Refinitiv released the Middle East and North Africa investment banking analysis for 2020. According to the report, investment banking fees generated in the Middle East and North Africa (MENA) reached an estimated $1.2 billion during the full year of 2020, down 12% from 2019 and representing the fourth-highest total since Refinitiv records began in 2000. Some $441.2 mn worth of advisory fees were earned from completed M&A transactions throughout 2020, up 12% from 2019 and the second-highest year in fees since 2000, second only to 2007 with $447.3 mn.
Debt capital markets saw an increase in fees reaching a record $282.3 mn, up 10% compared to 2019. This represents the highest annual fees total since our records began in 2000. Meanwhile, equity capital market underwriting fees declined 61% to $86.9 mn, marking the lowest full-year equity fees total since 2016. Syndicated loans also fell 8% to a three-year low of $410.4 mn. Government and independent agencies contributed the most fees with $450.7 mn, representing 37% of total fees, up from 22% in 2019. The United Arab Emirates along with Saudi Arabia represented two-thirds of investment banking fees in MENA generating $433.9 mn and $382.9 mn, respectively. HSBC earned the highest investment banking fees in MENA during 2020, a total of $104.8 mn or an 8.6% share of the total fee pool.
Mergers & acquisitions
The value of announced M&A transactions with any MENA involvement reached $70.3 bn during 2020. This makes 2020 the fourth highest annual total of all time, despite falling 47% in value from the record high achieved last year with Saudi Aramco’s agreement to buy a stake in Saudi Basic Industries Corp for $69.1 bn.
A total of $52.0 bn worth of target M&A deals were announced from 550 deals, making it the second-highest year in deal value. Inbound M&A in MENA saw a record year of $24.1 bn in deal volume and 260 deals announced, a 41% increase in deal volume and a 64% increase in the number of deals from 2019. Despite the records, domestic M&A registered a 69% decline from 2019 to $27.9 bn, largely due to the Aramco/Sabic deal.
Outbound M&A also declined by 32% to $10.3 bn. The financial sector was most active in 2020, with deals targeting financial companies accounting for 39% of total M&A in MENA, followed by Energy & Power with 26%. The United Arab Emirates was the most targeted nation, followed by Saudi Arabia and Egypt. Morgan Stanley topped any MENA involvement announced M&A financial advisor league table with 37% market share and MENA Target M&A league table with 49% market share in 2020.
Equity capital markets
MENA equity and equity-related issuance totaled $4.6 bn in 2020, down 86% from 2019 and a four year low in ECM proceeds. The largest ECM issuance in MENA was the $1.2 bn follow-on from Mobile Telecommunications Co Saudi in October 2020. The Largest IPO of 2020 in MENA was the IPO of Dr Sulaiman Al-Habib Med Svcs raising $699.7 mn in proceeds. The Energy sector was the best forming sector with $1 bn in equity proceeds. Citi Bank takes the top spot in the MENA ECM league table in 2020 with a 15% market share, closely followed by First Abu Dhabi Bank PJSC with 14%.
Debt capital markets
MENA debt issuance reached record levels of $120.7 bn in 2020, up 15% from 2019 and the highest total on record. Investment Grade issuance also reached its highest total in 2020 with $60.2 bn generated in proceeds. The largest DCM issuance in 2020 was from the Ministry of Finance Qatar in April, with $10.0 bn in proceeds.
The United Arab Emirates and Saudi Arabia were the most active issuer nations during 2020 with $40.6 bn and $31.4 bn in bond proceeds, respectively. Governments and independent agencies was the top-performing industry with the highest bond proceeds throughout 2020. Standard Chartered PLC took the top spot in the MENA bond underwriter rankings in 2020 with $21.4 bn of related proceeds or an 18% market share.