The US ratings agency Moody's Investors Service is to open a new office in Cyprus by the end of February to serve the Middle East, Africa, East Europe and the Indian subcontinent.

The office, which will be based in Limassol, has already been registered with the local authorities. A date for opening the office and the appointment of a head have yet to be announced.

'This is a significant move into non-OECD markets,' says Ray McDaniel, managing director for Moody's Europe. In the Middle East, the agency will concentrate on offering services to banks which deal with corporate treasuries and interbank risks, which will include most of the larger banks, McDaniel says. 'The (Middle East) market is looking for credit analysis and credit opinion put on a global benchmark,' he says.

The only ratings agency with an office in the region is the Limassol- based Capital Intelligence. Elizabeth Jackson-Moore, managing director of the firm, says Moody's decision to open an office will increase competition for ratings work in the area, but will also increase awareness of the services such agencies have to offer. 'It is a great step for ratings business in general to show that ratings for Middle East businesses are wanted,' she says. 'It is really a growing global phenomenon.'

Another US agency, Thomson Bank Watch, is seeking to develop its presence in the region. 'We have no specific work in the Middle East at the moment, although it is an area we are looking at in terms of future expansion,' a Thomson official says.

The Kuwait-based Arab Monetary Fund is also assessing plans to set up a ratings agency in association with an unnamed international partner, specifically aimed to serve businesses in the Middle East.

The fund says the new agency would be able to offer services to small and medium-size businesses that cannot afford the fees charged by existing international agencies (MEED 13:1:95).