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Middle Eastern debt issuance reaches US$57.4 billion during the first half of 2017– an increase of 53% year-on-year

Value of announced M&A transactions with Middle Eastern involvement reached US$20.1 billion in H1 2017 – an 8% increase from H1 2016

Dubai - United Arab Emirates

Thursday, July 13, 2017
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Thomson Reuters, the world's leading source of intelligent information for businesses and professionals, today released the quarterly investment banking analysis for the Middle East.

According to estimates from Thomson Reuters, Middle Eastern investment banking fees totalled an estimated US$462.1 million during the first six months of 2017, 15% less than the value of fees recorded during the same period in 2016. Debt capital markets underwriting fees totalled US$136.9 million, up 88% year-on-year and the highest first half total in the region since our records began in 2000.

Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said; “Equity capital markets fees increased 36% to US$39.7 million. Fees generated from completed M&A transactions totalled US$98.0 million, a 20% decrease from last year and the lowest first six month total since 2012. Syndicated lending fees declined 41% year-on-year to US$187.6 million, a three year low.”

“Debt capital markets fees accounted for 30% of the overall Middle Eastern investment banking fee pool, the highest first half share since 2001. Syndicated lending fees accounted for 41%, while completed M&A advisory fees and equity capital markets underwriting fees accounted for 21% and 9%, respectively,” he added.

HSBC earned the most investment banking fees in the Middle East during the first six months of 2017, a total of US$29.2 million for a 6.3% share of the total fee pool. UBS topped the completed M&A fee rankings with 20% of advisory fees, while JP Morgan was first for DCM underwriting. ECM underwriting was led by EFG Hermes with US$12.4 million in ECM fees, or a 31% share. Industrial and Commercial Bank of China took the top spot in the Middle Eastern syndicated loans fee ranking.

The value of announced M&A transactions with any Middle Eastern involvement reached US$20.1 billion during the first six months of 2017, 8% more than the value recorded during the first half of 2016. US chemical maker Tronox’s US$2.2 billion acquisition of a Saudi Arabian titanium dioxide business is the largest deal to be announced so far during 2017, boosting inbound M&A to US$6.6 billion, the highest first half total in 11 years. Domestic and inter-Middle Eastern M&A declined 46% year-on-year to US$2.8 billion, while outbound M&A activity dropped 13% to US$8.3 billion. Energy & Power deals accounted for 41% of Middle Eastern involvement M&A by value, while the Financial sector dominated by number of deals. Six of the largest ten deals announced in the region so far during 2017 were energy deals, the largest being Saudi Aramco’s Saudi Refining unit’s US$2.2 billion payment to Royal Dutch Shell in the breakup of their oil refining joint venture Motiva Enterprises.

HSBC topped the H1 2017 announced any Middle Eastern involvement M&A league table. Morgan Stanley and Citi took second and third places, respectively.

Middle Eastern equity and equity-related issuance totalled US$1.0 billion during the six months of 2017, a 72% decline year-on-year and the lowest annual start for issuance in the region since 2004. Five initial public offerings raised US$603.3 million and accounted for 60% of first half ECM activity in the region. Dubai-based oil and gas production services firm ADES International Holding raised US$243.5 million on the London Stock Exchange in May, the largest IPO in the region so far this year. Follow-on offerings accounted for the remaining 40% of activity. The National Bank of Kuwait took first place in the H1 2017 Middle Eastern ECM ranking with a 24% market share.

Bolstered by Saudi Arabia’s US$9.0 billion international Islamic bond in April and Kuwait’s US$8.0 billion debut international bond sale in March, Middle Eastern debt issuance reached US$57.4 billion during the first half of 2017, 53% more than the proceeds raised during the same period last year and by far the best annual start in the region since records began in 1980. Saudi Arabia was the most active nation in the Middle East accounting for 21% of activity by value, followed by Kuwait with 18%. International Islamic debt issuance increased 50% year-on-year to reach US$31.4 billion so far during 2017.

JP Morgan took the top spot in the Middle Eastern bond ranking during the first half of 2017 with a 13.4% share of the market, while HSBC took the top spot for Islamic DCM issuance with a 12.3% share.