China has become an increasingly important bilateral trade partner, experts said Wednesday at the one-day 7th Middle East Investor Relations Society (MEIRS) Conference.
As China is a source market for investment into stock-listed firms in the Middle East, the rise in trade between both sides is due to Arab markets opening up to foreigners.
Mahmoud Salem, Middle East and Africa Head at Dubai's branch of the United State's bank BNY Mellon, said during the conference that the lender's latest 2015 investor relations (IR) survey of global companies, revealed that 54 percent of all Middle East respondents said that China is one of the most important global capital markets.
IR describes a pro-active information and communications policy between stock-listed companies and existing as well as potential investors such as banks, fund managers, pension funds and retail investors.
"Albeit the U.S. and the UK are the most important markets according to between 90 and 80 percent of IR Middle East managers, China's third ranking is significant compared to five or 10 years ago - and continues to rise," said Salem, adding that IR for 2015's top priority (61 percent of all respondents) was increasing international shareholder ownership.
Ms. Azza Abdel-Bari, Senior Markets Manager at Dubai's Regulatory Financial Services Authority (DFSA) said Chinese banks and investors are increasing their presence in the Gulf region, "China's significance is increasing in relation to setting up regulatory standards and information exchange with other regulators abroad," said Abdel-Bari.
The DFSA already signed a memorandum of understanding (MoU) in 2007 with China's Banking Regulatory Commission, and in 2008, China's biggest bank, ICBC, opened a branch in the Dubai banking free zone, DIFC, regulated and supervised by the DFSA.
The DFSA also regulates 390 authorised firms. The top four Chinese lenders run offices in the center in addition to ICBC, such as China's Construction Bank, The Agricultural Bank of China and Bank of China.
Schutzmann, MEIRS Chairman, founder and CEO of Dubai-based IR advisory firm Iridium, said in his key note address that the growing role of Chinese investors in Middle Eastern firms is not coincidental, as governments in the Gulf region are pushing ahead to increase corporate transparency in capital markets and listed firms "as recent developments force them to."
The UAE and Qatar have been upgraded to emerging markets from their previous frontier markets standing by global index provider MSCI in June last year. "The law in the UAE stipulates that all firms must have an IR department and manager by the end of 2015, serving market information requirements, investors, stakeholders and the public," said Schutzmann, a veteran of Dubai's financial industry.
In 2014, China surpassed India, becoming Dubai's largest foreign trade partner as Chinese-Emirati trade in the Sheikhdom hit 175 billion dirhams (47.70 billion US dollars).
Several UAE banks such as Emirates NBD, the country's biggest lender, and the National Bank of Abu Dhabi, have opened branches in China to conduct private and corporate banking.
In June this year, Saudi Arabia for the first time opened its stock market, Tadawul, the biggest in the region relative to market capital (around 580 billion US dollars), to include foreign investors "motivating Saudi-listed companies towards increased transparency in order to attract worldwide capital," added Schutzmann.
Schutzmann's Iridium IR advisory firm and Germany's EQS Group, a specialist in digital corporate communications, announced their partnership for the promotion of digital solutions for investor relations across the Middle East.
EQS, founded in 2000, provides digital solutions for investor relations and corporate communications, enabling 7,000 International firms to fulfill corporate information requirements on time.
Achim Weick, Chief Executive Officer of the Munich-based EQS Group, told Xinhua "We had a two-year presence in Hong Kong when we took over the IR Group, and we will soon expand to mainland China, namely Shanghai.
We see tremendous opportunities in upgrading IR efforts through our Middle East stock-connect platform, as listed firms are keen to reach out to investors in China."