Subscribe to The Spectator
Home > Essays > All

Friday 10 February 2012

Latest issue

Buy the current issue

Jobs at Telegraph

Petrodollar flush

26 September 2007
/article_images/articledir_404/202451/1_listing.jpg

The Gulf states are competing for prestigious Western investments, say Jon Ashworth and Allister Heath

While Britain adopts a commendably open attitude, the American authorities could yet try and block Dubai’s stake building in Nasdaq on security grounds, as they did with Dubai Ports World’s purchase of the shipping group P&O’s US ports. Several American ports were sold on to a domestic firm in the face of intense political pressure. Nasdaq rightly says the situation is different because Dubai Borse does not have voting control.

While it may be coming off second-best to Dubai in the battle of the exchanges, the QIA is not to be underestimated. It was established in June 2005 as part of a concerted drive to reduce Qatar’s reliance on fossil fuels. The QIA’s international investments include a 5.1% stake in Lagardère, the French publishing house, and 5% in Raffles Medical Group, based in Singapore. Dubai, by contrast, owns P&O and budget hotels Travelodge. It remains an investor in Tussauds, the leisure group.

In further regional muscle-flexing, Abu Dhabi National Energy, the state-controlled oil and gas producer, popularly known as Taqa, this week announced the C$5bn (£2.5bn) acquisition of PrimeWest, a Canadian energy company. Taqa is actively building a Canadian oil division as part of a wider drive to reduce Abu Dhabi’s geographic reliance on the Gulf.

Similar petrodollar-fuelled excitement has gripped the Gulf’s banking sector. Steep competition in domestic markets has encouraged banks to look to acquisitions and branch expansion for growth. This week, Qatar National Bank (QNB), 50%-owned by the Qatar government, paid $195m to raise its stake in Jordan’s second largest lender, Housing Bank, and said it would raise $1.39bn from share issues in the next few months to finance growth.

QNB bought Ansbacher, the London-based institution, in 2004 for £135m. It is now setting up a bank in Syria, which opened its market to newcomers three years ago, while Commercial Bank of Qatar is paying $601m for a 40% stake in United Arab Bank, based in Sharjah, next door to Dubai. The Saudis have also being jumping onto the bandwagon: they too are launching vast Dubai-style property developments. Saudi Basic Industries bought the plastics division of America’s General Electric for $11.6bn in May.

More articles from: | this section

Post this entry to:   del.icio.us | Digg | Newsvine | NowPublic | Reddit

Comments Post comment

Be the first to comment on this article!

Back to top

Cartoons

sponsored links

Spectator recommends

Spectator classifieds

THE PRESENT FINDER

1,700 Unusual Christmas Presents Request Catalogue 01935 815 195 Quote SPEC10 for 10% discount www.presentfinder.co.uk

OLIVE BRANCH FLORISTS

Pimilco based Florist with online ordering Web: www.olivebranch.net Tel: 020 7630 1868 Fax: 020 7233 8844

RUFFS Bespoke Signet rings

62 Shore Road, Warsash, Southampton, SO31 9FT Telephone: 01489 578867 Web site: www.ruffs.co.uk