The seventh Global Financial Markets Forum (GFMF), the annual conference organised by the National Bank of Abu Dhabi (NBAD), kicked-off yesterday in Abu Dhabi with speeches from UAE and global policy makers, asset managers, sovereign wealth funds (SWF), and bankers.
Sheikh Nahyan bin Mubarak Al Nahyan, the UAE Minister of Culture, Youth, and Social Development, inaugurated the GFMF with a keynote speech, in which he said that "Abu Dhabi has become not only the centre of finance and business but also a nurturing source of innovation and creativity that promises to benefit the world." "Abu Dhabi and UAE have shown the world that people from different cultures can live and work together in peace and harmony," He added. Highlighting the link between culture and finance, Sheikh Nahyan said that capital markets around the world recognise the worth of operating in Abu Dhabi and have played a role in strengthening its culture. "Our financial sector has been exemplary and provided a safe, robust and innovative market. We are proud of business environment in the UAE and we hope to promote a sustainable development." He remarked that 2015 is the year of innovation in the UAE and this is already reflected in the innovations achieved by the country's financial and capital markets. H.E said that financial markets will continue to innovate based on the three principles adopted by the architects of the financial sector of this country – openness, access and transparency.
In his keynote speech, Nasser Ahmed Al Suwaidi, the Chairman of Abu Dhabi Department of Energy and Chairman of NBAD, confirmed that GFMF has become the financial event of the year in the region. It is widely recognised as a gathering which provides an outstanding platform for knowledge sharing through discussions on topical financial and economic issues of our times.
"GFMF represents a unique opportunity for NBAD's most valued clients to network with --- and to learn from --- our many esteemed guests, which include leading industry insiders, global policy decision-makers, investors, economists and experts from the world of academia, ' he said.
"Abu Dhabi and the UAE are at the heart of the West-East corridor, the high growth area of the world which spans from West Africa to East Asia. Our geographic position provides us with a unique opportunity to capitalise on the significant business that will be done between East and West. Abu Dhabi is already a key player in the Gulf region and is increasingly becoming a major player on the global scale as well," Al Suwaidi added.
"There are many exciting things happening in Abu Dhabi, and many of them are a direct result of Abu Dhabi's Vision 2030, an initiative by the Government of Abu Dhabi to develop and diversify the economy beyond oil revenues. From a financial perspective, the recent introduction of Abu Dhabi Global Markets puts Abu Dhabi on the map as an emerging leader in the financial services industry," he concluded.
Ahmed Al Sayegh, Chairman of Abu Dhabi Global Market (ADGM) said that "Our Nation's and our Emirate's journey of growth and development from the outset has been very strategic, carefully planned and precisely implemented . An exciting journey and growth trajectory that began more than 43 years ago under the leadership of the late Sheikh Zayed bin Sultan Al Nahyan and that continues today with the vision of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE." "A blueprint of exchange between the UAE and beyond that continues today and that makes Abu Dhabi not just an influential hub for global commerce but also a hub for arts and culture, a hub for education and a hub for healthcare with the latter being located within Abu Dhabi Global Market' (ADGM) jurisdiction on Al Maryah Island," Al Sayegh added .
"Over the past 12 months we have made significant progress with the development of the three main pillars of ADGM – the Registrar, the Financial Services Regulator and the Courts”. "The Board of ADGM took the innovative step of making English common law on civil and commercial matters directly applicable in our financial centre. This is the first time such an approach has been adopted in the Middle East. A similar approach was taken with great success by Hong Kong and Singapore," Al Sayegh explained .
"We are committed to delivering a commercial regulatory framework that will be both pragmatic and dynamic. It is designed to ensure that a balance is struck between the need to encourage entrepreneurial activity and investment and the need to protect the market and the integrity of our reputation. Firms that wish to operate from ADGM will have the ability to utilise a variety of legal structures under our Companies regulations" said Chairman of ADGM.
In his keynote speech, Husain Al Nowais, Chairman of The General Holding Corporation (Senaat), emphasised the importance of economic diversification saying that it is the reason the UAE is considered the pioneering nation it is today.
"The UAE placed investment of its oil proceeds at the heart of a well-considered diversification strategy.. In 1970s, the General Industry Corporation (GIC), which today we call Senaat, was created to plan and implement Sheikh Zayed's vision for industrial and economic diversification". "Senaat invested over the last five years 16 billion dirhams developing the metals sector and plans to invest 5 billion dirhams in the next 2 years," he disclosed.
The Chairman of (Senaat) added that the vision of our late founding father Sheikh Zayed has created global players with significant ripple effects on the local economy such as Emirates Global Aluminium,; Emirates Steel, and Borouge. Today, the UAE has nearly 6000 industrial establishments with an investment of 150 billion dirhams, contributing to about 15 per cent of the UAE's total GDP.
