Live Currency Rates
  Quotes: US MENA   Enter Symbol: NewsLetter: Search: advanced

Gulf firms look to emerging markets for more returns  Join our daily free Newsletter

MENAFN - Arab News - 24/11/2012

No. of Ratings : 0
Add to Mixx!


Emirates NBD, Dubai
(MENAFN - Arab News) Gulf firms and state-backed investors, flush with petrodollars and facing limited growth options at home, are stepping into emerging markets in Africa and Asia to get a foothold in key sectors such as banking and telecommunications.

Investors from the Gulf have for years put their oil wealth into developed markets in the United States, Europe and Japan. The consistent focus on less developed countries is new, and may have big implications for the economies receiving the money.

Emirates NBD, Dubai's largest bank, is one example of the trend; it is looking at potential acquisitions in areas including Africa, Chief Executive Rick Pudner told the Reuters Middle East Investment Summit this week.

"If you can find something that isn't betting the bank on but is a good opportunity to take advantage of weaker asset prices in the region, then you need to look at it," Pudner said.

Data from the Arab Investment and Export Credit Guarantee Corp show the start of the trend. Foreign direct investment outflows from Arab countries, the vast majority from the Gulf, rose 24 percent to 24.6 billion last year; FDI outflows from all nations in the world climbed 17 percent, to 1.69 trillion.

The rise in Arab FDI was striking because it occurred during the Middle East's Arab Spring uprisings, which might have been expected to stifle outflows by making most firms risk-averse.
Two major motives are behind the Gulf's investment push into emerging markets.

One is the fact that Gulf companies are outgrowing their home markets and are being forced to go abroad to continue expanding. Qatar, for example, has nearly 20 banks catering to a population of only around 1 million.

Qatar National Bank (QNB), the Gulf state's flagship lender with a market value of over 25 billion, is in the advanced stages of negotiations to buy the Egyptian arm of Societe Generale.

State-owned Qatar Telecom agreed in June to double its stake in Iraq's No. 2 mobile telephone operator Asiacell to 60 percent for 1.47 billion. It may bid for a stake in Maroc Telecom, after France's Vivendi's said last month it had received four expressions of interest for the potential sale of its 53-percent stake in the Moroccan firm.

The other motive is more positive: Gulf companies think their skills and backgrounds give them a competitive advantage in pursuing some emerging market opportunities.

One area which they plan to dominate is Islamic banking, which is expected to take off in North Africa after last year's overthrow of authoritarian regimes there.

"We're seeing great interest from Gulf and regional banks wanting to enter the Libyan market, mainly those operating according to Islamic Shariah," said Jamal Abdelmalek, chairman of Libya's Bank of Commerce and Development.
Countries such as Sudan, plagued by wars, poverty and a decade-long conflict with South Sudan, are forbidding to Western investors but look more accessible from the Gulf because of cultural and political ties.

Investors in Bank of Khartoum, mostly owned by Gulf banks including Dubai Islamic Bank, Sharjah Islamic Bank and Abu Dhabi Islamic Bank, plan to boost its capital, Bank of Khartoum's General Manager Fadi Faqih said.

He told the Reuters Summit that capital would rise within two years to 1 billion Sudanese pounds (225 million according to the official exchange rate) from 300 million pounds, allowing the bank to expand its financing of agricultural and mineral projects in the country.

Pudner at Emirates NBD said Dubai's position as a financial and trading hub linking several major groups of emerging markets made it logical for the bank to consider investment in those markets.

"Our longer-term strategy is to use Dubai's growing influence in terms of location to facilitate trade and capital flows between Africa, the Middle East and Asia... We think that Dubai is ideally positioned to link those flows together."

Gulf firms have been slower to move into Asia than Africa, but many bankers think an Asian push is inevitable and may begin soon. In February last year, QNB completed the acquisition of a majority stake in Indonesia-based Bank Kesawan.

With oil prices high, the Gulf has more money to invest abroad than it can spend on corporate acquisitions and investments, so some of its cash is starting to move into emerging market bonds.

Traditionally, the Gulf's bond investors have focused on their own region. But in September, Gulf investors bought nearly 60 percent of Turkey's first issue of a sovereign Islamic bond, which totaled 1.5 billion in size.

This was seen as a sign that Gulf funds were willing to leave their comfort zone, and could be followed by Gulf investment in bond issues planned by North African states seeking to repair their state finances after the Arab Spring.

"Gulf investors are already looking at North African opportunities, with existing relationships strengthened further by the funding that is being provided by Gulf sovereigns to their neighbors post-Arab Spring," said Dilawer Farazi, portfolio manager at Invest AD in Abu Dhabi.

Morocco is considering a possible dollar-denominated bond issue in coming days and plans to launch its investor meetings in Abu Dhabi on Thursday this week. "It's where the money is," a regional banker said.


  MENA News Headlines
Apr 23 2014Omantel launches service package for youth ,MENAFN
(MENAFN) Omantel announced launching 'Ozone' plan, a new package designed especially for the youth. This comes with the company"s constant efforts to enhance the communication needs of its customers, ...

Apr 23 2014Dh154 billion for Arabtec projects ,Khaleej Times
(MENAFN - Khaleej Times) Arabtec will spend dh140 billion on building one million low-cost houses in egypt and dh14 billion on five mixed-use residential projects in abu dhabi and dubai its chief ...

