Mena investment banking fees up 15 per cent in nine months

Dubai: Middle East and North Africa (Mena) investment banking fees totalled an estimated $651.4 million in the first 9 months of 2019, up 15.2 per cent compared to the same period in 2018, according to data from Refinitiv, a provider of financial markets data.

Debt capital markets underwriting fees totalled $148.7 million, up 1.2 per cent year-on-year to the second highest level on record. Equity capital markets fees decreased 56.6 per cent to $24.1 million; a 10-year low.

Fees generated from completed mergers and acquisition (M&A) transactions totalled $210.3 million, a 218 per cent increase from last year to an 11-year high. Syndicated loan fees reached $268.4 million, down 9.6 per cent year to date.

Debt capital markets fees accounted for 23 per cent of the overall Mena investment banking fee pool while syndicated lending fees accounted for 41 per cent. The share of completed M&A advisory fees up from 12 per cent to 32 per cent, to reach a 4-year high. Equity capital markets underwriting fees accounted for 4 per cent, down to a 10-year low.

Among the financial institutions, HSBC earned the most investment banking fees in the Mena regions far during 2019, a total of $70.3 million for a 10.8 per cent share of the total fee pool, followed by JP Morgan and Standard Chartered in second and third place, respectively.

M&A surge

The value of announced M&A transactions with any Mena involvement currently stand at an all-time high, up 160 per cent reaching $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 $104.7 billion, $88.2 billion and $16.4 billion, respectively.

Data showed, outbound M&A volumes fell 29 per cent so far this year to $9.2 billion. Energy and power deals currently account for 78 per cent of Mena target M&A by value, followed by the financial sector with a 14 per cent market share. HSBC currently leads regional league table, followed by JP Morgan and Goldman Sachs in second and third place, respectively.

Capital market

Mena equity and equity-related issuance totalled $1.7 billion so far during 2019, a 57 per cent decrease year-on-year to the lowest level since 2004. With $1 billion, initial public offerings (IPOs) represent 61 per cent of the region’s equity capital market (ECM) issuance, up from 25.1 per cent year to date.

Morocco stands out as the top issuing nation with $1 billion raised in equity issuance, followed by Saudi Arabia and Kuwait. At a sector level, Real Estate account for 39 per cent of the region’s issuance with financials coming in second place. Arabian Centres Co’s $660 million raised through an IPO, stands out as the biggest deal in the region so far this year.

Mena debt issuance currently stands at a $77.5 billion, up 5 per cent compared to first 9 months of 2018. Sovereign issuances were up 8.2 per cent year to date compared to the same period last year

Saudi Arabia leads Mena issuance by country with $26.6 billion raised in proceeds so far this year, followed by the UAE and Qatar. Raising $12 billion each, Qatar sovereign bond and Saudi Arabian Oil Co corporate issues stand out as the two biggest deals so far this year.