The Dubai International Financial Centre (DIFC) is wooing Indian financial services companies for setting up shop in the emirate.
The business potential in financial services in the Middle-East has been estimated at $3 billion by management consultant Booz Allen Hamilton and DIFC intends becoming the hub for such services rivalling London, New York and Frankfurt.
DIFC has initiated talks with India's largest financial services company in the private sector for providing wholesale banking and other financial intermediation services out of the Middle-East.
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The chairman of the Regulatory Council (the Dubai financial system regulator), Ian Hay Davison, said that the DIFC is focussing on institutional participation specialising in the areas of debt, capital markets, reinsurance, project advisory, trade finance and wholesale, investment and Islamic banking.
The centre is also looking at Indian papers listing in the stock exchange being set up. According to Davison the advantage of investing in the centre is that is offers western investors proximity to the region.
Davison said DIFC expects to tap business from countries as far as Kazakhstan and Turkey in the north, Egypt and Sudan in the west and India and Pakistan in the east.
The regulatory council is being modelled on the lines of the Financial Services Authority (FSA) of the UK.
"There are around 150 companies bigger than the Emirates Airlines in the Middle-East that need to tap the capital market. There is lot of money in the Emirates but no institutionalised capital market. The need for the Centre has arisen as these companies, which are not known in the western world, cannot access global financial centres to raise equity or debt," Davison explained.
Further he pointed out that many state-owned companies in the countries identified by the Centre are to be privatised and there was huge potential for investment banking.
However more than equity the thrust is on the debt market and the DIFC is set to kick-off its activity with a World Bank bond offering, which will be listed at the Centre, of $100 million in the next couple of months, said Hussain Al Qemzi, chief operating officer, DIFC.
Davison had a meeting with G Muniappan, deputy governor of the Reserve Bank of India today and officials of the Securities and Exchange Board of India. "The meetings were very positive," said Davison.
The intention is to rope in all the regulatory authorities in the region in order to have their co-operation and persuade the financial institutions in the region to invest in the DIFC.