DOHA: Qatar has led the Middle Eastern region both in terms of outbound M&A activity and debt issuance during the first nine months of this year. Overseas acquisitions from Qatar accounted for 41 percent of Middle Eastern outbound M&A activity during the period. As for Debt Capital Markets, Qatar was the most active nation in the Middle East accounting for 36 percent of overall activity.
The value of announced M&A transactions with any Middle Eastern involvement reached $37.4bn 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.
The quarterly investment banking analysis for the Middle East region released by Thomson Reuters yesterday noted the region’s investment banking fees reached $580.7m during the first nine months of 2016, an 11 percent increase compared to fees recorded during the same period in 2015.
Nadim Najjar, Managing Director, MENA, Thomson Reuters, said: “ “Middle Eastern equity and equity-related issuance totalled $1.5bn 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 $43.8bn 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.”
In respect to investment banking fees, fees generated from completed M&A transactions totalled $158.3m 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.m, marking the slowest first nine month period since 2009, while debt capital markets fees increased 64 percent to $83.2m.
According to estimates from Thomson Reuters / Freeman Consulting, 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 $36.5m 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( debt capital market) underwriting, up from second place a year ago. ECM (equity capital market) underwriting was lead by Samba capital with $13.0m in ECM fees, or 45 percent share. Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking with $32.2m in fees for 10.4 percent of the market.
As for M&A deals, the $14.1bn 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 $20.5bn. Outbound M&A activity fell 24 percent from first nine months 2015 to reach $11.4bn.
Overseas acquisitions from Qatar accounted for 41 percent of Middle Eastern outbound M&A activity, while acquisitions by companies based in Saudi Arabia and United Arab Emirates accounted for 34 percent and 11 percent, respectively. Inbound M&A fell 53 percent to $2.2bn. 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 raised $811.9m 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 2016 Middle Eastern ECM ranking with 31 percent market share.
Regarding the Debt Capital Markets, Qatar was the most active nation in the Middle East accounting for 36 percent of overall activity, followed by United Arab Emirates and Oman.
