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Middle Eastern debt issuance reached $77.8 billion in 2016

Staff Writer | January 21, 2017
Middle Eastern investment banking fees reached $820.8 million during 2016, an 18 percent increase compared to fees recorded during 2015 and the highest annual fee total in the region since 2008.
Dubai bank
Banking fees   The annual investment banking analysis
This is according to the annual investment banking analysis for the Middle East region, by leading business information provider Thomson Reuters.

"Bolstered by Saudi Arabia’s $17.2 billion bond sale in October, Middle Eastern debt issuance reached $77.8 billion during 2016, a 145 percent increase compared to the value raised during 2015 and by far the highest annual total in the region since records began in 1980," said Nadim Najjar, Managing Director, MENA, Thomson Reuters.

Saudi Arabia was the most active nation in the Middle East accounting for 29 percent of overall activity, followed by United Arab Emirates and Qatar. International Islamic debt issuance increased 24 percent year-on-year to reach $37.9 billion during 2016.

HSBC took the top spot in the Middle Eastern bond ranking during 2016 with 13.3 percent share of the market, while CIMB Group took the top spot for Islamic DCM issuance with a 13.5 percent share.

"The value of announced M&A (mergers and acquisitions) transactions with any Middle Eastern involvement reached $46.9 billion during 2016, 16 percent less than the value recorded during 2015 and the lowest annual total in the region since 2013.

Middle Eastern equity and equity-related issuance totalled $2.6 billion during 2016, a 55 percent decline year-on-year and the lowest annual issuance total in the region since 2004," he added.

In respect to investment banking fees, syndicated lending fees increased 50 percent year-on-year to $444.0 million, a nine-year high, while debt capital markets fees more than doubled to $134.1 million.

Fees generated from completed M&A transactions totalled $200.9 million during 2016, a 20 percent decrease compared to 2015 and the lowest annual total for M&A fees in the region since 2012. Equity capital markets underwriting fees declined 51 percent to $41.8 million, a 12-year low.

Syndicated lending fees accounted for 54 percent of the overall Middle Eastern investment banking fee pool, the highest annual share since 2004.

Completed M&A advisory fees accounted for 24 percent of fees in the region, while debt and equity capital markets underwriting fees accounted for 16 percent and 5 percent, respectively.

HSBC earned the most investment banking fees in the Middle East during 2016, a total of $43.4 million for a 5.3 percent share of the total fee pool. Rothschild topped the completed M&A fee rankings with 16.0 percent of advisory fees, while HSBC was first for DCM underwriting.

ECM underwriting was led by SambaCapital with $13.0 million in ECM fees, or 31 percent share. Sumitomo Mitsui Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking.

As for M&A deals, the $14.1 billion merger of National Bank of Abu Dhabi and First Gulf Bank was the largest deal to be announced in the region during 2016, it is the largest domestic Middle Eastern deal of all time.

Boosted by this deal, domestic and inter-Middle Eastern M&A increased 151 percent year-on-year to $22.0 billion. Outbound M&A activity fell 24 percent from 2015 to reach $14.7 billion.

Overseas acquisitions by Qatar accounted for 33 percent of Middle Eastern outbound M&A activity, while acquisitions by companies based in Saudi Arabia and United Arab Emirates accounted for 28 percent and 20 percent, respectively. Inbound M&A fell 30 percent to $4.0 billion.