Middle East investment banking fees up 22%

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During the first nine months of 2013, Middle Eastern investment banking fees reached $535.9m. According to Thomson Reuters report, the value of announced M&A transactions with any Middle Eastern involvement reached $29.0bn during the first nine months of 2013.

Russell Haworth, managing director, Middle East & North Africa at Thomson Reuters, commented, “Middle Eastern companies raised $4.0bn from 15 issues during the first nine months of 2013, while Middle Eastern debt issuance reached $4.5bn during third quarter of 2013.”

Mr. Haworth, pointed out, “The investment banking fees in the first nine months increased 22% increase over the same period last year ($438.6m).” He added, “This is the best first nine months for fees in the region since 2009. Fees from completed M&A transactions fees totaled $150.2m, up 37% from the first nine months of 2012 ($109.3m), and accounting for 28% of the overall fee pool. Fees from debt capital markets underwriting in the region hit $112.7m, up 75% from $64.5m during the same period last year, and marking the best first nine months for DCM fees in the Middle East of all time.”

“Equity capital markets underwriting fees totaled $54.2m, down 42% from the same period last year ($93.9m) for the lowest first nine month total since 2004. Fees from syndicated lending increased 28% to $218.7m, accounting for 41% of the first nine month fee total. HSBC earned the most investment banking fees in the Middle East during the first nine months of 2013, a total of $35.9m for a 6.7% share of the total fee pool. Morgan Stanley topped the Middle Eastern completed M&A fee league table with an 8.8% share. JP Morgan took first place in the Middle Eastern ECM fee ranking with a 14% cut, while Deutsche Bank topped the DCM fee ranking,” Mr. Haworth noted.

In respect to Mergers and Acquisitions, Mr. Haworth pointed out, “The value of announced M&A transactions with any Middle Eastern involvement reached $29.0bn during the first nine months of 2013, 3% more than the $28.2bn witnessed in the region during the same period last year, and marking the best first nine months since 2010. Bolstered by the $7.5bn merger of 2 UAE state-owned aluminium producers, materials was the most targeted industry, accounting for 34% of activity.”

He added, “Inbound M&A totalled $5.5bn, up 5% from the same period last year and marking the best first nine months for inbound M&A in the region since 2006. Egypt was the most popular target, while China registered the highest value of inbound M&A deals targeting the Middle East. Outbound M&A fell 38% from this time last year to total $6.0bn, marking the lowest first nine month total since 2004. As sole advisor on the aluminium merger, Morgan Stanley topped the 3Q’13 announced any Middle Eastern involvement M&A league table with $10.1bn.”

Mr. Haworth noted, “Middle Eastern companies raised $4.0bn from 15 issues during the first nine months of 2013, a 36% decline from the same period in 2012 ($6.2bn). Initial public offerings, worth a combined total of $2.2bn, accounted for 54% of ECM activity in the region.”

Five follow-on offerings totalling $1.4bn accounted for 35%, while convertible issuance accounted for the remaining 12%. The largest Middle Eastern ECM transaction so far during 2013 was Asiacell Telecommunication’s IPO in February, which raised $1.3bn. The United Arab Emirates was the most active nation, while telecoms was the most active sector in the Middle East during the first nine months of 2013. As sole bookrunner on the Asiacell IPO, Rabee Securities currently leads the 3Q 2013 Middle Eastern ECM ranking with 32% of the market.

Mr. Haworth, added, “Middle Eastern debt issuance reached $4.5bn during third quarter of 2013, down 68% from the previous quarter and marking the lowest quarterly total in the region since 3Q’11. Despite the slow third quarter, debt issuance in the region totaled $30.5bn during the first 9 months of 2013, a 22% increase over the same period last year, and the strongest first nine months in the region on record.”
He concluded, “Investment grade corporate debt totalled $21.9bn and accounted for 72% of Middle Eastern DCM activity so far this year. The most active nation for Middle Eastern debt issuance was the UAE with 40%, followed by Saudi Arabia with 23%. International Islamic debt issuance reached $20.0bn from 56 issues during the first nine months of 2013, a decrease of 29% from the same period in 2012. HSBC took the top spot in the Middle Eastern bond ranking during the first nine months of 2013 with a 16.5% share of the market.”

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