Mideast IPOs raise $4bn in nine months
Dubai, October 22, 2013
The Middle Eastern companies raised a total of $4 billion from 15 issues in first nine months, down 36 per cent compared to $6.2 billion raised in the same period last year, said a report by Thomson Reuters.
During the period, the Middle Eastern investment banking fees surged 22 per cent to hit $535.9 million compared to $439 million last year, stated Reuters in its regional investment banking analysis for the first nine months of 2013.
According to the report, the value of announced Mergers and Acquisitions (M&A) transactions with any Middle Eastern involvement reached $29 billion during the first nine months of 2013.
In his comments, Russell Haworth, the managing director of Mena at Thomson Reuters, said: “This is the best first nine months for fees in the region since 2009. Fees from completed M&A transactions fees totaled $150.2 million, up 37 per cent from $109.3 last year, and accounting for 28 per cent of the overall fee pool.
"The fees from debt capital markets underwriting in the region hit $112.7 million, up 75 per cent from $64.5 million during the same period last year, and marking the best first nine months for DCM fees in the Middle East of all time," he noted.
According to Haworth, the Middle Eastern debt issuance reached $4.5 billion during the third quarter.
"Equity capital markets underwriting fees totaled $54.2 million, down 42 per cent from the same period last year ($93.9 million) for the lowest first nine month total since 2004. Fees from syndicated lending increased 28 per cent to $218.7 million, accounting for 41 per cent of the first nine month fee total," the expert stated.
Haworth pointed out that HSBC earned the most investment banking fees in the Middle East during the first nine months netting a total of $35.9 million for a 6.7 per cent share of the total fee pool.
"Morgan Stanley topped the Middle Eastern completed M&A fee league table with an 8.8 per cent share. JP Morgan took first place in the Middle Eastern ECM fee ranking with a 14 per cent cut, while Deutsche Bank topped the DCM fee ranking," he added.
On the M&A sector, Haworth said the value of announced transactions with any Middle Eastern involvement reached $29 billion during the period, three per cent more than the $28.2 billion witnessed in the region during the same period last year, and marking the best first nine months since 2010.
Bolstered by the $7.5 billion merger of two UAE state-owned aluminium producers, materials was the most targeted industry, accounting for 34 per cent of activity.
"Inbound M&A totalled $5.5 billion, up 5 per cent from the same period last year and marking the best first nine months for inbound M&A in the region since 2006. Egypt was the most popular target, while China registered the highest value of inbound M&A deals targeting the Middle East," explained Haworth.
He pointed out that the outbound M&A fell 38 per cent from this time last year to total $6 billion, marking the lowest first nine month total since 2004. "As sole advisor on the aluminium merger, Morgan Stanley topped the third quarter announced any Middle Eastern involvement M&A league table with $10.1 billion," the expert added.
Haworth noted the initial public offerings, worth a combined total of $2.2 billion, accounted for 54 per cent of ECM activity in the region.
Five follow-on offerings totalling $1.4 billion accounted for 35 per cent, while convertible issuance accounted for the remaining 12 per cent. The largest Middle Eastern ECM transaction so far during 2013 was Asiacell Telecommunication’s IPO in February, which raised $1.3 billion.
The UAE was the most active nation, while telecoms was the most active sector in the Middle East during the first nine months of 2013. As sole bookrunner on the Asiacell IPO, Rabee Securities currently leads the third quarter Middle Eastern ECM ranking with 32 per cent of the market.
Haworth pointed out that the Middle Eastern debt issuance reached $4.5 billion during the third quarter, down 68 per cent from the previous quarter and marking the lowest quarterly total in the region since the third quarter.
"Despite the slow third quarter, debt issuance in the region totaled $30.5 billion during the first nine months, a 22 per cent increase over the same period last year, and the strongest first nine months in the region on record," he noted.
The investment grade corporate debt totalled $21.9 billion and accounted for 72 per cent of Middle Eastern DCM activity so far this year, the report stated.
The most active nation for Middle Eastern debt issuance was the UAE with 40 per cent, followed by Saudi Arabia with 23 per cent, it added.
Haworth said international Islamic debt issuance reached $20 billion from 56 issues during the first nine months of 2013, a decrease of 29 per cent from the same period in 2012. "HSBC took the top spot in the Middle Eastern bond ranking during the first nine months with a 16.5 per cent share of the market,” he added.-TradeArabia News Service