Thomson Reuters, the world's major source of intelligent information for businesses and professionals, has released the quarterly investment banking analysis for the Middle East region.

The Middle East investment banking fees reached $237.9 million during the second quarter of 2014, a 72 percent increase from the previous quarter.

The value of announced M&A transactions with the region’s any involvement reached $14 billion during the second quarter of this year (2014), 2.5 times the value registered during the previous quarter and the highest quarterly total since Q1, 2011.

Nadim Najjar, MD, MENA, said: “ Middle Eastern equity and equity-related issuance during the first half of 2014 totaled $2.9 billion, a 6 percent increase in activity from the same period in 2013 ($2.8 billion). The region’s debt issuance reached $18 billion during the second quarter of 2014, the all-time highest quarterly total recorded in the region.”

Speaking about investment banking fees, Najjar pointed out that despite the quarterly uptick, fees earned during the first half of 2014 registered a 19 percent decline from the same period in 2013 to $375.9 million.

Fees from completed M&A transactions totaled $110.9 million during the first six months of 2014, up 3 percent from the same period in 2013, and accounting for 29 percent of this year’s overall Middle East fee pool.

“Equity capital markets underwriting fees totaled $99.4 million, up 187 percent from the amount registered during the first half of 2013 ($34.6 million) and marking the best first half total for ECM fees in the Middle East since 2009.

ECM fees account for 26 percent of the fee pool. Fees from debt capital markets underwriting declined 39 percent year-on-year to $64.5 million, while syndicated lending fees fell 53 percent to $101.2 million,” he added.

Najjar noted: “Lazard earned the most investment banking fees in the Middle East during the first half of 2014, a total of $29.4 million for a 29 percent share of the total fee pool. Lazard topped the Middle East’s completed M&A fee league table, while Qatar National Bank was first in the ECM underwriting fee rankings. HSBC and National Bank of Abu Dhabi took the top spots in the Middle East’s DCM and loans fee rankings, respectively.”

Commenting on M&A transactions, Najjar pointed out that value of M&A deals during the first half of 2014 declined 4 percent from the same period last year to $19.7 billion. Domestic and inter-Middle Eastern M&A declined 49 percent from the first half of 2013 to $6.9 billion during the first six months of 2014.

He added: “Inbound M&A also declined, falling 19 percent to $1.3 billion. Outbound M&A drove activity, up 83 percent from this time last year to reach $7.6 billion, the highest first half total since 2011.

Qatar’s overseas acquisitions accounted for 46 percent of the Middle East’s outbound M&A activity. The largest deal during the first half of 2014 was Labregah Real Estate Company’s purchase of a $2.5 billion stake in Doha-based real estate development firm, Barwa Commercial Avenue Company.

Boosted by this deal, real estate was the most targeted sector, accounting 29 percent of first half activity. Bank of America Merrill Lynch topped the H1, 2014 announced any Middle Eastern involvement M&A league table with $4 billion.”

About equity capital markets, Najjar pointed out that seven initial public offerings (IPOs) raised $1.5 billion and accounted for 53 percent of activity in the region. Follow-on and convertible offerings accounted for 13 percent and 34 percent, respectively.

The largest IPO during the first six months of 2014 was the $905.3 million offering from Mesaieed Petrochemical Holding, a unit of state-owned Qatar Petroleum. It was Qatar's first IPO since 2010.

As a sole bookrunner on the Mesaieed Petrochemical Holdings IPO, Qatar National Bank took first place in the H1, 2014 Middle East ECM ranking.

Speaking about the debt capital market activity in 2014, Najjar said: “Dragged down by a slow first quarter, bonds issued during the first half of 2014 fell 16 percent from the same period last year, to $22 billion.

Investment grade corporate debt totaled $16.4 billion and accounted for 90 percent of the first half total. The UAE was the most active nation accounting for 55 percent of activity, followed by Saudi Arabia with 28 percent.

International Islamic debt issuance declined 17 percent year-on-year to reach $14.1 billion, the lowest first half total since 2011. HSBC took the top spot in the Middle East bond ranking during the first half of 2014 with a 14 percent share of the market.