MANAMA, 2 November 2007 — Bahrain has managed to establish its position as a leading center to attract funds.
According to official figures, the size of funds domiciled in the kingdom is over $20 billion and the competition from neighboring countries like Dubai and Qatar will require more efforts from the concerned quarters to enhance the size of the specialized business, senior executives at Citigroup said on Wednesday.
Jervis Smith, managing director, Financial Institutions Group-Citigroup and Richard Street, director, Securities Fund Services-MENA, said Bahrain being the first country to implement investment undertaking law, has a natural advantage over other competitors.
But it doesn’t necessarily mean, they said, that there is no competition at all as Dubai and Qatar are also moving in this strategic direction to attract more funds.
Smith and Street, taking part in the Fund Forum at the Ritz-Carlton Hotel, said Bahrain has successfully managed to ensure the highest level of transparency in running the affairs of the financial and banking sector. “This element alone is a huge step forward to attract more investments as trust and confidence of investors and market players is very important factor. The confidence of investors coupled with flexibility, protection to foreign investments, and last but not the least, the best regulatory framework are the most important factors considered to be a hallmark for any financial center,” he said, adding that the Bahrain has been at the forefront in implementing these vital pillars for the banking and financial sectors. “The stringent rules and regulations have helped the kingdom to establish its position as a hub for funds.”
Talking about the regional scenario, Jervis said that mounting private wealth, a deepening equity culture and a fast-improving regulatory backdrop are prompting new interest in the region among international asset managers. “There are however specific operational challenges to establishing and developing a fund business in the region. Against this backdrop, we at Citi have recognized the demand for a truly global provider to work in partnership with the region’s securities and fund industry.” As a result, we are now engaged in developing our local securities and fund services presence in the Gulf states, he said.
“With product experts located in the region, supported by the global network of securities services operations, Citi is well placed to help shape the local funds industry and assist in its international product development.”
He added: “The move reflects our commitment to a region where we have had a presence for more than 50 years. It also reflects our determination to continue to support the asset management industry in its international expansion and deliver a best-in-class service in every key marketplace.”
“Our strong presence in investment banking, equities, cash and treasury management, our local knowledge, combined with the scale and expertise of a truly global bank, allows us to deliver a powerful and consistent set of solutions to our clients throughout the region,” he added.