Dubai, Bahrain and Qatar are investing heavily in financial services projects The Gulf states are battling to establish the Arab world's leading financial centre and the jobs market in the Middle East is booming as a result.
Dubai is to launch a new stock exchange in its International Financial Centre this month. It is the latest phase of a project announced in 2002, which has encouraged the likes of Barclays Capital and ABN Amro to increase their presence in the city state.
Dubai's quest for the Middle Eastern banking crown is not uncontested. Bahrain, the traditional home of banking in the region, is near to completing a $1.3bn (€1.1bn) financial harbour. In May, Qatar, the largest and richest of the region's states, announced the opening of its financial centre.
Many European financial services recruiters are present. Hogarth Davis Lloyd, a London search company, opened an office in Dubai's financial centre 12 months ago and Armstrong International, a rival, has been in Dubai since May.
Aidan Kennedy, a partner at Armstrong International, said financial services jobs in the Middle East were growing exponentially. He said: "It's a developing market and less mature in terms of using search firms. The core areas are private banking, project finance and infrastructure finance, but there are opportunities in areas like corporate finance and M&A."
Nick Lloyd, a managing director at Hogarth Davis Lloyd, said hiring in Dubai was being driven by the push to create the new capital market. He said banks in Dubai needed compliance officers from mature regulatory environments such as Asia, Europe or North America. "It is not a mature market and there is a need to hire talent from overseas," he said.
Isabel Martin, head of financial services recruitment at Korn Ferry International in Europe, reported growing demand for corporate financiers. She said: "The high price of oil is creating enormous potential for corporate finance business in the Middle East. Banks there are building corporate finance and equity research teams."
Thomson Financial, the information provider, said M&A deals in the Middle East excluding Israel were worth $4.2bn last year and the announced value of deals in the region has hit a record $14bn this year.
Capital markets are also a success story. Between August 2004 and August 2005, the index of stocks listed on the Dubai Financial Market rose from 252 to 953. Nigel Sillitoe, director of business development Middle East at Mellon Global Investments, said: "I'm a strong believer in what Dubai is trying to achieve. Mellon thinks this is an ideal market for an institutionally biased fund manager and the growth in Middle East markets, whether equities or property, has been staggering."
Despite controversy last year surrounding the dismissal of Ian Hay Davidson and Philip Thorpe, heads of the Dubai Financial Services Authority, the local regulator, Sillitoe said regulation is regarded as one of Dubai's strong points. "The financial centre benefits from a rule book similar to that of the UK Financial Services Authority," he said.
While Dubai prepares to launch its stock exchange, Stuart Pearce, chief executive and director-general of Qatar's financial centre and a former executive at HSBC in London, said Qatar aims to attract international financial groups, including commercial banks, private banks and corporate and investment banks.
He said: "This is an underdeveloped market with a huge amount of potential based on the development of natural resources. Over time you will see additional financial expertise moving to Doha as people relocate from other parts of the region as well as Asia, Europe and North America as the centre grows."
Just how many jobs will be created in the region is open to question. When it was launched, Dubai's financial centre forecast the creation of thousands of new jobs but conversations with financial services companies in the centre suggest recruits have been minimal. Mellon has two people there. "There isn't the need for 10 or 20 people. We delegate money management to London or the US - the operation here is marketing-orientated," said Sillitoe.
Nicholas Hegarty, managing director and head of the Middle East and North Africa at Barclays Capital, said the investment bank employed 10 people in the region. "Most of them are focused on origination and relationships. We use our London headquarters as the main base for execution," he said.
Hegarty said there was potential for growth: "The number of products being used in the Middle East and the scope of the market is broadening. This area used to have a limited energy sector focus but opportunities now extend across financial institutions, telecoms, private equity and governments." He said Barclays Capital planned to add to its Middle East team in the next 12 months.
Bankers may be happy to move to the region. Lloyd said Dubai was no longer seen as a hardship posting: "Basic pay is comparable to London but there's a 40% mark-up on goods because there is no income tax. Bonuses are typically lower but, as banks attempt to attract outside talent, we are seeing evidence of this changing."