Oil prices rebounded last year and have remained buoyant. But activity in Middle East investment banking failed to pick up so quickly, comparing badly with recovery elsewhere, especially Asia.
In 2009 investment banking revenue in Asia (excluding Japan) was only 15% down from its 2007 peak. By the end of the summer this year, Asia had already almost surpassed its 2009 revenue.
In equity markets, Middle Eastern issuance last year was $4.6 billion, little more than a third of the amount in 2008 and 2007. By September this year, equity issuance totalled just $2.7 billion.
In 2007 and 2008, the Gulf got used to multi-billion-dollar IPOs. But Saudi Arabia’s Knowledge Economic City (KEC) is the region’s biggest IPO to close so far this year, at a paltry $272 million.
Outbound M&A mandates are perhaps the region’s biggest attraction. But only one of the Gulf’s top-five acquisitions of the past five years was after the collapse of Lehman Brothers. The rest were in 2007, when global stocks had a long way to fall – which has been part of the Gulf problem.
M&A volumes fell in all emerging market regions last year.