Middle Eastern investment banking fees reached $536.1 million during 2012, a 19 per cent increase over 2011, a report said.

Equity capital markets issuance reached $9.4 billion during 2012 while total debt issuance reached $38.6 billion in 2012, a 26 per cent increase over 2011, said Thomson Reuters in its latest investment banking analysis for the Middle East region for 2012.

“Merger and acquisition (M&A) transactions with Middle Eastern targets reached $20.0 billion during 2012, double the activity seen in the region during 2011 ($9.8 billion), and the strongest annual total since 2008,” said Russell Haworth, managing director, Mena at Thomson Reuters.

“Telecoms was the most targeted industry in the Middle East with 30 per cent of the activity during the year, followed closely by Financials with 27 per cent. Egypt was the most targeted Middle Eastern country during 2012, while Qatar was the most active Middle Eastern acquiror.

“The UK is the most popular target for outbound Middle Eastern M&A transactions, followed by Brazil and India,” he added.

Goldman Sachs topped the 2012 Announced Any Middle Eastern Involvement M&A Ranking with $5.9 billion, while Credit Suisse took second place with $5 billion. Morgan Stanley topped the Middle Eastern target M&A Ranking with a market share of 22 per cent of the market, the report said.

The largest deal with Middle Eastern involvement during 2012 was the $2.0 billion stake acquisition of Centennial Asset Brazilian Equity Fund by Abu Dhabi state investment fund Mubadala.

M&A fees totaled $157.9 million during 2012, up 23 per cent from the previous year ($128.8 million), and accounting for 29 per cent of the overall fee pool. Fees from equity capital markets underwriting totaled $99.5 million, a 23 per cent increase over 2011.

According to Thomson Reuters, fees from debt capital markets underwriting in the region totaled $93.8 million for the year, up 26 per cent from the $74.7 million seen during 2011.

Fees from syndicated lending totaled $185.0 million, a 10 per cent increase over 2011 and accounting for 34 per cent of the overall fee pool. Barclays topped the Middle Eastern completed M&A fee rankings for 2012, earning 9 per cent of the fee pool.

Saudi Fransi Capital took first place in the Middle Eastern ECM fee rankings with a 20 per cent cut of the fees. Standard Chartered and National Commercial Bank topped the debt capital markets and syndicated lending fee league tables, respectively.

Haworth noted that Equity Capital Markets (ECM) issuance reached $9.4 billion during 2012 to finish 5 per cent down from 2011 ($9.9 billion).

Follow-ons accounted for 77 per cent of ECM activity during the year, while IPOs accounted for 21 per cent. The largest Middle Eastern ECM transaction during 2012 was Qtel’s follow-on in May, which raised $1.9 billion.

Bolstered by this deal, and a $1.6 billion follow-on from Mobile Telecommunications Co Saudi Arabia, Telecoms was the most active sector in the Middle East during 2012. Qatar National Bank topped the 2012 Middle Eastern Equity Capital Markets ranking with 28 per cent of the market.

“Middle Eastern debt issuance reached $13.5 billion during the fourth quarter of 2012. It took 2012 DCM activity to $38.6 billion, a 26 per cent increase over 2011, and the strongest annual total in the region since 2009. Investment grade corporate debt accounted for 82 per cent of Middle Eastern DCM activity during the year,” Haworth said.

Islamic debt issuance reached $37.1 billion from 91 issues during 2012, an increase of 11 per cent from 2011, and marking the all-time strongest year for Islamic debt activity.

The global top Islamic debt issuer nation during 2012 was Malaysia with 48 per cent of the activity, while the strongest industry was the financial sector. HSBC took the top spot in the Middle Eastern bond ranking for 2012 with a 13 per cent share of the market, according to the report. – TradeArabia News Service