Dubai: Middle Eastern investment banking fees reached $237.9 million (Dh873.8 million) during the second quarter of 2014, a 72 per cent increase from the previous quarter, according to the quarterly investment banking fees figures from Thomson Reuters.
Despite the quarterly uptick, fees earned during the first half of 2014 registered a 19 per cent drop from the same period in 2013 to $375.9 million.
Fees from completed mergers and acquisitions (M&A) transactions totalled $110.9 million during the first six months of 2014, up 3 per cent from the same period in 2013, and accounted for 29 per cent of this year’s overall Middle Eastern fee pool.
Equity capital markets (ECM) underwriting fees totalled $99.4 million, up 187 per cent from the amount registered during the first half of 2013 ($34.6 million), accounting for 26 per cent of the total fee pool.
“Middle Eastern equity and equity-related issuance during the first half of 2014 totalled $2.9 billion, a 6 per cent increase in activity from the same period in 2013,” said Nadim Najjar, managing director of Thomson Reuters, Middle East & North Africa.
Fees from debt capital markets (DCM) underwriting declined 39 per cent year-on-year to $64.5 million while syndicated lending fees fell 53 per cent to $101.2 million.
Among the investment banks operating in the region Lazard topped investment banking free incomes with $29.43 million.
“Lazard earned the most investment banking fees in the Middle East during the first half of 2014 with a 29 per cent share of the total fee pool. Lazard topped the Middle Eastern completed M&A fee league table, while Qatar National Bank was first in the ECM underwriting fee rankings. HSBC and National Bank of Abu Dhabi took the top spots in the Middle Eastern DCM and loans fee rankings, respectively,” Najjar said.
The first half of the year saw a 4 per cent decline in M&A deals to $19.7 billion compared to the same period last year. Domestic and inter-Middle Eastern M&A declined 49 per cent from the first half of 2013 to $6.9 billion during the first six months of 2014. While the inbound M&A deals declined 19 per cent to$1.3 billion, outbound M&A drove activity was up 83 per cent. Bank of America Merrill Lynch topped the M&A adviser ranking with 20 per cent market share.
In ECM deals, seven initial public offerings raised $1.5 billion and accounted for 53 per cent of activity in the region. Qatar National Bank took first place in the 1H 2014 Middle Eastern ECM ranking.
Debt issuance slowed down in the first half of the year.
“Dragged down by a slow first quarter, bonds issued during the first half of 2014 fell 16 per cent from the same period last year to $22 billion. Investment grade corporate debt totalled $16.4 billion and accounted for 90 per cent of the first half total,” said Najjar.
The UAE topped issuance accounting for 55 per cent of activity, followed by Saudi Arabia with 28 per cent. International Islamic debt issuance declined 17 per cent year-on-year to reach $14.1 billion, the lowest first half total since 2011. HSBC took the top spot in the Middle Eastern bond ranking during the first half of 2014 with a 14 per cent share of the market.”