Analysts are sighing with relief as second-quarter figures for Middle Eastern loans out pace first-quarter numbers by 43%.
Stability Replacing Uncertainty
At the beginning of the year uncertainty was the main attitude of economists and other observers as they stood by watching the Middle East turn to flames during revolutions in Egypt, Tunisia, Libya and to a lesser extent several other Middle Eastern nations.
First-quarter numbers for lending reflect that uncertainty very well, with only $8 billion raised in the first quarter. The total volume for second-quarter loans will reach $11.5 billion, if the $5.5 billion of loans for the Middle Eastern borrowers is completed.
Sabic Capital, Investment Corp. of Dubai and Commercial Bank of Dubai are the leading banks, contributing the greatest percentage to the overall 43% rise in the value of loans.
Ready for Risk
Companies are once again ready to take the risk that taking a loan represents as the uncertainty in the Middle East dissipates and governments, along with their economies, seem to be stabilizing.
What is now being called the “Arab Spring” was a time of great turmoil and unrest, resulting in the overthrow of dictators in Egypt and Tunisia.
“At the start of the year there was a lot of uncertainty about the Arab Spring and the popular uprisings in the Middle East,” said Dirk Hentschel, head of distribution and loan syndication for Europe, the Middle East and Africa at WestLB AG in London. “That has improved a bit now and we’re seeing an increasing pipeline of deals.”