The equity capital markets (ECM) issuance in the Middle East region surged a record 81 per cent to hit $8.3 billion during the first half compared to $4.6 billion last year, said a report.

Al Rajhi Banking & Investment topped the Middle Eastern equity capital markets rankings, as sole-lead bookrunners for Saudi-based Jabal Omar Development’s $688 million follow-on offering, according to the analysis report released by Thomson Reuters on the H1 investment banking in the region.

Thomson Reuters said financials was the most active industry in the region during the period with 83 per cent of this activity. The real estate and energy and power sectors together accounted for 17 per cent of ECM activity during the first half, the report stated.

The follow-ons accounted for 67 per cent of quarterly activity, while the top Middle Eastern ECM transaction was $3.5 billion follow-on from Qatar National Bank, it added.

According to Thomson Reuters, the region witnessed its banker fees and merger and acquisition ativity down over 40 per cent with a 16 per cent drop in debt issuance.

Russell Haworth, managing director Middle East & Africa at Thomson Reuters, said, 'These figures show that it has been a tough year so far throughout the region for investment banks, with banker fees comparable with 2004 levels.'

'However confidence is returning to the market as regional economies continue to recover despite the Arab Spring, and the 81 per cent increase in ECM issuance is indicative of that,” he noted.

On the investment banking sector, Haworth said the region witnessed a 46 per cent drop in banking fees which hit $197 million during the first half compared to $367.8 million in the same period a year earlier.

The mergers and acquisitions (M&A) fees totalled $74.1 million during the first half accounting for 39 per cent of the overall fee pool.

Debt Capital Markets (DCM) fee activity in the Middle East fell 31 per cent over the first half of 2010 to reach $50 million during the first half.

Fees from syndicated lending and equity capital markets totaled $20.4 million and $53.3 million, respectively, the report stated.

The Thomson Reuters review placed HSBC on the top spot in the Middle Eastern DCM fee ranking list for the first half with $7.8 million.

Morgan Stanley topped the completed M&A rankings during first half with $5.5 million. Bank of America Merrill Lynch controlled nearly 20 per cent of equity capital markets fees in the Middle East during the first half.

According to the review, Middle Eastern targeted M&A activity reached $7 billion, a 40 per cent decrease compared to the first half of 2010 when activity totaled $11.7 billion.

Real estate is the most targeted industry in the Middle East region with $2.3 billion, 33 per cent of the activity down from $4.5 billion during the first half of 2010.

The UAE is the most active Middle Eastern country, based on target, with $3.7 billion for 53 per cent of annual activity, the report stated.

BNP Paribas topped the 'Any Middle Eastern Involvement M&A' ranking with $10.1 billion, followed by Goldman Sachs in second place with $9.3 billion. Citi and Credit Agricole topped the ME target M&A ranking with $950.2 million.

The two top Any Middle East Involvement M&A deals involved regional investment funds investing in Spanish Energy & Power targets, with IPIC’s $7.4 billion investment in Cepsa and Qatar Holding Luxembourg’s $2.7 billion investment in Iberdrola.

Middle Eastern debt issuance reached $11.2 billion during the first half, down 16 per cent from last year, the Thomson Reuters said in the report.
 
HSBC took the top spot in the Middle Eastern bond ranking during the first half with eight issues, which raised $1.8 billion, while CIMB Group and HSBC Holdings control nearly 50 per cent of the Islamic bond market during the first half of 2011, it added.-TradeArabia News Service