HSBC Targets Branches: Mid East Roundup

HSBC’s Islamic Arm Targets 125 Branches by 2012.

HSBC Amanah, the Islamic arm of HSBC(HBC), plans to open 125 branches across the Middle East and Asia by the end of 2012, eyeing the rapid expansion in the Islamic finance industry which is worth $1 trillion, Dailystar reports.

Razi Fakih, HSBC Amanah’s deputy CEO said Islamic banking will grow at a 6% CAGR in the Middle East and Asia over the next five years. He further added that the next attractive markets will be China and India and HSBC is seeking to extend presence in countries like Egypt, Turkey, and Oman.

However, the lack of liquidity management tools and standardization in Asia and the Gulf pose challenges.

China and India to Get Qatar’s Additional LNG

Qatar, the world’s largest LNG exporter has identified two buyers for its additional capacity, Gulfbase reports, citing Qatar’s oil minister. The minister indicated that Qatar could export 7 million tonnes of LNG annually to China and about 5 million to India, from the originally planned exports of 5 million tonnes to China and 7.5 million to India.

The move was taken by Qatar as shale gas has now become a challenge in the U.S. and therefore the Middle Eastern country is seeking for additional customers across the North and South American countries, some other Gulf countries, Canada, Argentina and Chile.

In a separate development, Qatar revealed to the International Energy Agency (IEA) that it is on track to reach a targeted capacity of 77 million tones per year by December 30, 2010. Also, the country estimates the excess supply of the fuel in the world markets to end by the end of 2013

Gulf States Look to Appreciate Currencies to Counter a Weak Dollar

As per a Arab monetary official, the continuous slide in the U.S. dollar has raised concerns in the Gulf countries and most of them are seeking to appreciate their respective currencies against the dollar, Gulfbase reports. A weaker dollar to which most Gulf currencies are pegged could create Inflationary pressures, said Jassem al-Mannai, director general of the UAE-based Arab Monetary Fund.

Five out of the six GCC states have their currencies pegged against dollar with only Kuwait pegging it against a basket of currencies in which the dollar constitutes 70%-80%. In 2007 and 2008, the Gulf States did not hike interest rates when inflation rocketed to double digits during that period. Due to the dollar peg, the Gulf States did resort to a rate hike then.

According to a new report by Economist Intelligence Unit (EIU), the UAE economy is estimated to grow at an average 5.1% over the next 10 years, higher than the global trend which is forecast below 4%, Gulfbase reports. The non-oil sector will likely drive the next leg of growth in the UAE. This segment could constitute nearly two-thirds of the economy during the next decade, driven by tourism and trade.

The increased focus on the non-oil sector in the GCC states will de-risk them from excessive oil dependence. For the overall GCC, growth is estimated at 4% annually until 2020 with non-oil growth surpassing the oil sector growth by 5.1% much above the 3.3% annual average growth in the oil and gas sector.

Gulf to Pump $180 Billion Into Industrials

The Gulf countries’ thrust to diversify their oil-reliant economies and take advantage of abundant energy resources ploughed about $180 billion into the non-oil manufacturing sector, Emirates 24 7 reports.

According to Doha-based Gulf Organization for Industrial Consulting (GOIC), the total capital pumped into the GCC industrial sector doubled to nearly $180.4 billion at the end of last year, from $86.6 billion in 2000. Also, the total number of industrial units in the GCC at the end of 200 stood at 2000 which has now surpassed to more than 13,000 plants.

A breakdown showed chemicals and plastic products as the largest beneficiaries of GCC industrial capital followed by non-metallic mineral products, basic mineral products, and manufactured metallic products.

Looking ahead, investments in the industrial sector is likely to increase at a faster pace than the other sectors mainly due to factors like high feasibility of such projects, the abundance of cheaper labour and energy, and availability of long-term funding for industries.

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