Fewer mergers and stock market listings meant a slower year for the region’s investment banks in 2020, with the overall fees earned dropping 12 per cent to $1.2 billion, according to data provider Refinitiv.
Advisory work on debt deals boomed, with bond issuers from the Middle East and North Africa raising a record $120.7bn – a 15 per cent year-on-year increase. The UAE was the most active issuer, with sovereign and corporate borrowers raising about a third of this, or $40.6bn.
However, following a bumper 2019 that featured the world’s biggest stock market listing – Saudi Aramco’s $25.6bn initial public offering – fundraising on Mena equity markets plunged 86 per cent last year to $4.6bn.
Some $70.3bn of mergers and acquisitions involving Mena companies were completed last year.
"This makes 2020 the fourth highest annual total of all time, despite falling 47 per cent in value from the record high achieved [in 2019] with Saudi Aramco's agreement to buy a stake in Saudi Basic Industries Corp for $69.1bn," Refinitiv's 2020 Mena Investment Banking Review showed.
The biggest merger deal last year was the $15.6bn merger between Saudi Arabia’s National Commercial Bank and Samba Financial Group. The second-biggest was the $10.1bn sale of a 49 per cent stake in Abu Dhabi National Oil Company’s gas pipeline network to a group of investors including Singaporean wealth fund GIC, Global Infrastructure Partners and Brookfield Asset Management.
About two-thirds of the investment banking fees generated in the region were earned by bankers based either in the UAE or Saudi Arabia. Some $433.9m – or 36 per cent – of the total was generated in the UAE and $382.9m was generated in Saudi Arabia. HSBC was the top fee earner, with an 8.6 per cent share of the total fees earned, followed by JP Morgan with 7.1 per cent and Citi with 6.3 per cent.
The slightly more subdued market meant salaries in the investment banking sector remained largely flat last year, with 54 per cent of respondents to Hays’ 2021 GCC Salary and Employment Report saying their salary remained unchanged, 9 per cent reporting a cut and 37 per cent an increase.
"Expectations for this year are that investment professionals' salaries will remain stable, if not increase," Daivik Malhotra, a banking and financial services recruiter for Hays Middle East, told The National.
Hiring rates were low as a result of Covid-19, but “picked up significantly in the last quarter of 2020 and we expect this to continue into 2021”, he added.
“International investment banks, who are largely based in DIFC, are doing the most hiring in the region. Demand for their services has remained strong,” he said.
Hays’ salary survey found that a director-level post in the industry attracted an average salary of about Dh80,000 per month, while a senior associate’s average pay was about Dh60,000 and an associate Dh40,000.
Scores
Rajasthan Royals 160-8 (20 ov)
Kolkata Knight Riders 163-3 (18.5 ov)
UNSC Elections 2022-23
Seats open:
- Two for Africa Group
- One for Asia-Pacific Group (traditionally Arab state or Tunisia)
- One for Latin America and Caribbean Group
- One for Eastern Europe Group
Countries so far running:
ARGENTINA SQUAD
Goalkeepers: Franco Armani, Agustin Marchesin, Esteban Andrada
Defenders: Juan Foyth, Nicolas Otamendi, German Pezzella, Nicolas Tagliafico, Ramiro Funes Mori, Renzo Saravia, Marcos Acuna, Milton Casco
Midfielders: Leandro Paredes, Guido Rodriguez, Giovani Lo Celso, Exequiel Palacios, Roberto Pereyra, Rodrigo De Paul, Angel Di Maria
Forwards: Lionel Messi, Sergio Aguero, Lautaro Martinez, Paulo Dybala, Matias Suarez
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
Who was Alfred Nobel?
The Nobel Prize was created by wealthy Swedish chemist and entrepreneur Alfred Nobel.
- In his will he dictated that the bulk of his estate should be used to fund "prizes to those who, during the preceding year, have conferred the greatest benefit to humankind".
- Nobel is best known as the inventor of dynamite, but also wrote poetry and drama and could speak Russian, French, English and German by the age of 17. The five original prize categories reflect the interests closest to his heart.
- Nobel died in 1896 but it took until 1901, following a legal battle over his will, before the first prizes were awarded.
Company profile
Name: Tratok Portal
Founded: 2017
Based: UAE
Sector: Travel & tourism
Size: 36 employees
Funding: Privately funded
