Investment banking fee revenue down 58.7% to $134m in Q1

Advisory fees for M&A deals plunged 80.4% YoY to $16.04m.

The value of Singapore’s investment banking activities plunged 58.7% YoY in Q1, totalling $134m (US$91.9m), according to data from research firm Refinitiv.

Revenue from advisory fees for completed mergers and acquisitions (M&A) were the hardest hit, plummeting 80.4% YoY to $16.04m (US$11m).

Overall M&A activity reached $25.65b (US$17.6b), down 35.7% YoY after a strong start in 2019. Singapore-targeted M&A activity crashed 33.8% YoY to $16.18b (US$11.1b), whilst domestic M&A amounted to $13.26b (US$9.1b) and fell 10.8% in value. Meanwhile, cross-border M&A activity slowed down as inbound M&A activity fell 69.2% YoY to $2.91b (US$2b), whilst outbound M&A dropped 31% YoY to $7b (US$4.8b).

The biggest M&A deal so far is the proposed merger between CapitaLand Mall Trust and CapitaLand Commercial Trust for $11.66b (US$8b).

Refinitiv noted that the majority of the M&A deal making in Singapore targeted the real estate sector, accounting for 64% market share and totaled $16.33b (US$11.2b). However, this figure is 15.4% YoY lower compared to Q1 2019. Financials took second place with a 7.4% market share, followed by high technology at 6.1%.

Deloitte leads in the M&A league table rankings as it accounts for 50.4% market share at $12.97b (US$8.9b) in deal value.

All other asset classes recorded declines. Underwriting fees from the equity capital market (ECM) were halved (54.7% YoY) to $42.29m (US$29m) over the same period.

ECM issuance plunged 64.5% YoY to $1.17b (US$804.2m) so far in Q1, its lowest start to a year since 2017 according to Refinitiv. Follow-on offerings fell 91.2% YoY to $279.4m (US$191.7m) worth of proceeds.

Lastly, debt capital market (DCM) underwriting fees similarly plunged 60.4% YoY to $32.52m (US$22.3m). Syndicated lending fees also slowed down 35.8% YoY to $43.14m (US$29.6m).

Primary bond offerings from Singapore-domiciled issuers were nearly halved (45.2% YoY) in Q1 to $6.27b (US$4.3b). Singaporean companies in the financial sector captured 50.8% market share but 27.7% lower to $3.21b (US$2.2b) YoY.

DBS Group currently leads the Singapore bonds underwriting with $2.48b (US$1.7b) of proceeds and capturing 38.8% of the market share. The bank also takes the lead in the overall investment banking fees with a total of $20.11m (US$13.8m) or 15.2% of the total fee pool.

In contrast, the value of initial public offerings (IPOs) rose eight-fold in Q1 to $892.84m (US$612.5m). Elite Commercial REIT’s $248.54m (US$170.5m) IPO is currently the largest IPO deal in Singapore. Credit Suisse currently leads Singapore’s ECM underwriting rankings, with a 21.1% market share and $226.35m (US$155.3m) in related proceeds.