The region’s investment banking market, as ever, remains more tilted to the Gulf, which has recently been less active in blockbuster sovereign wealth-fund M&A mandates and more vigorous in public-sector financing as the lower oil price has bitten.
Indeed, it was a record year for debt issuance in 2016, according to Moody’s, largely fuelled by sovereign issuance, including several international debuts. Large volumes look set to continue, if perhaps slightly diminished, in 2017.
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| Georges El Hedery, HSBC |
These trends have very much played into the regional and global strengths of HSBC, the Middle East’s best investment bank, led by its regional CEO, Georges El Hedery. In a year when époque-making investment banking mandates came thick and fast in the Middle East, HSBC has barely missed any of them. It was instrumental in the debut international bond issues from Saudi Arabia and Kuwait, in a jumbo deal for Qatar and a $20 billion triple-tranche deal extending to 30 years for Oman. But it has shown brains as well as brawn, as its coordination of bonds for regional financial institutions illustrates, notably the first Gulf insurance hybrid from Qatar Insurance Company and a string of perpetual sukuk from Kuwait. There was even a schuldschein bond for Abu Dhabi’s Etihad Airways, a first in that format from the region. Outside the Gulf, HSBC led an export credit agency-backed financing for the Egyptian national electricity company.
The last year was, again, something of a non-starter for equities. There is, however, a rather large deal on the horizon in this particular asset class. The IPO of Saudi Aramco would be the biggest listing anywhere in the world, ever. HSBC is advising on that project and started work with the company on a debut sukuk in local currency towards the end of the awards period.
In the awards period, HSBC helped Abu Dhabi healthcare firm NMC Health raise equity in London for a local acquisition, among other deals. It was also involved in advisory and equity financing deals for Qatar Airways in its acquisitions of large minority stakes in IAG and Latam Airlines.
Finally, HSBC’s regional markets business is also an asset for the bank and its clients, as shown by the $2 billion repo it provided to the Egyptian central bank, giving it much-needed dollar liquidity. Another innovative piece of work here is the $2 billion 25-year interest-rate swap it coordinated for Qatar’s Umm Al Houl Power Company.