services and consumer, Azevedo said.