(MENAFN Editorial) Thomson Reuters today released its full year investment banking analysis for the Middle East region in 2013.
During 2013, Middle Eastern investment banking fees reached US722.2 million. According to the report, the value of announced M&A transactions with any Middle Eastern involvement reached US43.4 billion during 2013, 7% more than the US40.7 billion witnessed in the region during 2012, and marking the best full year total since 2010
Nadim Najjar, Managing Director, Middle East, Africa, and Russia / CIS, said: " Middle Eastern companies raised US4.2 billion of equity during 2013, a 39% decline from 2012 (US6.9 billion), while Middle Eastern debt issuance reached US8.1 billion during fourth quarter of 2013, up 82% from the previous quarter. Despite the quarterly uptick, only one-third of 2013 activity was seen during the second half of the year.
Mr. Najjar pointed out that the investment banking fees increased by 20% over the US602.6 million seen during 2012 recording the highest annual total in the region since 2010.
He added: "Investment banking fees from completed M&A transactions totalled US212.8 million, up 22% from 2012 (US174.0 million), and accounting for 29% of the overall fee pool. Fees from debt capital markets underwriting hit US144.1 million, up 44% from US100.0 million during the previous year, and marking the best annual total for DCM fees in the Middle East since 2010. Equity capital markets underwriting fees totalled US62.4 million, down 43% from 2012 (US108.9 million) and the lowest annual total since 2003. Investment banking fees from syndicated lending increased 38% to US303.0 million, accounting for 42% of total Middle Eastern fees, the highest share since 2004."
Mr. Najjar noted that HSBC earned the most investment banking fees in the Middle East during 2013, a total of US61.6 million for an 8.5% share of the total fee pool. HSBC topped the Middle Eastern completed M&A fee league table, as well as both the DCM and Loans underwriting fee rankings. The National Bank of Abu Dhabi took first place in the Middle Eastern ECM fee ranking with a 10.3% cut
In respect to Mergers and Acquisitions, Mr. Najjar pointed out that 2013 marked the best full year total since 2010. "Bolstered by the US7.5 billion merger of 2 #UAE
state-owned aluminium producers in June, materials sector was the most targeted, accounting for 23% of activity. Energy & Power and Telecoms deals also helped drive activity during 2013, with each sector accounting for 21% of Middle Eastern involvement M&A," he said.
Mr. Najjar added: "Inbound M&A totalled US6.1 billion, down 3% from the previous year. #Egypt
was the most popular target, while #China
registered the highest value of inbound M&A deals targeting the Middle East. Outbound M&A increased 11% from this time last year to total US14.8 billion. As sole advisor on the aluminium merger, Morgan Stanley topped the 2013 announced any Middle Eastern involvement M&A league table with US12.7 billion.
In the area of equity capital markets, he pointed out that Middle Eastern companies raised US4.2 billion during 2013, a 39% decline from 2012 (US6.9 billion), led by an 80% drop in follow-on offerings.
"Follow-ons accounted for 23% of equity issuance in the region during 2013, compared to 69% the previous year. Despite the fall in overall equity issuance, Initial public offerings recorded the highest level since 2008, with US2.7 billion accounting for 66% of ECM activity in the region. The strong IPO total was supported by Asiacell Telecommunication's US1.3 billion stock market debut at the beginning of the year. The United Arab Emirates was the most active nation, accounting for 45% of total equity issuance in the Middle East during 2013. As sole bookrunner on the Asiacell IPO, Rabee Securities took first place in the 2013 Middle Eastern ECM ranking with 31% of the market," he noted.
Speaking about the debt capital market activity in 2013, Mr. Najjar said: "Despite the quarterly uptick, only one-third of 2013 activity was seen during the second half of the year. Debt issuance in the region throughout 2013 totalled US38.6 billion, nearly levelling 2012's total of US38.8 billion. Investment grade corporate debt totalled US27.4 billion and accounted for 71% of the annual total."
He concluded: "The United Arab Emirates was the most active nation accounting for two-fifths of activity, followed by #SaudiArabia
with 22%. International Islamic debt issuance declined 11% from 2012 to reach US32.5 billion during 2013.
HSBC took the top spot in the Middle Eastern bond ranking during 2013 with a 16% share of the market."