Fund managers are exhausting people to talk to. They demand intensely detailed information, they know exactly the right questions to ask, and they do not hold back from giving business people such as myself their candid opinions, whether these are positive or negative.

For exactly the same reasons, conversations with fund managers are also very rewarding. Their refusal to suffer fools at all, let alone gladly, helps to sharpen the wits, and their insights range from how a particular company could improve its performance in a particular market to how an entire region of the world could make itself more attractive to investors.

A few days ago in New York I met some of the world’s largest fund management firms at the Borse Dubai International Investor Conference, attended also by the Dubai Financial Market (DFM) together with 15 of the leading Nasdaq Dubai and DFM listed companies.

Opportunities

The fund managers who attended the event are increasingly aware of the excellent opportunities that the Middle East, and Dubai in particular, can offer them. Investor roadshows are common in New York, but this was an event they did not want to miss. One reason for their interestcan be seen in some simple  numbers. US share prices have performed strongly in 2009, with the Dow up 17 per cent and the Nasdaq composite index up an even more impressive 36 per cent.

But these numbers are modest compared to the gains in some emerging markets. Brazil’s Bovespa index is up 65 per cent and India’s Sensex has put on 87 per cent; in our own region the FTSE Nasdaq Dubai UAE 20 index, which tracks major UAE companies listed on Nasdaq Dubai, the DFM and in Abu Dhabi, has risen 76 per cent. So it is natural that fund managers should be looking in our direction.

Uncertainty

They do not do so uncritically, of course. The fact that share prices have risen strongly so far this year says nothing about what they will do in future. So all of us who travelled to New York were subjected, as we expected to be, to lengthy and rigorous questioning.

Much of this centred around the nature of the capital markets in our region and the direction they are headed. Are governments, exchanges and corporates committed to raising the bar in the standards of governance and disclosure achieved by listed companies?

Do exchanges offer easy access to foreign investors, with liquid markets that they can dip in and out of when they please? Is there a sufficient depth of attractive companies to justify an increased allocation of funds to the Middle East, and is the region developing other asset classes that will also catch their eye? These are key issues for fund managers.

I believe that the conference was an effective vehicle for providing mostly positive answers to the fund managers’ questions, especially as far as Dubai itself is concerned.

I was struck by how wellinformed many of them already were about the progress that has been made here to build one of the word’s great financial centres.

But many of the fund managers I spoke to are impatient for Dubai to step up,
to the next level. Critical mass They are looking for greater critical mass, for a more mature centre that can compete in terms of scale with established international hubs such as London, Hong Kong and New York itself.

This will require many more listings in Dubai of initial public offerings by substantial companies, as well as of other important asset types such as bonds and sukuk, together with an expanding equity derivatives market.

All this should take place against a backdrop of greater regulatory robustness and transparency. The stakes for Dubai are high, the fund managers told me; if it fails to take its opportunities to expand, other financial centre may move in on its space. I am confident that Dubai will indeed maintain its successful expansion as a financial centre. And I look forward to many more discussions about its progress with fund managers.

The columnist is Chief Executive, Nasdaq Dubai.