Dubai: London, a premier global financial centre with its advanced network of financial institutions can be of help to the GCC governments and businesses at a time when the region is facing economic challenges arising from sharp fall in oil prices, said Alderman the Lord Mountevans, The Lord Mayor of the City of London.
Lord Mountevans’ visit to the GCC comes at a time the region is facing a number of geopolitical challenges and economic pressures related to the drop in oil prices. During the current visit he covered Kuwait, Saudi Arabia, Dubai and Abu Dhabi and Bahrain.
“Relations with the GCC region are historically very important for the UK and the City of London. We believe the turmoil in the oil market is temporary and we do not expect any significant impact on business between the region and the City of London,” said Mountevans.
City of London, home to world’s leading financial institutions and wealth managers play significant role in global fund flows between the Gulf region and the rest of the world. Amidst reports that some of the Gulf governments, government related entities and sovereign wealth funds withdrawing funds held overseas to address domestic fiscal pressures, Lord Mountevans said such withdrawals are not significantly large. On the contrary, he said, in the context of economic challenges faced by the region, investors are looking at diversifying their portfolios and in this context London with its sophisticated financial services industry will be an attractive investment destination.
“We’ve taken a number of steps in recent years to make UK more attractive to investors. We currently rank at sixth position in the ease of doing business ranking,” he said.
In addition to offering investment opportunities to GCC investors in the UK, Lord Mountevans said City of London is well positioned to help regional governments and institutions to raise funds in global markets.
“Our financial services infrastructure is geared to meet the funding requirements of Gulf governments and businesses. Both debt and equity issues from the region could be sold through London,” he said.
Commenting on recent reports on the potential flotation of Aramco, Lord Mountevans said it is too early to speculate on when and what kind of assets will be floated. “Clearly it is not going to be the crude production. If it happens it could be linked to downstream assets. London has the largest number of resource companies listed on London Stock Exchange. With primary listing likely on Saudi bourse, London clearly will be a candidate for secondary listing of Aramco shares,” he said.
City of London in keen on cooperating with regional financial centres, particularly in Islamic finance and Insurance industry.
On doing business with Iran, he said, there are long term opportunities, but he said it is too early to make commitments. “We are not yet sure what sectors of the economy will be open to foreign investments. Additionally, we know, while sanctions related to nuclear deal has been lifted there are host of other sanctions that are still in place and we need to wait and see how these will play out in the future,” said Lord Mountevans.
Speaking at a reception on Sunday evening for City University London’s Dubai Centre, the Lord Mayor spoke on how London can support Dubai’s vision to become one of the most innovative cities in the world.
“Dubai and London are natural partners given their shared ambitions for economic growth, job creation and development. This is particularly true in the financial and professional services and education sectors, where London has a huge amount of experience and expertise that it can offer the Emirate in terms of driving innovation,” he said.