At a lavish party to celebrate the first anniversary of the Dubai International Financial Centre this month, its director-general, Omar bin Sulaiman, was in high spirits.
Proclaiming the Middle East's time as a "financial wilderness" to be over, he encouraged the gathered bankers to exploit Dubai's position as a new international capital market bridging the void between Frankfurt and Singapore.
To an extent Mr bin Sulaiman was preaching to the converted. Despite a prelaunch crisis in June 2004, when two senior members of the centre's captive regulatory authority were sacked after allegedly questioning governance standards, 15 financial services firms have won licences to set up in the free zone.
Dubai itself may not have much oil , but the emirate is positioning itself as a conduit for Arab wealth seeking regional opportunities and international capital seeking to cash in on the oil boom.
Recently in one week alone, Morgan Stanley said it planned to bring a full service team of 25 to Dubai, while HSBC will move up to 250 investment, private and Islamic bankers into the DIFC early next year. Credit Suisse, the Swiss-based banking group, has set up a joint broking venture in Saudi Arabia and it has been granted a banking licence by the DIFC.
David Hodgkinson, HSBC's regional chief executive, said his bank's onshore business in the Middle East had doubled In size, over the past two years and was expected to double again by 2008.
In a region where retail banking remains heavily protected in favour of local institutions, foreign investment bankers are increasingly attracted to the petrodollars swelling government coffers in the Gulf.
The IMF forecasts that Middle Eastern and North African oil producers will earn $560m (£460m, £330m) from crude sales in 2006, up from $300m a year ago. With oil liquidity pouring into the Saudi economy, the region's largest, the Tadawul stock exchange's all-share index has more than doubled since the start of the year, and cash-rich Saudi companies seeking to diversify have similarly doubled their mergers and acquisitions activity.
According to Julian Mylchreest, Citigroup's head of investment banking for the region, the world's largest financial services group has put new emphasis on Middle Eastern markets over the past 12 to 18 months.
"From an investment banking standpoint the Middle East has been under resourced by the big firms relative to the resources committed to emerging markets in Russia and Asia," he said. "That has changed."
Where once so-called "briefcase bankers" would fly into the Gulf periodically, today an increasingly competitive environment is forcing foreign banks to review their local teams' strengths. Omar Al Salehi, head of investment banking for the Middle East at UBS, believes "the key judgment call for banks now is whether they need more resources on the ground because of the sheer volume of activity".
As a new generation takes over the region's family businesses, a new interest in bond and equity issuance has coincided with government efforts to privatise public companies. More than $3.0bn of IPOs have been brought to market in the Middle East so far this year, with investor demand for local assets so strong that price earnings ratios are topping 80 in some sectors.
In the $561m IPO for Dana Gas brought to the Abu Dhabi securities market in October, for which the wholesale tranche was 220 times oversubscribed, the 10 receiving banks are collectively estimated to have earned $270m in fees and 21-day loans to investors trying to secure large allocations.
Data from Thomson Financial show that the volume of international bond issuance by Middle Eastern companies this year has more than tripled from its 2003 level, while the volume of syndicated loans has almost quadrupled. Keen to support what is seen as the homegrown Islamic finance industry, Gulf governments have been trying to kick-start a market for sukuks, or Islamic bonds. In 2004 the value of regional sukuk issues grew more than 300 per cent year-on-year to $6.7bn.
International banks with Islamic structuring capabilities have been willing partners in corporate issues, such as the $550m sukuk issued by Emirates airline in May.
Dubai is not alone, though, in its bid to host a new wave of incoming bankers. Neighbouring Qatar -- where over the next six years the government has a commitment to spend about $100bn on developing vast natural gas resources -- has launched its own financial free zone. The Qatar Financial Centre is expected to appeal to project financiers as they vie for favour and mandate share, while Bahrain is trying to secure its position as the Gulf's Islamic finance hub.