IRAN TALKS BOOST IN­VESTORS' CON­FI­DENCE

Qatar Today - - BUSINESS > TAG THIS - BY V L SRINI­VASAN

G reen says that the in­vest­ment cli­mate in the Gulf is ex­pected to re­main buoy­ant, de­spite the con­flicts in Iraq and Syria, be­cause of the grow­ing belief that sanc­tions against Iran will soon be lifted and that this will pro­vide a sig­nif­i­cant boost to re­gional trade.

“The Mid­dle East is not one co­her­ent re­gion, so we can­not gen­er­alise about for­eign in­vest­ments too widely. How­ever, tra­di­tion­ally the most re­cep­tive part of the re­gion to for­eign in­vest­ment are the hy­dro­car­bon economies of the Gulf Co­op­er­a­tion Coun­cil (GCC) in view of their oil and gas re­serves,” he says.

With the re­ports of Saudi Ara­bia join­ing the MSCI EM in­dex next year the im­pact on GCC stock mar­kets could be huge, help­ing to put the re­gion firmly on the map for global in­vestors. “But other GCC mem­ber states will have to work to im­prove liq­uid­ity and trans­parency is­sues if they are to make the most of the in­crease in in­vestor aware­ness of the re­gion,” he says.

Saudi Ara­bia has an­nounced in July that for­eign in­sti­tu­tional in­vestors would be al­lowed to invest in its mar­ket and that other cri­te­ria such as liq­uid­ity and free float (as a per­cent­age of to­tal mar­ket cap­i­tal­i­sa­tion) should not be a prob­lem.

“Gold­man Sachs has es­ti­mated that the Saudi mar­ket could ac­count for up to 4% of the MSCI EM in­dex, and 19% of the MSCI EMEA in­dex. The Saudi mar­ket (the Tadawul All Share) is the largest and most liq­uid within the GCC,” he says.

How­ever, there is a glitch as the Iran talks are com­pli­cated by the rise of ISIS in Syria and Iraq, and Green ex­pects any lifting of sanc­tions to be put on hold un­til the ISIS threat is con­tained.

Another block could be the ap­pre­hen­sions of Is­rael that Iran will never truly give up its nu­clear weapons am­bi­tions, while Saudi Ara­bia - which rep­re­sents the Sunni strand of Is­lam - fears that a rap­proche­ment be­tween Iran and the US will boost the for­mer in the long-stand­ing ri­valry be­tween the two coun­tries.

“If the West can clear th­ese doubts in the minds of its al­lies in the re­gion, there should be no look­ing back for the Mid­dle East­ern na­tions as far as at­tract­ing in­vestors from all over the world is con­cerned,” Green says.

On track

As far as Qatar is con­cerned, Green feels that the lo­cal au­thor­i­ties are def­i­nitely mov­ing in the right di­rec­tion and this is clearly ev­i­denced by the grow­ing num­ber of for­eign busi­nesses mov­ing into the coun­try.

“My ex­pe­ri­ence from work­ing with ex­pa­tri­ates and in­ter­na­tional in­vestors, which is deVere Group's pri­mary client base, is that for­eign in­vestors are feel­ing more pro­tected than ever by the reg­u­la­tory frame­work that is now in place and this is driv­ing con­fi­dence in Qatar as a des­ti­na­tion to do business and invest,” he says.

Ac­cord­ing to him, th­ese are ex­cit­ing times for Qatar and his firm is thrilled to be one of the ma­jor global brands that is

The progress be­ing made in the on­go­ing nu­clear talks be­tween Iran and the West is rekin­dling fresh hopes among the Mid­dle East coun­tries in at­tract­ing for­eign in­vest­ment to the re­gion, James Green, the newlyap­pointed Area Man­ager of Qatar and Abu Dhabi, at PIC deVere group, tells Qatar To­day.

cur­rently us­ing its re­sources to de­velop its pres­ence in the coun­try with its strate­gic and am­bi­tious growth plans for the longer term. “One can sense the grow­ing mo­men­tum in Qatar and I am con­fi­dent that Doha will be­come a ma­jor in­ter­na­tional business hub within a mat­ter of years,” he says.

