Abu Dhabi finance sector

Among the initiatives to diversify Abu Dhabi's economy is to improve and expand its manufacturing and production industry.

The government already understands that in order to do this efficiently it needs to create industries where it can maintain a competitive advantage such as petrochemicals, steel and aluminum. The government is projecting to spend 25 bn USD in the next 5 years to in developing and increasing plant capacity and raising GDP contribution of industry from 13% to over 20%.  Abdic (Abu Dhabi Basic Industries Corporation) is the entity that will help fund and develop these plants.  The plan is to shift the emphasis away from labor intensive industries such as textiles and fishery to high tech and energy intensive ones.  If looking at the UAE as a whole we know that investment in the industrial sector hit a record at approx 20 bn USD in 2006 which is an increase of more than 3 percent compared to the previous year.  The number of Industrial establishments has increased from approximately 2500 to over 3500 in the past 5 years. Over 270 establishments were established in 2006.  60-70% of Mubadala’s activities are in business start ups and smelters. Abu Dhabi’s aluminum smelter is recognized by the Financial Times to be the largest in the world and expected to start operating in 2010. Abu Dhabi has also developed its aerospace assets and maintenance capabilities. 

 Abu Dhabi Investment Company and the Financial Sector

Abu Dhabi Investment Company (Adic), the government owned investment bank which has only catered government institutions has recently made itself available to the public. It has approximately 2 bn USD’s worth of assets its aim is to raise funds from institutions and high net worth individuals to invest in the Middle East and other regions.  Adic will also create an asset management arm with the aim of allowing the public to invest with them. Although Adic has always offered traditional investment banking services such corporate advisory and asset investments it has diversifying its itself into 3 wings, namely infrastructure , real estate and private equity. The real estate and infrastructure component is aimed at regional development as well as investments in assets.

             The Abu Dhabi Financial Center is   a project that will construct the office spaces for the leading securities firms. The UAE stock exchange has not been established yet but the Saadiyat International Stock Exchange (SISE) is open in Abu Dhabi. SISE is expected to become a fully functioning electronic market with straight through processing capabilities. The Saadiyat Free Zone signed a concession agreement to develop a 3.3 bn USD offshore financial market center, which includes SISE, Saadiyat Futures and Options Exchange, Saadiyat Clearing House and Saadiyat Commodities Exchange.

             The banking sector has also grown since the end of the 90’s. In 1998 the number of local banks as well as foreign banks increased. The Abu Dhabi Islamic Bank, the world’s largest Islamic banking institution was officially opened in 1999.  The Abu Dhabi Securities Market General Index is the main index to track the stock market.