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The value of announced M&A deals involving any Mena fell 65% year-over-year to $8.3 billion in Q1 2023. Saudi Arabia was the most targeted country, followed by the UAE and Egypt.
The number of deal announcements in the region also fell 26% from last year, the slowest year since 2020, according to Refinitiv, a unit of LSEG (London Stock Exchange Group).
Deals involving MENA targets fell to a seven-year low, totaling $2.9 billion in the first quarter of 2023, down 75% year-on-year. The number of deals fell 22% from last year, marking the lowest number of first-quarter deals since 2020. Inbound deals involving non-MENA acquirers fell 72% year-over-year to $742.3 million, while the value of domestic deals fell 76% to $2.2 billion.
Outbound M&A in the Middle East and North Africa totaled $5 billion, a 46% decline compared to the value recorded in Q1 2022.
The industrial sector was the most active, with deals targeting industrial companies accounting for 45% of MENA targeted M&A in Q1 2022, followed by the consumer goods and services sector at 15%.
Morgan Stanley ranks among the top M&A financial advisors announced for Q1 2023 among all Mena’s participation in the announcement.
Equity Capital Market
Equity and equity-related issuance in the MENA region totaled $3.6 billion in Q1 2023. Funds raised by companies in the region were down 6% and number of issuances was down 7% compared to Q1 2022.
Initial public offerings (IPOs) accounted for 99% of activity, while follow-on offerings accounted for 1%. There were 13 IPOs in the first quarter of 2023, in line with the number of IPOs in the same period last year. Together, they raised $3.5 billion worth of funding, down 5.3 percent from a year ago. Adnoc Gas PLC raised $2.5 billion in its initial public offering in March, making it the world’s largest IPO so far this year and the largest ever for a Mena oil and gas IPO.
The energy and power sector was the most active, with issuers raising $2.8 billion, or 78% of the region’s total equity funding. The high-tech and financial sectors ranked among the top three, accounting for 14% and 7% of the market respectively. Dubai Islamic Bank PJSC tops the Mena ECM underwriting leaderboard with a 13.9% market share in Q1 2023, followed by EFG Hermes with a 12.9% market share.
investment bank
According to the report, the Middle East and North Africa region generated $225.2 million worth of investment banking fees in the first quarter of 2023, a 62% decline after its strongest start to 2022.
Revenue from advisory fees on completed M&A deals in the region reached $66.1 million, down 71% from a year earlier and the lowest first-quarter total since 2021. Equity capital markets underwriting fee income of $70.8 million was down 14 percent from a year ago, a strong period last year, but still high compared to historical levels. Syndicated loan fees fell 97% year-over-year to $6.8 million, while debt capital markets fees rose 275% to $81.6 million, the highest Q1 level since 2021.
MENA fees accounted for 0.9% of global investment banking revenue in Q1 2023. Saudi Arabia generated 48% of all MENA expenses in Q1 2023, followed by the UAE (44%).
JPMorgan earned the most investment banking fees in the region in the first quarter of 2023, totaling $21.2 million, or 9.4% of the total fee pool.
debt capital market
Bond issuance in the Middle East and North Africa region totaled $26.9 billion in Q1 2023, almost triple the value recorded in Q1 2022 and the highest opening-year gain since 2021. Saudi Arabia was the most active issuer in Q1 2023, accounting for 67% of total bond proceeds, followed by the UAE (17%), Morocco (9%) and Egypt (6%).
Government and institutional issuers accounted for 55% of capital raised in Q1 2023, while financial issuers accounted for 45% of the market. Sukuk raised $6.3 billion in Q1 2023, a 57% increase from Q1 2022 and a three-year high. Sukuk accounted for 23% of total bond proceeds in the region in Q1 2023, compared to 42% in Q1 2022.
Citi tops Mena’s bond bookrunner rankings for the first quarter of 2023, with associated proceeds of $3.5 billion and a 13% market share. Emirates NBD PJSC ranks first in the MENA Sukuk league table for Q1 2023. — trade arab news agency
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