Abu Dhabi's planned financial zone will complement Dubai, which should benefit from a deepening of financial markets in the United Arab Emirates, a senior Abu Dhabi executive said on Sunday. "It brings complementarity to Dubai and to the region overall," Mahmood Ebraheem al Mahmood, chief executive and chairman of ADS Holding, said of Abu Dhabi's plan.
In an interview, he noted that other successful financial centres operated in close proximity, such as Tokyo and Osaka, London-Frankfurt-Zurich, and New York and Chicago.
Early this month the Abu Dhabi government said it would set up a full-service financial zone on an island near the city's downtown. The zone would have its own administration and court system to attract banks and other firms from around the world.
The announcement prompted speculation that because of its oil wealth, Abu Dhabi could eventually become a major competitor to the Dubai International Financial Centre (DIFC), currently the Middle East's top financial centre. The DIFC is little more than an hour's drive from Abu Dhabi. Al Mahmood, who is also on the board of Abu Dhabi state investment fund Mubadala, said ADS, a major, privately owned financial firm based in Abu Dhabi, would establish operations in the zone. He took part in preliminary discussions with Abu Dhabi authorities planning the new financial centre.
Business types that are likely to flourish in Abu Dhabi include market-making, money markets, asset management, commodities trading and prime brokerage services - activities that currently lack sophistication and depth in Abu Dhabi, said Al Mahmood.
"We are looking at opening a door of a new set of services that wasn't here. If you open this door, there will only be more traffic flow," he said. Because of the presence of big Abu Dhabi investment firms such as its sovereign wealth fund, the Abu Dhabi Investment Authority with estimated assets of $400-600 billion, Abu Dhabi has traditionally been a centre for "buy side" financial activity.
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