The equity capital markets (ECM) issuance in the Middle East region grew 47 per cent to reach $10.2 billion in 2011 compared to $6.9 billion the previous year, according to Thomson Reuters.

Even though the ECM issuance witnessed growth during the full year, the overall investment banking fees dropped by $271.6 million, said Thomson Reuters in its 2011 investment banking analysis for the region released today.
 
The review examines the performance of the Middle East investment banking industry in the region’s debt and capital markets, both conventional and Islamic.

It also includes dedicated regional rankings of banks and advisors operating in the Middle East based on their deals and fees.

Russell Haworth, managing director of Financial Services, Middle East & Africa at Thomson Reuters, pointed out that the major factor adversely affecting investment banking in the Middle East this year was the Arab Spring.

'This was clearly illustrated by the $271.6 million fall in investment banking fees, reflecting the decline in overall activity throughout the region compared with 2010,' he remarked.

According to him, the investment banking fees in the Middle East only reached $406.8 million during the whole year, which was a 40 per cent decline compared to 2010, when fees were calculated at $678.4 million.
The fees for mergers and acquisitions (M&A), which accounted for 54 per cent of the overall fee pool, totaled $221.2 million during the 12-month period, down 37 per cent from 2010.

Debt capital markets (DCM) fee activity too fell 66 per cent to $55.6 million in 2011. Fees from syndicated lending and ECM totaled $47.8 million and $82.1 million respectively.

According to the review, HSBC held the top spot in the Middle Eastern DCM and the syndicated loan fee rankings for 2011 earning $8.6 million and $5.2 million respectively.

Goldman Sachs topped the M&A fee rankings during the year with $14 million. Bank of America Merrill Lynch dominated the scene controlling 13 per cent of ECM fees in the Middle East.

The Middle Eastern-targeted M&A activity witnessed a  43 per cent drop hitting S$10.1 billion for the full year compared to $17.7 billion in 2010.

The real estate remains the most targeted industry in the Middle East with $2.6 billion. However, the activity was down 26 per cent from $4.8 billion last year.

The UAE was the most active Middle Eastern country with $4 billion, for 39 per cent of annual activity. BNP Paribas topped the Any Middle Eastern Involvement M&A ranking with $10.1 billion, said the Thomson Reuters review.

RBS topped the Middle Eastern target M&A ranking with $980 million, bolstered by advisory work for Aujan Industries-Beverage.

In ECM issuance follow-ons accounted for 62 per cent of the year’s activity and the top Middle Eastern ECM transaction was $3.5 billion follow-on from Qatar National Bank (QNB).

According to the review, financials was the most active industry in the Middle East during the year (70 per cent of all activity), with real estate, materials and energy and power sectors together accounting for 24 per cent of ECM activity.

Al Rajhi Banking & Investment topped the Middle Eastern equity capital markets rankings as sole-lead book runners for Saudi-based Jabal Omar Development’s $688 million follow-on offering, the review stated.

Middle Eastern debt issuance reached $29.5 billion during 2011, down 20 per cent from 2010. Investment grade corporate debt accounted for 35 per cent of all Middle Eastern DCM activity in 2011, it added.-TradeArabia News Service