The 22-year-old, who finished fifth behind winner Giacomo Nizzolo (Trek-Segafredo), says he is not intimated by the stars.
Team Wiggins charged late in the 147-kilometre stage to Madinat Zayed, south of the capital. Latham hung on Degenkolb's wheel through the final corner and kept the team's red and blue colours at the front to the line.
"Intimidated? Not really,” Latham said. “I know I can get up there and beat them, and maybe even win because it's the last race of the season for a lot of people, so maybe their switched off a bit. But I'm fully switched on!"
Cavendish balked at the suggestion that Latham was "up there" in the sprint.
"Not really. He got in the way up there", Cavendish said.
"He's a strong guy, but he's not going to win a pro race just yet, I don't think. I don't mean that in a bad way because he's good."
Cavendish, who counts 30 Tour de France stage wins and a silver medal from the worlds on Sunday, made sure that he was not seen as being too hard on his "mate."
"He's all right," he added. "He's a mate of mine, he lived in my flat in the winter."
Cavendish looks back on the 2016 season
He did say that Wiggins should have rode earlier given that the British development team upset the organiser by not bringing star rider Sir Bradley Wiggins.
"We said, 'Why don't you ride?' They said, 'Oh, no one is strong enough'. Then they are up there with six guys in the final.
"I quite like a sprint of smaller teams then less lead out men get in the way, but then you have the whole of Team Wiggins up there going backwards. It's a little bit dangerous."
The two had fun with each other. When Latham heard Cavendish's comments, he laughed it off.
"I'll take that, usually he's ripping me," Latham said. "We are a Continental team, they are all WorldTour teams, so they should do the work."
Andy Tennant looked after Latham in the final 40 kilometres and left him to try to latch on to Degenkolb's wheel.
"You don't want to mess everyone up because of a crash. I was just trying to follow and getting up there on my sprint with 20 metres to go."
Any result is welcome for Sir Bradley's team. Wiggins came under fire for his TUEs ahead of the Grand Tours and his failure to mention them or his allergies in his book.
"It's not going to affect me, it's nothing really, it's not really a story," Latham said. "I don't even know what's going on, so I'm not that bothered. It doesn't affect me. I'm pretty sure everything is fine."
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