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M&A VALUE UP 30pc

Mideast debt issuance surges 40pc to $26bn

Manama, July 16, 2013

Debt issuance in the Middle East reached $26 billion during the first half of the year, a 40 per cent increase over the same period last year, a report said.

Middle Eastern investment banking fees reached $356.6 million while equity issuance by the region's companies raised $3.2 billion from 12 issues during the first half of this year, according Thomson Reuters investment banking analysis for the region, reported the Gulf Daily News (GDN), our sister publication.

"The value of announced mergers and acquisitions (M&A) transactions with Middle Eastern targets reached $14.7 billion during the first half, 30 per cent more than the $11.3 billion witnessed in the region during the same period last year, and marking the best first half since 2008," Thomson Reuters Mena managing director Russell Haworth said.

"Bolstered by the $7.5 billion merger of two UAE state-owned aluminium producers, materials was the most targeted industry during the first half, accounting for 64 per cent of activity.

"The UAE was the most active Middle East country, being both the most targeted and the most acquisitive country in the region so far this year," he said.

India was the most popular target for outbound Middle East M&A transactions, while the US registered the highest value of inbound M&A deals targeting the region.

"As sole adviser on the aluminium merger, Morgan Stanley topped the Middle Eastern involvement M&A ranking with $9.8 billion," he added.

In respect to Middle Eastern investment banking fees, Haworth said that these fees reached $356.6m during the first half, a 28 per cent increase over the same period last year ($277.5 million), and the best first-half for fees in the region since 2010.

Completed M&A fees totalled $83.6m, up 56 per cent from the first six months of last year ($53.5 million), and accounting for 23 per cent of the overall fee pool.

Fees from debt capital markets underwriting in the region hit $102.2 million, up 125 per cent from $45.4m during the same period last year, and marking the best first-half for debt capital markets (DCM) fees in the Middle East of all time.

Equity capital markets underwriting fees totalled $43.1 million, down 35 per cent from the same period last year ($66.7 million), while fees from syndicated lending reached $127.6 million, up 14 per cent over last year and accounting for 36 per cent of the first half fee total.

Mr Haworth said that equity issuance by Middle Eastern companies raised $3.2 billion from 12 issues during the first half, a 15 per cent decline from the same period last year ($3.7 billion), and marking the slowest first half since 2010.

Initial public offerings, worth a combined total of $2 billion, accounted for 63 per cent of activity in the region. Three follow-on offerings totalling $702 million accounted for 22 per cent, while convertible issuance accounted for the remaining 15 per cent.

"Middle Eastern debt issuance reached $26 billion during the first half, a 40 per cent increase over the same period last year, and the strongest first half in the region on record," he added.

Investment grade corporate debt totalled $20.8 billion and accounted for 80 per cent of Middle Eastern DCM activity.

International Islamic debt issuance reached $16.4 billion from 44 issues during the first six months of 2013, an increase of 6 per cent from the same period last year.

The most active nation for international Islamic debt issuance was Saudi Arabia with 37 per cent, followed by Malaysia with 32 per cent. – TradeArabia News Service




Tags: Middle East | merger | Investment banking | M&A | Debt insurance |

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