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School’s out for summer

Money never sleeps, and nor does the financial sector. Any capital that is left idle for a substantial amount of time is being used inefficiently - hence the growing interest in the region for instruments like overnight repo notes.

So it is surprising that activity in the Middle East has traditionally slowed down so much over the summer. In recent years, it has not been unusual to find some senior members of management taking an entire month off work.
This must lead to a delay in the implementation of some potentially lucrative business strategies and a corresponding cost to the organisation. The proposed merger of Emirates Bank International and National Bank of Dubai is not expected to be approved before September - the two banks are aware that if they call an extraordinary general meeting over the summer, many of their shareholders will not be present. Europe and the US also experience a summer slowdown, but not on the same scale as the Middle East.

However, there are signs that this pattern of inactivity could be changing. In 2005, the largest GCC market movements - downward - happened during the summer months.

This year it has been reported that many bankers have cancelled their holidays in anticipation of a huge number of sukuk deals. HSBC is expected to arrange the sale of more than US$3 billion of sukuk in Q3, and there are whispers that the government of Abu Dhabi may announce plans in August to issue its first bonds. Anyone who takes time off this summer may miss the chance to be involved in some huge transactions.

Of course, summer will be followed by Ramadan, a month in which many local businesses reduce their operating hours. It will be interesting to see whether any of the region's financial institutions will do the same, or whether business will carry on as usual.

As Middle East financial institutions forge ever-tighter links with their counterparts in the rest of the world, they may need to have members of staff working shifts that are more in line with trading hours in other markets. In years to come it seems likely that organisations will stagger their employees' holidays to avoid having a lull in business at any particular time of year.

Even those who are lucky enough to take a break this summer may find that they never really leave the office. Whether skiing in the Alps or sunbathing in Barbados, many in the financial sector will still be linked to the office by their BlackBerrys. Time off is becoming an ever-scarcer commodity.

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