No wonder Middle Eastern bankers and brokers are looking happier these days. Business has been booming recently, albeit with the recent oil price crash the best times are probably now over.
Mergers and acquisitions with Middle Eastern involvement reached $23 billion during the fourth quarter of 2014, more than double the value registered during the previous three months.
This was the highest quarterly total since Q1 2008, according to the Thomson Reuters/Freeman Consulting annual investment banking survey published today. Investment banking fees rose to $147 million during Q4, 19 per cent higher than in Q3.
Higher activity
Middle Eastern equity and equity-related issuance totalled $11 billion in 2014, a 173 per cent increase from 2013. But regional debt issuance totalled just $3.5 billion in Q4, only half the value raised during Q3.
In fact, despite the uptick in the investment banking fees during Q4, fees earned during 2014 showed an overall decline of three per cent to $752 million. Equity capital markets underwriting fees totalled $125 million in 2014, up 163 per cent from the previous year. This was the best annual total for ECM fees in the Middle East since 2009, accounting for 17 per cent of the overall Middle Eastern fee pool.
Fees from completed M&A transactions totalled $159 million, down five per cent from 2013 and comprised 21 per cent of the fee pool. Fees from debt capital markets underwriting declined 27 per cent year-on-year to $87 million, while syndicated lending fees fell 21 per cent to $233 million.
HSBC earned the most investment banking fees with a total of $57 million, while Lazard topped the Middle Eastern completed M&A fee league table. Mizuho Financial took the top spot in the Middle Eastern loans fee ranking.
As for Middle Eastern mergers and acquisitions the year finished 23 per cent up with $50 billion of announced M&A transactions in the region, the highest annual total since 2010. Qatar’s overseas acquisitions accounted for 65 per cent of Middle Eastern outbound M&A activity, while acquisitions by UAE and Saudi Arabian companies accounted for 15 and nine per cent respectively.
Canary Wharf bid
The largest deal with Middle Eastern involvement in 2014 was the $9 billion offer for Songbird Estates, the owner of London’s Canary Wharf financial district, by The Qatar Investment Authority and Canada’s Brookfield Property Partners.
Thirteen initial public offerings raised $8 billion with the biggest by Saudi Arabia’s National Commercial Bank for $6 billion in November, the largest Middle Eastern IPO of all-time. Globally it was 2014’s second biggest initial public offering after Alibaba.
Bonds issued during 2014 decreased six per cent from 2013 to $37 billion. Investment grade corporate debt totalled $33 billion and accounted for 90 per cent of the annual total, led by the UAE with 48 per cent of activity, followed by Saudi Arabia with 30 per cent. International Islamic sukuk issuance increased 18 per cent year-on-year to reach $39 billion.
