Dubai looks East for global financial hub status

Dubai skyline at night with rich coloursDubai is no longer merely a leading regional financial centre; it’s now an emerging global hub for markets and securities. 

The emirate has been able to attract some of the biggest players to the Dubai International Financial Centre (DIFC), and is now firmly anchored as the gateway between east and west.

A regulatory framework based on London and New York makes this the number one destination for capital in the Middle East and Africa.

Global hub

Confirming its status was the 18th Global Financial Centres Index, which saw Dubai rank 18th worldwide after rising seven places in the last year alone. Doha in Qatar is the only regional centre that comes close, ranking 22nd.

Dubai scored very well for business environment and infrastructure, but human capital and reputation are areas in which improvement is assured as initiatives like the DIFC gain momentum and attract the brightest and best to the emirate.

“DIFC has become the financial hub for the region,” Philippe Dauba-Pantanacce, senior economist covering Turkey, Middle East and north Africa global markets, at Standard Chartered Bank told the Financial Times.

Expansion

Now, with a firm footing, the DIFC is looking to expand to make Dubai an even greater force in the finance world. At the moment it is home to almost 1,400 companies, around 400 of which are financial institutions hailing from 100 different nations.

This year has already seen steady growth with the number of new firms up eight per cent in the first six months alone. Among the new companies setting up operations in the DIFC in the first half of 2015 was Lloyd’s of London.

“The forward momentum established in early 2015 will drive further expansion of our operations throughout the rest of the year and consolidate DIFC’s position as the leading financial hub of the MEASA region,” says Essa Kazim, governor of DIFC.

And increasingly Dubai is looking east for growth. While initially about 80 per cent of finance firms came from North America and Europe, they now only account for around 20 per cent. The DIFC is launching new efforts to attract emerging players from countries like India and China, which is increasingly making it a truly global hub for finance.

It has launched an initiative to see a fivefold increase in Indian companies to 100 by 2025. Meanwhile it already hosts the four largest mainland Chinese banks – Industrial and Commercial Bank of China, Bank of China, China Construction Bank and Agricultural Bank of China.

Arif Amiri, deputy chief executive at DIFC, said: “With regards to our banking assets, especially on our full-fledged category 1 licence firms – more than half of them are from India and China. In terms of percentage, Asia represents 12 per cent of our financial firms, whereas the Asian banking sector represents more than 50 to 60 per cent of the balance sheet of the business that is booked in the DIFC. We see a significant opportunity that already exists, and which is on an upward trend.”