The Middle Eastern Investment Banking Industry continues to grow with second quarter activity contributing to an impressive overall first half of 2010. The analysis, compiled by Thomson Reuters, shows that although the second quarter activity was at a lower level than the first quarter, there is still a strong foundation for which to build on for the remainder of 2010.
Managing Director of Thomson Reuters Middle East & Africa, Basil Moftah commented, "Although the second quarter was modest in comparison to a highly impressive first quarter, the two have combined to build a solid start to 2010. The levels of fees, M&A, capital market and loan activity are fuelling a growing confidence among the Middle East investment banking community."
Thomson Reuters released its first half 2010 review of the Middle East investment banking industry, which covers the region's M&A, debt and equity capital markets. The review includes rankings of banks and advisors operating in the Middle East based on deal activity and fees and provides and independent assessment of the market.
Analysis of the Thomson Reuters Middle East Investment Banking data for the first half of 2010 shows that:
The volume of Middle East targeted M&A in Q2 dropped 70% on Q1 2010, but contributed to a H1 that reached US$11.7bn – the busiest start to a year since 2008.
Investment banking and adviser fees reached US$247 million during Q2 contributing to US$429 million for H1 2010 – up 19% year on year
Middle Eastern debt issuance reached US$5.6 billion during Q2, driven by the Financials, Governments/Agencies, and Telecommunications sectors
Equity issuance reached US$2.57 billion during Q2 to contribute to US$5.6 billion for H1, resulting in 64% year on year growth
Loan activity in Q2 was recorded at US$3.3 billion, down from US$9 billion during Q1. Despite this, loan activity for H1 reached US$12.4 billion, a 92% year on year increase
The analysis shows that M&A fees account for 40.4% of activity during the first half of 2010, with DCM activity accounting for 13% of Middle East fees, in the most active first half since 2007. HSBC holds the top spot in Middle Eastern DCM fee raking for the first half of 2010, with Central Bank of Libya topping the Middle Eastern ECM ranking. Credit Suisse leads the M&A rankings with Standard Chartered leading the Syndicated Loans ranking.
The second quarter recorded a 70% drop in M&A activity compared to the previous quarter, but this had little impact on the overall first half figures which reached US$11.7 billion.
Real estate represents the most targeted industry in the Middle East with US$4.4 billion, or 37.7% of the region's M&A activity. The top Middle Eastern targeted deal for the first half was the government of Abu Dhabi's acquisition of Yas Island Properties of Aldar Properties PJSC for US$2.4billion.
Geographically, Qatar is the most acquired and acquisitive country in the Middle East, representing 29% and 30.8% of the activity respectively. HSBC topped the M&A Any Middle Eastern Involvement Ranking with US$12.129 billion as Standard Chartered climbed 21 places into fourth position with US$11 billion. The top deal with any Middle East involvement for the second quarter was the Qatar Holding acquisition of Harrods, with Credit Suisse advising the acquirers.
Debt issuance recorded a 32% year on year decline during the first half of 2010 to post US$10.9 billion of activity. Agency, supranational and sovereign issuance accounts for 39% of the activity with investment grade corporate issuance accounting for 33.4%. The top Middle Eastern bond this year to date was issued by Egypt and worth US$1.5 billion.
In the Equity Capital Markets, equity issuance reached US$5.6 billion for the first half of the year, an annual increase of 64%. Financials represents the most active sector in the equity capital markets, accounting for 57% of the activity with Real Estate and Consumer Staples following in second and third place.
Middle East loan activity during the second quarter reached US$3.3 billion, combining with the first quarter to reach US$12.4 billion, a year on year increase of 92%. The Financials and Telecommunications industries were the first and second most active sectors representing 54.6% and 36% of activity in the market during the first sixth months of 2010. WestLB (US$ 2.2 billion), HSBC (US$ 1.2 billion) and Mitsubishi UFJ Financial (US$ 959 million) were the top three institutions during the period under review. The largest Middle Eastern loan for the second quarter 2010 was the US$ 2 billion book run by BNP Paribas, DBS Bank, Qatar National Bank, Societe Generale, and RBS for Qatari telecoms outfit QTel.
