Bankers in Bahrain are preparing escape bags. Bankers in the UAE are off for the summer
As the hot war in the Middle East shows no sign of cooling, financial services professionals in Dubai have a different sort of heat on their minds. Temperatures in the emirate are reaching the point in the year when they become unbearable.
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"It's 50 degrees here and 100% humidity," says the head of one private placement boutique in Dubai. "The expat community here always spends three to four weeks on summer holidays as soon as schools break up. I'm leaving for the UK with my wife and children soon."
Like the other UAE bankers and hedge fund managers we've spoken to, the Dubai-based head of the private placement boutique says the war isn't a source of concern to financial services professionals in the region, even after the US strikes at the weekend. "There's no impact to people on the ground here," he insists. "We live in a noisy region. A lot of people here lived through the Gulf wars, the attacks on Lebanon, Gaza and now this. History has shown that the GCC is safe."
Not everyone in the GCC may agree. The UAE includes Dubai and Abu Dhabi, where most bankers and hedge fund managers are based. The GCC, or Gulf Cooperation Council, includes the UAE, plus Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia. In Bahrain, in particular, some people are preparing for the worst.
"People in Bahrain are concerned," says a financial services professional with close relatives working in banks in the region. "Bank employees are being asked to stay home. They're stocking up on food and preparing bags in case they need to leave in a hurry."
We asked Goldman Sachs, Citi and JPMorgan to comment on the advice they're issuing employees in the Middle East. None responded. Employees at banks and buy-side firms in the region told us they'd received no guidance on safety.
What differentiates Bahrain from Dubai? Together with Kuwait and Qatar, it hosts a large US military base. Reuters reported yesterday that the Bahrain interior ministry is testing warning systems, urging people to avoid main roads and instructing government employees to work from home.
Bloomberg reported at the weekend that British Airways, Singapore Airlines and Air France were cancelling flights to Dubai after the US strikes on Iranian nuclear facilities. However, Dubai finance professionals can still go on holiday, said the private placements professional: "I could fly to London this afternoon with Emirates," he pointed out.
The only impending issue is with US investors, who may be discouraged from visiting the UAE if the US changes its current travel guidance from level two ("exercise increased caution") to three ("reconsider travel").
Dubai financial services professionals may also feel less sanguine if the war is continuing when they return from their summer vacations in late August. "But if the war is still going on then, it will be a problem for everyone," said the private placements MD.
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