Financial picture brightens in Dubai

The exodus of financial firms from the UAE appears to be over. Take the Swiss private banks Clariden-Leu and Sarasin. Both banks almost simultaneously opened representative offices in Abu Dhabi last year in November, and both have been running branches in the Dubai International Financial Centre since 2007 and 2005, respectively.

And while the old trader's rule might not sound attractive for equity market investors (the Dubai Financial Market DFM and the Abu Dhabi Securities Exchange ADX posted the largest losses in the GCC in January, down 5.90% and 4.89% respectively), the positive trend from the end of 2010, when more firms entered the financial hotspot continued at the beginning of 2011.

In mid-January, Bennet Jones opened as the first Canadian law-firm in the DIFC, despite the ongoing dispute between the UAE and Canada.
After the North American state did not grant UAE airliners Emirates and Etihad daily landing rights for Toronto, Abu Dhabi terminated the on-arrival visa policy for Canadian citizens as of January 1st 2011.

"Nevertheless there are 27,000 Canadians living in the UAE and bilateral trade surged to $1.5bn in 2009," Danny H. Assaf, Managing Partner at Bennet Jones told AMEinfo.com. "Clearly, these figures show that both sides need legal advice, and we are open to consult for any financial firm."

Scotiabank also became the first Canadian bank to operate in the DIFC in January 2010, while Reliance Asset Management, ABN Private Banking, India's IDBI Bank Ltd and Munich Re followed shortly after. And half a year after the launch of Dubai Metro on September 9 2009, the DIFC was eventually connected with the Dubai Metro through the red line-station station at Emirates Towers.

The positive trend continues. On January 19, T. Rowe Price, a global investment management company from the US, entered the DIFC. Meanwhile, US-based Russell Investment's Executive Managing Director EMEA Pascal Duval said on January 31st that Russell also plans to open an office in the UAE, 'whether in the DIFC or at another place, that is not clear as yet'.

Russell aims to create a set of new regional funds worth $5bn to $10bn within the next five years in its established partnership with Rayan Asset Management. Furthermore Russell will cooperate soon with Spanish-Italian Allfunds Bank in order to distribute its Islamic funds through Allfunds's well established funds platform, a co-operation Russell's rival SEI Middle East has started recently.

SEI, like Russell a multi-manager whose clients are mainly sovereign wealth funds, family offices and institutional investors, has been present in the DIFC since 2007. All things considered, this year could mark a turning point in post-crisis UAE.