While the UAE has not seen any IPOs this year, companies raised $1.1 billion through three offerings in 2025. Simkowitz stated that a resolution or stabilization of conflicts would lead to a rebound in the IPO marketplace, highlighting Morgan Stanley's investment and high confidence in the sector. He also praised the country's leadership in developing its financial infrastructure.
The ongoing conflict, which began on February 28, has introduced uncertainty into the Middle East. Despite a fragile ceasefire following retaliatory strikes, the region faces economic challenges, with the World Bank forecasting a 4.3 percent contraction for Gulf economies this year. However, the International Monetary Fund anticipates a strong recovery next year, contingent on the normalization of shipping.
Simkowitz noted that the conflict creates a temporary risk premium but does not alter long-term investment perspectives or investor interest. Morgan Stanley remains committed to the region, with plans to expand its operations and workforce, focusing on wealth and asset management. The bank has maintained a presence in the region for two decades and opened a new office in Abu Dhabi in 2024.
The executive also expressed optimism about the UAE's credit markets, which encompass bonds, government debt, private credit, and bank loans. Globally, asset managers are playing a crucial role in credit markets, supporting industries requiring significant capital expenditure. The UAE and the broader Gulf region have seen substantial activity in debt capital markets, reaching $1.2 trillion outstanding in the first half of the year, with over $100 billion raised in debt markets this year alone.
Simkowitz also touched upon the transformative impact of Artificial Intelligence (AI), emphasizing the substantial capital required for its development and the UAE's significant role as an AI player. He anticipates AI-related revenues will grow, despite a potential timing mismatch between capital deployment and productivity gains. Looking ahead, he described the market outlook as intense, urging vigilance amidst ongoing global uncertainties.