Friday, October 21, 2005

Sea of petro-dollars looking for a home :: Reuters

apart from buying real estate and telecom assets, the Gulf's petrodollars are still chasing few assets in the Arab world and this makes it hard to attract new investment.

"There is a lack of depth in the region's financial markets. Investors have very few stocks to choose from," said Steve Brice, senior Middle East economist at Standard Chartered bank in Dubai. "The debt markets are also underdeveloped... The Middle East region ranks pretty poorly in terms of business environment."

EFG-Hermes' Genena agreed, but saw the silver lining. "This imbalance of supply and demand could trigger investment and stimulate development in equity markets. It is not negative all the time," he said.
Egypt's bourse is one of the most active outside the Gulf. A new foreign exchange interbank market launched in 2004 also made it easier for offshore money to come in and out of the country.

But analysts say more direct investment in the Arab world from the Gulf and elsewhere will depend on faster privatisation schemes and more initial public offerings on stock markets. "There is plenty of cash from the Gulf to be invested in the Arab world," said Gregory Kronsten, emerging analyst at WestLB in London. "But the question is what to do with it."
How can I bring you
To the sea of madness
I love you so much
It's gonna bring me sadness
I've never seen you
Through these eyes before
Now I don't believe it
I think I'll take it
Or leave it.
-Neil Young


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