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This year has seen economic devastation as Covid-19 caused lockdowns around the world. The pressures of a pandemic have given emerging markets an opportunity to shine. Investors have been looking to emerging markets in search of value and money managers and financial advisors haven’t missed the trend. A series of high value deals has pushed Citigroup to the front of the pack this year, dethroning JPMorgan Chase& Co. as lead dealmaker in the emerging markets, according to Bloomberg data. – Melani Nathan
JPMorgan ousted as Mideast-Africa’s top dealmaker by US rivals
By Matthew Martin
(Bloomberg) — JPMorgan Chase & Co. is no longer the top dealmaker in the Middle East and Africa after losing ground this year to rivals Citigroup and Morgan Stanley.
Citigroup leads the regional league table for initial public offerings, buoyed by its re-entry to Saudi Arabia in 2017 after a 13-year absence. It also worked on secondary placements from Egypt’s Hikma Pharmaceuticals and the United Arab Emirate’s Network International Holdings, according to data compiled by Bloomberg.
For Morgan Stanley, advising on the $18 billion merger of National Commercial Bank and Samba Financial Group, one of the biggest bank combinations of the year, helped propel it to the top of the table for takeovers. It also worked with a consortium that invested $10 billion in Abu Dhabi National Oil’s gas pipelines.
Citigroup had “a very strong 2020” after renewed investments in people and capital in the region over the past few years, Miguel Azevedo, head of investment banking in the Middle East and Africa, said in an interview. “We expect further IPO activity in 2021, both in the Middle East and Africa,” he said. JPMorgan declined to comment.
Deal flow in the Middle East has slowed from last year, when Aramco’s $30bn IPO and $70bn acquisition of a stake in Saudi Basic Industries boosted activity to a record.
But bankers still see signs that budget stresses caused by the coronavirus and low oil prices will encourage more deals as governments look to raise money through asset sales. Business owners, meanwhile, are looking to sell stock or merge to grow in size.
This year presented “unprecedented challenges as many clients needed to consider options they might not have thought about otherwise,” said Sammy Kayello, chief executive officer of Morgan Stanley’s Middle East and North Africa business. “We’re optimistic about 2021.”
Next year looks set to be a busy one for IPOs, particularly from Saudi Arabia. The CEO of the Saudi stock exchange said earlier this month that the pipeline is “much better” than in the past five years, with companies including Acwa Power and Solutions by STC expected to sell shares.
International investment banks have increasingly focused efforts on building a presence in the Middle East’s biggest economy, as Saudi Arabia was largely shut off to foreign investors until 2015.
Citigroup, which had been present in Saudi Arabia since 1955, exited in 2004, and obtained an investment-banking license three years ago as the country opened up.
In Africa, deal flow was mixed. While South African equity sales rose 31% from 2019 — when they sank to the worst levels in at least 12 years — the value of takeover deals dropped by almost a third to a three-year low. The continent’s most industrialized economy is trapped in its longest downward cycle since 1945.
In Ghana, Occidental Petroleum Corp.’s potential sale of its oil and gas stakes, and MTN Group’s disposal of its telecoms towers boosted transactions credited to the West African nation. Mauritius and Nigeria also chalked up M&A improvements, although the sum total of deals from the three countries was only slightly higher than those from South Africa.
Standard Chartered was the top arranger for bond sales from the Middle East and North Africa for the third year. With almost $140 billion raised in bond and sukuk sales, issuance reached a record, with sales driven by sovereigns looking to plug budget shortfalls.
In sub-Saharan Africa, Johannesburg-based Standard Bank Group toppled Standard Chartered as the No. 1 arranger of debt.
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