Financial Capital: Realising the dream

His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, has completed two years as the Ruler of Dubai and the Vice-President and Prime Minister of the UAE and during this time, he realised many achievements that have won the admiration of regional and world personalities.

Sheikh Mohammed has established a school of caring and service of the country, under the leadership of President His Highness Sheikh Khalifa bin Zayed Al Nahyan, Ruler of Abu Dhabi.

Sheikh Mohammed’s character and success in administering the affairs of Dubai have given the federal establishment a strong push, which is evident through initiatives and positive things at the federal level, including decentralisation and how to reactivate and handle matters. Also, His Highness’s leadership qualities, administration skills and reputation as a leader at regional and global levels have given a higher credibility to the country and its institutions.

The wise decisions made by Sheikh Mohammed since assuming responsibility as the Ruler of Dubai have been in the interest of citizens and of promoting the emirate’s status at regional and world levels. They have also contributed to keeping pace with world developments and achieving growth in all human, political, economic and social sectors.

Essa Kazim

The biggest news in the past two years from a stock market perspective would definitely be DFM becoming the first stock market in the Middle East to go public – a decision that was envisioned by Sheikh Mohammed as head of the Dubai Government, which is the DFM’s largest shareholder.

Under Sheikh Mohammed’s patronage, the DFM has been able to strengthen its position as a stock-trading platform. The DFM is currently the sixth-biggest publicly traded stock market in the world.

 

The current price of DFM stocks values it at $12 billion, which is more than the current valuation of Nasdaq.

Consolidation in Dubai’s stock exchanges is another aspect that was administered by the stakeholders under the patronage of Sheikh Mohammed. What this consolidation has meant for Dubai is that it has positioned the emirate as a global player, which now has the means to buy stakes in giant trading platforms such as London Stock Exchange and Nasdaq-OMX.

Borse Dubai – formed by combining DFM and Dubai International Financial Exchange – currently owns about 22 per cent of stake in LSE. Borse Dubai holds 80 per cent ownership in DFM, with the rest being publicly traded. Very soon, Dubai will boast the third-biggest stock market in the world. All of this has been possible with the vision of Sheikh Mohammed.

After the DFM General Index fell by about 40 per cent in 2006, it has made a splendid comeback gaining by 43 per cent in 2007, thereby recovering all the losses of 2006. This shows how resilient Dubai’s economy has become. Once the Nasdaq-OMX deal is completed, Dubai will hold 19.9 per cent of the joint entity with an additional eight per cent kept in a trust. Once that deal is through, you will have a lot more local and regional companies getting an international listing via the Nasdaq-DIFX platform.

Dubai has been a regional leader in opening up its markets for foreign players and is currently among the four exchanges in the GCC that allow cross-listing of shares. The fact that you have had so many companies going public in 2007 and many more in the pipeline shows the government’s keen interest to make the community benefit from Dubai’s phenomenal growth.

Sheikh Mohammed has clearly identified the financial sector as one of the pillars of Dubai’s future growth through the Capital Market Strategy under the Dubai Strategic Plan 2015. I am sure we will see many more key strategic decisions in the achievement of those objectives this year as well.

 

Frederic Sicre

Under Sheikh Mohammed’s leadership, the Government of Dubai is run along the same lines as a corporation. Since he took over the reins of Dubai’s leadership, he has organised a group of highly efficient people around him who control most of the key functions in the emirate’s development strategy.

His leadership is built around measuring everyone on performance. From the perspective of both local and foreign investors, if a government is run on performance, it is a great sign of confidence.

Dubai has been a regional pioneer in identifying the right regulations and deregulating wherever needed. As a result of his leadership, other Gulf countries are now emulating Dubai’s standards and business practices.

 

In the past two years, since Sheikh Mohammed took charge, regional and foreign capital inflows have been on the rise. And also, because of the huge liquidity factor in the GCC states, Dubai has also led the way in terms of implementing a diversification strategy, investing important quantums of money into global players who can have a strategic importance to Dubai’s future.

 

The fact that less than five per cent of Dubai’s GDP now comes from the oil sector shows the successful policy that the government has adopted in diversifying its economy… and this diversification has not just been domestic; Dubai’s diversification has also been in assets abroad.

From the perspective of private equity and investment, we have seen that 60 to 70 per cent of firms investing in Mena are headquartered in Dubai. It is a testimony to the conducive environment the leadership has created to attract skilled workforce from around the world.

