Middle Eastern M&A reaches $18.7bn in H1
Middle Eastern M&A reaches $18.7bn in H1
Thomson Reuters, the world's major source of intelligent information for businesses and professionals, released its quarterly investment banking analysis for the Middle East region on Thursday, with a statement from Nadim Najjar, MD, MENA, Thomson Reuters.
Najjar said: “The value of announced mergers and acquisitions (M&A) transactions with any Middle Eastern involvement reached $18.7 billion during H1, 2016, a decline of 29 percent compared to H1 2015 and the slowest first six months for deal making in the region since 2014.”
“Middle Eastern equity and equity-related issuance totaled $1.1 billion during H1, 2016, an 80 percent decline from the first half of 2015 and the slowest opening six-month period for equity capital markets issuance since 2004. Bolstered by a record-breaking second quarter, Middle Eastern debt issuance reached $32.9 billion during the first half of 2016, a 45 percent increase compared to the value raised during the first half of 2015 and the strongest first half for DCM issuance since records began in 1980,” he added.
Regarding investment banking fees, the fees from completed M&A transactions totaled $104 million during the first half of 2016, a 24 percent decrease compared to a year ago and the slowest first half for M&A fees since 2012.
Syndicated Lending fees accounted for just over 55 percent of the overall Middle Eastern investment banking fee pool, the highest first half share since 2002.
Equity capital markets underwriting declined 77 percent compared to last year, while debt capital markets fees totaled $63.7 million, up 48 percent from 2015.
Fees from combined debt and equity capital markets underwriting accounted for 30 percent of the overall fee pool in the region during the second quarter of 2016, up significantly from the 6 percent recorded during the first quarter of the year.
Powered by M&A and DCM fees, JP Morgan earned the most investment banking fees in the Middle East during the first half of 2016, a total of $20.6 million for a 4.9 percent share of the total fee pool.
Rothschild topped the completed M&A fee rankings with 19.7 percent of advisory fees, while HSBC was first for DCM underwriting, up from second place a year ago.
ECM underwriting was led by Emirates NBD PJSC with $4.4 million in ECM fees, or 24.4 percent share.
Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking with $12.8 million in fees for 5.6 percent of the market.
As for M&A deals, outbound M&A activity fell 22 percent from H1 2015 to reach $9.2 billion, the lowest first half total since 2014.
Overseas acquisitions from Saudi Arabia accounted for 42 percent of Middle Eastern outbound M&A activity, while acquisitions by companies based in Qatar and the UAE accounted for 31 percent and 11 percent, respectively.
Domestic and inter-Middle Eastern M&A decreased 22 percent year-on-year to $6.1 billion. Inbound M&A fell 76 percent to $809.8 million, a seven-year low.
Technology was the most active sector, accounting for 22 percent of Middle Eastern involvement M&A.
The largest deal with Middle Eastern involvement during the half-year was the $3.5 billion investment in the US-based Uber Technologies by Saudi Arabia’s Public Investment Fund.
JP Morgan, which advised Uber Technologies, topped the H1, 2016, and features in the Middle Eastern involvement in M&A league table.
Jones Lang LaSalle and CBRE Holding, which advised BlackRock on the $2.5 billion sale of its Asia Square Tower to Qatar Investment Authority, ranked second and third respectively.
Regarding equity capital markets, six initial public offerings raised $379.7 million and accounted for 35 percent of H1, 2016 activity in the region.
Follow-on offerings accounted for the remaining 65 percent of activity.
Dubai Parks & Resorts raised $456.9 million in a follow-on offering in May, the largest equity offering in the region during the first half. Emirates NBD PJSC took first place in the first half 2016 Middle Eastern ECM ranking with 38.3 percent market share.
As for debt capital markets, Qatar was the most active nation in the Middle East accounting for 41 percent of overall activity, followed by the UAE and Oman.
International Islamic debt issuance increased 10 percent year-on-year to reach $ 19.4 billion during H1 2016, the largest first half for issuance since records began.
JP Morgan took the top spot in the Middle Eastern bond ranking during H1, 2016 with 11.3 percent share of the market, while CIMB Group took the top spot for Islamic DCM issuance with a 15.6 percent share.