MANAMA: Investment banking in the Middle East continued to grow in the first half of this year as it bucked a global trend reflecting an upturn in economic activity across the region.
Although second quarter activity was at a lower level than the first quarter, there is still a strong foundation for which to build on for the remainder of this year after an overall impressive start to the year, according to a report by Thomson Reuters.
"Although the second quarter was modest in comparison to a highly-impressive first, the two have combined to build a solid start to 2010," said Thomson Reuters Middle East managing director Basil Moftah.
"The levels of fees, merger and acquisition (M&A), capital market and loan activity are fuelling a growing confidence among the Middle East investment banking community."
The analysis shows that M&A fees account for 40.4 per cent of activity during the first half of this year, with debt capital market (DCM) activity accounting for 13pc of Middle East fees, in the most active first half since 2007.
HSBC holds the top spot in Middle Eastern DCM fee ranking for the first half of this year, with Central Bank of Libya topping the Middle Eastern equity capital market ranking.
Credit Suisse leads the M&A rankings with Standard Chartered leading the syndicated loans ranking.
The second quarter recorded a 70pc drop in M&A activity compared to the previous quarter, but this had little impact on the overall first half figures which reached $11.7 billion.
"Real estate represents the most targeted industry in the Middle East with $4.4bn, or 37.7pc of the region's M&A activity," the report states.
"The top Middle Eastern targeted deal for the first half was the government of Abu Dhabi's acquisition of Yas Island Properties of Aldar Properties for $2.4bn.
"Debt issuance recorded a 32pc year-on year decline during the first half of 2010 to post $10.9bn of activity.
"Agency, supranational and sovereign issuance accounts for 39pc of the activity with investment grade corporate issuance accounting for 33.4pc.
"The top Middle Eastern bond this year to date was issued by Egypt and worth $1.5bn," it added.
In the equity capital markets, equity issuance reached $5.6bn for the first half of the year, an annual increase of 64pc.
Middle East loan activity during the second quarter reached $3.3bn, combining with the first quarter to reach $12.4bn, a year-on-year increase of 92pc.