IRAN TALKS BOOST INVESTORS' CONFIDENCE
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.
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.
“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