Investment banking fees surge 34.4%

Fees in investment banking activities in Singapore have risen US$1 billion (S$1.37 billion) so far this year, a 34.4 per cent increase from 2020 as mergers and acquisitions (M&A) activity hit a record high.

According to preliminary data from Refinitiv released yesterday, the growth in investment banking fees was largely buoyed by a 91.1 per cent rise in advisory fees for completed M&A deals, which have amounted to US$349.2 million so far this year.

This comes as M&A activity in Singapore witnessed a record period of deals amounting to US$175.1 billion so far in 2021, up 70.4 per cent from the previous year mainly due to the US$31.1 billion de-Spac (special purpose acquisition company) transaction of Grab and Altimeter Growth Corp.

Over the year, Singapore saw a total of seven de-Spac transactions with a combined value of US$42.8 billion, as opposed to just one deal last year.

Singapore-targeted M&A activity amounted to a combined value of US$94.7 billion, up 97.8 per cent compared with 2020.

Morgan Stanley led in the M&A league table rankings for any Singapore involvement, accounting for 32 per cent of market share and US$56 billion in related deal value.

Debt capital market (DCM) underwriting fees, too, surged 87.6 per cent from a year ago to hit US$182.6 million as primary bond offerings from Singapore-domiciled issuers witnessed a record period to raise US$45 billion so far this year.

This represents a 67.3 per cent increase compared with a year ago, with Singapore companies from the financial sector capturing more than half (55.2 per cent) of market share to raise US$24.8 billion so far this year, up 84.5 per cent from 2020.

The top Singapore bond deal this year was a combined US$2.5 billion bond offering priced by Temasek in July.

Green, social, sustainability and sustainability-linked bonds from Singapore issuers notably accounted for 20 per cent of the total bond proceeds in 2021 after raising US$9.2 billion.

DBS led the Singapore bond underwriting sector, with US$7.4 billion in related proceeds and capturing about 16.4 per cent market share.

Meanwhile, equity capital market (ECM) underwriting fell 19.3 per cent from the year before to US$229.3 million as follow-on offerings fell 18.4 per cent from the previous year despite a higher number of follow-on issues.

Equity and equity-linked issuance by Singapore companies raised US$11.9 billion, relatively unchanged from 2020.

Sea's US$3.5 billion primary follow-on offering marked the largest Singapore ECM deal this year, while High Technology accounted for 58.4 per cent of Singapore's ECM proceeds.

The ECM underwriting rankings were led by BofA (Bank of America) Securities with a 20.6 per cent market share and US$2.5 billion in related proceeds.


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A version of this article appeared in the print edition of The Straits Times on December 23, 2021, with the headline Investment banking fees surge 34.4%. Subscribe