Easter report: Morgan Stanley's mega blocks business makes it top of 1Q class

Data InsightECM Explorer 7 April

Easter report: Morgan Stanley's mega blocks business makes it top of 1Q class

Morgan Stanley finished the first quarter as top of the class of EMEA ECM bookrunners, with a steady flow of huge block trades propelling the bank up the Dealogic league table.

The US financial giant’s follow-on wins involved roles on the GBP 2bn sell-down in LSEG [LON:LSEG], the dual tranche EUR 3.2bn secondary sell-down in Heineken [AMS:HEIA] and Heineken Holding [AMS:HEIO], EUR 1bn capital raises in EDP Renovaveis [ELI:EDPR] and in Energias de Portugal [ELI:EDP]. It ended the quarter with a EUR 1.4bn block in Mercedes-Benz Group [ETR MBG], a deal on which it was the sole bank.

Morgan Stanley's 1Q league table volume of USD 3.9bn was its best quarter since the start of 2022. It also finished with a whopping 11.59% of market share, a greater dominance than any bank managed to achieve across all quarters last year.

Goldman Sachs finished as a strong runner up. The US bank was a fellow bookrunner to MS on a number of its biggest deals and also held a role on the EUR 2.16bn block in BNP Paribas on March 1. The bank was also more active in the IPO market, with a role on the second line of the EUR 355.5m IPO of IONOS [ETR:IOS]. But the sheer volume of Morgan Stanley’s follow-on business ensured it took top spot at the end of 1Q.

Goldman's USD 3.32bn of league table volume and 9.9% market share was an improvement on its 4Q22 and 3Q22 numbers; the bank was also on 17 transactions this quarter making it the joint most active bank in EMEA ECM alongside BNP Paribas, which also did 17 deals.

The French bank was one of the most improved among EMEA’s top 10. It finished 1Q in third place, in terms of league table volume, its best quarterly finish post-crisis. Alongside being the joint most active bank in the market, it had the broadest spread across deal types.

As well as holding a role on many of the largest follow-ons of the quarter, it was also a global coordinator on the IPO of EuroGroup Laminations [BIT:EGLA] and IONOS, and a bookrunner on the USD 2.4bn-equivalent listing of ADNOC Gas [ADX:ADNOCGAS] in Abu Dhabi.

Despite the IPOs of IONOS and EuroGroup, 1Q was grim for new listings and bankers speaking to this news service expect more of the same in 2Q.

“We have done some things but we could have been busier and my outlook on the year is exactly the same now as it was before 1Q, with accelerated products gathering momentum, IPOs a lot slower and convertibles ticking along,” said a senior banker at a top ten bank. “It is going to be similar in 2Q but hopefully in 3Q we will see IPOs return and I am far more bullish around H2 than H1.”

Many of the top 10 will be happy with their relative performance in 1Q, but the fact remains that investment banking revenue, including EMEA ECM, has fallen dramatically since the start of 2022.

The industry remains beset by worry over reported cost-cutting and until volumes increase and high margin products like IPOs return, there will be unease within the sector.

Dealogic stats show EMEA ECM net revenue of only just over USD 400m in 1Q, better than some quarters of last year, but not all, and far below the heady days of 2020 and 2021.

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