Morgan Stanley is to establish a Middle East and North Africa office in Dubai, its first on-the-ground commitment to the region, the Wall Street bank announced on Thursday.
From early next year up to 25 staff will be based in the Dubai International Financial Centre, a financial services free-zone launched by the government in September 2004 to attract foreign banks, asset managers and insurers to the Persian Gulf emirate.
Since the 1970s Morgan Stanley has served Arab clients from overseas centres such as London, but it hopes this new branch will expand its franchise in a region where oil-fuelled economic growth is averaging about 6 per cent.
“High oil prices are certainly funding optimism and asset growth in the Middle East,” said Georges Makhoul, newly appointed regional managing director. “You can’t build a business bound to oil prices though.
“Our strategy is being driven by the region’s privatisation initiatives and the coming of age of local corporates. M&A flows are not just coming into the region any more, they are heading out as well.”
Morgan Stanley will be bringing investment banking and capital markets capabilities to Dubai, and wealth managers targeting institutional and private clients.
This week Invesco, part of Amvescap, which has £215bn ($370bn) of funds under management, became the latest asset manager to open an office in the DIFC.
It joined Credit Suisse, Merrill Lynch, Deutsche Bank and Barclays bank as one of 15 financial services firms licensed by the centre’s in-house regulatory authority, the DFSA.
Coinciding with a visit to the Gulf by Stephen Green, group chief executive, HSBC said on Monday it planned to move up to 250 staff into the DIFC by the first quarter of 2006.
David Knight, former acting chief executive of the DFSA and now HSBC’s managing director of business development in the Middle East, said the DIFC would provide a home for some migrating wholesale and private banking businesses.
“We see asset management opportunities once the DFSA removes a prohibition on collective investment funds next year,” he said, “and we will expand the product range of HSBC Amanah, our Islamic finance business. We also have a pipeline of IPOs and so expect our capital markets business to be active.”
HSBC is one of five broker banks on the Dubai International Financial Exchange.
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