S Ara­bia, UAE among Ja­pan’s most fa­vored in­vest­ment tar­gets

The Pak Banker - - Company& -

TOKYO: The Ja­pan Bank for In­ter­na­tional Co­op­er­a­tion's an­nual sur­vey once again had China at the top of the list of for­eign coun­tries that Ja­panese com­pa­nies con­sider to be the most promis­ing in­vest­ment desti­na­tions, while Saudi Ara­bia and United Arab Emi­rates came in joint 20th.

Sau­dia Ara­bia dropped from 14th place to 20th, while the UAE stayed at the same rank. They were the only Arab coun­tries to make the top 20.

The sur­vey, which cov­ers in­vest­ment over the next three years, was con­ducted be­tween July and Novem­ber and in­volved 961 Ja­panese man­u­fac­tur­ers with lo­cal units in China; 605 of the firms ap­proached re­sponded. The num­ber of Ja­panese com­pa­nies hav­ing a fa­vor­able view of China rose 3 per­cent from the pre­vi­ous year.

But the sur­vey also showed that 47 per­cent of the re­spond­ing com­pa­nies have con­cerns about risks re­lated to in­vest­ment in China, such as fall­out from diplo­matic ten­sions and la­bor dis­putes.

In­dia ranked sec­ond on the list, while Viet­nam was third.

The top three coun­tries re­mained the same for the fifth straight year. Thai­land, Brazil and In­done­sia ranked 4th, 5th and 6th, re­spec­tively.

Of the com­pa­nies that chose China as the most promis­ing in­vest­ment des­ti­na­tion, 63 per­cent cited ris­ing la­bor costs as a mat­ter of con­cern.

The fig­ure is three times higher than for other coun­tries. La­bor strife - in­clud­ing strikes tar­get­ing Ja­panese com­pa­nies - was cited as a mat­ter of con­cern by 36 per­cent of those list­ing China as the most promis­ing in­vest­ment des­ti­na­tion.

Twenty-two per­cent said the diplo­matic row be­tween Ja­pan and China over dis­puted is­lands in the East China Sea had a neg­a­tive in­flu­ence on the way they re­sponded, cit­ing curbs on rare earth ex­ports to Ja­pan and stalled cus­toms pro­ce­dures in China.

Mean­while, NCB Cap­i­tal Co., which man­ages $15 bil­lion in as­sets, plans to ex­pand its wealth man­age­ment and bro­ker­age ser­vices next year as the unit of Na­tional Com­mer­cial Bank seeks growth in Saudi Ara­bia.

"We will be ex­pand­ing our as­set man­age­ment prod­uct range ag­gres­sively next year," Raul Biancardi, man­ag­ing di­rec­tor at Riyad­hbased NCB Cap­i­tal, said in re­sponse to e-mailed ques­tions on Dec 18. "Our pri­mary fo­cus is in­di­vid­ual clients within the king­dom."

NCB Cap­i­tal joins other re­gional com­pa­nies pur­su­ing op­por­tu­ni­ties in the world's largest sup­plier as the econ­omy and Saudi busi­nesses ben­e­fit from the G-20 mem­ber's $400 bil­lion spend­ing pack­age, an­nounced in late 2008. Saudi busi­nesses rep­re­sented six of the 10 rich­est Arabs this year on the Ara­bian Busi­ness list re­leased yes­ter­day.

The Mid­dle East may ri­val China, In­dia and Brazil as a des­ti­na­tion for in­vest­ment due to its grow­ing pop­u­la­tion and wealth, said David Rubenstein, co­founder and man­ag­ing di­rec­tor of the Car­lyle Group, in Oc­to­ber. The Arab world's largest econ­omy is fore­cast to ex­pand by 3.5 per­cent this year by the king­dom's cen­tral bank. - PB News

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