UAE builds position as global financial hub

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Arnaud Leclercq, Partner Holding Privé, Head of New Markets at Lombard Odier, one of the world’s oldest private banks, believes that the UAE has become an important financial and economic hub, both regionally and internationally. Speaking to Al Khaleej, he explained that the UAE forms a link between East and West, via relationships with India, Africa, and nations across the world.

Leclercq highlighted that in recent years the UAE economy has attracted long-term investments from Europe and elsewhere, with the golden visa system making the country significantly more attractive to overseas investors.

According to Leclercq, “Dubai has become an important financial centre for the entire world, as many investors come from London, Asia, America and Europe to invest in the Emirate.” Meanwhile Abu Dhabi, he explained, enjoys high solvency and liquidity, and has become a serious regional and international geopolitical force, and a decision centre that is attracting growing global attention.

Lombard Odier in the UAE

Regarding the bank’s presence in the UAE, and its expansion plans, Leclercq noted that Lombard Odier was the first Swiss bank to open an office in Abu Dhabi, and that they are currently preparing to obtain a license from the Dubai International Financial Center (DIFC). “We’ve seen wealth coming from Europe over the last couple of years. This will remain an important part of our work as we grow in the region,” he said, noting that the Dubai office will be for wealth management, citizens and residents, and the wider Arabian Gulf region.

Lombard Odier was the first Swiss bank to open an office in Abu Dhabi, and that they are currently preparing to obtain a license from the Dubai International Financial Center (DIFC)

Investors in the Gulf invest 80% of their money within the region, he explained. The rest is invested abroad, mostly in America and Europe, where there are many opportunities in private investments, and, importantly, in secondary markets.

Investing in sustainability

“The most important investment for Lombard Odier is in the area of sustainability,” Arnaud Leclercq continued. “In essence, this is an investment in the future. We are going to see a radical change in the global economy, and we are actively searching for companies that are interested in investing in sustainability. We have our own internal team dedicated to this work, and we have partnered with other companies that also have experts in this field.”

“When we talk about sustainability, we’re talking about investing in wind and solar generated electricity, in demand-side electric solutions, in the rise of new, sustainable food systems, and in the transformation of our materials systems, such as companies innovating to get rid of plastic waste.”

In addition to sustainable investments, “Lombard Odier is interested in private and family investments, and investment in funds in accordance with Islamic law,” he said, highlighting improvements in investment opportunities in the UAE and Saudi Arabia, through successful IPOs. However, he warned, globally there is a shortage of liquidity, which is a concern for global investors who look for high liquidity in order to invest.

Lombard Odier is interested in private and family investments, and investment in funds in accordance with Islamic law

America’s banking crisis

Turning to the Credit Suisse crash and the collapse of some smaller banks in the US, Leclerc said, “the big banks in America and Europe will come out of the crisis stronger. At Lombard Odier we specialise in wealth management only and we have high liquidity and no debt.”

“Banks in the UAE are strong in a number of areas, including housing loans, trade, insurance and others,” he noted. “However, in the field of wealth management there is room for improvement. There must be better research and analysis. Thanks to the advanced infrastructure and facilities that have been built here, the UAE has become a destination for investors. But a great effort must be made to keep wealth within the country.”

What investors want

On what investors want from the UAE, Arnaud Leclercq pointed out that “what distinguishes the UAE is security and safety, and this is necessary for investors. In addition, the low tax on business and the golden residency arrangement that provides stability, this is what makes investors interested in investing in the UAE, and in staying for a long time and investing here with their families too. It is important that the UAE is also characterised by advanced infrastructure and modern airports that make it a link between East and West – this is vital for investors.”

When it comes to corporate tax on investments, he concluded, “This will not be a deterrent because rates are low. However, they must remain within acceptable levels so as not to alienate investors.”

Note: Interview published in Al Khaleej, 10 July 2023

Image by: Pixabay

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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