Summit Notebook

Exclusive outtakes from industry leaders

Cure for lending constipation needed

DUBAI/ Yes, the market for IPOs is opening up, investors are regaining confidence and the worst seems to be over, but challenges are still looming and there’s a dire need for a change in regulation. Or so suggested Shuaa Capitals’ chief Sameer al-Ansari.

“With the balance sheet of banks, whatever is keeping them constipated, we need to give them something to start. Banks have to be more comfortable and confident that there are no more shocks on the horizon,” said Ansari at the Reuters Middle East Investment Summit in Dubai on Tuesday.

The right provisions need to be made — and that means more acknowledgment of non-performing loans — in turn bringing adequacy ratios down, so that banks get a boost and start
lending again, Ansari noted.

“We need to open the tap a bit, even if its a drip,” the banking exec said, using hand gestures to illustrate his point. “We can’t have growth in the economy if its negative.”

No bonds for Arabtec; not for now anyway

MIDEAST-SUMMIT/ARABTEC Just to be clear, Arabtec is not considering a convertible bond issue.

The builder has no need for funds and has adequate access to capital if needed. But nonetheless its chief financial officer Ziad Makhzoumi is watching the region’s increasing capital raising activities with interest.

“I don’t think we need any funding whatsoever… As a CFO I have to look at all the options all the time,” he told the Reuters Middle East Investment Summit in Dubai on Monday.

Is investor confidence returning to the Middle East?

UNITED ARAB EMIRATES/A recovery in the Middle East and the prospects for investment are on the agenda at the Reuters Middle East and Investment Summit, taking place in Dubai, Riyadh, Cairo, Kuwait, Beirut, Bagdad, Abu Dhabi and London.

In the wake of Dubai’s debt crisis, which rocked financial markets globally and dented confidence in the region, top executives and officials will discuss whether the investment climate in the region is improving and confidence returning. 2011 will be a year of more restructurings, but the region’s capital needs will lead to a surge in debt issues and even a possible revival of the IPO market.

Tax evaders on the run

  By Neil Chatterjee
    The U.S. has promised it will hunt down tax evaders.
    And it seems tax evaders are on the run.
    DBS bank, based in the growing offshore financial centre of
Singapore, told Reuters it had been approached by U.S. citizens
asking for its private banking services. But when told they would
have to sign U.S. tax declaration forms, the potential clients
disappeared.  
    Swiss banks also approached DBS on the hope they could
offload troublesome U.S. clients to a location that so far has
not been reached by the strong arms of Washington or Brussels.
    DBS said no thanks. In fact many private banks and boutique
advisors now seem to be avoiding U.S. clients.
    Will this spread to other nationalities, as governments
invest in tax spies and tax havens invest in white paint?
    Is this the end of offshore private private banking?

Islamic finance just one more crisis victim?

Photo

It’s not just traditional western banks that are hurting — the recession is hitting Islamic finance hard, too.

The industry, which operates according to Islamic law and hence has an in-built conservative investment strategy, is seen as relatively insulated from the financial crisis. But some executives at the Reuters Islamic Banking and Finance Summit are not so sure.

  •