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06 December 2023

Dubai top financial hub in Gulf says report

By Joseph George



Dubai has retained its position as the leading financial centre in the region in the latest Global Financial Centres Index (GFCI).

The emirate also came in first out of five global cities that were singled out as likely to become “significantly more important” over the next two to three years.

GCC financial centres have recorded significant ratings increases in the third GFCI, released on Thursday by the City of London Corporation, which represents British financial services.

Dubai was identified as a key and growing regional hub, while Bahrain and Qatar experienced the biggest jump in the ratings, by 59 and 51 points, respectively.

Dubai’s rating increased by 10 points, moving it into 24th position globally. It was a 15-point jump in ratings since the first report was published in March last year.

Dubai International Financial Centre’s Chief Economist Nasser Saidi, speaking to Emirates Business recently, attributed Dubai’s emergence as a world-class financial centre to several factors, mainly due to investment in the infrastructure of the financial markets.

Bahrain and Qatar, which initially failed to enter the top 50 GFCI ranking in March last year, have improved their performance since September.

Bahrain, which was ranked 44th with 455 points, improved its performance and its position by three spots. Qatar on the other hand gained 51 points and remains in 47th position with 491 points, compared to 440 points in September.

The index has rated and ranked each major financial centre in the world in terms of competitiveness.

London and New York continue to hold their first and second positions respectively, leading by 90 points ahead of the next two centres. Singapore, in fourth place, is quickly catching up  Hong Kong.

Elsewhere, the rankings show Sydney, Australia, has lost ground and moved down to the 10th spot, losing 15 points compared to the previous index published in September last year.

The bi-annual report was first published in March last year. The new report updated some of the external indices used in the previous model and added eight new indices of features contributing to competitiveness.

The report provides ratings for centres using a total of 62 external indices and a total of 18,878 assessments from 1,236 respondents.

Although London maintained its overall lead in all five areas of competitiveness – people, business environment, market access, infrastructure and general competitiveness – its lead over New York weakened, dropping from 806 points to 795 out of 1,000.

The capital of England currently has a reduced lead of nine points over the financial centre of United States due to proposed income-tax changes and the collapse of Northern Rock bank.

The British Government’s proposal to raise more tax from foreigners living or working in Britain will have a negative impact on London, said the report.

Meanwhile, Dubai continues to remain in the lead among the list of cities that have been identified as centres most likely to increase in importance over the next two to three years. Others in the list are Shanghai, Malta, Beijing and Singapore.

Dubai, according to the authors, is the clear leader in perceptions of potential growth as a financial centre.

Overall, Dubai was mentioned 22 times by respondents when asked about the top five financial centres where organisations may open new operations in the next two to three years.

The authors also noted the growth of Bahrain and Qatar highlights their role as key regional hubs in the Middle East and beyond.

“The consistently high price of oil and massive investments by national governments in the creation of financial hubs have helped to raise these two centres in the Index.”