Strongest quarter in two years for Middle East M&A

There was a revival in Middle East mergers and acquisitions business in the second quarter of this year, but overall the investment banking industry in the region remains under pressure from a lack of activity in the financial markets.

This was the picture that emerged from an analysis of the investment banking sector by Thomson Reuters, the global information group.

Regional mergers and acquisitions (M&A) activity reached US$8.5 billion (Dh31.21bn) in the second quarter, 45 per cent up on the first, marking the strongest quarter in M&A since 2010. But fees from M&A were 19 per cent down compared with the first half of last year.

"Investment banking has seen strong activity across Middle Eastern markets during the second quarter of 2012," said Russell Haworth, the managing director for the Middle East and North Africa at Thomson Reuters. "This is clearly evident by the strong M&A activity during the second quarter, which took the total value of M&A to $14.3bn by the first half of 2012, an increase of 137 per cent over the same period in 2011."

Equity capital market (ECM) issuance, the industry term for selling new shares or derivatives of shares, reached $4bn in the period April to June, nearly four times the value of the first three months. But nearly half this amount was made up by one transaction, a $1.9bn issue by the Qatari company Qtel.

Total ECM activity in the first half of the year was 40 per cent down on the same period of 2011.

Bolstered by the Qtel deal, telecommunications was the most active sector in the region during the first half, followed by the financial sector.

Qatar National Bank, the sole bookrunner for Qtel, topped the rankings for ECM business.

Deutsche Bank topped the regional rankings for fees from the booming debt capital markets, while HSBC led the M&A fee rankings.