Thomson Reuters launches Middle East Investment Banking League Tables

"Thomson Reuters has a long history of pioneering in the region since opening its office in Alexandria in 1865," said Basil Moftah, Managing Director of Thomson Reuters, Middle East and Africa. "We are pleased to be launching these dedicated rankings in the Middle East. For the financial community, these well-respected league tables serve as an independent authority on the investment banking marketplace."

Moftah was speaking as Thomson Reuters released the first in a new series of quarterly analytical reviews which examine the performance of the Middle East investment banking industry in the region's debt and equity capital markets, both conventional and Islamic. The review includes dedicated regional rankings of banks and advisors operating in the Middle East based on their deals and fees.

In a snapshot of the current state of the industry for the year so far, the analysis of the Middle East drawn from Thomson Reuters data shows that compared with the same period in 2008:

• Investment banker and adviser fees at $431m - down 57%
• Mergers and acquisitions at $5bn - down 70%
• Equity issues at $4.7bn - down 86%
• Loan values at $13.6bn - down 82.5%
• Debt issuance at $21.8bn - up 43%

In a tight market, the rankings show HSBC holding the top spot in both the Middle Eastern debt and equity capital market fee rankings, with $13m and $11.5m respectively. Morgan Stanley comes first in the mergers and acquisition fee rankings with $19.2m while Calyon tops the syndicated loan fee ranking with $9.5m.

Middle East debt issuance at $21.8bn is up from $15.2bn (compared with same period in 2008). Agency, supranational and sovereign issues account for 35% of the activity with $7.6bn while investment grade corporate issues account for 65% with $14bn. Islamic debt issuance reached $9.7bn with 27 issues - down 61% when compared with 2008.

The top Islamic debt issuer is Malaysia with 45% of the activity, with Saudi Arabia coming in second with 21.5%. Financials; energy and power; governments and agencies are the most active industries with 36.5%, 30% and 28.5% respectively.

Rothschild tops the M&A financial advisor Middle East rankings based on deal values with US$15.39bln. Deutsche Bank came second with US$15.31bln. The top Middle East targeted deal for 2009 was France Telecom's $716m acquisition of MobiNil Telecommunications. The top Middle East acquisition of the year worth $9.5bn was Qatar Investment Authority's acquisition in Volkswagen.

The most targeted M&A sector in the Middle East was financials with $2bn, 39.4% of the activity. However, this is down from $4.69bn when compared with the first three quarters of last year. Kuwait is the most acquired Middle East country with $2bn, 41.5% of the activity. The most acquisitive Middle East country is the United Arab Emirates with 48.5%.

"Thomson Reuters data shows that it has been a tough year so far both regionally and internationally for investment banks and financial advisers. While there have been encouraging signs in the region's debt markets, it remains to be seen if there is sufficient confidence in talk of recovery to re-ignite the Middle East equity offering and loan markets which are witnessing dramatic declines so far this year compared with 2008."

Moftah said.

Equity issuance in the Middle East so far this year has reached $4.7bn - down by 86% year-on-year. Follow-ons, or secondary offerings, are the most active issue type with $2.7bn, more than 57.9% of the activity. Financials was the most active industry in the Middle East with 42.5% of the activity. Telecommunications and energy & power come second and third.

HSBC, Saudi Hollandi Bank and Qatar National Bank come first, second and third in the Middle Eastern equity capital market ranking based on deal values. The largest equity issue so far was the Gulf Bank secondary issue worth $1.3bn.

In the Islamic finance space, the Thomson Reuters quarterly series looks beyond Middle East to assess the strength of the market globally. In this first publication, the data shows the Islamic debt capital market volumes and values witnessing major declines from their peaks of 2007 and 2008.

AmInvestment Bank Group tops the Islamic financed bond ranking based on deal values with six issues worth $1.8bn. The top Middle East bond was issued by Qatar and was worth $2.9bn. Al-Rajhi Banking & Investment Corp. of Saudi Arabia, Calyon and Banque Saudi Fransi all rank first in the Islamic loan ranking with $833.3m each due to their work as bookrunners on the top Islamic loan, the Zain loan of $2.5bn.

At the height of the credit boom in 2007 the value of Middle Eastern targeted mergers and acquisitions topped $40bn. In 2008 the value plummeted to $21bn but has managed only $5bn so far this year.

In 2007 there were 72 major Islamic debt issues valued at around $28bn. The number of issues rose to 108 last year with a total value of $25bn. So far this year the number of deals has reached 27 with a total value of $9.7bn. The most active industry for Islamic loan issuance was telecommunications with 37.5%, while financials came second with 27.3%.