The UAE has recorded no initial public offering listings so far in 2026. Uncertainty linked to the Iran conflict weighs on markets, but Dan Simkowitz, co-president of Morgan Stanley, said listings could rebound once the conflict ends or stabilises.
War Risk and Market Confidence
UAE companies raised $1.1 billion through three IPOs in 2025, according to Dealogic data. Simkowitz told The National that stabilisation in the region would bring a rebound in the UAE IPO market. “I think long term, as the conflicts get resolved or hits some level of stabilisation, you will definitely see a rebound in the IPO marketplace in the UAE,” he said. “So, we are investing in and have high confidence in that.”
The Iran war began on February 28 and increased uncertainty across the Middle East. The US-Israeli bombing of Iran and Tehran’s retaliatory strikes on its Arab neighbours halted in early April, but the region remained under a fragile ceasefire, according to the article.
A World Bank report released the previous week forecast Gulf economies would contract by an average of 4.3 per cent in 2026. The forecast marked a downward revision of 5.7 percentage points from the bank’s April forecast. The International Monetary Fund also expected the Gulf economy to contract this year, followed by a strong recovery next year if shipping normalised, managing director Kristalina Georgieva said.
Simkowitz said the war “clearly creates a slightly higher and hopefully temporary risk premium in the region, but not so much that it changes long-term investment perspectives and investor interest”. He said Morgan Stanley’s commitment to the region was “as strong as it's ever been”.
Regional Investment and Credit Markets
Morgan Stanley’s regional deal pipeline remains active, Simkowitz said. Some deals have paused, and companies may need to reassess supply-chain resilience and diversification. But “most of it that was on is underway,” he said.
The bank continues to consider investment in growth, while corporate and foreign direct investment clients remain focused on regional demographics, potential GDP growth and market diversification, Simkowitz said. He described the region as having built extreme resilience and said it had capital strength to rebuild or redirect energy infrastructure, with international capital available to help.
Morgan Stanley is headquartered in the US and has more than $10 trillion in assets. It has operated in the region for the past 20 years. The bank opened an office in Abu Dhabi in 2024, employs well over 100 people in the region and plans to expand its operations. “We're going to stay very committed to growing that. I think wealth and asset management will be a part of that,” Simkowitz said.
He also expects credit markets to grow in the UAE and across the region, in line with positive global trends. Gulf debt capital markets had $1.2 trillion outstanding at the end of the first half of 2026, according to Fitch Ratings. More than $100 billion had been raised in regional debt markets that year, Simkowitz said.
Debt, AI and Market Risks
Credit markets include bonds, government debt, private credit and bank loans. Asset managers and owners, including sovereign wealth funds and pension funds, play a key role globally, Simkowitz said. High-capital-expenditure manufacturing requires investment to bridge the gap between building and generating revenue or profitability, he said, and funding “is not just banks or governments”.
S&P Global Ratings said economic tailwinds from AI investment and “surprisingly enduring demand” had bolstered credit conditions in many major economies in 2026. The agency warned that positive momentum in overall credit stability seen over the previous few years would become harder to sustain. Heading into the fourth quarter, it said, “risks are building amid the sharp rise in benchmark borrowing costs, including yields on government debt, as investors bet that major central banks have a complex challenge in their fight against inflation”.
Simkowitz called AI “incredibly transformational” and said it would require substantial capital before productivity gains emerge. A recent Bain report said the AI industry would need $6 trillion in annual revenue by 2031 to justify capital deployed for data centres. The report projected revenue from new product development would become the industry's largest contributor, generating about $4.2 trillion to fund the technology's global market within the next half-decade.
Investors were also watching the US midterm elections early the following month. Simkowitz said markets would focus on them, but they were “not nearly as consequential” as presidential elections, including upcoming elections in Brazil or France. He cited uncertainty over the US-Iran war, the Ukraine-Russia conflict and inflation. Asked about 2027, he said: “I think intense and don't be complacent. No one can be complacent. It may not be as dramatic [as this year], but it's going to be intense.”