MENA Bond Market Record Impressive Gains in H1-2024

The bond market in the Middle East and North Africa (MENA) region totalled $73.4 billion during the first half of 2024, 59% more than the value recorded last year at this time and the highest first half total since 1980, the London Stock Exchange Group (LSEG) said in a report.

The report entitled “LSEG Deals Intelligence: MENA Investment Banking Review First Half 2024,” also said that the number of issues increased 63% over the same period.

“Saudi Arabia was the most active issuer nation during the first half of 2024 accounting for 49% of total bond proceeds, followed by the UAE and (29%), and Qatar (10%) financial issuers accounted for 56% of proceeds raised during the first half of 2024, while government & agencies accounted for 36%, the report noted.

Investment Banking Fees

An estimated $724.5 million worth of investment banking fees were generated in the MENA region during the first six months of 2024, 23% more than the value recorded a year ago and the third highest first half total in the region since LSEG’s records began in 2000.

Debt capital markets underwriting fees increased 81% to $230.9 million, the highest first half debt capital markets fee total in the region since 2000. Equity capital markets underwriting fees increased 62% year on year to $206.7 million.

Merger and Acquisitions

The value of announced M&A transactions with any Middle East or North African involvement reached $46.6 billion during the first six months of 2024, up 48% compared to year ago levels. The number of deals announced in the region declined 5% from last year at this time.

Deals involving a MENA target totalled $17.6 billion during the first half of 2024, up 22%from first half 2023 levels as inbound deals, involving a non-MENA acquirer, increased 55% in value to $11.2 billion.  Domestic M&A in the region declined 12% to seven-year low of $6.3 billion.

MENA outbound M&A totalled $28.6 billion, a 77% increase from year ago levels and the highest first half total since 2007, boosted by the announcement that Abu Dhabi National Oil Company (ADNOC) had entered into negotiations with German materials company Covestro on a potential takeover worth $14.8 billion.  It was the largest deal with MENA involvement during the first half of 2024 and the 9^th largest globally.

Equity Capital Markets

MENA equity and equity-related issuance totalled $16.5 billion during the first half of 2024, almost three-times 2023 levels and the highest first half total in the region since 2008.The number of issues increased 19% from H1 of 2023.

The initial public offerings (IPOs) accounted for 22% of activity, while follow-on issuance accounted for 78%. A total of 23 IPOs were recorded during the first half of 2024, the highest first half total since 2008.

They raised a combined $3.6 billion, 32% less than last year. Saudi healthcare provider Dr Soliman Abdul Kader Fakeeh Hospital Co, raised $763.5 million in its Saudi main stock exchange Tadawul debut in May, the largest IPO in the region during the first half of 2024, the report said.