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Patience, people, patience

January 18, 2011 5:03 by Sam Potter

There’s some other rule change suggestions that we won’t bore you with now (they’re on the website). They’ll be under public consultation for the next 60 days, but the gist is this: Nasdaq Dubai has recognized that it needs more liquidity in the system, and that it would be a jolly good idea to have more investors (perhaps an implicit admission that some of the difficulties faced by the markets over the past 24 months have stemmed from having too few investors overall – a situation that suited everyone when they had plenty to invest, but not when they tightened their belts).

Kipp likes any rule changes that will: a) help get liquidity into the system, and b) help make the exchanges more accessible. So all this is good news, hooray for Nasdaq.

However, just like the saying “time heals all,” we think the real healing of the local investment market will mostly come as time passes.

According to Moelis & Co (one of them there fancy investment banks), the Middle East and North Africa region will see more debt restructuring and merger and acquisition (M&A) activity this year. Senior execs at the bank, no doubt called something like Rupert or Hans, say that sellers of assets have become more comfortable with valuations, and so are more likely to strike deals.

“We’re going to see a steady flow of M&A, lots of it is going to be coming from the region,” said Augusto Sasso, head of MENA at Moelis (that’s even better than Hans). “We see sovereign wealth funds, big companies and family offices expanding in the region and targeting assets in South East Asia, Turkey and North Africa.” The sizes of the deals might not be huge, but the more of them the better. More deals means more opportunity and more money floating around.

And the sort of people that know this stuff, Mergermarket, said in a recent report that there were 306 M&A deals in the Middle East and North Africa region in 2010 worth a total of $49.7 billion, up 54 percent by value and 7.7 percent by deal count from the previous year. The Reuters figures disagreed in the detail, but concluded the same thing: deals were up in 2010, big time.

Kipp’s point is this: Things inside and outside of the exchanges will recover. Maybe slowly, maybe at their own pace, but they will get better. Nasdaq’s rule changes will help, but time will do most of the work.

Now if you’ll excuse us we’re off to hang out on the street corner in our leather jacket with a cigarette.

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