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Middle Eastern inbound M&A jump 220% to all-time high of US$7.3 billion
Source: Thomson Reuters , Author: Posted by BI-ME staff
Posted: Fri October 20, 2017 10:52 am

UAE. 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.

According to estimates from Thomson Reuters, Middle Eastern investment banking fees totalled an estimated US$669.2 million during the first nine months of 2017, 4% less than the value of fees recorded during the same period in 2016. 

Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said: “Fees from debt capital markets underwriting were up 118% year-on-year, totaling US$193.8 million, which makes it the highest first nine months total in the region since our records began in 2000.” 

Equity capital markets fees increased 48% to US$43.2 million, with fees generated from completed M&A transactions totaling US$145.9 million, a 23% decrease from last year and the lowest first nine month total since 2012. Syndicated lending fees declined 26% year-on-year to US$286.2 million, with debt capital markets fees accounting for 29% of the overall Middle Eastern investment banking fee pool, the highest first nine months share since 2001.

Syndicated lending fees accounted for 43%, while completed M&A advisory fees and equity capital markets underwriting fees accounted for 22% and 6%, respectively.

HSBC earned the most investment banking fees in the Middle East during the first nine months of 2017, a total of US$52.8 million for a 7.9% share of the total fee pool. Credit Suisse topped the completed M&A fee rankings with 15.8% of advisory fees, while JP Morgan was first for DCM underwriting.

 ECM underwriting was led by EFG Hermes with US$12.4 million in ECM fees, or a 28.7% share. Industrial and Commercial Bank of China took the top spot in the Middle Eastern syndicated loans fee ranking.

The value of announced M&A transactions with any Middle Eastern involvement reached US$35.2 billion during the first nine months of 2017, 7% less than the value recorded during the first nine months of 2016.

Driven by Tronox’s US$2.2 billion acquisition of a Saudi Arabian titanium dioxide business and Chinese stake acquisitions in Abu Dhabi’s giant onshore oil concession, inbound M&A stands at an all-time high of US$7.3 billion, up 220% from this time last year.

Domestic and inter-Middle Eastern M&A declined 70% year-on-year to US$6.2 billion, while outbound M&A activity dropped 31% to US$8.2 billion. Energy & Power deals accounted for 50.7% of Middle Eastern involvement M&A by value, while the Financial sector dominated by number of deals.

With Qatar Investment Authority’s involvement, China CEFC Energy Co’s acquisition of Rosneft Oil Co is the biggest deal with Middle Eastern involvement so far this year. The Chinese company acquired a 14.2% stake of the Russian crude petroleum and natural gas producer.

China International Capital and VTB Capital shared first place in the Q3 2017 announced any Middle Eastern involvement M&A league table, with HSBC taking third place.

Middle Eastern equity and equity-related issuance totalled US$1.2 billion during the nine months of 2017, a 20% decline year-on-year and the lowest first nine months for issuance in the region since 2004. Eight initial public offerings raised US$694.4 million and accounted for 57% of the first nine months ECM activity in the region. Malath Coop Ins Co SJSC follow-on offering raised US$101.3 million and stands out as the biggest deal for Q3 2017.

National Bank of Kuwait took first place in the Q3 2017 Middle Eastern ECM ranking with a 20.5% market share.

“Bolstered by Saudi Arabia’s US$12.4 billion international Islamic bond in September, Middle Eastern debt issuance reached US$84.1 billion during the first nine months of 2017,” added Najjar. “This is 82% more than the proceeds raised during the same period last year and by far the best annual start in the region since records began in 1980.” 

Saudi Arabia was the most active nation in the Middle East, accounting for 36.1% of activity by value, followed by the UAE with 15.9%. International Islamic debt issuance increased 44% year-on-year to reach US$41.4 billion so far during 2017.

JP Morgan took the top spot in the Middle Eastern bond ranking during the first nine months of 2017 with a 14.5% share of the market, while HSBC took the top spot for Islamic DCM issuance with an 11.2% share.

Photo Caption: Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters

 

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