Regional investment banking fees touch $912.4m

Muscat: Investment banking fees for the Middle East were an estimated $912.4 million for 2017, 0.1 per cent less than the fees recorded in 2016, according to a report released by Thomson Reuters.
“Debt capital markets' (DCMs) underwriting fees totalled $256.3 million, up 102 per cent year-on-year and the highest full year total in the region since our records began in 2000,” said Nadim Najjar, managing director, Middle East and North Africa, Thomson Reuters.
Equity capital markets' (ECMs) fees increased 118 per cent to $91.3 million, while fees generated from completed mergers and acquisition (M&A) transactions totalled $181.9 million, a 21 per cent fall from last year and the lowest full year total since 2012. Syndicated lending fees declined by 25 per cent year-on-year to $389.9 million.
The DCM fees accounted for 28 per cent of the overall Middle Eastern investment banking fee pool, the highest full year share since 2001. Syndicated lending fees accounted for 42 per cent, while completed M&A advisory fees and ECMs underwriting fees accounted for 20 per cent and 10 per cent, respectively.
The HSBC earned the highest investment banking fees in the Middle East during 2017, a total of $84.7 million for a 9.2 per cent share of the total fee pool. Credit Suisse topped the completed M&A fee rankings with 13.7 per cent of advisory fees, while JP Morgan was first for DCM underwriting. ECM underwriting was led by EFG Hermes, with $12.91 million in ECM fees, or a 14.1 per cent share. The Industrial and Commercial Bank of China took the top spot in the Middle Eastern syndicated loans fee ranking.
The value of announced M&A transactions, with any Middle Eastern involvement, reached $43.8 billion during 2017, 14 per cent less than the value recorded during 2016. Driven by Tronox’s $2.2 billion acquisition of the Natl Titanium Dioxide business, and the Chinese acquisitions in Abu Dhabi’s giant onshore oil concession, inbound M&As stand at a 10-year high of $9.8 billion, up 117 per cent from this time last year.
Domestic and inter-Middle Eastern M&As declined 63 per cent year-on-year to $8.7 billion, while outbound M&A activity dropped 35 per cent to $10.8 billion. Energy and power deals accounted for 41.9 per cent of Middle Eastern involvement in M&As by value, while the financial sector dominated in the number of deals. With Qatar Investment Authority’s involvement, China CEFC Energy Co’s acquisition of Rosneft Oil was the biggest deal with Middle Eastern involvement in 2017, with the Chinese company acquiring a 14.2 per cent stake in the Russian crude petroleum and natural gas producer.
China International Capital and VTB Capital shared first place in any 2017 Middle Eastern involvements in the M&A league table. Citi took third place.
Middle Eastern equity and equity-related issuance totalled $3.5 billion during 2017, a 36 per cent decline year-on-year and the second lowest year since 2009 for issuance in the region.
Twelve initial public offerings (IPOs) raised $2.8 billion and accounted for 80 per cent of the year's ECM activity in the region. The Emaar Development IPO raised $1.3 billion and stands out as the biggest deal for 2017.
Bank of America, Merrill Lynch, First Abu Dhabi Bank and Goldman Sachs share the first place in the 2017 Middle Eastern ECM ranking with a 20.5 per cent market share.
“Bolstered by Saudi Arabia’s $12.4 billion international Islamic bond in September, Middle Eastern debt issuance reached $103.7 billion during 2017, 33 per cent more than the proceeds raised last year and, by far, the best year in the region since records began in 1980,” noted Najjar.
“Saudi Arabia was the most active nation in the Middle East, accounting for 30 per cent of activity by value, followed by the UAE with 27.8 per cent. International Islamic debt issuance increased by 36 per cent year-on-year to reach $51.5 billion so far during 2017,” he added.
JP Morgan took the top spot in the Middle Eastern bond ranking in 2017, with a 15.5 per cent share of the market, while Malayan Banking took the top spot for Islamic DCM issuance with a 10.8 per cent share.