Abu Dhabi is the largest and wealthiest emirate in the seven-member United Arab Emirates (UAE) federation, with 90 percent of its oil resources. It has been largely shielded from the debt troubles in neighbor Dubai and has big plans to develop its economy.

"There are a number of entities in Abu Dhabi who are considering acquisitions that are consistent with 2030," HSBC Managing Director Declan Hegarty told the Reuters Middle East Investment summit, referring to the emirate's strategic development blueprint Plan 2010.

He said Abu Dhabi would consider any industrial process in energy, as well as the hospitality industry for purchase in 2011 but would spend its money cautiously.

"They know what they're looking for. There's a very clearly communicated list of industries that are on the shopping list and the bar is set high because they know they have to live with the consequences of what they buy," Hegarty said.

"By no stretch is there a sense of money burning a hole in anyone's pocket."

HSBC, one of the oldest banks in the region, has expanded operations in the UAE capital, lured by its deal potential.

In 2009, HSBC acted as an adviser to the Abu Dhabi government investment vehicle International Petroleum Investment Corp.'s (IPIC) in its acquisition of Canada's Nova Chemicals for $500 million.

Hegarty said that although the case for creating national champions in the UAE was strong, the focus for Abu Dhabi would be on strategic acquisitions outside the country and that any consolidation in the UAE would be done from positions of strength on both sides.

"Consolidation within the UAE ... won't be from the perception of any distressed sale and that will be the tone of the UAE discussions," Hegarty said.

HSBC is a net lender to the region and one of four UK banks thought to be among the most exposed to state-owned conglomerate Dubai World. 

But now lending is more constrained and HSBC has been more focused on winning bond mandates in the region, including Dubai's first sovereign bond foray since its 2009 debt crisis, four times oversubscribed.

Speculation is high that Abu Dhabi could also issue a sovereign bond in the coming months.

"If you look at the Abu Dhabi curve, it would make particular sense for the sovereign to come at the long end. I think this is something they're likely to be giving serious consideration to at the moment," Hegarty said.

Long tenor bonds are an exception in the region, but government spending plans, particularly on developing infrastructure, could lead to longer maturities.

In 2009 the state of Qatar issued a three-tranche bond with one component carrying a 30-year maturity.

Hegarty expects bond issues from the region to rise due to strong investor demand and the current lower cost of funding. Regional issues totaled about $35 billion in 2009.

"The pipeline across the region is still considerable but very digestible because the market is still hungry for the credit," he said, adding volumes could reach $40 billion in 2011. He expects Abu Dhabi entities to issue next year.

In Abu Dhabi, HSBC is currently on bond mandates for Abu Dhabi Islamic Bank and IPIC.