EMEA Finance Magazine - October/November 2008

GCC insurance industry picks up speed

As international business continues its steady stream into the Gulf Cooperation Council (GCC) area, growth in the region’s insurance markets is accelerating, writes Kevin Godier.

The six GCC states have experienced breathtaking economic growth in recent years, witnessed by an estimated total of US$1.25tn of public and private projects planned or underway. As the level of insurable assets continues to rise, the world’s largest brokers and underwriters are keenly eyeing the opportunities.
 

African Banking Awards: The Age of Expansion

emeafinance’s inaugural African banking awards come at a very exciting time for African banks, as banks raise large amounts of capital on domestic and foreign equity capital markets, and use it to finance aggressive regional expansion plans.

Africa Banking Awards Write-ups

Tunisia
Best Bank: Banque de l‘Habitat

Tunisia’s economy is set to grow by over 6% this year, and its position near the GCC is helping to attract large amounts of FDI from the Gulf. That includes financial investors, who are buying into the country’s banking sector. This year, Islamic Bank Noor set up offices in Tunis, while Qatar National Bank also bought a local bank.

'We didn’t want this war'

In March, Georgia’s Prime Minister Lado Gurgenidze told emeafinance that the issue of the separatist provinces of South Ossetia and Abkhazia would be resolved “in the next few months”. Instead, the question of the sovereignty of those territories exploded in August, when a bold Georgian bid to reclaim sovereignty over South Ossetia backfired, and led to Russian troops invading and occupying large areas of Georgian territory. The troops are, at the time of writing, still there. So was the war a failure, and how is the economy recovering? emeafinance speaks exclusively to Prime Minister Gurgenidze about the aftermath of the war.

Is HSBC ready to go east?

HSBC’s new head of international banking, Tony Mahoney, tells emeafinance’s editor Julian Evans the bank is ready for a “substantial move” into Central & Eastern Europe (CEE).

As you stand on the escalators at Heathrow, looking at the row upon row of adverts for HSBC, you see signs of its activities all over the world. You can tell that it is very active in China and Hong Kong, as its history would suggest. You can tell it has made strong in-roads into the Middle East, not least through its Islamic banking subsidiary, HSBC Amanah. It has expanded ambitiously into the US, and also has active businesses in Central and South America.
 

The return of distressed debt

At the end of September, Seychelles announced it was defaulting on its US$800mn of external debt, in the first sovereign default for two years. Experts agree that more defaults are coming in EMEA sovereign and corporate debt, and some funds are poised to take advantage of distressed debt situations.

On September 30, the tiny archipelago of Seychelles, with a population of just 80,000, suddenly seized the attention of emerging market investors, when the government announced it was defaulting on its US$800mn of external debt.

Sovereign wealth funds face the limelight

Having been caught in a blizzard of media and regulatory attention in the first half of 2008, sovereign wealth funds are taking steps to try and improve their public image, including agreeing to a voluntary code of conduct in September, reports Julian Evans.

For decades, sovereign wealth funds (SWFs) have been operating quietly in the shadows of the global financial system, with minimal fuss or publicity, buying minority stakes in western assets, and rarely even taking seats on the boards of companies they invested in. But that all changed in the last 12 months, when SWFs suddenly became the hot topic of the western financial media.

Who's afraid of Jacob Zuma?

Foreign investors are worried by the prospect of Jacob Zuma becoming the president of South Africa next year. But what changes is he likely to bring, and how will they affect the economy, asks Tim Cohen in Johannesburg.

Soon after a crucial court case found largely in his favour in September, African National Congress (ANC) President Jacob Zuma addressed thousands of his supporters outside the court in the town of Pietermaritzburg. But the highpoint of his speech was not spoken but sung.

King Abdullah keeps faith in the dollar

Saudi Arabia has been pegged to the dollar since 1986. But the kingdom is coming under more and more pressure to de-peg in order to tackle domestic inflation.

There’s a little-known Jane Fonda film, made in 1981, called Rollover. It’s a rather far-fetched financial-romantic thriller, in which Saudi Arabian investors quietly try to pull their capital out of the falling dollar without instigating a global panic and financial meltdown. In the film’s conclusion, this attempt fails, an enormous run on the dollar ensues, and the world financial system collapses.

From Strength to Strength - Sponsored Statement

Ansher Holding has expanded from its roots as the first western-style investment bank in Uzbekistan, to become a multinational player, with offices in Singapore, UK, Switzerland, UAE and elsewhere, and a diversified pool of product offerings. The chairman of the board of directors of Ansher Holding, Anvar Rasulev, tells us about the company’s plans.

Private banking goes onshore

As local market infrastructure strengthens in EMEA countries, private banking is increasingly going onshore. So will western offshore centres  lose out? Julian Evans reports.

Private banking is booming, and nowhere more so than in emerging markets. Catherine Tillotson, head of research at Scorpio Partnership, which is a private banking consultancy firm, says: “Our evidence suggests last year was an excellent year for private banks, and that most of the growth came from emerging markets.”
 

African telcos cash in on mobile payments

While mobile network operators have stolen the lead in the provision of mobile payment services to unbanked people in developing countries such as Africa,  their ability to provide full banking services, and get involved in remittances, may be somewhat limited. Partnering with established global banks, seeking to capitalise on unbanked regions, could be the answer, writes Liz Salecka.

Mobile network operators (MNOs) have made a headstart in facilitating mobile payments in regions with high unbanked populations, such as Africa, and are well positioned to exploit the growth in global remittances.

Depository Receipt Roundtable: A reliable business in unreliable times

Depository receipts have proven to be a reliable business even in these volatile times. Indeed, trading on GDRs is actually up 87% this year, even though new issuance is dramatically down on 2007.
emeafinance gathered several of the top institutions from the cosy depository receipt market together to talk about how their businesses are faring, and found them in a relatively positive mood: headcounts are steady in their departments, revenues are also relatively steady, and even if the primary DR market is not that active, the outlook is good in 2009 for new issues from Russia, Sub-Saharan Africa, and the Middle East.
Other issues raised include: changes to SEC regulation for depository receipts, which looks set to provide a major boost to the GDR and ADR market; the rise of local listings in markets like Dubai and Moscow, and how much of a challenge that poses for the LSE’s dominance; and the extent to which the EMEA region is likely to be dragged down by the recession in western markets.

Dubai real estate: trouble in paradise

The real estate projects in Dubai get ever bigger and more extravagant. But an investigation into corruption and concerns over liquidity are threatening the market’s image. Will Rankin and Julian Evans report.

In September, the doors were opened at the Atlantis Hotel, the latest eye-popping real estate development in Dubai. Guests at the US$1.5bn development can eat at Michelin-starred restaurants, stay in suites that cost up to US$25,000 a night, or ride on water-slides through shark-infested lagoons.