Al Shaali says West will continue to get Gulf investments

Washington: A top official of a Dubai financial and regulatory centre on Friday said emerging markets would continue to invest in US and European companies despite uneasiness among some policy-makers in developed nations.

"It's unfortunate that there is this investment protectionism," Nasser Al Shaali, chief executive officer of the Dubai International Financial Centre (DIFC), said. "It would behoove all of us to find areas of cooperation, mechanisms of cooperation rather than reaction to this process."

To address uneasiness over growing foreign ownership stakes in American companies, the US Cong-ress earlier this year passed a law overhauling how the government reviews foreign takeovers of US companies. It requires US regulators to spend more time vetting deals and keep Congress better informed.

However, concerns remain. Eight US lawmakers last week urged the Bush administration to block the proposed buyout of Massachusetts-based technology group 3Com Corp, saying a Chinese company's role in the $2.2 billion transaction threatened US security.

Last month, some Demo-crats called for a careful national security review of a deal that would give Dubai's stock exchange control of 20 per cent of Nasdaq, the exchange that is home to many top US high-tech companies. In the proposed deal, Nasdaq would take a strategic one-third stake in Dubai International Financial Exchange, which operates under the DIFC umbrella.

DIFC was created by Dubai to launch a regional capital market that allows 100 per cent foreign ownership, tax-free income and profits, and that has strict money laundering laws and a sophisticated infrastructure.

Al Shaali said global shifts in capital would continue. "We will be increasing our participation in the US and Europe. We will be going after those markets with more fervour to build bridges with those countries or with those peoples," he said.

Al Shaali said emerging market players have "more conviction than ever" that investment relationships with the United States and Europe should be strengthened.

"Even more so because of this reactive behaviour," he said. "That is exactly and specifically what we are trying to overcome - the fear factor or the xenophobia."