Syndicated lending and debt capital markets – the supposed bright spots of Middle Eastern investment banking – are fading
We’ve mentioned previously that debt capital markets (DCM) have been a rare positive in the Middle Eastern investment banking world, while syndicated lending has been a quiet, but significant, generator of fees for local institutions in particular. Both appear to be wobbling.
Firstly, DCM, which on the face of it is doing rather well this year. In the first half, deals were up by 51% to $16.9bn on 2011, according to Thomson Reuters. However, in Q2, debt issuance slumped by 45% on the first quarter of the year, showing that anticipated ‘pipeline’ of deals is actually slowing down.
Then, there’s syndicated lending – during the first half of this year it reached just $186.8m, which is a 98% decrease on the same period in 2011 and the slowest first half for more than 10 years.
M&A, meanwhile, is showing some signs of recovery. Deal volume reached $8.5bn in the second quarter, which is an increase of 45% on Q1 and the strongest three months since Q1 in 2010.
As the league tables below show, boutique operations like Houlihan Lokey and Moelis & Co are starting to compete with the bulge bracket banks in M&A, but HSBC has taken the top spot. Deutsche Bank, meanwhile, has the number one spot in DCM, while HSBC has dropped down from 1st in 2011 to 7th this year.
