The mergers and acquisitions (M&A) deal activity in the Middle East region fell 10 per cent in the first quarter of 2013 to $5.1 billion from $5.7 billion last year, said a report.

The Middle Eastern fees reached $143.5 million during the first quarter of 2013, a 49 per cent  increase over the same period last year ($96.3 million), according to the report by Thomson Reuters released today.

The equity issuance by Middle Eastern companies raised $2.3 billion from six issues during the first quarter, more than 5 times the amount raised during the same period in 2012 ($453 million), Thomson Reuters said in its investment banking analysis for the Middle East region.

“Bolstered by OCI NV's $2.2 billion mandatory tender offer to acquire Orascom Construction Industries, Materials was the most targeted industry during the first quarter, accounting for 43 per cent  of activity,” remarked Russell Haworth, the managing director, Mena at Thomson Reuters.

According to him, Egypt was the most active Middle Eastern country, being both the most targeted and the most acquisitive country in the region so far this year.

"China was the most popular target for outbound Middle Eastern M&A transactions, followed by Greece, while the United Kingdom registered the highest value of inbound M&A deals targeting the Middle East,” he noted.

Citi topped the M&A ranking with $2.6 billion, followed closely by Barclays with $2.5 billion. Advisors on the Orascom deal (Barclays, Citi, CI Capital, Allen & Co, and Rabobank) shared first place in the Middle Eastern target M&A rankings.

With respect to Middle Eastern investment banking fees, Haworth pointed out that year-on-year fee increases were seen across asset classes. Completed M&A fees totaled $47.6 million, up 81 per cent  from the first quarter of 2012 ($26.3 million), and accounting for 33 per cent of the overall fee pool.

The fees from debt capital markets underwriting in the region hit $44.1 million, up 48 per cent from the $29.8 million seen during the first quarter of 2012, it added.

According to him, the ECM underwriting fees totaled $16.7 million, nearly three times the total seen during the same period last year ($5.9 million), while fees from syndicated lending reached $35.1 million, up 3 per cent over 2012 and accounting for 24 per cent of the quarter's fee total.

JP Morgan topped the Middle Eastern completed M&A fee ranking during the first quarter of 2013, earning 21 per cent of the fee pool, the Thomson Reuters report said.

ANB Invest took first place in the Middle Eastern ECM fee ranking with a 40 per cent cut, while HSBC topped both the debt capital markets and syndicated lending fee league tables during the first quarter.

Haworth indicated that IPO worth a combined total of $1.6 billion, accounted for 70 per cent of ECM activity in the region. Three follow-on offerings, totalling $702 million, accounted for the remaining 30 per cent, he added.

The largest Middle Eastern ECM transaction so far during 2013 was Asiacell Telecommunication’s IPO in February, which raised $1.2 million. Bolstered by this deal, Iraq was the most active nation in the Middle East during the first quarter of 2013.

As sole bookrunner on the Asiacell IPO, Rabee Securities currently leads the 1Q 2013 Middle Eastern ECM ranking with 55 per cent  of the market.

On the debt capital markets activity, he said the investment-grade corporate debt accounted for 93 per cent of Middle Eastern DCM activity during the quarter, the most since 2009.

International Islamic debt issuance reached $11.5 billion from 23 issues during the first quarter, an increase of 40 per cent from the previous quarter, and 57 per cent  from the same period in 2012, remarked Howarth.

“The most active nation for international Islamic debt issuance was Malaysia with 47 per cent  of the activity, while the strongest industry was the financials sector. HSBC took the top spot in the Middle Eastern bond ranking so far this year with a 15 per cent  share of the market,” he added.-TradeArabia News Service