After a disappointing year, investment banks are looking forward to a recovery in equity and M&A markets, and winners of our annual awards are poised to succeed.

Author: Michael Shari

UPSTARTS AND START-UPS

In other emerging and frontier markets, investors were most likely to avoid the Middle East and Africa last year. Our award for Best Investment Bank in the Middle East goes to Samba Capital of Saudi Arabia, which distinguished itself on the stock market despite military conflict in the region by raising $471 million in a single equity deal that garnered a 13.9% share of the capital raised on the region’s troubled stock market last year—more than any other bank on record.

Blackie, Standard Bank: The most important thing to watch is the recovery of economies post-economic slump.

Our award for Best Investment Bank in Africa goes to Standard Bank of South Africa which, with branches and licensed banks scattered strategically across the continent, advised its clients on seven M&A deals that were valued at $7.9 billion last year. All told, Standard commanded an 11.9% equity market share in Africa—more than any other bank. Based in Johannesburg, South Africa, this 154-year-old bank controls its own balance sheets in 20 countries across Africa through its local entities, such as Stanbic Holdings in Kenya and Stanbic IBTC Bank in Nigeria. Off the continent, the bank has a strong partnership with Industrial and Commercial Bank of China, which in in turn owns 20% of the bank in South Africa and 60% of its subsidiary in the UK, That bank  has actually been renamed ICBC Standard Bank. The bank now has in-country advisory capabilities in China and the UK.

“We make sure we have a real brick-and-mortar presence on the ground, with balance sheets and the capacity to do corporate market transactions, in every single one of the markets that we are in,” says Bill Blackie, head of investment banking at Standard Bank in Johannesburg. These advantages helped Standard also pick up our award for Best in Emerging Markets. “Most of my clients are coming to the market for the first time,” he adds.

This year, investment bankers are eyeing emerging markets, where their next new corporate clients will emerge. “The most important thing to watch is the recovery of economies post-economic slump,” explains Blackie. “Those that have been most disciplined will recover quicker. That will be a good indicator of where it will be most attractive to invest going forward.”

It’s only fitting that we found our Best Up & Comer in China, where investment banks saw their revenue surge to an all-time high of $8.8 billion last year.

Feuerstein, Societe Generale: Back in 2010, the market was driven by small-cap issuance; now we see more large-caps.

Guotai Junan Securities Co. of Shanghai advised Shanghai Electric Power on its acquisition of a 66.4% stake in K-Electric of Pakistan in a $1.8 billion deal last October. According to Dealogic, that deal represented a 5.6% share of the entire market for M&A in frontier markets last year.

Now it’s incumbent on Shanghai Electric, Guotai’s client, to secure the approval of local regulators, which will mean resolving a dispute that cropped up in February over $1.2 billion in fees that K-Electric allegedly owes two Pakistan government agencies.

However, it’s a Wall Street titan we honor for its unbeatable will to close one merger after another in some of the world’s most remote and least predictable countries. Best in Frontier Markets goes to Citi (which also won Best for Securitization). Citi advised Pampa Energia on its $1.1 billion acquisition of a 67.2% stake in Petrobras Argentina last May and Central Group of Companies on its $1.1 billion acquisition of hypermarket chain Big C Vietnam last April. All told, Citi advised clients on 11 M&A transactions that were valued at $6.4 billion—more than any other bank in frontier markets—last year.

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