Investment banks receive $416.8m in Middle Eastern fees in H1

Investment banks received $416.8m in fees for Middle Eastern transactions during the first half of the year, an 8 per cent increase increase on the same period in 2015, according to a new analysis.

The Thomson Reuters/Freeman Consulting report noted the sum represented the strongest period for investment banking fees since 2014.

In comparison fees from equity and equity-related issuance were down 80 per cent on the first half of the previous year to $1.1bn, representing the slowest opening period for equity capital issuance since 2004.

Fees from completed M&A transactions totalled $104m, a 24 per cent decrease from Q2 2015 and the slowest half since 2012, according to the study. Equity capital markets underwriting also declined 77 per cent compared to last year.

However, syndicated lending fees accounted for its highest share of the fee pool since 2003, at just over 55 per cent, and debt capital fees were up 48 per cent to $63.7m.

Debt and equity capital markets underwriting also increased significantly from 6 per cent during the first quarter of the year to 30 per cent during the second quarter.

Thomson Reuters Middle East and North Africa managing director Nadim Najjar said it was the slowest six months for deal making in the region since 2014, with M&A transactions with any Middle Eastern involvement declining 29 per cent to $18.7bn.

However, it was a record first half for debt issuance.

“Bolstered by a record-breaking second quarter, Middle Eastern debt issuance reached $32.9bn during the first half of 2016, a 45 per cent increase compared to the value raised during the first half of 2015 and the strongest first half for DCM issuance since records began in 1980,” he said.

US bank JP Morgan received the most in investment banking fees in the Middle East during the first half at $20.6m, or 4.9 per cent market share, according to the study.

Elsewhere Rothschild topped the list for M&A fee rankings with 19.7 per cent of advisory fees and HSBC was first for debt capital markets underwriting.

Equity capital markets underwriting was lead by Emirates NBD at $44m or 24.4 per cent share.

Mitsubishi UFJ Financial Group topped the list for syndicated loan fees with $12.8m or 5.6 per cent of the market.

Thomson Reuters said outbound M&A activity fell 22 per cent year-on-year in the first half to $9.2bn, with overseas acquisitions from Saudi Arabia, the UAE and Qatar accounting for 42 per cent, 31 per cent and 11 per cent respectively.

Inter-Middle East M&A declined 22 per cent to $6.1bn and inbound M&A fell 76 per cent to $809.8m, a seven-year low
The largest deal during the period was a $3.5bn investment into ride sharing service Uber by the Saudi Public Investment Fund.

In equity capital markets, six IPOs raised $379.7m and accounted for 35 per cent of first half activity in the region, in comparison to 65 per cent from follow-on offerings.

While in debt capital markets Qatar was the most active nation, with 41 per cent of overall activity, followed by he UAE and Oman.

International Islamic debt issuance increased 10 per cent year-on-year to reach $19.4bn, the largest first half issuance since records began.