Friday, September 14th, 2007
Dubai Plans to Boost Asia Investment by 150% Within Two Years
By Mike Caggeso
Staff Writer
Soud Ba’alawy, the executive chairman of Dubai World — an investment company backed by the state — said the firm would invest up to $2.5 billion in India and China over the next two years.
The moves will strengthen Dubai World’s already-expanding international portfolio. But these investments are at a level higher than its other ventures.
The Wall Street Journal reported that Dubai World’s Asia portfolio is valued at over $1 billion, and the billions more it wants to put into Asia are aggressive, large-scale investments such as manufacturing, real estate and finance.
“We feel right now we’ve done the first stage,” executive chairman Soud Ba’alawy was quoted in The Journal, referring to previous investments and the several years it has spent familiarizing itself with Asia’s financial offerings.
Ba’alawy didn’t give many details of Dubai World’s potential investments, but hinted at their diplomatic purpose. Asia is still an emerging market, and a top-dollar investment into it would be seen as a sign of trust, loyalty and friendship — especially from Dubai, whose foreign investments have been primarily in the United States and Europe, The Journal reported.
On the other hand, Asia’s growing demand for oil and gas is establishing political and economic ties to the Middle East. Though Dubai’s sparse energy reserves couldn’t supply a fraction of China or India, its position as the Middle East’s business hub would make for a great primary or branch venue for the Asia’s manufacturing, real estate and finance institutions Dubai World plans to invest in.
So far, Dubai World has invested in the IPOs of Bank of China, Ltd. and Indian-based real-estate developer DLF, Ltd. And last year, it purchased a 40% stake in Malaysia’s Bank of Islam, a $225 million investment that turned the company around, Ba’alawy told The Journal.
But not all of Dubai’s big checks are being sent overseas. Dubai Group, another state-owned holding company, plans to buy “two or three” Middle Eastern banks to create the Persian Gulf’s biggest financial services corporation, the Middle East-North Africa Financial Network reported.
Ba’alawy said the bank — yet to be named — will be established in the next 12 months, and has received regulatory approval for its Al Noor Islamic Bank, which will be started
in six months.
News and Related Story Links:
- Money Morning News:
Dubai’s Investment Arm Grabs Stake in MGM. - Money Morning Analysis:
Dubai Employs the Latest Private Equity Strategies to Boost its Shifting Economy. - Money Morning Analysis:
State Investment Funds: Beware of the Big New Buyers.
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