Regional financial institutions venturing into shipping finance

Dubai: Middle East ship financing is becoming increasingly attractive to private investors and financial institutions in the region, said shipping executives on Monday.

Historic highs in maritime activity, an unprecedented fleet expansion, the changing and maturing profile of the Arab-owned fleet have increased an awareness of the investment opportunities, said participants attending a major ship finance conference in Dubai.

Jamal Majid Bin Thaniah, vice chairman of the board of Ports, Customs and Free Zone Authority (PCFC), opened the Middle East Money and Ships conference.

The completion of Jebel Ali Port's first expansion stage, scheduled for the first quarter 2007, will result in a 20 per cent increase in transhipment handling and a 16 per cent rise in imports and exports, he said in his keynote address.

"The multi-billion mega expansion will significantly increase the storage handling capacity at the port and boost business volumes."

"The developments taking place at JADAF Dubai, Dubai Dry Docks and the completion of Dubai Maritime City next year will be a tremendous boost to the emirate's maritime industry," he said.

The event is organised by international maritime publisher and event organiser Seatrade.

There is a big attitude change and numerous foreign and local banks are setting up special maritime finance departments, said Ramesh Ramakrishnan, chairman, Transworld Group of Companies, shipowners and logistics providers.

"Previously the financial institutions and investors lacked an understanding of the shipping industry. Today there is a huge amount of interest thanks to the industry doing well and also the expansion of maritime infrastructure and DP World's global activities, which has given additional credibility," said Ramakrishnan.

International banks are also increasingly tapping into emerging opportunities in the region, said Steve Addison, marine finance division, LMG (UAE), insurance brokers in the Middle East.