Middle East’ mergers and acquisitions (M&A) activity reached $ 8.5 billion during the second quarter of 2012, an increase of 45 percent on the previous quarter, and marking the strongest quarter since 1Q 2010, the Thomson Reuters’ regional investment banking review said.

The region’s equity capital market issuances also grew to $ 5 billion in H1 2012, due to $ 4 billion issuance in the second quarter, four times the value seen during the first quarter 2012, it said.

The report said Middle Eastern M&A activity reached $ 8.5 billion during the second quarter of 2012, an increase of 45 percent on the previous quarter, and marking the strongest quarter since 1Q 2010.

Russell Haworth, Managing Director, Middle East & North Africa at Thomson Reuters, said: "Investment banking has seen strong activity across Middle Eastern markets during the second quarter of 2012. This is clearly evident by the strong M&A activity during the second quarter which took the total value of M&A to $ 14.3 billion by the first half of 2012, an increase of 137 per cent over the same period in 2011 when activity totaled $ 6.0 billion."

Equity capital markets activity during the first half of 2012 totaled $ 5.0 billion, down 40 percent from the first six months of 2011. The top Middle Eastern ECM transaction was a $ 1.9 billion follow-on from Qatari telecoms company Qtel. Bolstered by this deal, telecoms was the most active sector in the Middle East during the first half of 2012 with 44 percent, followed by the Financials sector with 26 percent. As sole-lead bookrunner for Qtel’s follow-on offering, Qatar National Bank topped the Middle Eastern Equity Capital Markets ranking.

Financials is the most targeted industry in the Middle East M&A activity with $ 4.3 billion or 30 percent of the activity so far during 2012, followed closely by telecoms with 29 percent. Egypt is the most active Middle Eastern country, based on target, with $ 4.0 billion for 28 percent of first half activity. Credit Suisse topped the Any Middle Eastern Involvement M&A Ranking during the first half of 2012 with $ 4.78 billion, while HSBC took second place with $ 4.13 billion. HSBC topped the Middle Eastern target M&A Ranking, controlling 29 per cent of the market. The largest Middle Eastern targeted deal so far this year was National Bank of Kuwait’s $ 2.1 billion offer for Kuwaiti Islamic lender, Boubyan Bank in June.

Middle Eastern debt issuance reached $ 6 billion during the second quarter of 2012, a 45 percent decline from the strong first quarter total of $ 10.9 billion. It took first half 2012 activity to $ 16.9 billion, up 51 percent on the same period in 2011.

Islamic debt issuance reached $ 14.5 billion from 34 issues, an increase of 25 percent from the same period in 2011, and the strongest first six months total since 2008. The top Islamic issuer nation during the first half of 2012 is Malaysia with 45 percent of the activity, while the strongest industry is the financials sector. HSBC took the top spot in the Islamic bond ranking for the first half of 2012 with 10 issues, which raised $ 1.9 billion.

Middle Eastern syndicated lending during the first half of 2012 reached just $ 186.8 million, a 98 percent decrease from the same period in 2011 ($ 10.2 billion), and the slowest first half in more than a decade. As book runner on Citadel Capital’s $ 175 million refinancing loan in January, Citi took the top spot in the Middle Eastern Loan Bookrunner ranking for first half 2012.

Moreover, the Middle Eastern investment banking fees reached $ 234.8 million during the first half of 2012, a 5 percent increase from the first six months of 2011 when fees reached $ 223.7 million. M&A fees totaled $ 59.6 million during the first half, accounting for 25 percent of the overall fee pool. M&A fees were down 19 percent compared to the same period in 2011 ($ 74.0 million).

Middle Eastern debt capital markets fee activity during the first half of 2012 totaled $ 54.9 million, more than double the $ 25.1 million seen during the first half of 2011. Fees from syndicated lending and equity capital markets totaled $ 61.3 million and $ 59.0 million, respectively.

Deutsche Bank topped the Middle Eastern DCM fee rankings for the first half of 2012, earning 10 per cent of the fees. HSBC topped the Middle Eastern M&A fee rankings with $ 5.3 million, while Qatar National Bank and Saudi British Bank topped the equity capital markets and syndicated lending fee league tables, respectively.