Dubai – MENA Herald: Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today released the annual investment banking analysis for the Middle East region.
According to estimates from Thomson Reuters / Freeman Consulting, Middle Eastern investment banking fees reached US$636.4 million during full year 2015, 16% less than the value recorded during full year 2014 and the lowest annual period for investment banking fees in the region since 2012.
Nadim Najjar, Managing Director, MENA, Thomson Reuters, said: “The value of announced M&A transactions with any Middle Eastern involvement reached US$56.2 billion during full year 2015, 13% more than the value registered during the same period in 2014 and marking the best annual period since 2008.”
“Middle Eastern equity and equity-related issuance totalled US$5.7 billion during the full year 2015, a 50% decline from full year 2014 and the slowest annual period for equity capital markets issuance in the region in two years. Middle Eastern debt issuance reached US$6.2 billion during the fourth quarter of 2015, a significant increase compared to the value raised during the previous quarter,” he added.
In respect to investment banking fees, Fees from completed M&A transactions totalled US$213.1 million during full year 2015, a 4% increase compared to a year ago and the only investment banking product in the region to see a year-over-year gain. M&A fees accounted for 33% of the overall Middle Eastern investment banking fee pool, the highest annual share since fee records began in 2000. Equity capital markets underwriting declined 33% compared to last year, while syndicated lending fees totalled US$278.6 million, down 16% from 2014. Fees from debt capital markets underwriting declined 33% year-on-year to US$59.1 million.
HSBC earned the most investment banking fees in the Middle East during full year 2015, a total of US$62.9 million for a 9.9% share of the total fee pool and up 2.1 wallet share points compared to a year ago. HSBC also topped the completed M&A fee rankings, while Nomura was first for DCM underwriting. EFG Hermes took the top spot for ECM underwriting fees in the region with 15.5% share. Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking with US$18.2 million in fees for 6.5% of the market.
As for M&A deals, Outbound M&A drove activity, up 34% from 2014 to reach US$35.2 billion, the highest annual total since 2008. Overseas acquisitions from the United Arab Emirates accounted for 46% of Middle Eastern outbound M&A activity, while acquisitions by companies based in Qatar and Saudi Arabia accounted for 36% and 10%, respectively. Domestic and inter-Middle Eastern M&A decreased 16% year-on-year to US$11.3 billion.
Inbound M&A also saw a marked increased, up 29% to US$5.4 billion. Healthcare was the most active sector, accounting for 24% of Middle Eastern involvement M&A. The largest deal with Middle Eastern involvement during the year was the US$11.1 billion acquisition of South Africa-based Mediclinic International by Al Noor Hospitals Group PLC. Morgan Stanley topped the full year 2015 announced any Middle Eastern involvement M&A league table with US$18.4 billion in advisory credit.
In respect to Equity Capital Markets, Eleven initial public offerings raised US$2.6 billion and accounted for 45% of full year activity in the region. Follow-on and convertible offerings accounted for 17% and 38%, respectively. Aabar Investments PJSC raised US$2.2 billion from a convertible offering in March, the largest equity offering in the region during the year. HSBC took first place in the full year 2015 Middle Eastern ECM ranking with 16.5% market share.
As for Debt Capital Markets, Middle Eastern debt issuance reached US$6.2 billion during the fourth quarter of 2015, a significant increase compared to the value raised during the previous quarter. Despite the quarterly increase, full year bond issuance in the region decreased 19% from last year to US$30.2 billion during full year 2015, marking the lowest annual total since 2011. The United Arab Emirates was the most active nation accounting for 60% of activity, followed by Bahrain with 9%. International Islamic debt issuance declined 23% year-on-year to reach US$28.9 billion during full year 2015. Nomura took the top spot in the Middle Eastern bond ranking during 2015 with a 27% share of the market.