The value of the merger and acquisition (M&A) transactions with any Middle Eastern and North African involvement during the first six months stood at $50 billion, according to Refinitiv, a major provider of financial markets data and infrastructure.
 
This was 55% less than the value recorded during the same period in 2019, which reached a record high with Saudi Aramco’s agreement to buy a stake in Saudi Basic Industries Corp for $69.1 billion, stated Refinitiv in its 2020 first half investment banking analysis for Mena.
 
The number of deals declined 9% from last year to a three-year low, said the report.
 
The value recorded during the period is the third highest first half total of all-time after 2019 figures of $112.7 billion and 2007 ($58.5 billion), it added.
 
According to the report, investment banking fees in the region reached an estimated $522.1 million during the first half, down 25% from last year and was seen at a three-year low with declines recorded across equity underwriting, M&A advisory, and syndicated lending.
 
Equity capital markets underwriting fees declined 62% to $17.1 million, marking the lowest first half year total for equity fees in the region since 2009, it added.
 
According to Refinitiv, advisory fees earned from completed M&A transactions generated $206.4 million, down 7% year-on-year, while syndicated lending fees fell 50% to a five-year low of $137.7 million.
 
Debt capital markets underwriting fees increased 6% year-on-year to $161.0 million, the highest first half total since our records began in 2000.
 
Government & Agency fees accounted for 36% of total investment banking fees earned in the region during the first half, up from 24% during the same period last year.
 
Saudi Arabia generated the most fees in the region during the first six months which surged to $206.0 million, thus accounting for 39%, followed by the UAE with 29%.
 
HSBC earned the most investment banking fees in the region during the first six months of 2020, a total of $58.5 million or an 11.2% share of the total fee pool.
 
Refinitiv pointed out that after merger activity fell to a seven-month low of $1.9 billion in April, the M&A increased in volume and in value for two consecutive months and reached $27.5 billion in June as Saudi Arabia’s National Commercial Bank announced plans to acquire Samba Financial Group for $15.6 billion and a consortium of investors agreed to buy Adnoc gas pipeline assets for $10.1 billion.
 
The deals are the largest to be announced in the region so far during 2020 and boosted the value of M&A in June to the second highest monthly total since our records began in the 1980s.
 
Despite scoring the second highest first half total of all-time, domestic M&A registered a 72% decline from last year to $24.0 billion, again due to the Aramco/Sabic deal, stated the report.
 
Inbound M&A, involving an acquiror from outside of the region, increased 13% to an all-time first half high of $17.0 billion, while outbound M&A declined 12% to US4.8 billion.
 
Deals in the financial sector accounted for 41% of Mena target M&A activity during the first half of 2020. Saudi Arabia was the most targeted nation, followed by the UAE (25%) and Egypt (11%).
 
Morgan Stanley topped the Mena involvement announced M&A financial advisor league table during the first six months of 2020 with a 51% market share.
 
As to equity capital markets, Mena equity and equity-related issuance totaled $875.7 million during the first half of 2020, 58% less than the value recorded during the same period last year and the lowest first half total since 2004.
 
Just two initial public offerings were recorded during the first six months of 2020.
 
Saudi Arabian private healthcare operator, Dr. Sulaiman Al Habib Medical Group, raised $699.7 million on the Saudi Stock Exchange at the beginning of March, while Emerald Real Estate Investment raised $13.1 million on the Egyptian Stock Exchange in February.
 
EFG Hermes, Jadwa Investment and Riyadh Bank shared first place in the Mena ECM league table during the first half of 2020.-TradeArabia News Service

Copyright 2020 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).

Disclaimer: The content of this article is syndicated or provided to this website from an external third party provider. We are not responsible for, and do not control, such external websites, entities, applications or media publishers. The body of the text is provided on an “as is” and “as available” basis and has not been edited in any way. Neither we nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this article. Read our full disclaimer policy here.