According to the latest LSEG Middle East & Africa Investment Banking review, the Middle East and North Africa (MENA) region witnessed a surge in investment banking activity during the first half of 2024. The report highlights significant growth across various segments, including investment banking fees, mergers and acquisitions (M&A), equity capital markets (ECM), and debt capital markets (DCM).
Investment Banking Fees Reach Record Highs
An estimated US$724.5 million in investment banking fees were generated in the MENA region during H1 2024, marking a 23% increase compared to last year. This figure represents the third-highest first-half total since records began in 2000.
- Debt capital markets underwriting fees soared by 81% to US$230.9 million, setting a new record for the year’s first half.
- Equity capital markets underwriting fees also significantly increased by 62% year over year to US$206.7 million.
- Advisory fees from completed M&A transactions rose 14% to US$130.7 million.
Saudi Arabia Emerges as a Dominant Force
The report highlights Saudi Arabia’s growing influence in MENA investment banking. Forty-seven percent of all MENA investment banking fees were generated in the Kingdom during H1 2024, followed by the United Arab Emirates (36%). This underscores Saudi Arabia’s increasing importance as a regional financial hub.
Mergers and Acquisitions Activity on the Rise
The value of announced M&A transactions with any MENA involvement reached US$46.6 billion in H1 2024, representing a 48% increase compared to the previous year. This growth was primarily driven by inbound deals involving non-MENA acquirers, which increased 55% in value to US$11.2 billion.
- Outbound M&A activity from the MENA region also witnessed a significant jump, reaching US$28.6 billion, a 77% increase from the previous year. This surge was primarily attributed to Abu Dhabi National Oil Company’s (Adnoc) potential takeover of German materials company Covestro, a deal worth US$14.8 billion.
Equity Capital Markets Experience Record Growth
MENA equity and equity-related issuance reached US$16.5 billion during H1 2024, nearly tripling 2023 levels and marking the highest first-half total since 2008. The issues also increased by 19% compared to last year.
- Initial public offerings (IPOs) accounted for 22% of activity, with 23 IPOs recorded during the year’s first half. The largest IPO in the region was Saudi healthcare provider Dr. Soliman Abdul Kader Fakeeh Hospital Co, which raised US$763.5 million in its Tadawul stock market debut in May.
- Follow-on offerings raised a record-breaking US$13.0 billion, driven by Saudi Aramco’s June stock sale of US$11.2 billion.
Debt Capital Markets Set New Records
MENA bond issuance totaled US$73.4 billion during H1 2024, a 59% increase from the previous year and the highest first-half total since records began in 1980. The number of issues also surged by 63%.
- Saudi Arabia emerged as the most active issuer nation, accounting for 49% of total bond proceeds, followed by the United Arab Emirates (29%) and Qatar (10%).
- Islamic bonds, or Sukuk, also witnessed a record-breaking first half, raising US$27.6 billion.
The LSEG Middle East & Africa Investment Banking review for H1 2024 paints a picture of a thriving and dynamic investment banking landscape in the MENA region. With Saudi Arabia leading the charge, the region is poised for continued growth in the year’s second half and beyond. This positive momentum is a testament to the region’s strong economic fundamentals and increasing attractiveness to global investors.
