Middle East region’s primary issues fall
Five initial public offerings raised $603.3 million and accounted for 60 per cent of the first half equity capital market activity in the region.
MUSCAT: Middle Eastern equity and equity-related issuance totalled $1 billion during the first six months of 2017, reflecting a 72 per cent decline year-on-year and the lowest annual start for issuance in the region since 2004.
Five Initial Public Offerings (IPOs) raised $603.3 million and accounted for 60 per cent of the first half Equity Capital Market (ECM) activity in the region, according to a report released by Thomson Reuters on quarterly investment banking analysis for the Middle East.
Dubai-based oil and gas production services firm ADES International Holding raised $243.5 million on the London Stock Exchange (LSE) in May, the largest IPO in the region so far this year. Follow-on offerings accounted for the remaining 40 per cent of activity. The National Bank of Kuwait took first place in the first half of 2017 Middle Eastern ECM ranking, with a 24 per cent market share.
Bolstered by Saudi Arabia’s $9 billion international Islamic bond in April and Kuwait’s $8 billion debut international bond sale in March, Middle Eastern debt issuance reached $57.4 billion during the first half of 2017, 53 per cent more than the proceeds raised during the same period last year and by far the best annual start in the region since records began in 1980. Saudi Arabia was the most active nation in the Middle East, accounting for 21 per cent of activity by value, followed by Kuwait with 18 per cent. International Islamic debt issuance increased 50 per cent year-on-year to reach $31.4 billion so far during 2017, the report noted.
JP Morgan took the top spot in the Middle Eastern bond ranking during the first half of 2017, with a 13.4 per cent share of the market, while HSBC took the top spot for Islamic DCM issuance with a 12.3 per cent share.
According to estimates from Thomson Reuters, Middle Eastern investment banking fees totalled an estimated $462.1 million during the first six months of 2017, 15 per cent less than the value of fees recorded during the same period in 2016. Debt capital markets underwriting fees totalled $136.9 million, up 88 per cent year-onyear and the highest first half total in the region since our records began in 2000.
“Equity capital markets fees increased 36 per cent to $39.7 million. Fees generated from completed mergers and acquisition transactions totalled $98 million, a 20 per cent fall from last year and the lowest first six month total since 2012. Syndicated lending fees fell 41 per cent year-on-year to $187.6 million, reflecting a threeyear low,” said Nadim Najjar, managing director, Middle East and North Africa, Thomson Reuters.