 

Dubai has come to be the right choice as a regional headquarter for any firm because of its ability to attract foreign talent and its excellent connectivity and infrastructure. Whether it is capital market reforms, developing the mortgage and insurance industry, encouraging good governance… Dubai has been a regional and global pioneer in many respects. This is thanks to Sheikh Mohammed and his superb team.

In my 10 years of interaction with Sheikh Mohammed, I have seen some unique aspects of his leadership. No matter how successful Dubai continues to be, he has always put corporate social responsibility as one of the top priorities for all companies operating within Dubai. Environmental initiatives such as Green Dubai show that the emirate is leading the way in terms of creating an environmentally conscious business ambience.

 

His charity initiatives such as Dubai Cares show his compassionate and philanthropic leadership and the ability to think for the greater humanity. His most striking aspect for me is his ability to engage business leaders and executives like us. He never tries to lecture us. When business needs to be pushed, he pushes us and when he needs to take advice from the industry, he does it readily.

 

For the banking and finance industry, the past two years have seen a marked acceleration in the expansion and maturing of the UAE, and the experience of HSBC provides a mirror of this development.

The last year saw HSBC celebrate 60 years in the UAE, making it the oldest and largest international bank in the country. The accession of His Highness Sheikh Mohammed as the Vice-President and Prime Minister of the UAE and Ruler of Dubai marked the beginning of one of the most exciting stages of expansion and development for HSBC in the UAE.

 

We look forward to the next 60 years of growing prosperity and international influence in Dubai. Among the highlights for the bank under Sheikh Mohammed’s leadership have been: HSBC became the first international bank to be granted a licence to operate as a broker on the country’s two stock exchanges, a sign of the growth and rapid maturing of these markets.

On the capital markets side, HSBC worked with Borse Dubai to put together a multi-party transaction that has led to Borse Dubai being a partner of Nasdaq, OMX and the LSE. The Dubai International Financial Centre’s continued growth, attracting global institutions and reinforcing its status as the region’s financial hub, are all achievements that have been possible because of Sheikh Mohammed’s initiatives.

HSBC was also proud to have supported His Highness’s Dubai Cares campaign through a donation towards this worthwhile cause. This campaign fitted well with the many other worthy causes in Dubai and the UAE that HSBC supports, and we are sure underprivileged children worldwide will have a better opportunity to receive proper education through funds provided by Dubai Cares.

We look forward to continuing to bring the world’s best techniques, technology and practices to Dubai, and of taking the best of Dubai’s ambition and vision to the rest of the world.

 

The decisions of His Highness Sheikh Mohammed bin Rashid Al Maktoum, since he assumed the roles of the Vice-President and Prime Minister of the UAE and Ruler of Dubai two years ago, have brought to the country a surge of energy that has reflected positively across the UAE economy.

His vision for Dubai has seen the emirate transforming fast into a world-class financial hub with unmatched advantages for global players and investors. As the Vice-President and Prime Minister of the UAE, we can safely say he has taken the Dubai model of excellence to the rest of the country, and effected a genuine change that would further boost the UAE’s status as a global economic powerhouse.

Due to the progressive nature of this regional hub and the opportunities made available under his leadership, Citi has designated the Middle East among its top promising markets globally, and shifted the regional headquarters for the Middle East to Dubai. Citi has been able to achieve good regional coverage through key treasury, equity and investment banking appointments in Dubai.

In 2007 alone, we added five new financial centres, thus doubling our network from five branches to 10 outlets. But while we have been growing our consumer offering across the UAE, we have also been able to expand our presence in the field of corporate and investment banking due to the excellent business environment created by Sheikh Mohammed. In 2006, we lead-managed Emaar Properties’ $1bn Musharaka Islamic sukuk syndication, the first debt issue for Emaar in terms of size and scope.

One milestone achievement facilitated by Sheikh Mohammed from the perspective of the finance industry is the establishment of the DIFC. This platform has helped Citi to advance its activities in the region. Since establishing our presence at the financial hub in mid-2006, we have led major regional deals and investment initiatives that totalled more than $20bn and that led us to achieve the highest rate of profit in our history in the UAE.

The determination and clear focus of the Dubai Government ensures the five long-term thrusts of the Dubai Strategic Plan 2015 are achievable on time, especially when it comes to ensuring transparency in all government practices and establishing partnerships with the private sector. As a member of the business community, we see Dubai as a model for successful partnerships between public and private sectors, especially that both are applying the same global service standards as well as world-class governance practices.