The syndications market experienced the strongest pick-up after a precipitous slump the previous year. Borrowings worth about $3,000 million were arranged for FIs seeking to ease tenor mismatches and take advantage of a buoyant market. Almost all borrowings were well oversubscribed and many ended up being upsized considerably. Arab Banking Corporation, Gulf International Bank and Standard Chartered Bank were particularly active in this area.

But a more interesting story is in the increasing development of the nascent fixed-income market, conventional and Islamic, and the involvement in it of international heavyweights such as ABN Amro, Bank of America, Credit Suisse First Boston (CSFB), HSBC and Morgan Stanley. CSFB completed its first sukuk arranging mandate with Abu Dhabi-based The National Investor in early 2004, while the other four variously worked on EMTN drawdowns for Emirates Bank, Gulf Investment Corporation and Mashreqbank. So far all the issues have been well received and bankers say that several more are in the pipeline as GCC institutions seek to diversify their investor bases.

The inexorable rise of the sukuk market presented many opportunities for conventional and Islamic banks alike. Citigroup's elevated position in the rankings was driven largely by its arranging role on the two biggest issues of the Islamic instrument in 2004 - the $250 million sovereign issue from Bahrain, done through subsidiary Citi Islamic Investment Bank, and the $1,000 million issue by Dubai's Department of Civil Aviation. Deal flow is expected to pick up further in 2005, as a raft of project sponsors are considering raising funds through sukuk issuance.

Saudi Arabia is likely to be a focal point for activity in both the FI loans and bond markets over the course of the year, stimulated by implementation of the capital markets law. In quick succession Arab National Bank, Samba Financial Group, Saudi British Bank and Saudi Hollandi Bank have come to market and others are rumoured to be planning to do so imminently. Several major corporates are also set to enter the fray before the year is out.