ME H1 debt issuance surges 45% to $32.9b

The Middle Eastern debt issuance surged to $32.9 billion with the Qatar emerging as most active market in the region, data from a quarterly investment banking analysis showed."Bolstered by a record-breaking second quarter, Middle Eastern debt issuance reached $32.9 billion 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," said Thomson Reuters said.
Qatar was the most active country in the Middle East debt capital markets accounting for 41 per cent of overall activity, followed by the UAE and Oman. International Islamic debt issuance increased 10 per cent year-on-year to reach $19.4 billion during the first half of 2016, the largest first half for issuance since records began.
In the first half, while the value of announced M&A transactions with any Middle Eastern involvement reached $18.7 billion during the first half of 2016, a decline of 29 per cent compared to the first half of 2015 and the slowest first six months for deal making in the region since 2014, the region's equity and equity-related issuance totalled $1.1 billion, an 80 per cent decline from the first half of 2015. This was the slowest opening six-month period for equity capital markets issuance since 2004," Nadim Najjar, managing director, MENA, Thomson Reuters, said. 
According to estimates from Thomson Reuters / Freeman Consulting, Middle Eastern investment banking fees reached $416.8 million during the first half of 2016, an eight per cent increase compared to fees recorded during the first six months of 2015 and the strongest period for investment banking fees in the region since 2014. 
In respect to investment banking fees, fees from completed M&A transactions totalled $104.0 million during the first half of 2016, a 24 per cent decrease compared to a year ago and the slowest first half for M&A fees since 2012.
Syndicated lending fees accounted for just over 55 per cent of the overall Middle Eastern investment banking fee pool, the highest first half share since 2002. Equity capital markets underwriting declined 77 per cent compared to last year, while debt capital markets fees totalled $63.7 million, up 48 per cent from 2015. Fees from combined debt and equity capital markets underwriting accounted for 30 per cent of the overall fee pool in the region during the second quarter of 2016, up significantly from the six per cent recorded during the first quarter of the year.
In M&A deals, outbound M&A activity fell 22 per cent from first half 2015 to reach $9.2 billion, the lowest first half total since 2014. Overseas acquisitions from Saudi Arabia accounted for 42 per cent of Middle Eastern outbound M&A activity, while acquisitions by companies based in Qatar and UAE accounted for 31 per cent and 11 per cent, respectively. Domestic and inter-Middle Eastern M&A decreased 22 per cent year-on-year to $6.1 billion. Inbound M&A fell 76 per cent to $809.8 million, a seven-year low.
 Technology was the most active sector, accounting for 22 per cent of Middle Eastern involvement M&A. The largest deal with Middle Eastern involvement during the half was the $3.5 billion investment in United States-based Uber Technologies by Saudi Arabia's Public Investment Fund. JP Morgan, which advised Uber Technologies, topped the first half 2016 announced any Middle Eastern involvement M&A league table. Jones Lang LaSalle and CBRE Holding, which advised BlackRock on the $2.5 billion sale of its Asia Square Tower to Qatar Investment Authority, ranked second and third respectively. 
The region saw six initial public offerings raising $379.7 million and accounting for 35 per cent of first half 2016 activity in the region. Follow-on offerings accounted for the remaining 65 per cent of activity. Dubai Parks & Resorts raised $456.9 million in an follow-on offering in May, the largest equity offering in the region during the first half. Emirates NBD took first place in the first half 2016 Middle Eastern ECM ranking with 38.3 per cent market share. - issacjohn@khaleejtimes.com