Signs that DCM will soon be THE hot area in Gulf investment banking
The GCC's debt capital markets (DCM) are beginning to heat up again.
Last year was very good for DCM in the Gulf, with bond sales in the region more than trebling 2008 levels to $42bn, according to figures from Dealogic. So far this year, that level has shrunk to $17.1bn.
But a flurry of new issuance recently, combined with predictions that the fourth quarter could generate a further $10bn in bond sales, is leading many to speculate that DCM could really take off next year, according to the FT.
Surely, then, investment banks will have been (or at least are looking to) bolster headcount in this sector? Not necessarily.
"Despite the reduced activity, most investment banks kept their Gulf DCM teams intact. Now activity is picking up again there's not an immediate need to recruit," says Ally Ho, head of the financial services practice, MEA at Pederson & Partners. "Banks have been very reluctant to lay off senior originators because they are incredibly hard to replace."
Still, there are some signs of recruitment activity. RBS, for instance, which has been growing its share of the DCM advisory market this year, is expected to grow its team by 15-20% over the next 12 months, according to recruitment sources.
HSBC, which has long-dominated the DCM league tables in the region, is expected to add to its more junior ranks following the appointment of Mohammad Al Tuwaijri in June. Deutsche Bank and Citi are also hiring, according to headhunters, again at the junior end of the market.
But while the investment banks are keen to hold on to their specialist DCM rainmakers, they take a more generalist approach when recruiting at the analyst and associate level.
"Banks don't necessarily want a DCM specialist in the more junior roles," says Matthew Lewis, director of headhunters Boyden Middle East. "Regional experience is paramount, followed by an understanding of both capital markets and M&A."
Where else should be positioning yourself? As well as the banks mentioned above, Standard Chartered, Barclays Capital, Commercial International Bank (Egypt), National Bank of Abu Dhabi, Morgan Stanley and Qatar National Bank have all been active in the debt markets this year, according to Thomson Reuters figures.
