Capitalisation in the Middle East and North Africa (Mena) stock markets is only 2% on a global scale, thus offering abundant opportunities for investment managers in the region, particularly in Doha, Global Arab Network reports according to a top official of Qatar Financial Centre (QFC).
Qatar’s long-term growth is underpinned by the world’s third largest reserves of natural gas and the country’s savings rate is well above the Gulf average.
In the decade to 2011, the economy grew at a double-digit average annual rate, QFC managing director Abdulrahman Ahmad al-Shaibi told the Mena Investment Forum.
Although growth has slowed and is likely to remain more moderate, he said, Qatar would continue to be the fastest growing economy in a rapid growing part of the world.
“It is on course to be the second biggest economy in the region after Saudi Arabia. Most important, growth will be sustainable,” he said.
Highlighting that financial services have a major role to play in diversifying Qatar’s economy, al-Shaibi said the finance, insurance, real estate and business services sectors now contribute about 10% of GDP — one of the biggest sectors after hydrocarbons — and “we expect it to grow further”.
Stressing that opportunities for investment managers abound in Qatar, he said the country has one of the highest per capita incomes in the world, one of the highest proportions of millionaire households and one of the highest proportions of high net worth individuals.
“It has a savings rate of about 49%, well above the Gulf average and around twice the world average. The population doubled to 1.7mn in the decade to 2010 and continues to increase quickly,” he said.
Pointing out that Qatar’s infrastructure investment presents huge opportunities as well; he said an estimated $140bn is expected to be committed to infrastructure over the next five years.
“If one adds in the investment necessary to host the 2022 FIFA World Cup, project spending over the next decade will exceed $200bn,” al-Shaibi said.
The Mena region is still a relatively small part of the global asset management industry – although it is growing quickly, he said, adding global assets under management (AUM) total more than $100tn.
About half of the world’s AUM is in the United States. Europe accounts for about another third. The majority of the balance is split between South East Asia, Japan and Australia, he said.