H.E. shared his thoughts on necessary steps to take the industry sector to the next level. He stated that "Senaat" welcomes the creation of a domestic bond market, to provide longer-term funding. He urged local banks to establish deeper relationships with major export credit agencies ECAs and be able to act as an intermediary in big deals." Al Nowais also encouraged finical sector to develop local commodities market and provide commodity hedging specifically Iron Ore, Copper, Grain as there has been a large increase in liquidity in the market.
Mark Schwartz , Vice Chairman of the Goldman Sachs Group Inc. and Chairman of Goldman Sachs Asia Pacific, Alex Thursby – Group CEO of NBAD, discussed the role of Asia within the West-East Corridor. Both of them were very bullish about Asia, including China, India and South-East Asia. Trade has grown remarkably in all these countries and investment has followed.
They also discussed the risks associated to the region and the impact of the Chines economy's slowdown. Mark Schwartz insisted on the need for China to continue reforms especially in the area of capital market as well as social reforms, and to address severe environmental issues. Mr Schwartz did not see any risks on the financial level though in spite of the country's heavy debt.
Panellists found that the bearish the views on China that are shared in Europe and in the USA, unjustified and suspected an unnamed wish for China to fail.
"I think the banking system is strong and its liquidity is strong," Mr Thursby said, adding that the saving ratios of the country give confidence about the growth potential. Concerning the issue of public and private debt that has reached about US$28 trillion, Mr Schwartz said that 280% of the GDP may sound a lot but that "there is so much growth ahead".
As for declining oil prices and their impact on the West-East corridor strategy, Mr Thursby said that the Gulf has the capacity to hold that for a long time and to grow further and that the region's oil is still the cheapest. Importing and developing countries also benefit from the trend which is positive. He also insisted on tremendous opportunities ahead in Egypt, provided the country brings in the right infrastructure and reforms. "It can become very similar to China. The impact of Egypt on the rest of the Middle-East can only be positive." Among the other positive developments on the Africa continent is the relationship of governments with the private sector.
The first day of 2015 GFMF also featured panel discussion on "Future of Energy. Panellists discussed their various approaches towards renewable energy. The key question panellists they focused on was weather renewable energy actually makes money and is a profitable business.
According to Paddy Padmanathan – President & CEO, ACWA Power, the rates of return for investment in renewable energy is projected to be in double digits in the future.
Kuwait Petroleum Corporation is still new in this sector, Nizar Al-Adsani – Deputy Chairman & CEO of Kuwait Petroleum Corporation recognised. "we have taken fossil fuels for granted for too long", he said. "This is why we have invested in funds that develop solar power for instance.
Masdar has developed integrated holistic initiatives to tackle the challenge and invested in renewable energy across the world including Spain, the UK and the MENA region. "But energy is not only about generation, it is also about energy efficiency" said Bader Al Lamki – Director of Clean Energy, Masdar Rafi Baghdjia, Chief Operating Officer at Shell Abu Dhabi said the company is considering wind energy. Mr Baghdjian stressed the main debate should be climate change and that the world should move from coal energy to low carbon energy.
Panellists also agreed that fossil fuels will still continue to be a major part of energy generation, but that renewable energy is no longer just an alternative element. It has now become part of an energy mix.
A panel discussion titled, "The role of philanthropy in today's rapidly changing world" was also held on the first day. David Gibson-Moore from the LGT Group Foundation, who moderated the session, pointed out how appropriate it is to have this discussion in the UAE, which is one of the largest aid contributor in the world.
The underlying theme of the discussions that followed was how there has been a fundamental shift in the way organisations look at philanthropy and how it is being done.
Claire Woodcraft-Scott spoke about how the Emirates Foundation was transformed. "In the 21st century there is a fundamental shift in how capital is deployed, where the days of cheque-writing are over." She also pointed out that more and more philanthropic organisations are moving away from traditional way of functioning where they gave short term grants to more result-oriented way of doing long term funding. A view that was endorsed by the two other panellists as well.
Claire also highlighted that the Emirates Foundation has gone from focusing on multiple sectors to just one issue – youth development.
Tamer Makary reiterated the importance of a public-private partnership to achieve this cooperation. He also pointed out that it is important to respect local customs. "Localised empowerment should be a by-product of any programme." 2nd day of 2015 GFMF The 2nd day of 2015 GFMF will feature a conversation with Mohamed A. El-Erian, the Chief Economic Advisor at Allianz, the corporate parent of PIMCO where he formerly served as chief executive and co-chief investment officer. El-Erian, who chairs President Obama's Global Development Council, is a columnist for Bloomberg View and a contributing editor at the Financial Times.
It also include panel discussions on "The regulators' perspective ", "Sovereign Wealth Funds' view on the world today", "aviation", "financing trends in a challenging environment", and "global asset manager and allocators" comprising of global asset managers, investors, bankers, decision makers and thought leaders.
Source: WAM