When speakers such as a former US Treasury Secretary, a past French President and the Governor of the Central Bank of the UAE agree to speak at your event, you know that you are doing something right.
Such was the case at the 2013 Global Financial Markets Forum (GFMF), the fifth annual occasion of its kind, hosted by the National Bank of Abu Dhabi (NBAD). The forum has once again enhanced its reputation as the region’s unrivalled platform for debating the globe’s most pressing and critical issues.
One subject discussed was the necessity of “growing the domestic capital debt market to meet and realise the growth ambitions of the country”. H.E. Sultan Bin Nasser Al Suwaidi, the Governor of the Central Bank of the UAE, said, “A domestic bond market would empower UAE companies to raise funds domestically and rely less on international markets, adding that as Basel II and III required higher reserves, it would be critical to grow the domestic bond and sukuk market to empower UAE banks to raise money by issuing debt notes.”
“The region experienced an increased direct capital inflow as investors shifted to investment in GCC paper,” said Fawaz Abusneineh, the head of Debt Capital Markets at NBAD. “GCC notes also offer a premium over similarly rated European and North American issues and this has helped attract fixed income investors to this region.
On the subject of Europe, most speakers struggled to answer what the future held for the EU, even James A. Baker III, former US Secretary of Treasury and State, who noted that the continent had “deeper economic difficulties than the US”.
He added that “emerging economies are the bright spots” and that thought comes over strongly as a theme in this issue.
For example, we look at trade finance, where Gulf banks are well placed to step into the gap now being left by the retreat of some major international names.
The fact is that trade finance has become a target for cutback as banks concentrate resources on strengthening their reserves to meet the tough new requirements of the pending Basel III regulatory regime.
Nowhere is this trend more obvious than in Europe, where the financial crisis has left banks under heavy pressure to rebuild their strength. And that has implications for trade in other international regions such as the Gulf, because the European banks have traditionally been global leaders in trade financing.
In MENA, many banks grew their trade finance business in 2012. For example, National Commercial Bank and Bank Bilad in the KSA, the National Bank of Abu Dhabi and Dubai Islamic Bank, in the UAE, Bank Muscat in Oman, Qatar National Bank, Qatar Islamic Bank, the National Bank of Kuwait, and the National Bank of Bahrain, to name just a few, reported trade finance growth and in some cases in double digits, significantly above 20 per cent, according to our Tajara Monitor report in this edition.
Another trend that we highlight is collaboration on the trade finance front. Faced with growing demand for both trade and supply chain financing across MENA, regional banks are looking to join together with regional and global banks to make those facilities available.
This is all part of a wider movement towards bank partnerships, geared at enhancing product and service provision across a broader geographic reach.
A further topic explored in this issue is the fact that Asia is set to remain MENA’s best trading partner and that is a trend forecast to remain in the long term because of its ever-rising energy demands.
In this respect, one of the “star turns” will be Turkey, now seen as a rising hub for both regional and global trade.
Also, having emerged relatively unscathed from the global financial crisis, the country is now fast becoming a new international finance centre for the Middle East because of the re-emergence of its domestic banking sector as a global force.