MENA M&A Transactions US$120.6 Billion In The First Nine Months Of 2019

Refinitiv today released the 2019 third quarter investment banking analysis for the Middle East. According to the report, Middle Eastern and North African investment banking fees totalled an estimated US$651.4 million so far during 2019, 15.2% more than the value of fees recorded during the first nine months of 2018 and a 3-year high.

Debt capital markets underwriting fees totalled US$148.7 million, up 1.2% year-on-year to the second highest level on record. Equity capital markets fees decreased 56.6% to US$24.1 million; a 10-year low. Fees generated from completed M&A transactions totalled US$210.3 million, a 218% increase from last year to an 11-year high. Syndicated loan fees reached US$268.4million, down 9.6% from YTD 2018.

Debt capital markets fees accounted for 23% of the overall MENA investment banking fee pool while Syndicated lending fees accounted for 41%. The share of completed M&A advisory fees up from12% to 32%, to reach a 4-year high. Equity capital markets underwriting fees accounted for 4%, down to a 10-year low. HSBC earned the most investment banking fees in the Middle East and North Africa so far during 2019, a total of US$70.3 million for a 10.8% share of the total fee pool, followed by JP Morgan and Standard Chartered in second and third place, respectively.

The value of announced M&A transactions with any Middle Eastern and North African involvement currently stand at an all-time high, up 160% from YTD 2018 reaching US$120.6 Billion so far this year. Deals with a MENA target, inter-MENA or domestic and inbound deals all stand at all-time high volumes with US$104.7, US$88.2 and US$$16.4 up 289%, 584% and 18% from YTD last year, respectively. On the other hand, outbound volumes fell 29% from YTD last year to US$9.2 billion so far this year. Energy and Power deals currently account for 78% of MENA target M&A by value, followed by the Financial sector with a 14% market share. HSBC currently leads in the 9M any MENA involvement league table, followed by JP Morgan and Goldman Sachs in second and third place, respectively.

MENA equity and equity-related issuance totalled US$1.7 billion so far during 2019, a 57% decrease year-on-year to the lowest level since YTD 2004. With US$1 billion, IPOs represent 61% of the region’s ECM issuance, up from 25.1% during YTD last year. Morocco stands out as the top issuing nation with US$1 billion raised in ECM issuance, followed by Saudi Arabia and Kuwait. At a sector level, Real Estate account for 39% of the region’s issuance with Financials coming in second place. Arabian Centres Co US$660 million raised through an IPO, stands out as the biggest deal in the regionsofar this year.

Up 5% compared to the first nine months of 2018, MENA debt issuance currently stands at a US$77.5 billion. Sovereign issuanceup8.2% from YTD last year currently standing at the second highest level on record. Saudi Arabia leads MENA issuance by country with US$26.6 billion raised in proceeds so far this year, followed by the UAE and Qatar. Raising US$12 billion each, Qatar sovereign bond and Saudi Arabian Oil Co corporate issues stand out as the two biggest deals so far this year.