Refinitiv released the Middle East and North Africa investment banking analysis for the first quarter of 2021. According to the report, the Investment banking fees in the Middle East and North Africa reached an estimated $218 million during the first quarter of 2021, up 5% from last year and a three-year high.
Advisory fees earned from completed M&A transactions generated $20.4 mn, down 74% and representing the second-lowest total in the last ten years. Equity capital markets’ underwriting fees fell by more than half compared to 2020, to $7 mn, the lowest total since 2011. Syndicated lending fees increased 76% to $109.2 mn, a three-year high in fees and the third-highest total since Refinitiv’s records began in 2000. Bond underwriting fees also experienced an increase with $81.3 mn in fees, a 64% increase from the same period in 2020.
Governments/agencies and financials accounted for 87% of total fees this quarter in MENA with 59% and 28% fees recorded, respectively. HSBC Holdings PLC earned the most investment banking fees in the region during the first quarter of 2021, a total of $22.7 mn or a 10.4% share of the total fee pool.
Mergers and Acquisitions
Announced M&A transactions with any MENA involvement reached $17.1 billion during the first three months of 2021, a 19% increase in value compared to the same period in 2020 and a record number of deals with 270, the highest start to a quarter. Target M&A increased 55% from last year to $12.7 bn this quarter, the second-highest on record with only 2019 higher with Saudi Aramco and Saudi Basic Industries Corp deal of $69.1 bn making up a large proportion. Outbound M&A delivered a positive start to the quarter representing $3.9 bn in value and already overtaking 2020 full-year volumes. Domestic M&A experienced a 73% increase from last year with $9.4 bn in deal value.
The largest deal of the quarter in the MENA region was the acquisition of BP PLC-Block 61 based in Oman from Pttep Mena Ltd for $2.59 bn. Egypt was the most targeted nation with $3 bn in M&A activity, closely followed by Oman and Qatar. JP Morgan topped the MENA M&A involvement financial advisor league table during the first quarter of 2021, advising on $5.1 bn worth of deals and hold a 30% market share. In second place was Rothschild, while Citi took third spot.
Equity capital markets
MENA equity and equity-related issuance totaled $267.7 mn during the first quarter of 2021, a 67% decline in proceeds from 2020 and the lowest start to the year since 2011. $124.7 mn was raised through follow-on offerings, which equate to 46% of equity issuance in 2021 so far. Only one initial public offering was recorded during the first quarter of 2021 which was Alkhorayef Water & Power Tech’s offering in early March on the Tadawul Stock Exchange, raising $144 mn. Ubhar Capital SAOC took first place in the MENA ECM league table during the first quarter of 2021, with EFG Hermes and Banque Saudi Fransi were joint in second place.
Debt capital markets
MENA debt issuance totaled $34.8 bn during the first quarter of 2021, up 61% from the same period in 2020 and the best start to a year since our record began in 1980. 48% of this total came from Investment grade issuance which totaled $17 bn, the best start to a year since our records began in 1980. Saudi Arabia and the United Arab Emirates were the most active issuer nations with $12.3 bn and $7.5 bn in bond proceeds, respectively. Saudi Arabia’s bond sale in January this year of $4.9 bn was the largest MENA bond sale of the quarter. Standard Chartered took the top spot in the MENA DCM league table during Q1 2021 with $4.5 bn of related proceeds, or a 13% market share.