Apr 23 2014?Titli? makers excited about Cannes selection ,Khaleej Times
(MENAFN - Khaleej Times) The movie about the badlands of delhi?s dystopic underbelly will be in competition as part of the un certain regard section of the 67th cannes film gala to be held may ...

Apr 23 2014Saudi- Yaroub Bashraheel: In search of peace ... underwater ,Arab News
(MENAFN - Arab News) You've heard of diving snorkeling and other water activities but rarely has anyone heard of free-diving. it's a form of diving underwater without the aid of any breathing ...

Apr 23 2014Saudi- Schneider highlights intelligent health care solutions at forum ,Arab News
(MENAFN - Arab News) Schneider electric a global specialist in energy management is set to showcase its leadership in intelligent health care solutions at the second saudi forum for planning and ...

Apr 23 2014Saudi- Divorcees can seek housing ,Arab News
(MENAFN - Arab News) The kingdom will accept applications from saudi divorced women and widows for financial and housing support said justice minister muhammad called on applicants ...

Apr 23 2014Saudi Savola Group revenue up 43 pct in Q1 ,MENAFN
(MENAFN) Saudi Arabia's Savola Group registered a 43 percent increase in profits in the first quarter, well over expectations of analysts, Arabian Business reported. According to a statement to ...

Apr 23 2014Tamouh steps up activity on projects ,Khaleej Times
(MENAFN - Khaleej Times) Abu dhabi-based real-estate developer tamouh has scaled up construction activity on all of its announced reem island projects to meet the rising demand for prime spaces in ...

Apr 23 2014Here?s your chance to share screen space with SRK ,Khaleej Times
(MENAFN - Khaleej Times) Groupon india has joined hands with srk?s red chillies entertainment to give fans a chance to feature with the superstar in his upcoming film ?happy new year?. if you ...

Apr 23 2014Dewa and GE explore collaboration opportunities ,Khaleej Times
(MENAFN - Khaleej Times) Saeed mohammed al tayer managing director and chief executive officer of the dubai electricity and water authority (dewa) recently received a ge delegation to explore ...

Apr 23 2014Sale of Gate Towers penthouses launched ,Khaleej Times
(MENAFN - Khaleej Times) Aldar properties has launched the sale of 21 exclusive duplex penthouse apartments at gate towers the penthouse collection in shams abu dhabi on al reem island. one of ...

Apr 23 2014Local international companies come out in force ,Khaleej Times
(MENAFN - Khaleej Times) Cityscape abu dhabi has started showing stronger interest from property developers who have showcased their upcoming projects. the three-day realty show was opened by ...

Apr 23 2014ADCB profit grows 26% in first quarter ,Khaleej Times
(MENAFN - Khaleej Times) Abu dhabi commercial bank?s profit grew 26 per cent in the first quarter of the year to dh1. however net profit rose 22 per cent year-on-year. non-interest income was 24 ...

Apr 23 2014Saudi- New passport office opens at Red Sea Mall ,Arab News
(MENAFN - Arab News) The passport department has opened a new office for citizens and residents at the red sea mall.gen. abdul rahman bin abdullah al-tuwairki deputy director general of the ...

Apr 23 2014'Piles and piles' of bodies in S. Sudan ,Arab News
(MENAFN - Arab News) Nairobi: gunmen who targeted both children and the elderly left 'piles and piles" of bodies — many of those in a mosque — in a provincial capital in south sudan the un's top ...

Apr 23 2014UAE- Billion-dollar realty projects on show ,Arab News
(MENAFN - Arab News) Cityscape abu dhabi a three-day realty event that began with 120 regional and international exhibitors witnessed major announcements on tuesday.salama bint hamdan al-nahyan ...

Apr 23 2014Saudi- Ministry launches complaint center for domestic workers ,Arab News
(MENAFN - Arab News) The labor ministry has launched a first-of-its-kind multilingual communication center to address complaints and grievances voiced by the kingdom's 1.2 million domestic ...

Apr 23 2014Qatar's MPHC net profit hits USD127m in Q1 ,MENAFN
(MENAFN) Qatar's Mesaieed Petrochemical Holding Company (MPHC) announced that a net profit increase in the January-March period of this year, The Peninsula Qatar reported. The company, a leading ...

Apr 23 2014Kowait- Rationalization of water use in focus ,Arab Times
(MENAFN - Arab Times) Kuwait city april 7 (kuna): under the patronage of minister of electricity and water abdulaziz al-ibrahim kuwait environment protection society (keps) organized monday a ...

Apr 23 2014Kowait- MoI FM discuss visa issuance by embassies ,Arab Times
(MENAFN - Arab Times) Kuwait april 10 (agencies): officials of the ministries of interior and foreign affairs on thursday discussed implementation of a decision by the minister of interior to ...





Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  

Middle East North Africa - Financial Network

Main News
News By Industry
News By Country
Marketwatch News
UPI News
Comtex News

IPO News
Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

US Markets Details


Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks

Saudi Arabia 

Investment Game
Economic Calendar
Financial Glossary

Portfolio Tracker


Financial Calculators

RSS Feeds [XML]

Corporate Monitor


Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters

© 2000 All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help