There is a pent up demand for business in the merger and acquisition (M&A) in the GCC. The activity is set to pick up in the region in 2012-13 and Qatar would emerge as the most active player in the deals involving the assets in the Mena, Europe and Far East region.
“The boom is on the horizon. HSBC has been involved in a number of deals and we will see it picking up and going forward in the next six to 12 months”, two key executives of HSBC disclosed to The Peninsula in a recent interview.
HSBC that acted as lead manager for Mannai’s successful QR399m rights issue and was also the buy-side adviser and lead arranger for the financing of Mannai’s acquisition in 35 percent interest in the Axiom Telecom early this year, is now working with other clients in the Oil and Gas sector, hospitality industry, contracting and trading.
“Some big names in the Qatari family businesses are keen on acquiring outside Qatar. There are other potential groups who are looking for deals in Europe and the Far East”, said Fadi A Fattal, Head of Commercial Banking, HSBC.
There are some good opportunities in the region and some of our clients are looking at taking advantage of the opportunities. Despite the political instability, businessmen want to be in Egypt and catch the upward trend. Our clients are also keen on the re-emerging oil and gas sector in Iraq. Both the public sector and private sector are being actively involved in the deal process.
HSBC believes Qatar’s record spending budget announcement and its diversification will offer more opportunities for a trade bank of its kind. With the bank expecting that the boom time is coming in, it is adequately staffing its team in Qatar so that they are well prepared for the boom. “We are seeing a lot of companies coming in and obviously there are increasing possibilities for trade and project finance”, Fadi said.
Qatar is very infrastructure intensive at the moment. The country is set to invest about $ 100bn to build stadiums, hotels, roads and other infrastructure for the 2022 soccer World Cup. As the multi-billion riyal infrastructure projects are set to kick-off in another three to six months, we see a lot of potential for project finance. But it would be mainly in the private sector and quasi-government sector, he said.
On the huge drop in GCC’s syndicated loans in 2011, Fadi said the Syndicated loan is facing challenges in the region mainly due to banks’ risk appetite. That said, HSBC successfully concluded a syndicated facility for USD 4.7b for the Barzan natural gas project.
“A lot of funding is taking place on bilateral basis and mainly on a club deal basis. So we don’t foresee a lot of syndicated loans in 2012”. On Trade Finance, Farhan Zaidi, Head of Trade and Supply Chain, HSBC, said: “Trade is our No.1 sector of portfolio. We are looking at a good number of trade deals in the health sector, FMCG (fast moving consumer goods) and auto sector in 2012. With Qatar’s increased interest in the health sector, more activities are expected to take place in this segment in the next two years”. Farhan said global economy is fast connecting towards the East. More corridors are coming up in the world and the East to East migration is fast picking up. Qatar is becoming more focused in the expanding East to East business.
The Peninsula
27 June
