Wednesday, August 28, 2013

Bahamas looks to Middle East for growth

www.bethelfinance.com

The government of The Bahamas will undertake a trade mission to the Middle East this fall, with the intention of drawing into the country some of the region’s wealth in the form of sovereign wealth funds and high net worth individuals.

Fred Mitchell, minister of foreign affairs, said that officials from Saudi Arabia will visit The Bahamas next week, a representative from Qatar will come in October, and a trade mission to Dubai is being planned for later that month.
Ryan Pinder, minister of financial services and trade, told Guardian Business that the government will continue to look for new partners in order to expand the financial services sector during a period when traditional sources of wealth are less forthcoming.

When you look to expand an industry you have to be nimble enough to adjust to look at markets that demonstrate growth and wealth, and certainly it is clear we’ve identified Latin America as one of those regions and we understand that the EU economy has limited growth prospects there so we look to other markets. Latin America is one, North America is one and certainly we feel that certain areas in the Middle East are growth areas,” Pinder said.

He added that the intention of the upcoming trade mission would be to develop The Bahamas as a financial services hub that can connect Middle Eastern interests with “opportunities in Latin America and North America,” adding: “The Bahamas could be a perfect conduit for that.”
Noting that Bahamas-based financial institutions do currently deal with Middle Eastern clients, and some even have a presence in the Middle East, Pinder said the hope is that these linkages can be further leveraged.

We believe there’s a lot more growth business to be had. Traditionally a lot of Middle East private wealth management has been centered in Geneva. We believe we can utilize our location on this side of the world to give added value to clientele,” he explained.

Pinder added that the government will only attempt to engage in business with countries that have diplomatic relations with the US, and would also seek to use the trade mission to study Dubai’s success as a center for arbitration, an industry The Bahamas is also planning to develop.

Indicators do suggest that, notwithstanding the present turmoil in countries such as Syria and Egypt, the Middle East is ripe for further engagement by The Bahamas.

A recent study in the ‘Insights’ series of publications by leading wealth manager Barclays Wealth found that Middle East-based high net worth individuals (HNWIs) are more confident about their prospects for making money than their counterparts in Europe and North America.
Six in ten of the region’s HNWIs believe wealth can be created faster today than in the past, compared to 43 percent of respondents in Europe and 31 percent in North America, the report found.

Such findings do point to a higher level of interest in wealth management offerings that The Bahamas could provide.

As for sovereign wealth funds (SWFs), globally these are managing around $1.8 trillion at present on behalf of states such as Qatar and the United Arab Emirates.

In a May 2013 report, financial services firm KPMG notes that these funds are increasingly being seen by the West as an important source of capital given how the impact of the economic downturn on SWFs in the oil rich countries was partly mitigated by the increase in the price of oil during recent years.

This effect has left these funds in a strong position to take advantage of the recovery in the global markets.







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