Major business conference in Singapore reveals growing interest by Asian investors in the Middle East

Over 700 top executives from Asian countries attended the 3rd International Enterprise Forum, themed 'The Globalisation of Asian Enterprise', at which they discussed topics including the challenges of mergers and acquisitions as a growth strategy, the readiness of SMEs (small-to-medium-enterprises) for overseas expansion, and market opportunities in Europe, Japan, India, China, and the Middle East.

The Forum was organised by International Enterprise Singapore (IE Singapore), formerly known as the Singapore Trade Development Board. IE Singapore, an economic agency under the Ministry of Trade and Industry, is responsible for spearheading Singapore's efforts to development its external economic wing.

The only Middle Eastern financial institution to be invited to speak at this event, Gulf Finance House was represented by its Chief Economist, Dr. Ala'a Al-Yousuf, who addressed the Forum on the reasons behind the sustainability of the current economic boom in the Middle East, and highlighted key economic sectors of potential interest to Asian enterprises.

Welcoming Dr. Al-Yousuf, Mr. Lee Yi Shyan, Chief Executive Officer of IE Singapore, said: "The participation of Gulf Finance House in the Forum is a significant reflection of the increasing economic partnerships between Middle East and Singapore businesses. The Singapore government is keen to develop more inroads into the Middle East market through joint ventures and business collaborations. This Forum is one of the platforms to catalyse this exercise, which will be of mutual benefit.

"We believe the success of Gulf Finance House in global expansion holds a valuable lesson on Middle East entrepreneurship for the Asian, particularly Singapore, businesses keen to spread their reach outside their home countries. We are confident that Gulf Finance House will be able to enhance our awareness of the Middle East market through its participation in this Forum," he added.

Dr. Al-Yousuf began his address by noting that the Middle East's political and economic landscape is changing, and that the GCC states are experiencing a broad-based economic boom. "The elements of the economic boom in the GCC are rapid growth in consumption and investment (both by the private and public sectors), fast growth in bank credit to the private sector, a strong pick up in construction activity, high property prices, and sharp increases in regional stock market indices," he said.

Mindful that many Asian business executives still remembered the financial crisis that occurred in several Asian countries in 1997 following a regional investment boom, Dr. Al-Yousuf pointed out that the GCC economic boom had strong economic foundations. "Unlike the Asian boom that ended in 1997, the GCC economic boom is based on sizeable balance of payments and fiscal surpluses, substantial government assets, sound banking systems and strong corporate profits. The GCC economies have substantial needs for public and private infrastructure investment after many years of a wait-and-see attitude. These infrastructure projects are financed through a mixture of sources, including bank credit, capital market debt, but, more importantly, private equity. This is a key difference from the Asian experience of the mid-1990s," Dr. Al-Yousuf pointed out.

Dr. Al-Yousuf noted, however, that this did not mean that there were no risks to investors. "While there may be a correction to the most overvalued stock and property prices and imprudent investors may lose their money, the impact on the financial system and the macroeconomic performance would be limited. There are many sound investment opportunities in the GCC, especially in sectors such as oil, gas and petrochemicals, utilities, infrastructure, leisure and tourism, and also finance and asset management, especially the Islamic niche. Gulf Finance House can help Middle Eastern and Asian investors to work together to take advantage of these opportunities," concluded Dr. Al-Yousuf.

Commenting on the Bank's participation, Mr. Esam Janahi, Chief Executive Officer and Board Member of GFH said: "We view the Forum as a significant exercise in cementing the bonds between the Middle East and Singapore. As an organisation with a global focus, GFH is honoured to take part in the Forum which will help us add value to our business expansion strategy across international markets, particularly Asia. The Forum presents GFH with an opportunity to promote the existing and emerging economic opportunities in the Middle East to the Asian business community," he said.

Terming the Forum as a timely exercise in deepening Middle East-Singapore partnerships, Mr. Janahi, said: "The enhanced focus of Singapore businesses towards the Middle East, and vice versa, means that interactive meetings such as this one, are needed to clear any misconceptions and unveil opportunities on both sides. In this context, Dr. Al-Yousuf's session on the Middle East economic boom and its sustainability was both timely and well received. At GFH it is our constant endeavour to present a clear and analytical picture of the economic landscape of the Middle East to the Asian business community."