The value of announced M&A (mergers and acquisitions) transactions with any Mena involvement slumped yoy 65% reaching $8.3 billion during the first quarter of 2023. Saudi Arabia was the most targeted nation, followed by UAE and Egypt.

 

The number of deal announcements in the region also fell 26% from last year, making it the slowest start to a year since 2020, said Refinitiv, an LSEG (London Stock Exchange Group) business.

 

Deals involving a Mena target fell to a seven-year low and totalled $2.9 billion during first quarter of 2023, down 75% from a year ago.  The number of deals declined 22% from last year and marked the lowest first quarter deal count since 2020.  Inbound deals involving a non-Mena acquiror declined 72% from a year ago to $742.3 million, while domestic deals fell 76% in value to $2.2 billion.  

 

Mena outbound M&A totalled $5.0 billion, down 46% compared to the value recorded during the first quarter of 2022.

 

The industrials sector was most active, with deals targeting industrial companies accounting for 45% of Mena target M&A during first quarter of 2022, followed by the consumer products & services sector with 15%. 

 

Morgan Stanley topped the any Mena involvement announced M&A financial advisor league table during the first quarter of 2023.

 

Equity capital markets

Mena equity and equity-related issuance totalled $3.6 billion during the first quarter of 2023.  Proceeds raised by companies in the region declined 6% compared to the first quarter of 2022, while the number of issues fell 7%.

 

Initial public offerings (IPO) accounted for 99% of activity, while follow-on issuance accounted for 1%. A total of 13 initial public offerings were recorded during the first quarter of 2023, consistent with the number IPOs issued a year earlier.  They raised combined proceeds worth $3.5 billion, down 5.3% from a year ago. Adnoc Gas PLC raised $2.5 billion in its stock market debut in March, making it the largest IPO globally so far this year and the largest Mena oil & gas IPO of all time.

 

The energy & power sector was most active, with issuers raising $2.8 billion accounting for 78% of total equity capital raisings in the region.  The high technology and financials’ sectors rounded out the top three, accounting for 14% and 7% market share, respectively. Dubai Islamic Bank PJSC took first place in the Mena ECM underwriting league table during the first quarter of 2023 with an 13.9% market share, followed by EFG Hermes with 12.9% market share.

 

Investment banking

According to the report, an estimated $225.2 million worth of investment banking fees were generated in the Middle East & North Africa during the first quarter of 2023, a 62% decline after witnessing the strongest start in 2022.  

 

Advisory fees earned from completed M&A transactions in the region reached $66.1 million, a 71% decrease from the comparative period last year, making it the lowest first quarter total since 2021.  Equity capital markets underwriting fees generated $70.8 million, 14% lower compared to a strong period last year, but still elevated compared to historical levels. Syndicated lending fees declined 97% from a year ago to $6.8 million, while debt capital markets fees grew 275% to $81.6 million, the highest first quarter total since 2021.  

 

Mena fees account for 0.9% of investment banking fees earned globally during the first quarter of 2023.  Forty-eight percent of all Mena fees were generated in Saudi Arabia during the first quarter of 2023, followed by the UAE (44%).

 

JP Morgan earned the most investment banking fees in the region during the first quarter of 2023, a total of $21.2 million or a 9.4% share of the total fee pool.

 

Debt Capital Markets

Mena debt issuance totalled $26.9 billion during the first quarter of 2023, almost triple the value recorded during the first quarter of 2022 and the highest start to a year by proceeds since 2021.  Saudi Arabia was the most active issuer nation during the first quarter of 2023, accounting for 67% of total bond proceeds, followed by UAE (17%), Morocco (9%) and Egypt (6%).

 

Government and Agencies issuers accounted for 55% of proceeds raised during the first quarter of 2023, while financial issuers represented 45% market share. Islamic bonds raised $6.3 billion during the first quarter of 2023, a 57% increase from the first quarter of 2022 and a three-year high.  Sukuk account for 23% of total bond proceeds raised in the region during the first quarter of 2023, compared to 42% during the first quarter of 2022. 

 

Citi took the top spot in the Mena bond bookrunner ranking during the first quarter of 2023, with $3.5 billion of related proceeds, or a 13% market share. Emirates NBD PJSC ranked first in the first quarter 2023 Mena Islamic bonds league table.-- TradeArabia News Service