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ME equity issues surge to $4bn in Q2

Dubai, July 8, 2012

The equity capital markets issuance in the Middle East reached $4 billion during the second quarter of 2012, nearly four times the value seen in the previous quarter, according to a new report.

The Middle East equity capital sector witnessed solid activity in the first half which took the total issuance volume to $5 billion, said Thomson Reuters in its 2012 investment banking analysis for the region which was released today.
The merger and acquisition (M&A) activity reached $8.5 billion during the second quarter, up 45 per cent over the previous quarter, thus marking the strongest quarter since the Q1 of 2010, the report stated.

Russell Haworth, the managing director (Mena) at Thomson Reuters, said, “Investment banking has seen strong activity across Middle Eastern markets during the second quarter. This is clearly evident by the strong M&A activity which took the total value to $14.3 billion by the first half of 2012.

'This was an increase of 137 per cent over the same period in 2011 when activity totaled $6 billion,' he added.

Equity capital markets activity during the first half  totaled $5 billion, down 40 per cent from the first six months of 2011. The top Middle Eastern ECM transaction was a $1.9 billion follow-on from Qatari telecoms company Qtel.

Bolstered by this deal, Telecoms was the most active sector in the Middle East during the first half of 2012 with 44 per cent, followed by the Financials sector with 26 per cent. As sole-lead bookrunner for Qtel's follow-on offering, Qatar National Bank topped the Middle Eastern Equity Capital Markets ranking.

According to Haworth, the financials was the most targeted industry in the Middle East M&A activity with $4.3 billion or 30 per cent of the activity so far during 2012, followed closely by Telecoms with 29 per cent.

Egypt, he said, was the most active Middle Eastern country, based on target, with $4 billion for 28 per cent of first half activity.

Credit Suisse topped the Any Middle Eastern Involvement M&A Ranking during the first half with $4.78 billion, while HSBC took second place with $4.13 billion.

HSBC topped the regional target M&A Ranking, controlling 29 per cent of the market. The largest deal so far this year was National Bank of Kuwait’s $2.1 billion offer for Kuwaiti Islamic lender, Boubyan Bank in June, said Thomson Reuters in its report.

The Middle Eastern debt issuance reached $6 billion during the second quarter, down 45 per cent from the strong first quarter total of $10.9 billion. It took first half activity to 16.9 billion, up 51 per cent on the same period in 2011. 

According to the report, the syndicated lending in the Middle East plunged 98 per cent to reach just $186.8 million, compared to $10.2 billion last year. It was the slowest first half in more than a decade, it added.

As book runner on Citadel Capital's $175 million refinancing loan in January, Citi took the top spot in the Middle Eastern Loan Bookrunner ranking for first half 2012, the report stated.

The Middle Eastern investment banking fees hit $234.8 million, up 5 per cent over the first half last year when fees reached $223.7 million.

M&A fees totaled $59.6 million during the first half, accounting for 25 per cent of the overall fee pool. M&A fees were down 19 per cent compared to the same period in 2011 ($74 million).

According to Thomson Reuters, the debt capital markets fee activity totaled $54.9 million, more than double the $25.1 million seen during the first half last year. Fees from syndicated lending and equity capital markets totaled $61.3 million and $59 million, respectively. 

Deutsche Bank topped the Middle Eastern DCM fee rankings for the first half of 2012, earning 10 per cent of the fees. HSBC topped the Middle Eastern M&A fee rankings with $5.3 million, while Qatar National Bank and Saudi British Bank topped the equity capital markets and syndicated lending fee league tables, respectively.-TradeArabia News Service

Tags: Middle East | merger | Thomson Reuters | equity capital |

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