Penrose Financial, a UK’s financial services and capital markets public relations consultancy, today launched its report ‘The Road of Opportunity: Evolving Capital Markets in the Middle East’ examining the region’s financial landscape and its viability as a bona fide and sustainable financial centre.
Penrose produced the report in response to the incredible economic growth and investment seen in the region, and comes at a time where Western banks are increasingly looking to the Middle East for growth opportunities as business in Europe and America is hit by the ongoing financial crisis. With $1.5 trillion projected for investment across the Gulf over the next few years, there is enormous potential for Western companies that can offer genuine business opportunities to the region.
According to the Penrose survey, the rulers in the region are increasingly aware that to create lasting financial centres they must embrace foreign ownership, relax restrictive laws on outsiders, uphold the rule of law, enhance transparency and introduce regulatory controls. The report also proposes that to become a successful financial hub, the Middle East needs to increase capital liquidity by introducing sophisticated capital market instruments that will facilitate the flow of funds. The presence of large institutional investors is similarly crucial if its equity and debt markets are to develop fully.
Much has been written about the associated riches of Abu Dhabi and Dubai but, according to the study, Saudi Arabia also offers massive potential. Riyadh, the most populated city in the region with four million people, is widely considered to be the ideal centre for private banking as it has the highest concentration of wealthy inhabitants.
The research project involved extensive analysis of press coverage by leading media commentators, both in and outside the Middle East, and surveyed a wide range of market participants across the financial industry familiar with the region’s workings.
The report has been authored to provide clients and other interested parties with a broad but insightful view of the financial landscape in the Middle East outlining its strengths, weaknesses and some of the opportunities that the region affords. Given the sheer quantity of material written about the Gulf, its ruling elite, Sovereign Wealth Funds (SWFs), Sharia investment and so forth the guide has been designed to cut through extraneous information and present the opinions of those who watch developments there closely, highlighting the main themes and trends that hold future significance.