Green also has a sug­ges­tion: “One of the keys to at­tract­ing fur­ther for­eign in­vest­ment is to fur­ther con­sol­i­date and en­hance the le­gal sys­tem, which should be in­scrutable and can work quickly to set­tle cases, and pos­si­bly a greater use of English common law for trade dis­putes where one of the par­ties is non-do­mes­tic. This ap­plies not only to Qatar but to other coun­tries look­ing at for­eign in­vest­ments.”

He says that though, it is im­pos­si­ble to quan­tify the amount of pent-up in­vest­ment spend­ing wait­ing to take place, it is highly likely to be fo­cused in the oil and gas sec­tor which has been starved of in­vest­ment (and even cash for main­tain­ing pro­duc­tion) in re­cent years.

He also feels that the GCC fi­nan­cial mar­kets need to di­ver­sify away from the fi­nan­cial and prop­erty in­dus­tries, which are two closely in­ter­linked sec­tors. “Tight liq­uid­ity and lever­aged in­vestors re­main an is­sue, as was shown in the sum­mer when Arabtech's fall led to a knock-on ef­fect on the UAE mar­ket as banks called in money they had lent against shares,” he says.

Ad­vice to ex­pats

He says that due to their of­ten more tran­sient life­styles, their ca­reers, their ed­u­ca­tion fee plan­ning and re­tire­ment plan­ning needs, their unique tax sit­u­a­tion, and the fi­nan­cial tools avail­able to them, ex­pats al­ways re­quire spe­cial­ist fi­nan­cial ad­vice, and it is no dif­fer­ent in Qatar.

“Ex­pats are typ­i­cally able to be­come more fi­nan­cially se­cure than their coun­ter­parts back home due to the es­tab­lished, ex­pat-only fi­nan­cial op­por­tu­ni­ties avail­able to them in Qatar. How­ever, due to the com­plex­i­ties of cross-bor­der fi­nan­cial ser­vices, it is highly rec­om­mended that pro­fes­sional, in­de­pen­dent fi­nan­cial ad­vice is sought from an ad­viser who has this rel­e­vant cross-bor­der ex­pe­ri­ence and who works for a ro­bust company with an in­ter­na­tional pres­ence,” Green says.

When his at­ten­tion was drawn to the lat­est Business Op­ti­mum In­dex, which showed Qatari busi­nesses have scaled back their out­look for in­vest­ment in business ex­pan­sion, Green says it would be hard to iden­tify rea­sons for the decision of the lo­cal busi­ness­men.

Look­ing ahead

“We have dy­namic ex­pan­sion plans in place for Qatar, which is driven by the on­go­ing and in­creas­ing de­mand for our ser­vices from glob­ally-minded in­di­vid­u­als look­ing to safe­guard, max­imise and grow their wealth,” he says.

His company is also plan­ning to in­crease its business in Qatar by at least 50% over 12 months and ef­forts are be­ing made to achieve this goal by re­cruit­ing more tal­ented wealth man­agers to join the Doha-based team, Green says.

About his company, Green says that there are many fac­tors that give deVere Group its on­go­ing edge over its com­peti­tors. Among oth­ers, nat­u­rally th­ese in­clude size. With 80,000 clients, 70 of­fices and QR36.4 bil­lion ($10 bil­lion) un­der ad­vice and man­age­ment glob­ally, the group is one of the world's largest in­de­pen­dent fi­nan­cial ad­vi­sory or­gan­i­sa­tions.

“The fact that we are this ro­bust, global company gives our clients se­cu­rity and peace of mind. They also en­joy the as­so­ci­ated ben­e­fits such as our mar­ket-lead­ing tech­nolo­gies, our com­pre­hen­sive range of prod­ucts – many of which are ex­clu­sive to deVere clients in, and our well-es­tab­lished re­la­tion­ships with the world's lead­ing fi­nan­cial in­sti­tu­tions,” he adds

“My ex­pe­ri­ence from work­ing with ex­pa­tri­ates and in­ter­na­tional in­vestors, which is deVere Group's pri­mary client base, is that for­eign in­vestors are feel­ing more pro­tected than ever by the reg­u­la­tory frame­work that is now in place and this is driv­ing con­fi­dence in Qatar as a des­ti­na­tion to do business and invest.”

JAMES GREEN Area Man­ager, Qatar and Abu Dhabi PIC deVere Group

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