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Al Mazaya Report: Efficient mobility creates multiple investment opportunities for Asian economies

 

Chinese investors find investment-conducive environment in UAE real estate

The past period has witnessed growing investment mobility between the economies of the Gulf Region and East Asian countries, despite the besetting challenges and headwinds.

Al Mazaya Holding’s weekly report said that mutual investments between the two regions are set to stimulate growth at the time many economies around the world are witnessing a state of volatility and decline in terms of investment opportunities and returns.

According to the report, the attractive investment opportunities generated by Asian economies, particularly China and Japan, are conducive to drawing sovereign funds’ investments to the region, especially with European and US markets losing ground.

At the same time, Gulf sovereign funds often represent better long-term investment opportunities, providing key investment options for the post-oil period. They currently account for 35% of the total sovereign funds worldwide, estimated at $7.9 trillion at the end of the first half of the year.

Al Mazaya noted that growth rates and diversified investment opportunities are driving more Gulf sovereign funds’ investments towards Asian markets. This comes in light of expected FDI inflows to China thanks to the resilience of its financial sector and the diverse investment opportunities available in the stock and real estate markets there.

Al Mazaya report pointed out that the past few years have seen China adopting an open-door policy that was accompanied by a similar policy by the Gulf countries which resulted in mutual investment diversifications, with the current data indicating that Chinese investments in the UAE real estate, for example, will increase by 70% by the end of the year.

At present, the Chinese investments stand unrivalled across the UAE in general and Dubai in particular.

This is due to the fact that the investment opportunities found in the UAE real estate sector meet the objectives of Chinese investors who are looking to invest in various sectors. It is, therefore, crystal clear that the prevailing real estate prices have made the UAE real estate market one of the best global markets for investment.

At the same time, the economic reform plans currently adopted by the Kingdom of Saudi Arabia have helped increase Chinese investments to SAR8 billion  distributed over 153 areas, with the industrial sector accounting for 90% thereof and services sector 10%.

Al Mazaya reports a growth of 70% in the number of investment licenses issued in the first quarter of this year in Saudi Arabia compared to the same period of 2018, especially by Chinese companies. These investments are focused on the ICT and education sectors.

While the region’s countries need more foreign investments, their economies have huge investment liquidity values and are always looking for better investment opportunities east and west, with the value of Saudi investments in the Chinese economy amounting to $12 billion at the end of 2018. Most of these investments are found in the industrial and commercial sectors in addition to scientific research and technical services. Cooperation between the Chinese economy and Saudi Arabia covers the sectors of energy, industry, petrochemicals, infrastructure, and construction.

The increasing foreign investments in the Chinese economy which amounted to $ 135 billion, backed by the world’s second-largest economy’s tendency  to reduce restrictions on foreign investment, confirm the belief that the Gulf investments in the Chinese economy and other Asian economies will snowball, depending on the size of opportunities created by these countries.

The Al Mazaya report predicted a near-future growth in the value of mutual investments between the countries of the region and the key Asian economies, especially the Chinese economy, in the financial and economic fields. This is in addition to a continuing search for new opportunities in Europe and the United States of America to secure rising returns.