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$182.0 million during the first quarter of 2015, 5% more than the value recorded during the previous quarter and a 20% increase from the same period in 2014.
Nadim Najjar, Managing Director, MENA, Thomson Reuters, said: “The value of announced M&A transactions with any Middle Eastern involvement reached US$9.5 billion during the first quarter of 2015, less than half the value registered during the previous quarter, but marking a 152% increase from the first three months of 2014 and the best annual start since 2012.”
He added: “Middle Eastern equity and equity-related issuance totalled US$2.5 billion during the first three months of 2015, 59% less than the value recorded during the previous quarter. Compared to the same period in 2014, Middle Eastern ECM increased 179% and marked the best first quarter by proceeds raised since 2008. Initial public offerings raised US$224.6 million and accounted for 9% of activity in the region.”
Mr. Najjar pointed out that Middle Eastern debt issuance reached US$6.5 billion during the first quarter of 2015, 62% more than the value raised during the previous quarter. Compared to the first quarter of 2014, bond issuance decreased 15% and marked the lowest first quarter total since 2011.
He noted: “The United Arab Emirates was the most active nation accounting for 78% of activity, followed by Saudi Arabia with 16%. International Islamic debt issuance declined 13% year-on-year to reach US$8.9 billion. HSBC took the top spot in the Middle Eastern bond ranking during the first quarter of 2015 with a 13% share of the market.”
In respect to investment banking, syndicated lending fees saw the most growth from last year, increasing 91% to US$52.2 million. Fees from completed M&A transactions totalled US$73.8 million, a 13% increase from last year and the best annual start since 2009. M&A fees accounted for 41% of the overall first quarter Middle Eastern investment banking fee pool. Equity capital markets underwriting fees totalled US$37.0 million, down 2% from the first three months of 2014, while fees from debt capital markets underwriting declined 12% year-on-year to US$19.1 million.
Citi earned the most investment banking fees in the Middle East during the first quarter of 2015, a total of US$22.5 million for a 12.3% share of the total fee pool. Citi topped the Middle Eastern completed M&A fee league table, while Deutsche Bank was first for ECM underwriting and Emirates NBD was first in the DCM underwriting fee rankings. Banque Saudi Fransi took the top spot in the Middle Eastern syndicated loans fee ranking.
Mergers and Acquisitions were active in the first quarter. Outbound M&A drove activity, up 161% from the same period in 2014 to reach US$4.0 billion, the highest first quarter total since 2011. Qatar’s overseas acquisitions accounted for 48% of Middle Eastern outbound M&A activity, while acquisitions by UAE and Saudi Arabian companies accounted for 27% and 14%, respectively. Domestic and inter-Middle Eastern M&A increased 261% year-on-year to US$2.4 billion. Inbound M&A also saw a marked increased, up 129% to US$1.2 billion. Industrials was the most active sector, accounting for 33% of Middle Eastern involvement M&A.
The largest deal with Middle Eastern M&A involvement during the first quarter of 2015 was the US$1.9 billion offer for the remaining stake in Canary Wharf Group Plc by Stork Holdings Ltd, jointly owned by Qatar Investment Authority and Brookfield Property Partners. Citi topped the 1Q 2015 announced any Middle Eastern involvement M&A league table with US$4.3 billion.
As for equity capital markets, follow-on and convertible offerings accounted for 5% and 86%, respectively. United Arab Emirates Aabar Investments PJSC raised US$2.2 billion from a convertible bond in March. The bonds can be exchanged for shares in UniCredit SpA.
Five banks shared first place in the 1Q 2015 Middle Eastern ECM ranking as bookrunners on the Aabar Investments convertible – Barclays, BNP Paribas, Bank of America Merrill Lynch, Deutsche Bank and Societe Generale.