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Abu Dhabi: Standard Chartered Bank will welcome UAE sovereign wealth funds (SWFs) interested in having a share, the bank's top official said in Abu Dhabi yesterday.
"Were it not for SWFs, American and other banks would have had more serious problems, but these funds moved with speed and confidentiality to rescue a number of banks with capital, playing a very important role in the financial services industry," E. Mervyn Davies, Standard Chartered chairman, told Gulf News yesterday.
The invitation does not reflect any losses incurred by SCB in relation to the US subprime mortgage crisis, but rather confidence in the UAE's SWFs reliability and long-term investment objectives.
"We did not have any major write-offs in relation to the subprime mortgage crisis, as our focus is very different, and there are indeed many examples of very responsible SWFs such as Temasek, which holds 19 per cent in SCB, and has proved to be a very supportive and responsible shareholder," he said.
Nevertheless, worries about the code of conduct of SWFs remain as their role in the world economy grows. "SWFs have become so influential in the capital market that there have to be some rules of engagement and code of conduct. Yet I agree that some funds are very transparent, but others are not," Davies said. "If the UAE's SWF find us an attractive investment, we would be welcoming, and in fact there is already a Dubai-based investor, namely Istithmar, holding a sake in Standard Chartered," he said.
Impact
With the growing concerns about the slowing US economy, several leading financial powerhouses such as Merrill Lynch and Goldman Sachs are predicting a recession in the US that will affect the global economy.
"It is depending on whether you are looking at the empty or full half of the glass, and I think that growth in other places in the world, such as China, India and the Middle East, will more than compensate for any slowdown in the American economy," Davies said.
"In Abu Dhabi, for instance, there is a clear vision, accompanied by execution, which resulted in phenomenal economic growth prospects, and over the coming 10 to 20 years, the emirate is going to be one of the most exciting places in the world," he said.
Abu Dhabi's economy has been expanding rapidly in the past few years, with overseas investments growing at an impressive pace. "Not only that, but the emirate also became one of the most attractive places for foreign direct investments. As for Standard Chartered, we seek to become an important local partner here, while maintaining our status as an international bank," Davies added. He added that Standard Chartered will be keen to increase the number of branches, and even acquire a local bank, yet it respects the necessity of a staged development for the economy of Abu Dhabi.
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