Mideast M&A activity surges 45% to $8.5b in Q2

Mergers and acquisition activity in the Middle East surged 45 per cent in the second quarter to $8.5 billion on the previous quarter, marking the strongest quarter since 2010 first quarter, an investment banking analysis shows.

By Issac John

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Published: Mon 9 Jul 2012, 11:26 PM

Last updated: Tue 7 Apr 2015, 11:33 AM

“Investment banking has seen strong activity across Middle Eastern markets during the second quarter of 2012. This is clearly evident by the strong M&A activity during the second quarter which took the total value of M&A to $14.3 billion by the first half of 2012, an increase of 137 per cent over the same period in 2011 when activity totaled $6.0 billion,” said Russell Haworth, managing director, Middle East & North Africa at Thomson Reuters.

The region’s equity capital markets recorded issuances worth $5 billion down 40 per cent from the first six months of 2011, Thomson Reuters said in its 2012 investment banking analysis for the Middle East region.

Equity capital markets issuance in the second quarter reached $4 billion during the second quarter of 2012, nearly four times the value seen during the previous quarter, Thomson Reuters said.

Equity capital markets activity during the first half of 2012 totalled $5 billion, down 40 per cent from the first six months of 2011.

The top Middle Eastern ECM transaction was a $1.9 billion follow-on from Qatari telecoms company Qtel. Bolstered by this deal, telecoms was the most active sector in the Middle East during the first half of 2012 with 44 per cent, followed by the financials sector with 26 per cent.

As sole-lead bookrunner for Qtel’s follow-on offering, Qatar National Bank topped the Middle Eastern Equity Capital Markets ranking. In the GCC, a total of four IPOs raised $1.1 billion on GCC stock exchanges during the quarter compared to the same period last year, where three IPOs raised $340 million, according to a report by PricewaterhouseCoopers.

“Our outlook for the rest of 2012 is for a continued IPO upward trend in the Kingdom of Saudi Arabia market with perhaps limited to no activity on other regional markets,” Steven Drake, head of PwC Capital Markets in the Middle East region, said. In the region’s M&A sector, financials is the most targeted industry with $4.3 billion or 30 per cent of the activity so far during 2012, followed closely by telecoms with 29 per cent. Egypt is the most active Middle Eastern country, based on target, with $4 billion for 28 per cent of first half activity. Credit Suisse topped the Any Middle Eastern Involvement M&A Ranking during the first half of 2012 with $4.78 billion, while HSBC took second place with $4.13 billion.

HSBC topped the Middle Eastern target M&A Ranking, controlling 29 per cent of the market. The largest Middle Eastern targeted deal so far this year was National Bank of Kuwait’s $2.1 billion offer for Kuwaiti Islamic lender, Boubyan Bank in June.

Middle Eastern debt issuance reached $6 billion during the second quarter of 2012, a 45 per cent decline from the strong first quarter total of $10.9 billion. It took first half 2012 activity to $16.9 billion, up 51 per cent on the same period in 2011.

Islamic debt issuance reached $14.5 billion from 34 issues, an increase of 25 per cent from the same period in 2011, and the strongest first six-month total since 2008.

The top Islamic issuer nation during the first half of 2012 is Malaysia with 45 per cent of the activity, while the strongest industry is the financials sector.

HSBC took the top spot in the Islamic bond ranking for the first half of 2012 with 10 issues, which raised $1.9 billion.

Syndicated lending during the first half reached just $186.8 million, a 98 per cent decrease from the same period in 2011 ($10.2 billion), and the slowest first half in more than a decade.

As book runner on Citadel Capital’s $175 million refinancing loan in January, Citi took the top spot in the Middle Eastern Loan Bookrunner ranking for first half 2012.


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