Why working in equity capital markets in the Gulf is currently career suicide
We've mentioned previously that working in an international investment banking role in the Gulf is a precarious position to be in currently, but if you're an equity capital markets (ECM) professional, you'd be foolish to remain in the Middle East.
At the senior end, ECM heads within international banks are being pulled back from Dubai with increasing frequency.
Yesterday it emerged that Citigroup's head of equity capital markets for MENA, Adam Key, is now moving to cover the region from London. This follows on from Deutsche Bank's decision to move its key ECM man, Christopher Laing, away from Dubai and back to the UK. George Pavey, Credit Suisse's head of ECM in the region, also relocated to Hong Kong in May.
Ally Ho, head of financial services MENA for executive search firm Pedersen & Partners, says that a growing proportion of capital markets bankers - both on the equity and debt side of the business - are requesting relocations, predominantly to Asian markets.
"The majority of investment banking activity remains in restructuring," she says. "Those capital markets professionals staying in the region are looking to get involved in cross-border deals as well as looking further afield in Africa and the Levant."
It's easy to see why - ECM activity has been anaemic in the MENA region for nearly over two years, with companies in the region unconvinced that tumbling stock markets and an uncertain investment environment can offer fair value for their company.
On the face of it, the latest Ernst & Young MENA IPO update is relatively positive - $218.9m raised in Q3, or a 23.6% rise on this point last year. However, this figure masks the fact that just two listings were completed during the quarter across the whole region - and these were both in Saudi.
United Wire Factories of Saudi Arabia listed in August in an $88.3m deal, while Hail Cement Company's $130.5m IPO was completed in September.
Phil Gandier, MENA head of transaction advisory services at Ernst & Young, says: "Predictions of listings, even in the low single digits, may not necessarily hold for the next quarter, however the pipeline of companies waiting for their IPOs is building up."
