Thomson Reuters: M&A Transactions With Middle Eastern & North African Involvement Reached $33.9 Billion During Q2 2018

Thomson Reuters, the world's leading source of intelligent information for businesses and professionals, today released the 2018 Q2 investment banking analysis for the Middle East.

According to Thomson Reuters, Middle Eastern & North African investment banking fees totalled an estimated US$472.3 million during Q2 2018, 7% less than the value of fees recorded during Q2 2017. Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said: “Debt capital markets underwriting fees totalled US$140.6 million, down 7% year-on-year and the second highest start of the year the region since our records began in 2000. Equity capital markets fees increased 21% to US$56.4 million.”

Fees generated from completed M&A transactions totalled US$59.6 million, a 52% decrease from last year and the lowest first half since 2012. Syndicated loan fees reachedUS$215.7 million, up 17% from Q2 2017.
Debt capital markets fees accounted for 30% of the overall Middle Eastern & North African investment banking fee pool, the second highest market share since our records began in 2000. Syndicated lending fees accounted for 46% while the share of completed M&A advisory fees fell to its lowest level, only accounting for 13% of the market. Equity capital markets underwriting fees accounted for 12%.  

Citi earned the most investment banking fees in the Middle East & North Africa during Q2 2018, a total of US$44.8 million for a 9.5% share of the total fee pool; also leading in the M&A underwriting league table. DNB topped the completed ECM fee rankings with 14.2% of underwriting fees. DCM underwriting was ledby Standard Chartered with US$24.2 million in ECM fees, or a 17.2% share. JP Morgan took the top spot in the Middle Eastern syndicated loans fee ranking. 

In respect to Mergers & Acquisitions, the value of announced M&A transactions with any Middle Eastern & North African involvement reached US$33.9 billion during Q2 2018, 74% more than the value recorded during Q2 2017 and an 8-year high. Deals with a Middle Eastern and North African target reached an all-time high rising to US$21.3 billion, up 110% from the same period in 2017 while inter-MENA or domestic deals reached a 5-year high, also up 232% from year-on-year. 

Driven by Saudi British Bank acquisition of the entire share of capital of Alawwal Bank for US$5 billion, MENA inbound M&A currently stands at an all-time high. In the other hand, outbound M&A decreased from US$6.9 billion in Q2 2017 to US$6.6 billion so far this year. 
Energy & Power deals accounted for 32.8% of Middle Eastern and North African involvement M&A by value, followed by the financial sector with a 30.2% market share but counting with 58 transactions, 18 more than the 40 recorded in the Energy & Power industry. Goldman Sachs currently leads the Q2 2018 announced any Middle Eastern and North African involvement M&A league table. JP Morgan and Credit Suisse follow in second and third place. 

As to Equity Capital Markets, Middle Eastern and North African equity and equity-related issuance totalled US$3 billion during Q2 2018, a 68% increase year-on-year. Out of the 15 transactions announced so far this year, 9 have been follow-on offerings, raising a total of US$1.8 billion and accounted for 58.5% of the first half ECM activity in the region. Orange Egypt follow-on raised US$866 million and stands out as the biggest deal so far during 2018. EFG Hermes leads the Middle Eastern and North African ECM ranking with a 24.4% market share, followed by JP Morgan and Goldman Sachs in second and third place, respectively. 

Debt Capital Markets have seen significant activity during the first half of this year, despite showing a 2% decreased compared to Q2 2017, debt issuance in the Middle Eastern and North African region is at its second highest level since our records began, reaching US$59.4 billion so far this year. Qatar was the most active nation in the region accounting for 28.5% of activity by value, followed by Saudi Arabia with 21.8%. International Islamic debt issuance decreased 44% from Q2 2017 to reach US$19.3 billion so far during 2018.  Standard Chartered currently leads in the Middle Eastern and North African bond ranking for Q2 2018 with a 14.9% share of the market, while CIMB Group Holdings took the top spot for Islamic DCM issuance with a 15.5% share.