Arab Today, arab today dubai boosts role as global financial hub
Last Updated : GMT 19:10:18
Arab Today, arab today
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Dubai boosts role as global financial hub

Arab Today, arab today

Arab Today, arab today Dubai boosts role as global financial hub

Dubai - XINHUA

Global interest in Dubai's financial institutions and exchanges has been on the uptick, despite ongoing woes over some emerging markets. The first weeks of the year 2014 saw Dubai's financial markets and institutions recording ample turnover and interest, respectively, from the region and beyond. Dubai, poor on oil, but rich in trade, tourism and banking, is one of the seven sheikhdoms of the Gulf state United Arab Emirates. The Dubai financial market general index gained since the start of the year 19.46 percent amid ample interest from foreign traders, the DFM said. On Monday the gauge closed for the first time since early 2008 above 4,000 points. Abu Hani, a private investor at the DFM said despite the worries over currency value declined in some emerging countries like Turkey, Brazil or Indonesia, the sentiment in Dubai remained "very bullish." Ample interest from abroad is also recorded at Dubai's commodity exchanges. The Dubai Mercantile Exchange (DME), the only international oil futures market in relation to regulatory standards, posted in January a record average daily trading volume of 8,162 lots, representing a 52 percent increase year on year. According to DME's chief executive Christopher Fix, who worked over a decade in China and is fluent in Mandarin, has been instrumental in promoting the DME to Asian oil traders who use DME- listed future contracts to hedge themselves against price fluctuations in the oil spot market. The Dubai Gold and Commodities Exchange or DGCX also started well into the New Year. The number of future contracts on gold, silver, precious metals, tea, cotton and rubber plastics among other commodities, traded during January at the DGCX surged 36 percent month on month to hit 1.043 billion units. "Today, 20 percent of the world's gold trade flows through Dubai," said Ahmed Bin Sulayem, the CEO of the commodities free zone Dubai Multi Commodities Center. He added that the uptrend would continue despite last year's steep fall of the price of gold. "The gold price crashed, so it is buying time, not selling time," said Bin Sulayem. Earlier last week, the International Monetary Fund (IMF) raised its growth forecast for the UAE's gross domestic product to 4.5 percent from its earlier projection of 3.9 percent. However, the IMF warned that the UAE and Dubai government had to implement additional measures to prevent an overheating of the booming real estate market. The DFM index surge was mostly fueled by shares of real estate and construction firms such as Emaar Properties, the biggest developer in the Middle East. Meanwhile, financial firms from beyond the Middle East rush to Dubai to set up offices in the Gulf Arab emirate. Last week, Jeff H. Singer, the chief executive of the authority which manages the banking free zone Dubai International Financial Center (DIFC) said the center recorded in 2013 a company growth of 14 percent over the previous year. As of now, 1,039 banks, insurance firms, asset managers, law firms and retail and hospitality shops reside in the DIFC. Twenty- two of the world's 25 biggest lenders run branches in the DIFC. Singer praised Chinese major banks ICBC and Agricultural Bank of China for expanding their services in the center. ICBC was in 2008 the first Chinese bank which opened an office in the DFIC, at a time when a number of lenders pulled out due to the start of the global financial crisis at that time. He added that since the DIFC was reaching out to the global financial community, he was confident to double the number of firms in the DIFC within five years, even if there were imbalances in some emerging markets. "Dubai is strategically located between the fastest growing regions in the world, Africa and East Asia. This is a win-win situation for the DIFC, the only financial hub in the Middle East regulated by globally accepted standards." Recently, a major Geneva-based investment firm and a bank from Nigeria have applied to obtain a licence to open a branch in the DIFC, Xinhua has learnt. However, Singer made it also clear that the DIFC and the center 's regulator DFSA would not tolerate if firms would misuse the current boom and try to maximize profits by overlooking rules and regulations. "Any misconduct will be made public in line with the DIFCs principles of transparency, efficiency and integrity," said Singer. Earlier in the week, Deutsche Bank accepted a court order that was requested by the DFSA to hand out documents after it was found that Germany' biggest lender was in "material noncompliance with requirements to produce information and documents." The issue arose after the DFSA was seeking information from Deutsche Bank's wealth business in Dubai. Ian Johnston, the chief Executive of the DFSA said the regulator's powers to request information and documents are important regulatory tools that assist the DFSA in conducting supervisory and enforcement activities. "Where a person, without reasonable excuse, fails to comply with a DFSA Notice requiring it to deliver information and documents, the DFSA will enforce compliance with such a Notice by seeking orders in the DIFC Courts," said Johnston.

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