Dubai-based investment bank Arqaam Capital is set to act as a lead arranger on a bond issue for the first time during the next few months as the firm looks to continue its aggressive expansion plans into new business lines.
Since inception around four years ago, the firm has concentrated on other areas, particularly brokerage and trading bonds for its clients. The experience of trading in the secondary market has put Arqaam in a good position to place new bond issues with investors, says Riad Meliti, chief executive officer and founder of the company.
Meliti says that in the next six-nine months, Arqaam could be a lead arranger on several bond issues. “We are building a pipeline of issuance in the fixed-income market,” he says. “We have even had requests from other investment banks to assist them on placing deals with investors.”
Activity in the bond and sukuk (Islamic bond) market has been picking up during 2012. In the first half of the year, around $22bn of deals were done, compared with $27bn in the whole of 2011, according to data from Dealogic.
“The number of companies interested in tapping the bond markets is really growing,” says Meliti. “In some cases, that is a result of the crowding out effect as most bank lending is going towards sovereigns and quasi-sovereign entities.”