Thursday 21, July 2016

Dubai – MENA Herald: Thomson Reuters, the world’s leading source of intelligent information for businesses and professionals, today 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 US$416.8 million during the first half of 2016, an 8% increase compared to fees recorded during the first six months of 2015 and the strongest period for investment banking fees in the region since 2014.

Nadim Najjar, Managing Director, MENA, Thomson Reuters, said: “The value of announced M&A transactions with any Middle Eastern involvement reached US$18.7 billion during the first half of 2016, a decline of 29% compared to the first half of 2015 and the slowest first six months for deal making in the region since 2014.”

“Middle Eastern equity and equity-related issuance totalled US$1.1 billion during the first half of 2016, an 80% decline from the first half of 2015 and the slowest opening six-month period for equity capital markets issuance since 2004. Bolstered by a record-breaking second quarter, Middle Eastern debt issuance reached US$32.9 billion during the first half of 2016, a 45% increase compared to the value raised during the first half of 2015 and the strongest first half for DCM issuance since records began in 1980,” he added.

In respect to investment banking fees, Fees from completed M&A transactions totalled US$104.0 million during the first half of 2016, a 24% decrease compared to a year ago and the slowest first half for M&A fees since 2012. Syndicated Lending fees accounted for just over 55% of the overall Middle Eastern investment banking fee pool, the highest first half share since 2002. Equity capital markets underwriting declined 77% compared to last year, while debt capital markets fees totalled US$63.7 million, up 48% from 2015. Fees from combined debt and equity capital markets underwriting accounted for 30% of the overall fee pool in the region during the second quarter of 2016, up significantly from the 6% recorded during the first quarter of the year.

Powered by M&A and DCM fees, JP Morgan earned the most investment banking fees in the Middle East during the first half of 2016, a total of US$20.6 million for a 4.9% share of the total fee pool. Rothschild topped the completed M&A fee rankings with 19.7% of advisory fees, while HSBC was first for DCM underwriting, up from second place a year ago. ECM underwriting was lead by Emirates NBD PJSC with US$4.4 million in ECM fees, or 24.4% share. Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking with US$12.8 million in fees for 5.6% of the market.

As for M&A deals, Outbound M&A activity fell 22% from first half 2015 to reach US$9.2 billion, the lowest first half total since 2014. Overseas acquisitions from Saudi Arabia accounted for 42% of Middle Eastern outbound M&A activity, while acquisitions by companies based in Qatar and United Arab Emirates accounted for 31% and 11%, respectively. Domestic and inter-Middle Eastern M&A decreased 22% year-on-year to US$6.1 billion. Inbound M&A fell 76% to US$809.8 million, a seven-year low.

Technology was the most active sector, accounting for 22% of Middle Eastern involvement M&A. The largest deal with Middle Eastern involvement during the half was the US$3.5 billion investment in United States-based Uber Technologies by Saudi Arabia’s Public Investment Fund. JP Morgan, which advised Uber Technologies, topped the first half 2016 announced any Middle Eastern involvement M&A league table. Jones Lang LaSalle and CBRE Holding, which advised BlackRock on the $2.5 billion sale of its Asia Square Tower to Qatar Investment Authority, ranked second and third respectively.

In respect to Equity Capital Markets, six initial public offerings raised US$379.7 million and accounted for 35% of first half 2016 activity in the region. Follow-on offerings accounted for the remaining 65% of activity. Dubai Parks & Resorts raised US$456.9 million in an follow-on offering in May, the largest equity offering in the region during the first half. Emirates NBD PJSC took first place in the first half 2016 Middle Eastern ECM ranking with 38.3% market share.

As for Debt Capital Markets, Qatar was the most active nation in the Middle East accounting for 41% of overall activity, followed by United Arab Emirates and Oman. International Islamic debt issuance increased 10% year-on-year to reach US$19.4 billion during the first half of 2016, the largest first half for issuance since records began. JP Morgan took the top spot in the Middle Eastern bond ranking during the first half of 2016 with 11.3% share of the market, while CIMB Group took the top spot for Islamic DCM issuance with a 15.6% share.