M&A (mergers and acquisitions) transactions with any Mena involvement hit $59.5 billion during the first nine months (9M) of 2023, down 16% compared to a year ago and the lowest first nine-month total since 2020.

Although down 20% from last year’s all-time record first 9M tally, the number of deals announced in the region during the first nine months of 2023 reached the third highest level since 1980, said the investment banking analysis for Middle East and North Africa (Mena) released by LSEG (London Stock Exchange Group).

Deals involving a Mena target totalled $18.8 billion during 9M 2023, down 54% from last year and a six-year low. Inbound deals involving a non-Mena acquiror declined 43% to $5.8 billion, while domestic deals decreased 57% in value to $12.9 billion.

Mena outbound M&A

Mena outbound M&A totalled $37.9 billion, up 44% from last year and the highest first 9M total in sixteen years. The Financials sector was most active, accounting for 35% of Mena target M&A during 9M 2023, followed by the Materials sector with 20%.

Saudi Arabia was the most targeted nation, followed by the UAE and Oman. JP Morgan topped the any Mena involvement announced M&A financial advisor league table during 9M 2023.

Equity Capital Markets

Mena equity and equity-related issuance totalled $7.5 billion during 9M 2023, the second highest first 9M total in the last fifteen years.

Proceeds raised by companies in the region declined 50% compared to first-half 2022, while the number of issues dropped by 14%. Initial public offerings accounted for 91% of activity, while follow-on issuance accounted for 9%.

A total of 30 initial public offerings were recorded during 9M 2023, one more than last year at this time and the highest first 9M tally since 2008. They raised a combined $6.8 billion. Abu Dhabi National Oil Company (Adnoc) raised $2.5 billion in its stock market debut in March. The state-owned oil company IPO is the largest in the region so far this year and the largest-ever listing on the Abu Dhabi Securities Exchange.

The energy and power sector was most active, with issuers raising $4.0 billion accounting for 53% of total equity capital raisings in the region. The industrials and high technology sectors followed, accounting for 10% and 9%, respectively. EFG Hermes took first place in the Mena ECM underwriting league table during 9M with an 11% market share.

Debt Capital Markets

Mena debt issuance totalled $61.1 billion 9M 2023, almost triple the value recorded during the same period in 2022 but lower than the first 9M total recorded during each of the previous five years. The number of issues declined 3% over the same period. Saudi Arabia was the most active issuer nation during 9M of 2023 accounting for 50% of total bond proceeds, followed by the UAE (32%) and Bahrain (7%).

Financial issuers accounted for 44% of proceeds raised during 9M 2023, while Government & Agencies accounted for 43%. Islamic bonds in the region raised $26.1 billion during 9M of 2023, a first 9M record. Sukuk account for 43% of total bond proceeds raised in the region, compared to 38% last year. Citi took the top spot in the Mena bond bookrunner ranking during the first nine months of 2023 with $7.8 billion of related proceeds, or a 13% market share. Standard Chartered takes first in the Mena Islamic bonds league table.

Investment Banking Fees

An estimated $803.2 million worth of investment banking fees were generated in Mena during 9M 2023, 31% less than the value recorded during the same period in 2022 and the lowest first 9M total since 2018. Advisory fees earned from completed M&A transactions in the region totalled $181.2 million, a 52% decrease from year ago levels and the lowest first 9M total in five years.

Equity capital markets underwriting fees totalled $165.5 million, down 39% from last year but reaching the second highest level in the last 15 years.

Syndicated lending fees declined 43% to an eight-year low of $253.6 million, while debt capital markets underwriting fees almost tripled from last year to $203.0 million. Forty-seven percent of all Mena fees were generated in the UAE, followed by Saudi Arabia (34%). JP Morgan earned the most investment banking fees in the region during 9M 2023, a total of $66.1 million or an 8% share of the total fee pool.

--TradeArabia News Service

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