Wednesday 24 / April / 2024
Muscat: The value of announced merger and acquisition (M&A) transactions in the Middle Eastern & North African (Mena) involvement reached an eight-year high of US$33.9 billion in the second quarter of 2018, an increase of 74 per cent compared to the same period in 2017.
Deals with Mena targets reached an all-time high of $21.3 billion, up 110 per cent from the same period in 2017, while inter-Mena or domestic deals reached a five-year high after rising 232 per cent year-on-year, according a new report.
Driven by Saudi British Bank’s acquisition of the entire shares of capital of Alawwal Bank for $5 billion, Mena inbound M&A currently stands at an all-time high. On the other hand, outbound M&A transactions decreased from $6.9 billion in the second quarter of 2017 to $6.6 billion so far this year, according to Thomson Reuters, the world's leading source of intelligent information for businesses and professionals.
Energy and power deals accounted for 32.8 per cent of Mena involvement M&A by value, followed by the financial sector with a 30.2 per cent market share from 58 transactions, 18 more than the 40 recorded in the energy and power industry. Goldman Sachs currently leads the second quarter 2018 Mena involvement M&A league table, followed by JP Morgan and Credit Suisse in second and third place, respectively.
As for equity capital markets (ECM), Mena equity and equity-related issuances totalled $3 billion during the second quarter of 2018, representing a 68 per cent increase year-on-year. Out of the 15 transactions announced so far this year, 9 have been follow-on offerings, raising a total of $1.8 billion and accounting for 58.5 per cent of the first-half ECM activity in the region. Orange Egypt’s follow-on offerings raised $866 million and stands out as the biggest deal so far in 2018. EFG Hermes leads the Mena ECM ranking with a 24.4 per cent market share, followed by JP Morgan and Goldman Sachs in second and third place, respectively.
Debt Capital Markets have seen significant activity in the first half of this year. Despite a 2 per cent decrease compared to the second quarter of 2017, debt issuance in the Mena region is at its second-highest level since records began, reaching $59.4 billion so far in 2018. Qatar was the most active nation in the region, accounting for 28.5 per cent of activity by value, followed by Saudi Arabia with 21.8 per cent.
International Islamic debt issuances decreased by 44 per cent compared to the second quarter of 2017, totalling $19.3 billion so far in 2018. Standard Chartered currently leads in the Mena bond ranking for the second quarter of 2018 with a 14.9 per cent share of the market, while CIMB Group Holdings took the top spot in the Islamic Debt Capital Markets issuance ranking with a 15.5 per cent share.
According to Thomson Reuters, Mena region investment banking fees totalled an estimated $472.3 million in the second quarter of 2018, 7 per cent less than the value of fees recorded during the same period last year.
“Debt capital market underwriting fees totalled $140.6 million, down 7 per cent year-on-year and the second highest start of the year for the region since our records began in 2000,” said Nadim Najjar, Managing Director for the Middle East and North Africa at Thomson Reuters. “Equity capital markets fees increased 21 per cent to $56.4 million.”
Fees generated from completed M&A transactions totalled $59.6 million, a 52 per cent decrease from last year and the lowest first half figure since 2012. Syndicated loan fees reached $215.7 million, up 17 per cent from the second quarter of 2017.
Debt capital market fees accounted for 30 per cent of the overall Mena investment banking fee pool, the second highest market share since records began in 2000. Syndicated lending fees accounted for 46 per cent, while the share of completed M&A advisory fees fell to its lowest level, accounting for only 13 per cent of the market. Equity capital market underwriting fees, meanwhile, accounted for 12 per cent.
Citi earned the most investment banking fees in the Mena during the second quarter of 2018, with a total of $44.8 million for a 9.5 per cent share of the total fee pool, enough to take top spot in the M&A underwriting league table. DNB topped the completed ECM fee rankings with 14.2 per cent of underwriting fees. DCM underwriting was led by Standard Chartered with $24.2 million in ECM fees, or a 17.2 per cent share, while JP Morgan took the top spot in the Middle Eastern syndicated loans fee ranking.
