Wall Street drilling for Middle East riches

Years of raging energy prices have made the states surrounding the Persian Gulf one of the fastest-growing regions and a source of immense wealth seeking investments at home and around the world.

The sovereign investment arms of Saudi Arabia, Bahrain, Qatar, United Arab Emirates, Oman and Kuwait have an estimated $1.5 trillion at their disposal.

So it's little surprise that Goldman Sachs Group, Morgan Stanley and other investment banks have secured banking licenses and opened offices to develop a local presence in the Gulf, same as they have in the so-called BRIC markets of Brazil, Russia, India and China.

"There is a second wave of other interesting growth spots in the world. The Middle East comes to the forefront for many of the international players," said Sven-Olaf Vathje, a Boston Consulting Group partner and director of its Dubai office. "It's a new gold rush."

Wall Street's banks have expanded overseas in pursuit of new high-growth markets that can boost their revenue and offset the ups and downs of their U.S. businesses.

The six Gulf states, with a population of about 35 million, have a GDP roughly equivalent to that of the Netherlands, the world's 16th-largest economy. Last year the region generated $3 billion of corporate and investment banking fees.

But the Gulf markets are growing much faster than Europe and the U.S. BCG projects that banking fees from the region will rise by 20 to 25 percent a year, driven by bond issuance, derivatives, leasing and M&A.

'VERY HOT'

JPMorgan's securities services division on Tuesday hired an executive in Dubai as part of its efforts to draw in more business from the region. JPMorgan opened an office in the UAE city of Dubai in April and one in Riyadh last year.