DUBAI: Thomson Reuters, the world's major source of intelligent information for businesses and professionals, Monday released the quarterly investment banking analysis for the Middle East region.
According to estimates from Thomson Reuters/Freeman Consulting, Middle Eastern investment banking fees reached $580.7 million during the first nine months of 2016, an 11 percent increase compared to fees recorded during the same period in 2015.
Nadim Najjar, MD, MENA, Thomson Reuters, said: “The value of announced mergers and acquisitions (M&A) transactions with any Middle Eastern involvement reached $37.4 billion during the first nine months of 2016, 19 percent more than the value recorded during the first nine months of 2015 and the highest first nine-month total in the region since 2010.”
“Middle Eastern equity and equity-related issuance totaled $1.5 billion during the first nine months of 2016, a 72 percent decline from the first nine months of 2015 and the slowest opening nine-month period for equity capital markets issuance since 2004. Bolstered by a record-breaking second quarter, Middle Eastern debt issuance reached $43.8 billion during the first nine months of 2016, a 75 percent increase compared to the value raised during the first nine months of 2015 and the strongest first nine months for DCM issuance since records began in 1980,” he said.
About investment banking fees, Najjar added that fees generated from completed M&A transactions totaled $158.3 million during the first nine months of 2016, a 23 percent decrease compared to a year ago and the slowest first nine months for M&A fees in the region since 2012.
Equity capital markets underwriting fees declined 64 percent to $29.1 million, marking the slowest first nine-month period since 2009, while debt capital markets fees increased 64 percent to $83.2 million.
Syndicated lending fees accounted for 53 percent of the overall Middle Eastern investment banking fee pool, the highest first nine months’ share since 2002.
Completed M&A advisory fees accounted for 27 percent of fees in the region while debt and equity capital markets underwriting fees accounted for a combined 19 percent.
Powered by syndicated lending fees, Mitsubishi UFJ Financial Group earned the most investment banking fees in the Middle East during the first nine months of 2016, a total of $36.5 million for a 6.3 percent share of the total fee pool.
Rothschild topped the completed M&A fee rankings with 12.9 percent of advisory fees while HSBC was first for DCM underwriting, up from second place a year ago.
ECM underwriting was led by Sambacapital with $13.0 million in ECM fees, or 45 percent share.
Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking with $32.2 million in fees for 10.4 percent of the market.
As for M&A deals, the $14.1 billion merger of National Bank of Abu Dhabi and First Gulf Bank was the largest deal to be announced in the region so far this year; it is the largest domestic Middle Eastern deal of all time.
Boosted by this deal, domestic and inter-Middle Eastern M&A increased 149 percent year-on-year to $20.5 billion. Outbound M&A activity fell 24 percent from the first nine months of 2015 to reach $11.4 billion.
Overseas acquisitions from Qatar accounted for 41 percent of Middle Eastern outbound M&A activity while acquisitions by companies based in Saudi Arabia and the UAE accounted for 34 percent and 11 percent, respectively.
Inbound M&A fell 53 percent to $2.2 billion.
Financials was the most active sector, accounting for 45 percent of Middle Eastern involvement M&A, followed by Technology and Real Estate. Credit Suisse, which advised the Abu Dhabi banking merger with UBS, topped the first nine months 2016 announced any Middle Eastern involvement M&A league table. UBS ranked second.
In respect to Equity Capital Markets, six initial public offerings (IPOs) raised $811.9 million and accounted for 54 percent of first nine months 2016 activity in the region.
Follow-on offerings accounted for the remaining 46 percent of activity.
Samba capital took first place in the first nine months of 2016, with Middle Eastern ECM ranking with 31 percent market share.
As for debt capital markets, Qatar was the most active nation in the Middle East accounting for 36 percent of overall activity, followed by the UAE and Oman.
International Islamic debt issuance increased 26 percent year-on-year to reach $28.0 billion during the first nine months of 2016.
JP Morgan took the top spot in the Middle Eastern bond ranking during the first nine months of 2016 with 9.2 percent share of the market while CIMB Group took the top spot for Islamic DCM issuance with a 14.76 percent share.