Equity capital markets (ECM) issuances in the Middle East reached $10.2 billion during 2011, a 47 per cent increase compared to 2010 when volumes touched $6.9 billion (Dh25.32 billion), Thomson Reuters said in its 2011 investment banking analysts on Tuesday.
Russell Haworth, Managing Director of Financial Services, Middle East & Africa at Thomson Reuters, said: “Undoubtedly the major factor adversely affecting investment banking in the Middle East this year was the Arab Spring. This was clearly illustrated by the $271.6 million fall in investment banking fees, reflecting the decline in overall activity throughout the region compared with 2010.”
Investment banking fees in the Middle East only reached $406.8 million during the whole year, which was a 40 per cent decline compared to 2010, when fees were calculated at $678.4 million. Fees for mergers and acquisitions (M&A), which accounted for 54 per cent of the overall fee pool, totalled $221.2 million during the 12-month period, down 37 per cent from 2010.
Debt capital markets (DCM) fee activity in the Middle East fell 66 per cent from 2010 to $55.6 million in 2011. Fees from syndicated lending and ECM totaled $47.8 million and $82.1 million respectively.
HSBC held the top spot in the Middle Eastern DCM and the syndicated loan fee rankings for 2011 earning $8.6 million and $5.2 million respectively. Goldman Sachs topped the M&A fee rankings during the year with $14 million. Bank of America Merrill Lynch controlled 13 per cent of ECM fees in the Middle East.
According to the review, Middle Eastern targeted M&A activity reached $10.1 billion for the full year, down 43 per cent compared to 2010 when activity totaled $17.7 billion. Real estate remains the most targeted industry in the Middle East with $2.6 billion, 26 per cent of the activity down from $4.8 billion during 2010.
The UAE was the most active Middle Eastern country with $4 billion, for 39 per cent of annual activity. BNP Paribas topped the Any Middle Eastern Involvement M&A ranking with $10.1 billion. RBS topped the Middle Eastern target M&A ranking with $980 million, bolstered by advisory work for Aujan Industries-Beverage.
In ECM issuance follow-ons accounted for 62 per cent of the year’s activity and the top Middle Eastern ECM transaction was the $3.5 billion follow-on from Qatar National Bank (QNB). Financials was the most active industry in the Middle East during the year (70 per cent of all activity), with real estate, materials and energy and power sectors together accounting for 24 per cent of ECM activity. Al Rajhi Banking & Investment topped the Middle Eastern equity capital markets rankings as sole-lead book runners for Saudi-based Jabal Omar Development’s $688 million follow-on offering.
Middle Eastern debt issuance reached $29.5 billion during 2011, down 20 per cent from 2010. Investment grade corporate debt accounted for 35 per cent of all Middle Eastern DCM activity in 2011.
Islamic debt issuance reached $23.9 billion from 58 issues, up 66 per cent from 2010. The top Islamic issuer was again Malaysia with with 63 per cent of activity. Issuers in the financials sectors accounted for 66 per cent of the DCM issuance in the Middle East last year.
CIMB Group took the top spot in the Islamic bond ranking in 2011 with 27 issues which raised $5.1 billion.