Dubai: Middle Eastern & North African (Mena) investment banking fees declined six per cent year on year in the first quarter of 2018 to $243.1 million (Dh892 million) recorded during the same quarter last year due to subdued capital market activity, according to the latest data from Thomson Reuters.
Debt capital markets (DCM) underwriting fees totalled $62.9 million, down 18 per cent. Equity capital markets (ECM) fees decreased 46 per cent to $8.4 million. Fees generated from completed M&A transactions totalled $15.1 million, a 82 per cent decrease from last year and the lowest annual start since 2004.
“Debt capital markets fees accounted for 26 per cent of the overall Middle Eastern & North African investment banking fee pool. Despite being down 18 per cent year-on-year, this was the second highest start of the year in the region since our records began in 2000,” said Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters.
Despite showing a 25 per cent decrease compared to the first quartet 2017, debt issuance in the Middle Eastern and North African region is at its second highest level since our records began, reaching $23.9 billion so far this year.
The UAE was the most active nation in the region accounting for 33.3 per cent of activity by value, followed by Oman with 29 per cent. International Islamic debt issuance increased nine per cent year on year in the first quarter of 2018.
Syndicated loans
Mena region’s equity and equity-related issuance totalled $1.4 billion during first quarter of 2018, a 158 per cent increase year-on-year. Out of the six transactions announced so far this year, five have been follow-on offerings, raising a total of $1.3 billion and accounting for 92 per cent of the quarter’s ECM activity in the region.
Standard Chartered currently leads in the Middle Eastern and North African bond ranking for the first quarter of 2018 with a 16 per cent share of the market, while CIMB Group Holdings took the top spot for Islamic DCM issuance with a 15 per cent share.
Syndicated loans reached a record high of $156.6 million, up 87 per cent from first quarter of 2017. Syndicated lending fees accounted for 64 per cent, the highest share of the regional fee pool since our records began in 2000.
The share of completed M&A advisory fees fell to its lowest level, only accounting for six per cent of the market. Equity capital markets underwriting fees accounted for three per cent the lowest since 2011. HSBC took the top spot in the Middle Eastern syndicated loans fee ranking.
“The value of announced M&A transactions with any Middle Eastern & North African involvement reached $13.9 billion during the first quarter of 2018, seven per cent more than the value recorded during the first quarter of 2017 and a three-year high,” Najjar said. “Deals with a Middle Eastern and North African target reached an eight-year high rising to $11.2 billion, up 50 per cent from the same period in 2017 while inter-MENA or domestic deals reached a five-year high, also up 42 per cent from year-on-year.”
Among the leading institutions, Standard Chartered earned the most investment banking fees in the Middle East & North Africa during the last quarter with a total of $25.8 million for a 10.6 per cent share of the total fee pool; also leading in the DCM underwriting league table.
Moelis & Co topped the completed M&A fee rankings with 23.2 per cent of advisory fees, while ECM underwriting was led by Al Rajhi Banking & Investment with $3.1 million in ECM fees, or a 19.1 per cent share. HSBC took the top spot in the Middle Eastern syndicated loans fee ranking.
