By Elizabeth Broomhall
More than 40 percent of traders see business picking up, driven by Saudi, UAE growth
More than 40 percent of traders in the Middle East see business picking up over the next six months driven by improving sentiment in the UAE and Saudi Arabia, HSBC said Sunday.
A poll of 6,390 traders across 21 countries showed those in the MENA region were most optimistic about future business, HSBC’s latest Trade Confidence Index showed, despite rising costs, volatile demand and reduced profitability.
“Clearly traders in this region are facing rising costs and interest rates, and lower margins, coupled with global uncertainty about the economy,” HSBC’s head of commercial banking Tim Reid told reporters at an event in Dubai. “The survey underscores the resilience of the trade sector.”
Some 41 percent of MENA respondents expect trade business to increase in the next six months, while 39 percent expect it to stabilise. Around 20 percent expect trade to decrease, the index showed.
Concern remained over the ability of buyers to honour their trade agreements, with 37 percent of respondents expecting an increase in buyer defaults.
“If we look at the individual questions, one of the most important questions is the outlook for trade growth over the next six months,” said Kersi Patel, regional head of trade for HSBC MENA. “What is important is the huge increase in the number of traders expecting growth, especially in the UAE. That is a very positive message.”
Respondents also saw more liquidity in the markets, with bank lending seen as a key source of funding – particularly for those in the UAE.
“If we take HSBC as an example and look at average lending to trade businesses, it has grown by around 50 percent in the first quarter of this year when compared with last year,” Patel said.