Gulf investment banking business still there: JP Morgan

Opportunities still exist for global investment banks in the Gulf, but some may have to revise their expectations downwards and reduce headcount if they are to succeed, the MENA head of JP Morgan has said.

The US bank continues to see opportunities in the Gulf but some of its competitors may have to change their strategy in the region, Ghassan Abdul Karim said ahead of the official opening of the firm's new Riyadh office.

"I think it depends on how strong relationships these banks have there, how well they know the market and how well they know how to operate within the market. If they do, clearly there are opportunities," he said.

But banks also need to have the right operating model if they are to be successful, he added.

"Some banks in the region have taken the approach that they will throw an enormous number of bodies on the ground.

"If you’re going to have investment banking operations with hundreds of people and have certain expectations, then clearly that's a different story," Abdul Karim said.

Looking ahead, he sees IPO markets picking up next year.

"I think they will pick up in 2009, but when in 2009 it's hard to tell," he said.

"I would say that as soon as you see some clarity and optimism in the global capital markets this will spill into regional markets."

In the Middle East, JP Morgan has advised on Saudi Arabian mining company Ma'aden's $2.5 billion IPO and Etisalat's $2.9 billion acquisition of the third GSM license in Egypt.

It is currently advising on Petrochemical Industries Company's $19 billion global joint venture with Dow Chemical.