Economic reforms across the Gulf have driven a surge of new liquidity into the region and a re-appraisal of prospects for local financial markets by global investors, according to a senior HSBC executive.
Richard Godfrey, HSBC’s global co-head of securities services, said: “The region continues to offer significant investment opportunities and the pace of reforms has been phenomenal.
“Local markets have reflected this through increased market activity and higher growth,” Godfrey told an HSBC’s annual Markets & Securities Services Middle East forum.
Billions of dollars of fund inflows into the region’s asset markets from around the world have been triggered by a series of reforms to liberalise access for international investors, create new hedging instruments, and increase institutional investor participation, he added.
The reforms have led to the inclusion of key regional equity markets in benchmark indices tracked by major mutual and pension funds, supporting further inflows of long term capital.
Godfrey also said that a structural reform to the UAE’s working week announced early in 2022 that aligns the country to the schedule of the world’s biggest capital markets in Asia, Europe and the United States, has set the stage for a further surge of fund flows.
“The change of working days in the UAE, aligns well with global markets and has been viewed positively by the international community,” said Godfrey.
“It reflects innovative, new thinking about how work-life balance is being incorporated in this region as many markets around the world are testing new models and ways of working. With the new weekend change, trading volumes on both the Dubai Financial Market and Abu Dhabi Securities Exchange should surge.”
Now in its fifth year, HSBC’s four-day annual forum is the only such securities services event in the region to be run by a custodian bank.
Antoine Maurel, HSBC’s head of markets & securities services in the Middle East, North Africa and Turkey region, said: “We’re bringing together the full spectrum of market participants to further improve understanding on what matters most for investors. It’s our shared responsibility that the global securities services industry becomes more efficient and less complex.”
Key themes to emerge from the forum over the four days included the increased focus on sustainability-linked issuances and the importance of developing common sustainability standards as well as how regulation can successfully oversee the growing role of distributed ledger technology or ‘blockchain’ in finance.
HSBC is the largest international banking organisation in the Middle East, North Africa and Turkey (MENAT), with a presence in nine countries across the region – Algeria, Bahrain, Egypt, Kuwait, Oman, Qatar, Saudi Arabia, Turkey and the UAE.
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