China, India and Egypt top UAE outbound FDI
Inbound FDI rises 25% at $13 billion in 2014
The UAE accounted for an “overwhelming bulk” of outbound capital investment from the GCC, spending an estimated $20 billion in 2014, more than six times its fellow GCC members combined.
According to data released by fDi Markets, GCC outbound foreign direct investment, or FDI, to 15 countries in 2014 increased slightly by number of projects but saw a decline in capital expenditure to an estimated $22 billion.
Globally, FDI flows fell by eight per cent in 2014 to reach $1.3 trillion, down from $1.4 trillion in 2013 amid slowing economic growth.
In 2014, the inbound FDI into the UAE, which remains as the top investment destination in the Middle East, rose by 25 per cent to reach $13 billion, but fell short of the $14.4 billion forecast, according to UAE’s minister of Economy Sultan Saeed Al Mansouri.
But according to United Nations Conference on Trade and Development, the FDI flow into the UAE was only $10 billion in 2014.
With the UAE setting a target of boosting the contribution of FDI to five per cent of the country’s gross domestic product, or GDP, over the next few years, investment flow into the country is expected to gather increased momentum.
China, India and Egypt were the largest recipients of outbound FDI from the GCC countries in 2014.
India attracted the greatest number of projects, with 73 greenfield projects drawing a total of $3.6 billion, according to fDi Markets. “The number of projects far exceeded that of the second most popular destination by this measure, the US, which received 24 projects totalling $1 billion.”
In terms of investment size, China attracted the largest amount of $6.182 billion from the GCC across nine projects.
Egypt received $3.79 billion for 12 projects while the UK drew $3.53 billion for 14 projects. Other recipient countries included Singapore ($1.28 billion), the US ($1.016 billion), Morocco ($1.289 billion), Pakistan ($179 million) and Philippines ($192 million).
fDi Markets said outbound greenfield investment from the GCC has seen an overall increase over the past decade although it remains dwarfed by investment from companies in the US and western Europe.
It noted that there is much excitement among economic development officials in western markets about the potential of capturing investments from the region given the long-term trend; in times when global FDI flows are challenged, new sources of investment are chased after avidly.
The number of FDI-driven projects in India far exceeded that of the second most popular destination by this measure, the US, which received 24 projects totalling $1 billion, the report said.
A large number of India’s projects are new branches or service centres of remittances service provider UAE Exchange Centre, which tops the table as the most prolific greenfield investor from the GCC based on the number of outbound projects.
fDi Market said real estate projects generated the most interest, with that sector ranking top by capital expenditure at nearly $9 billion, more than double the second sector of financial services.
“While UAE Exchange Centre is most active with its big number of small investments, the top investor from the GCC by capital expenditure is Gazely, a developer of logistics warehouses which invested $3.5 billion on eight projects last year.”
Gazely, a subsidiary of Dubai World, announced or opened new facilities in China and Italy, two in France and four in the UK in 2014.
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