UAE accounts for 70% of Mena debt capital market

In the first three quarters, the value of announced Mergers and Acquisitions transactions with Middle Eastern involvement reached $33.7 billion, 23 per cent more than the value registered during the same period in 2014.

The UAE was the most active debt capital market tin the Middle East in the first nine months, accounting for 70 per cent of activity, according to data released on Sunday.
The region's debt capital market saw a quarterly increase with the result that bond issuance in the region decreased 27 per cent from last year to $24.4 billion during the first nine months of 2015, marking the lowest first nine-month total since 2011, according to estimates from Thomson Reuters / Freeman Consulting.
The region's international Islamic debt issuance declined 26 per cent year-on-year to reach $21.4 billion during the first nine months. Nomura took the top spot in the Middle Eastern bond ranking during the first nine months of 2015 with a 33 per cent share of the market.
In the first three quarters, the value of announced Mergers and Acquisitions transactions with Middle Eastern involvement reached $33.7 billion, 23 per cent more than the value registered during the same period in 2014 and marking the best annual start since 2010, according to the latest data released on Sunday.
According to the report, Middle Eastern investment banking fees reached US$480.5 million during the nine months of 2015, 22 per cent less than the value recorded during the first nine months of 2014 and the lowest first nine month total since 2012.
Nadim Najjar, managing director, Mena, Thomson Reuters, said Middle Eastern equity and equity-related issuance totalled $2.6 billion during the third quarter of 2015, a slight decline from the second quarter of this year. Middle Eastern debt issuance reached $16.1 billion during the third quarter of 2015, more than double the value raised during the previous quarter, he added.
The report said that in respect to investment banking fees, not one Investment Banking component saw year-over-year percentage gains during the first nine months of 2015, with equity capital markets underwriting declining three per cent compared to last year, while fees from completed M&A transactions totalled $177.6 million, a one per cent decline from the first nine months of 2014, and accounting for 37 per cent of the overall Middle Eastern investment banking fee pool, the highest first nine month share since records began in 1980.
Syndicated lending fees totalled $174.4 million, down 36 per cent from the first nine months of 2014, while fees from debt capital markets underwriting declined 42 per cent year-on-year to $47.8 million.
HSBC earned the most investment banking fees in the Middle East during the first nine months of 2015, a total of $53 million for a 11 per cent share of the total fee pool.
The report pointed out that HSBC topped both the completed M&A and the ECM underwriting fee rankings, while Nomura was first for DCM underwriting. Mitsubishi UFJ Financial Group took the top spot in the Middle Eastern syndicated loans fee ranking.
As for M&A deals, outbound M&A drove activity, up 57 per cent from the first nine months of 2014 to reach $17.2 billion, the highest first nine month total since 2009.
Qatar's overseas acquisitions accounted for 55 per cent of Middle Eastern outbound M&A activity, while acquisitions by Saudi Arabian and the UAE companies accounted for 27 per cent and 11 per cent, respectively. Domestic and inter-Middle Eastern M&A decreased two per cent year-on-year to $8.5 billion. Inbound M&A also saw a marked increased, up 154 per cent to $4.6 billion.
Energy & power was the most active sector, accounting for 31 per cent of Middle Eastern involvement M&A. The largest deal with Middle Eastern involvement during the third quarter of 2015 was the $3.1 billion offer for the synthetic rubber business of Germany's Lanxess AG by Aramco Overseas Co BV.
Despite the quarterly decline of ECMs, Middle Eastern ECM increased six per cent year-on-year to reach $5.5 billion during the first nine months of 2015, marking the best first nine months by proceeds raised since 2012.
Ten initial public offerings raised $2.5 billion and accounted for 45 per cent of first nine-month activity in the region. Despite the quarterly increase in debt capital markets, bond issuance in the region decreased 27 per cent from last year to $24.4 billion during the first nine months of 2015, marking the lowest first nine-month total since 2011.
The UAE was the most active nation accounting for 70 per cent of activity, followed by Egypt with eight per cent. International Islamic debt issuance declined 26 per cent year-on-year to reach $21.4 billion during the first nine months of 2015. Nomura took the top spot in the Middle Eastern bond ranking during the first nine months of 2015 with a 33 per cent share of the market.
- issacjohn@khaleejtimes.com

Issac John

issacjohn@khaleejtimes.com