Standard Chartered Is Top MENA Bond Arranger as Sales Boom

(Bloomberg) -- For the first time since 2008, Standard Chartered Plc is topping the list of bond sales arrangers in the Middle East and North Africa.

The emerging markets-focused lender climbed four places from 2017 and has already built up a substantial lead on the competition just four months into the year, according to data compiled by Bloomberg. JPMorgan Chase & Co., last year’s MENA league table leader, sits at No. 5.

The variety of bond issues this year, including governments, companies, banks, Islamic issuers, high yield, private placements as well as sales in Taiwan and China, has suited Standard Chartered’s diverse product offering, Salman Ansari, the bank’s head of capital markets for Africa and the Middle East, said in an interview in Dubai.

Bond sales from the MENA region, which includes the two biggest Arab economies of Saudi Arabia and the United Arab Emirates, have climbed 20 percent this year to $58 billion as governments sought to bridge budget deficits caused by low oil prices, and issuers attempted to beat an expected rise in interest rates. Sales climbed to a record $101 billion last year, led by Saudi Arabia, which raised $21.5 billion.

Diverse Issues

“Historically, we have seen issuance concentrated in one sector, while this year you have seen a broad spectrum of sectoral issuances across financial institutions, sovereigns and corporates,” Ansari said at the Dubai International Financial Centre. “If you look at the number of deals, we have always been in the top quartile, but sometimes rankings do get lopsided because of one or two big deals.”

The Middle East and Africa, where it is present in 25 markets, is Standard Chartered’s third-biggest region by income after greater China and North Asia, and Southeast and South Asia, according to its annual report. The U.A.E. is one of its five biggest businesses. The London-listed lender returned to profit in 2017 after two years of losses, with underlying pretax profit almost tripling in 2017 to $3 billion.

Standard Chartered was one of the arrangers of Qatar’s jumbo transaction of $12 billion, the biggest from the region this year. It has also been helped by the growing number of borrowers from the Gulf choosing to raise money through Formosa bonds in Taiwan, where Standard Chartered participated in five of seven deals, according to data compiled by Bloomberg. It was also one of the managers for a Sharjah government issue that raised money in China through Panda bonds.

Bond Sales

Ansari forecast bond sales this year to be similar to the last couple of years. Sales in 2017 were up 26 percent from the previous year’s $81 billion, and almost triple the amount raised in 2015, according to data compiled by Bloomberg.

“In the last few years, the MENA region has really raised its profile in the global debt investor community,” Ansari said. There is a sustainable investor base for MENA credit from Asia, Europe and the U.S., and “while markets have been slightly more challenging this year, investor appeal has continued to remain solid given the strength of the underlying” regional credits, he said.

To contact the reporter on this story: Arif Sharif in Dubai at asharif2@bloomberg.net.

To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Robert Brand

©2018 Bloomberg L.P.