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Morgan reaps reward for Dubai gamble |
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9/11/2008 9:56:40 AM |
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Morgan Stanley, along with several other large investment banks, bet big on the Gulf, hiring furiously when it launched operations from the newly opened Dubai International Financial Centre offices in 2006.
Against a backdrop of -global economic gloom, surging growth in the oil-rich Gulf is now serving the bank well. This year, say bankers there, it is expected to win $500m (€356m, £285m) in fees from the region, much more than last year.
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"From day one we said we would take it seriously, that we'd be on the ground in a credible fashion. We have got to do business in this region like in any other developed market," said Georges Makhoul, the bank's regional head for the Middle East and North Africa, emphasising a different approach to the classic Middle Eastern banker who used to suck funds out of the region.
He says some of the bank's initial Dubai recruits have been jettisoned but have been replaced by top executives from London and New York. The bank's head count continues to rise, to more than 100 at the headquarters in Dubai, compared with 60 a year ago.
Dubai might be riven with tension over an ongoing anti-corruption campaign, but bankers faced with the prospect of redundancy seem eager to dive into the wilder side of the Gulf. As a popular saying goes: "It's Shanghai, Mumbai, Dubai - or goodbye."
The bank is increasingly focusing on Saudi Arabia, the region's largest economy, where it has increased staff to 60 from 45 last year. Morgan Stanley last year launched in the kingdom through a joint venture with The Capital Group, a local investment bank.
This month the bank's Riyadh branch will launch a Saudi mutual fund, providing foreign investors with a window into the oil-rich country's stock market, currently central to initial public offerings in the region.
A steady procession of IPOs on to Saudi's Tadawul is keeping local banking groups and recently arrived international names busy - even if the fees on offer to companies such as Morgan Stanley are disappointing.
Either way, the Saudi economy is too important to ignore, no matter how tough the market can be for new entrants, in terms of both carving out a client base and persuading ambitious bankers to relocate there.
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Source: Ft.com |
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