11 Jan 2018 - 0:00
QIA supported CEFC’s acquisition emerges as biggest deal in Mideast
By Satish Kanady / The Peninsula
DOHA: China CEFC Energy Co’s acquisition of Rosneft Oil Co, with Qatar Investment Authority’s (QIA) involvement, was the biggest deal that took place with the Middle Eastern association in the region in 2017. The Chinese company acquired a 14.2 percent stake of the Russian crude petroleum and natural gas producer, Thomson Reuters revealed in its 2017 investment banking analysis for the Middle East, yesterday.
China International Capital and VTB Capital shared first place in the 2017 announced any Middle Eastern involvement M&A league table. Citi took third place.
According to the investment bank analysis, Middle Eastern investment banking fees totalled an estimated $912.4m during 2017, 0.1percent less than the value of fees recorded during 2016. Equity capital markets fees increased 118 percent to $91.3m, while fees generated from completed M&A transactions totalled $181.9m, a 21 percent decrease from last year and the lowest full year total since 2012.
Syndicated lending fees declined 25 percent year-on-year to $389.9m, Thomson Reuters revealed in its 2017 investment banking analysis for the Middle East.
Nadim Najjar, Managing Director, Middle East and North Africa, Thomson Reuters, said: “Debt capital markets underwriting fees totalled $256.3m up 102 percent year-on-year and the highest full year total in the region since our records began in 2000.”
Debt capital markets fees accounted for 28 percent of the overall Middle Eastern investment banking fee pool, the highest full year share since 2001. Syndicated lending fees accounted for 42 percent, while completed M&A advisory fees and equity capital markets underwriting fees accounted for 20 percent and 10 percent, respectively.
HSBC earned the most investment banking fees in the Middle East during 2017, a total of $84.7m for a 9.2 percent share of the total fee pool. Credit Suisse topped the completed M&A fee rankings with 13.7 percent of advisory fees, while JP Morgan was first for DCM underwriting.
ECM underwriting was led by EFG Hermes with $12.91m in ECM fees, or a 14.1 percent share. 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 $43.8bn during 2017, 14 percent less than the value recorded during 2016.
Driven by Tronox’s $2.2bn acquisition of Natl Titanium Dioxide business and Chinese stake acquisitions in Abu Dhabi’s giant onshore oil concession, inbound M&A stands at a 10-year high of $9.8bn, up 117 percent from this time last year.
Domestic and inter-Middle Eastern M&A declined 63 percent year-on-year to $8.7bn, while outbound M&A activity dropped 35 percent to $10.8bn. Energy & Power deals accounted for 41.9 percent of Middle Eastern involvement M&A by value, while the Financial sector dominated by number of deals.
Middle Eastern equity and equity-related issuance totalled $3.5bnn during 2017, a 36 percent decline year-on-year and the second lowest year since 2009 for issuance in the region. Twelve initial public offerings raised $$2.8bn and accounted for 80 percent of the year’s ECM activity in the region. Emaar Development PJSC IPO raised $1.3bn 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 percent market share.
“Bolstered by Saudi Arabia’s $12.4bn international Islamic bond in September, Middle Eastern debt issuance reached $103.7bn during 2017, 33 percent more than the proceeds raised during last year and by far the best year in the region since records began in 1980,” added Najjar.
JP Morgan took the top spot in the Middle Eastern bond ranking during 2017 with a 15.5 percent share of the market, while Malayan Banking Bhd took the top spot for Islamic DCM issuance with a 10.8 percent share.