HSBC has a pipeline of 45 mergers and acquisitions and initial public offering mandates across the Gulf and Europe's biggest lender expects listing activity to resume in the fourth quarter, following the signing of the US-Iran agreement to end the war.
It will take at least a quarter for investor sentiment, equity capital market activity and the deal flow to recover as peace is restored in the oil-rich region, said Selim Kervanci, HSBC's chief executive for the Middle East North Africa and Turkey.
“It really depended on the [US-Iran] deal and with the prospect of a [permanent] agreement now, we expect the market to open up in the fourth quarter for the ECM [equity capital market] transactions,” he told The National in an interview.
Mr Kervanci, who recently hosted the four-day HSBC GCC Exchanges Conference in London, said the region had gone through an extremely uncertain period over the past four months, which stemmed the flow of mergers and acquisitions as well as new listings on regional bourses.
After the barrage of US-Israeli bombing of Iran and Tehran’s retaliatory strikes on its Arab neighbours halted in early April, peace in the region has teetered on a fragile ceasefire.
The war delivered an unprecedented shock to global energy markets and severely disrupted business activity across the region. Global oil markets and the regional stock markets, which sank sharply during the early days of the war in March, swung with war-driven headlines that added to the uncertainty.
“Unfortunately, uncertainty did not help investors form a valuation perspective,” Mr Kervanci said. “That was the main obstacle in ECM transactions coming to the market.”
However, with the framework agreed between the US and Iran to end one of the worst geopolitical conflicts in the Middle East in decades, the regional equity markets are bracing for a leg-up.
Abu Dhabi Securities Exchange, the second-largest Arab bourse after Saudi Arabia’s Tadawul, as well as the Dubai Financial Market, jumped to their highest in three months on Wednesday after the 14-point memorandum of understanding between the US and Iran was unveiled.
The framework includes an end to hostilities on all fronts, including Lebanon, and the opening of the Strait of Hormuz, which will ease economic pressure on regional economies once hydrocarbon exports scale back up to prewar levels.
US President Donald Trump and his Iranian counterpart Masoud Pezeshkian have already signed the deal, which also includes lifting the blockade of Iranian ports and a $300 billion investment commitment for Iran if it continues to follow the peace process.
Mr Trump, however, has said although the US is ceasing hostilities, its military campaign will resume if Iran does not comply with the peace deal.
Stronger than before
Mr Kervanchi said there is optimism that peace will prevail in the region and the uncertainty that has clouded markets in the first half of the year will dissipate.
Top official of the gulf stock exchanges, capital markets regulators, senior executives from some of the biggest listed firms in the region and global institutional investor, who congregated in London for the HSBC conference, expect the regional equity markets, new listing, and M&A activity to bounce back to even stronger levels than before the war, he said.
HSBC pipeline
IPO activity has been in a state of flux in 2026, which had been slated as the year of recovery for new listings in the broader Middle East. With war breaking out at the end of February, the markets failed to realise the promised momentum.
Mutlaq Al Ghowairi Contracting Company (MGC), which had been scheduled to list its shares on Saudi Arabia’s Tadawul market, pulled its IPO plans at the last minute after consulting with its financial advisers, the company said in a June 9 statement.
Middle East IPOs last year slumped to their weakest level since 2020, hit by lower oil prices, geopolitical risks and weak post-listing performances
Firms across the wider region raised $7.1 billion from 61 listings in 2025, compared to $13.1 billion in 2024. The total amount raised in 2025 was the lowest since 2020 when companies pulled in $22 billion, according to financial data platform Dealogic.
However, Mr Kervanci said HSBC's IPO deals pipeline, mostly from the Arab world's two largest economies – Saudi Arabia and the UAE – remains intact despite the war-driven lull.
Companies from food, consumer, retail and technology sectors have delayed, not cancelled, their plans. These firms are primed for listing on the regional bourses, awaiting a window and the right valuations to tap capital markets for funds to drive growth, he said.
“The region has once again proven its resilience, which is seen as a competitive advantage by investors,” Mr Kervanci said. “I think there is a sense of confidence from the way the corporates and the governments in the region have reacted to the situation.”
The corporate sector, he said, has had a very strong 2025 and had the buffers to deal with the war challenges, which was supported by “the policy agility by the regulators and the governments”, that is playing an important role in boosting “the recovery potential of the region”, he added.
Growth push
Even with the lull in growth, especially in tourism, retail, properties and aviation sectors across the region, the long-term fundamentals remain intact. HSBC, Mr Kervanci said, has not altered its plans to grow in the region and continues to invest in strengthening its market share across markets and business segments.
He expects lenders such as HSBC to be at the front-and-centre of the postwar efforts to rebuild infrastructure across the Middle East.
Tens of billions of dollars would be needed not only to repair the damaged infrastructure in the region, but governments would also require funding to support diversification plans and cut dependence on the Strait of Hormuz for the supply of commodities to global markets.
“Most of the infrastructure plans are going to be accelerated, and we have seen announcements coming from different parties in the region already,” he said. “It's not easy to quote a number right now, in terms of what the amount required is going to be, but it will definitely be double-digit billions of dollars, or even more,” he said.
The region needs a significant amount of spending on schemes from centres to AI projects to electricity storage and batteries and expansion of port capacities, but immediate preference will be for the hydrocarbons sector, especially on the oil and gas pipeline projects, he added.
“I think it's going to be across the board, but obviously it will be mainly on projects, which will decrease the dependency on the Strait of Hormuz,” he said.
