UAE tops trade confidence index in HSBC global survey

The UAE has topped a trade confidence index as import/export traders see the Middle East as offering the best short-term growth prospects, an HSBC survey said yesterday.

The poll surveyed 2,100 trade-oriented small-and-medium businesses in 24 cities across seven countries on their three-month outlook on trade volume, buyer and supplier risks, trade finance and impact of foreign exchange and government regulation.

Sheikha Lubna Al Qasimi, Minister of Foreign Trade, said: "If the HSBC Trade Confidence Index is of any indication, it's a clear sign the UAE continues to be a place to do business and capture growth opportunities.

"The UAE has taken several rapid and practical steps to cope with the implications of the global financial crisis; the government guaranteed bank deposits and offered substantial financial facilities to banks amounting $32 billion (Dh117.5bn) in the fourth quarter of last year, boosting confidence in the UAE's economy and confirming the ability of country to deal rapidly, immediately and positively with the latest economic developments."

The Trade Confidence Index (TCI) for the UAE was the highest among all countries surveyed, including Singapore and the city of Hong Kong, with traders optimistic about the outlook for cross-border trade over the next three months, said the survey.

The UAE scored 115.2 points compared to Singapore's 99.9 and Hong Kong's 93.1, two major global trading centres.

"Trade is the lifeblood of the UAE economy and its trade to GDP ratio of more than 130, one of the highest in the world, is testimony to this," Kersi Patel, HSBC's regional head of trade and supply chain, told a news conference.

"The government here has done a lot to boost trade by investing in trade-related infrastructure and providing various incentives," he said.

Large businesses were excluded in the survey as they had the financial muscle to keep their businesses going unlike the medium and small traders, said Patel.

Around 40 per cent of UAE traders said they will need more finance in the short-term, compared to 30 per cent in Hong Kong and 20 per cent in Singapore. HSBC has sanctioned trade finance totalling Dh1.3bn this year alone in the UAE, said Patel.

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