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Fees, deals and loan activity increase in first quarter 2010
Thomson Reuters Middle East publishes investment banking league tables.
April 10, 2010 1:23 by Ben Flanagan
Dubai, 10 April, 2010: The Middle Eastern Investment Banking Industry has witnessed a dramatic improvement in the first quarter of 2010 with fees, M&A volume, equity and debt issuance and loan activity increasing significantly compared to the first quarter of 2009, according to analysis by Thomson Reuters.
Managing Director of Thomson Reuters Middle East & Africa, Basil Moftah commented, “After a very tough 2009, the Middle East Investment Banking industry seems to have started the year in a strong position with the number of deals announced showing real signs of confidence returning to the market”.
Thomson Reuters released its first quarter 2010 review of the Middle East investment banking industry, which covers the region’s M&A, debt and equity capital markets. The review includes rankings of banks and advisors operating in the Middle East based on deal activity and fees and provides an independent assessment of the market.
Analysis of the Thomson Reuters Middle East Investment Banking data for the first quarter of 2010 shows that compared with the first quarter of 2009:
• The volume of Middle Eastern targeted M&A more than tripled during the first quarter with US$10.7billion in deals announced compared with US$2.5 billion in Q1 2009
• Investment banking and advisor fees rose 11% to reach US$175.9 million in the first quarter
• Middle Eastern debt issuance increased more than seven times during the first quarter of 2010 with US$4.5 billion up from US$0.6 billion
• Equity issuance rose 67% to reach US$3.7 billion.
• Loan Activity in the first quarter doubled to US$7.4 billion in the first quarter compared with 2009.
The analysis shows that M&A fees account for 49% of the activity while ECM fees accounted for 28% of total fees and syndicated loans 12%. Deutsche Bank holds the top spot in the Middle Eastern DCM fee ranking for the first quarter of 2010, while the Central Bank of Libya topped the ECM Ranking, JP Morgan lead the M&A fee ranking and Standard Chartered topped the fee ranking for Syndicated Loans.
The first quarter of 2010 was the busiest for Middle Eastern M&A since the fourth quarter of 2007. The main areas for deals were in the real estate and industrial sectors, with the UAE driving most of the M&A activity overall. The top Middle Eastern targeted deal for the first quarter of 2010 was the US$2.5 billion acquisition of certain infrastructure and property assets from Aldar Properties by the Abu Dhabi government. The second biggest transaction announced was the US$1.7 billion merger of Qatar Real Estate Investment Co QSC and Barwa Real Estate Co QSC. Standard Chartered topped the M&A Any Middle Eastern involvement Ranking with US$11.0 billion while Goldman Sachs and JP Morgan tied for first place in the Middle Eastern target ranking with US$1.7 billion.
The first quarter saw a seven-fold increase (year on year) in Middle Eastern debt issuance with agency, supranational and sovereign issuance accounting for 57% of activity. The top Middle Eastern bond issued during the first quarter was by Bahrain, which raised US$1.2 billion on March 22.
In the equity capital markets during the first quarter of 2010, issuance increased 67% year on year with follow-ons being the most active issue type. The most active industry in issuing equity was Financials, followed by telecoms and real estate.
The financials sector was also the most active for syndicated loans in the region, followed by telecommunications. National Bank of Abu Dhabi, Santander, HSBC and Mitsubishi UFJ Financial Group all tied for first place for first quarter lending with US$895.9million. All four firms served as bookrunners for the top Middle Eastern loan in the region, the US$3.6 billion financing package for UAE-based International Petroleum Investment Company.
Notes for Editors
A copy of the Thomson Reuters Deals Intelligence Middle Eastern Investment Banking Analysis (Q1 2010) is attached in pdf format.
Islamic loan and bond data not included in this quarter’s tables due to low levels of activity
Middle East includes the following countries: Bahrain, Egypt, Iraq, Iran, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Syria, United Arab Emirates and Yemen.
Deal fees are calculated using Freeman & Co. proprietary algorithm where spreads or fees are not disclosed. Deal fees are on a gross basis before all expenses. Each underwriter or advisor is allocated its share of deal fees using Freeman & Co. allocation methodology, based on the number of underwriters or advisors on the deal and their role. No fees are allocated to syndicated members. Industry totals include fees on deals with undisclosed advisors.
A financial glossary of terms and concepts related to the financial markets can be found at www.glossary.reuters.com
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About Thomson Reuters Deals Intelligence
Thomson Reuters Deals Intelligence, a part of Thomson Reuters Investment Banking division, brings up to the minute market intelligence to clients and the financial media through a variety of research reports including Daily Deals Insight, weekly Investment Banking Scorecard, monthly Deals Snapshots and industry-leading quarterly reviews highlighting trends in M&A and Capital Markets.