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Bahrain hosts regional and global initiatives

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The price of Brent crude may have plummeted, followed by considerable volatility in the world oil market, but the GCC – and Bahrain in particular – is responding positively.
 
With growth across the region expected to continue at more than 4% in 2015, opportunities for investment remain strong. Such confidence is being driven by regional governments’ commitment to support economic activity and priority projects, as well as steadily increasing diversification.
 
A powerful example is the current take-over battle for Egyptian cake and biscuit-maker Bisco Misr, which global giant Kellogg’s is leading. According to Rafi-uddin Shikoh, CEO of research consultancy DinarStandard, who spoke at the recent Global Islamic Investment Gateway event in Bahrain, this is “just one of a series of transactions which reflect the escalating international appetite for investment in the diversifying Islamic MENA markets.”
 
Demonstrating leadership
 
Bahrain has a history of showing the way. Not only was it the first Gulf state to discover oil, but the first to diversify into other sectors. Now, Bahrain is a leading financial centre in the Middle East with more than 400 registered financial institutions and the highest concentration of Islamic finance institutions found anywhere in the world. Furthermore, so far this year the Kingdom has hosted two international events that gathered financial experts and business leaders from across the region and around the world– with a view to meeting the challenges of 2015 and exploring opportunities for future growth.
 
The GCC Financial Forum 2015
 
Bahrain held the 4th Euromoney GCC Financial Forum on 24th – 25th February.
 
The event enabled more than 400 leading experts from the financial community to discuss the global economic outlook, its recovery and effect on regional financial markets. Topics included the role of private capital in public projects, Bahrain’s real economy, the growth of local companies, and the pipeline of hydrocarbon projects.
 
Some highlights:
 
  • The Bahrain Economic Development Board’s (EDB) Chief Economist Jarmo Kotilaine moderated sessions alongside editorial staff from Euromoney Conferences and Petroleum Economist, including a high-profile discussion examining the impact of the global macroeconomic environment on the GCC and the regional outlook

 

  • Richard Banks, Director, Emerging Markets, Euromoney Conferences outlined the challenges and complexities in 2015 and beyond, and observed that with the return of geopolitics and ever-increasing regulation, the regional financial sector must redefine both its role and methods in coping with a reluctant global economic recovery and decline in oil prices

 

  • Interactivity was a major feature of the conference which included an open ‘Town Hall’ dialogue with HE Rasheed Mohammed Al Maraj, Governor of Central Bank of Bahrain (CBB) that allowed audience members to put questions directly to him. Euromoney also promoted discussion on social media platforms such as Twitter, enabling participants to voice opinions using the dedicated hashtag #emBahrain.
 
Commenting on the Forum, HE Kamal bin Ahmed Mohammed, Minister for Transportation and Telecommunications and former Acting Chief Executive of the EDB, said: “The financial sector has an important role to play in providing the capital, products and services to ensure that the region’s economies are able to maintain their strong growth in the coming years. At the same time, the increasing sophistication of the sector and the Gulf’s strong fundamentals mean that the opportunities for international investors to play a role in that growth are greater than ever.”
 
Looking even wider – the Global Islamic Investment Gateway
 
This pioneering event, which brought together investors and showcased cross-border Islamic investment opportunities, took place between the 2nd and 3rd of March.
 
The Global Islamic Investment Gateway (GIIG) was organised by Thomson Reuters and the Islamic Development Bank, and was attended by decision-makers from investment banks, sovereign wealth funds, investment companies and family offices of high net worth individuals. Participants from more than 30 OIC (Organisation of Islamic Cooperation) countries also represented the GCC, MENA, CIS, South-East Asia, South Asia, West Africa and Sub-Saharan Africa.
 
An immense opportunity
 
An opportunity has been identified through compelling macroeconomic thinking by Rafi-uddin Shikoh (mentioned earlier) that calls for a new investment model and is prompted by increasing international interest in Islamic markets.
 
It’s easy to see why. The 57 countries that comprise the OIC have a combined GDP of $6.7 trillion (2013). They are growing faster than the rest of the world, with an average GDP growth-rate of 5.4% to 2019, versus 3.6% for all other countries. Even the high-potential BRICS markets are growing at just 3.9%.
 
Markets in the OIC are astonishingly well connected commercially, demographically and politically across a wide range of business sectors. Almost all are represented by a single financial institution, the multilateral Islamic Development Bank, that’s delivering successfully on investments across its membership.
 
More importantly, though, OIC countries are young. Their average age is projected to be 30 years by 2030, compared to 44 years for Europe and North America. Consequently, these markets, with their youthful populations and strong long-term dynamics are creating a rich set of innovative businesses that are largely financed through private capital.
 
Making investment easier
 
GIIG participants saw the launch of a new Investment Monitor portal that collates opportunities and identifies viable projects that need capital. Opportunities are refined with the help of Thomson Reuters’ internal specialists and can be ready for companies’ investment committees to approve within two weeks.
 
Commenting before the event, Dr Sayd Farook, Global Head of Islamic Capital Markets, Thomson Reuters, said: “The Global Islamic Investment Gateway will be the premier event for any investor looking for access to opportunities in emerging and frontier Islamic markets. These markets have the value chains that have the potential to provide excellent returns for the capital in the GCC and this event will give investors the means to access them.”
 
Referencing the Investment Monitor portal, he explained, “There are great opportunities out there but reliable up to date information can be hard to access. This online portal is all about doing real business and will help to make it happen.”