Targeting Investments towards Capital Market Developments

Philippe Dauba-Pantanacce, a speaker at the marcus evans Middle East Investments Summit 2012, talks about how the Gulf will increasingly play a role in the global financial markets as oil revenues have built a wealth of historical proportion. Interview with: Philippe Dauba-Pantanacce, Senior Economist, Turkey, Middle East and North Africa, Standard Chartered Bank

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Many Gulf Cooperation Council (GCC) markets are in need of higher liquidity and a diversification of their investor base toward institutional money, says Philippe Dauba-Pantanacce, Senior Economist, Turkey, Middle East and North Africa, Standard Chartered Bank. Investors should monitor capital market development mostly on the equity side, but also fixed income for a potential positive transformation of the investments dynamic in the GCC, he adds.

A speaker at the marcus evans Middle East Investments Summit 2012 in Dubai, UAE, 4 - 5 November, Dauba-Pantanacce shares his views on the new investment opportunities flourishing from countries that have been through a political transition.

How will the Gulf play an increasing role on the global financial markets?

Gulf countries are coming up against growing oil receipts, which translates into massive investment potential around the world, as well as domestically. How this money will be disbursed is becoming of greater importance to the world every day.

Can emerging and frontier markets produce higher returns in exchange for higher risk?

In terms of emerging markets versus frontier markets, we have the problem of who came first, the chicken or the egg. Many of these markets are in need of higher liquidity levels, more institutional rather than retail investors. Investors are not experiencing high returns and the reason is that equity markets in the GCC are retail driven and a poor reflection of the fundamentals of their economies and the main drivers of their gross domestic product.

Circumstances could also improve when investors see an evolution in certain cultural boundaries that have prevented a better access to these markets. Typically, family owned enterprises, even the ones interested in accessing capital markets, have ended up finding it a daunting prospect to lose a majority ownership and respond to the regulatory requirements of transparency or governance demands. Once we witness an evolution in some of these aspects, many financially ripe opportunities will arise for both domestic and international investors.

How can demand-driven investments maximise diversification for Middle East investors?

Countries like Egypt or Iraq have a great need for infrastructure with their large populations driving a high demand. A stabilised political environment and a strengthened legal framework will fulfil this need. These outcomes will enable investors to capitalise on the demands coming from this section of the globe.

In terms of diversification, we only have to look at Dubai, which has flourished by basing its strategies on connecting societies with logistics, trade, airports, tourism and retail destinations.

Are there any further comments you would like to make?

There is huge potential for discerning investors who will tap into new opportunities in the countries that have been through a political transition. Infrastructure development will continue in oil exporting countries and interest will remain high. Capital market developments and diversification of investor base and tenors will be a major driver of consideration on equity and fixed income.

Contact: Maria Gregoriou, Journalist, marcus evans, Summits Division

Tel: +357 22 849 400
Email: press@marcusevanscy.com

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