Middle East banking sector sitting pretty on $20 bilion merger market
Middle Eastern investment banking fees reached $536.1 million during 2012, a 19 percent increase over 2011, according to a report from Thomson Reuters.
It also said M&A (mergers and acquisitions) transactions with Middle Eastern targets reached $20.0 billion last year, double the activity seen in the region during 2011 ($9.8 billion), and the strongest annual total since 2008.
Thomson Reuters released these figures in its investment banking analysis for the Middle East region for 2012.
The report said equity capital markets issuance reached $9.4 billion last year while total debt issuance reached $38.6 billion in 2012, a 26 percent increase over 2011.
It report said M&A (mergers and acquisitions) fees totaled $157.9 million during 2012, up 23 percent from the previous year ($128.8 million), and accounting for 29 percent of the overall fee pool.
Fees from equity capital markets underwriting totaled $99.5 million, a 23 percent increase over 2011.
Fees from debt capital markets underwriting in the region totaled $93.8 million for the year, up 26 percent from the $74.7 million seen during 2011.
Fees from syndicated lending totaled $185.0 million, a 10 percent increase over 2011 and accounting for 34 percent of the overall fee pool.
Barclays topped the Middle Eastern completed mergers and acquisitions (M&A) fee rankings for 2012, earning 9 percent of the fee pool. Saudi Fransi Capital took first place in the Middle Eastern ECM fee rankings with a 20 percent cut of the fees.
Standard Chartered and National Commercial Bank topped the debt capital markets and syndicated lending fee league tables, respectively.
M&A transactions with Middle Eastern targets reached $20.0 billion during 2012, double the activity seen in the region during 2011 ($9.8 billion), and the strongest annual total since 2008.
Telecoms was the most targeted industry in the Middle East with 30 percent of the activity during the year, followed closely by financials with 27 percent.
Egypt was the most targeted Middle Eastern country during 2012, while Qatar was the most active Middle Eastern ‘acquiror’.
The United Kingdom is the most popular target for outbound Middle Eastern M&A transactions, followed by Brazil and India.
Goldman Sachs topped the 2012 ‘Announced Any Middle Eastern Involvement’ M&A Ranking with $5.9 billion, while Credit Suisse took second place with $5.0 billion.
Morgan Stanley topped the Middle Eastern target M&A Ranking, controlling 22 percent of the market.
The largest deal with Middle Eastern involvement during 2012 was the $2.0 billion stake acquisition of Centennial Asset Brazilian Equity Fund by Abu Dhabi state investment fund Mubadala.
Equity capital markets issuance reached $9.4 billion during 2012 to finish 5 percent down from 2011 ($9.9 billion).
Follow-ons accounted for 77 percent of ECM activity during the year, while IPOs accounted for 21 percent.
The largest Middle Eastern ECM transaction during 2012 was Qtel’s follow-on in May, which raised $1.9 billion.
Bolstered by this deal, and a $1.6 billion follow-on from Mobile Telecommunications Co. Saudi Arabia, telecoms was the most active sector in the Middle East during 2012. Qatar National Bank topped the 2012 Middle Eastern Equity Capital Markets ranking with 28 percent of the market.
Middle Eastern debt issuance reached $13.5 billion during the fourth quarter of 2012.
It took 2012 DCM activity to $38.6 billion, a 26 percent increase over 2011, and the strongest annual total in the region since 2009.
Investment grade corporate debt accounted for 82 percent of Middle Eastern DCM activity during the year.
Islamic debt issuance reached $37.1 billion from 91 issues during 2012, an increase of 11 percent from 2011, and marking the all-time strongest year for Islamic debt activity. The top Islamic debt issuer nation during 2012 was Malaysia with 48 percent of the activity, while the strongest industry was the financials sector.
HSBC took the top spot in the Middle Eastern bond ranking for 2012 with a 13 percent share of the market.