Gulf nations focus on more investments in East Asia

Pedestrians cross a main road in front of the Sogo department store in the Causeway Bay district of Hong Kong. In October, Qatar Investment Authority on its own made its first major investment in China by buying 19.9% of Hong Kong-based Lifestyle International Holdings, which runs the department store.

By Arno Maierbrugger

Gulf Times Correspondent Bangkok

The “East Asia push” of Gulf countries has become more intense this week with a number of announcements made that put the fast-growing region in the focus of investment projects and business expansions.

Following the visit of HH the Emir Sheikh Tamim bin Hamad al-Thani in Beijing on Monday, where Qatar and China agreed on a strategic partnership on a number of topics, including investment and trade, an agreement was signed on Tuesday to launch a joint investment platform between the Qatar Investment Authority (QIA), Qatar’s sovereign wealth fund, and China’s state-owned Citic Group, the country’s biggest investment conglomerate.

The new investment platform will be funded with $10bn and is targeting investments in China, Singapore and other East Asian countries. In October, QIA on its own made its first major investment in China by buying 19.9% of Hong Kong-based Lifestyle International Holdings, which runs a Hong Kong department store popular with mainland Chinese shoppers, at a price of $616mn.

However, Qatar is not the only Gulf Cooperation Council (GCC) country that is fostering closer business ties to East Asia. In an announcement earlier this week, Abu Dhabi Commercial Bank, the fourth-largest lender by market value in the United Arab Emirates (UAE), announced that it will open a representative office in Singapore this year as part of its plans to expand in Southeast Asia.

The bank said the move has been made with a view on the continuously growing trade flows between Southeast Asia and the Middle East, adding that it was “natural and appropriate that ADCB establishes presence there.” Other UAE banks are also contemplating to expand in the region. National Bank of Abu Dhabi – the largest UAE bank by market capitalisation - is working on developing operations in Singapore and Hong Kong, First Gulf Bank has plans to open an office in China and Abu Dhabi Islamic Bank is seeking acquisition targets in Southeast Asia to expand its reach there.

In another development, the Abu Dhabi Securities Exchange has just staged a roadshow in Singapore and Hong Kong to raise awareness of the exchange in the Southeast and East Asian region, to increase foreign investment in its listed companies and to engage with potential new investors and finance management companies.

“This is one of several visits to the Far East in recent years, and we are confident of a positive response. We are now seeing increasing interest in the region from investors there, and this roadshow is intended to boost this trend,” said the exchange’s CEO Rashed Al Balooshi.

In October, Bahrain said it will boost economic relations to Southeast Asia by using Thailand as a gateway for Bahrain to regional markets and vice versa. The enhanced economic cooperation between the two nations will start with new rice orders by Bahrain.

A strong effect on GCC investments in East Asia is also expected from the newly established Asian Infrastructure Investment Bank, a China-based development bank that comprises of 21 nations in East, Southeast and Central Asia with China, Singapore, Qatar and Kuwait being the largest net contributors to the bank’s $100bn fund for lending to infrastructure projects in developing Asia.