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Regional financial leaders and investors recently gathered in Bahrain for two intense days of discussions to determine the future of investment in the region.
Hosted by business information group Naseba, the MENA Investors Summit emphasised the importance of economic diversification and concentrated on creating strategies to encourage foreign investment into the region.
Boyd Winton, business development financial services director, of Bahrain's Economic Development Board, opened the summit by urging countries to follow the lead of Bahrain, which has long been recognised as the financial hub of the Gulf.
As one of the top 20 freest economies in the world, Bahrain enjoys the most liberal business environment and tax regime in the Gulf. In addition, Bahrain's well diversified economy is led by financial services at 27 per cent, followed by manufacturing at 17 per cent and oil and gas at 13 per cent.
The first topic was a panel discussion on tracking foreign direct investments (FDIs) into and out of the region. Speaking on the ultimate importance of FDIs was Michael Essex, director MENA, IFC World Bank Group, who said: "MENA's capital markets are concentrated on banks; however, recovery in capital flows is expected to be driven by FDI."
Kamal El Tayara, managing partner, KCP Capital, who was also on the panel, highlighted the need to diversify FDIs into other areas. He said: "The GCC has yet to reduce its dependence on energy sector and oil specifically. We need a government focus on attracting FDIs into high-tech industry, which will help local economies to modernise, reduce dependence on the energy sector and begin the switch to a knowledge-based, innovative economy."
Continuing the focus on the region was a discussion dedicated to Islamic funds and new potential models and revealed vital information about the industry in terms of size, growth and the different types of investments: sukuks and Sharia-compliant hedge funds among others.
In a face-to-face discussion with Ijlal Ahmed Alvi, CEO of International Islamic Financial Market (IIFM), Pamela Chikhani, vice president - Funds Investment at Zawya, said: "It is crucial to cater for the underserved retail Islamic market in the coming years as there are huge opportunities in these markets."
The panel went on to discuss the findings of an Ernst & Young 2010 report on Islamic funds.
With real estate already sitting high on local investment portfolios, a panel explored how to attract global real estate investors to invest in GCC real estate markets.
Identifying the factors that motivate real estate investors to come to the region, Barmak Besharaty, managing director, Almas Consultancy said: "The primary motivation factor is the potential for high returns and solid profits and the region affords it. There are tremendous opportunities to invest in the region."
He went on to single out Saudi Arabia and Egypt as having the greatest real estate demand in the MENA region, where he claims there is a tremendous amount of opportunities in retail, mixed used developments, tourism and industrial space developments.
