The Banking Executive Magazine - March 2024 Issue

Middle East Middle East REMAINS PRIME HUB FOR GLOBAL INVESTORS EYEING EXPANSION The Middle East is expected to main- tain its strategic appeal to interna- tional investors as a key regional hub for geographical expansion. The region has shown resilience to macroeconomic factors, particularly compared to Western markets. “In 2024, key state investors are likely to continue their cautious but steady approach to domestic and outbound investments,” the report noted. According to BMS, there has been a growing interest in warranty and in- demnity (W&I) insurance policies in the Middle East as marquee advisors recognise its role as a deal enabler rather than an insurance cover. International investors, who have ex- perience using W&I in different ge- ographies and are co-funding invest- ments with sovereign wealth funds, have played a pivotal role in intro- ducing insurance during the early stages of the transaction. Unlike a few years ago, when only a limited number of insurers were will- ing to engage in deals in the Middle East, over a dozen insurers are now actively participating in risks, some even establishing local offices. “We are seeing those who partner with local counsel, and who en- hance their risk appetite with the help of experienced advisors, reap the benefits of diversifying their books,” BMS said. Despite a downturn in merger and acquisition (M&A) activity, sectors such as renewables & energy, finan- cial services, and retail & consumer have shown resilience, experiencing higher deal volume in 2023 com- pared to 2022. Although Asia, the Middle East, and India were the most stable markets, the latter two saw a decrease in the overall number of deals; an increase in $1 billion-plus enterprise value deals saw the value of transactions remain close to 2022. However, the overall increase in in- quiries rose 21% year-on-year in 2023, suggesting a strong transaction appetite going into 2024, the report said. the BANKING EXECUTIVE 14 ISSUE 183 MARCH 2024