DOHA: Middle Eastern & North African investment banking fees totalled an estimated $243.1m during Q1 2018, six percent less than the value of fees recorded during Q1 2017. HSBC took the top spot in the Middle Eastern syndicated loans fee ranking.
Standard Chartered earned the most investment banking fees in the region in the first quarter, a total of $25.8m for a 10.6 percent share of the total fee pool; also leading in the DCM underwriting league table, Thomson Reuters’ 2018 Q1 investment banking analysis for the Middle East has revealed.
Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said: “Debt capital markets underwriting fees totalled $62.9m. Despite being down 18 percent year-on-year, this was the second highest start of the year in the region since our records began in 2000.” Equity capital markets fees decreased 46 percent to $8.4m, while fees generated from completed M&A transactions totalled $15.1m, an 82 percent decrease from last year and the lowest annual start since 2004. Syndicated lending fees reached a record high of $156.6m, up 87 percent from Q1 2017.
Debt capital markets fees accounted for 26 percent of the overall Middle Eastern & North African investment banking fee pool. Syndicated lending fees accounted for 64 percent, the highest share of the regional fee pool since our records began in 2000. On the other hand, the share of completed M&A advisory fees fell to its lowest level, only accounting for 6 percent of the market. Equity capital markets underwriting fees accounted for 3 percent, the lowest since 2011.
Moelis & Co topped the completed M&A fee rankings with 23.2 percent of advisory fees, while ECM underwriting was led by Al Rajhi Banking & Investment with $3.1m in ECM fees, or a 19.1 percent share.
“The value of announced M&A transactions with any Middle Eastern & North African involvement reached $13.9bn during Q1 2018, 7 percent more than the value recorded during Q1 2017 and a 3-year high,” added Najjar. “Deals with a Middle Eastern and North African target reached an 8-year high rising to $11.2bn, up 50 percent from the same period in 2017 while inter-MENA or domestic deals reached a 5-year high, also up 42 percent from year-on-year.” Driven by Total SA’s acquisition of 20 percent of Umm Shaif and Nasr concession of Emirati state-owned Abu Dhabi National Oil Co for $1.1bn, Mena inbound M&A currently stands at an all-time high. At the same time, outbound M&A decreased from $3.3bn in Q1 2017 to $779m so far this year.
Energy & Power deals accounted for 54 percent of Middle Eastern and North African involvement M&A by value and despite having the same number of transactions as the financial sector, the latter only accounts for 10.7 percent of the region’s M&A activity. Goldman Sachs currently leads the Q1 2018 announced any Middle Eastern and North African involvement M&A league table. Rothschild and Morgan Stanley follow in second and third place.
Middle Eastern and North African equity and equity-related issuance totalled $1.4bn during Q1 2018, a 158 percent increase year-on-year. Out of the 6 transactions announced so far this year, 5 have been follow-on offerings, raising a total of $1.3bn and accounting for 92 percent of the quarter’s ECM activity in the region. Orange Egypt follow-on raised $866m and stands out as the biggest deal for Q1 2018. EFG Hermes leads the Middle Eastern and North African ECM ranking with a 63.4 percent market share.
Despite showing a 25 percent decrease compared to Q1 2017, debt issuance in the Middle Eastern and North African region is at its second highest level since our records began, reaching $23.9bn so far this year.
Standard Chartered currently leads in the Middle Eastern and North African bond ranking for Q1 2018 with a 16 percent share of the market, while CIMB Group Holdings took the top spot for Islamic DCM issuance with a 15 percent share.
