Abu Dhabi eyes foreign buys in 2011-HSBC

Abu Dhabi eyes foreign buys in 2011-HSBC

Head of HSBC's Abu Dhabi office expected regional bond issuance to hit $40 billion in 2011 in contrast to about $35 billion last year.

October 20, 2010 1:22 by Reuters

The emirate of Abu Dhabi is on the prowl for international acquisitions and is eyeing deals in the energy and hospitality sectors in 2011, a senior executive at HSBC Middle East said.

Declan Hegarty, managing director and head of HSBC’s Abu Dhabi office, also said he expects regional bond issuance to hit $40 billion in 2011 in contrast to about $35 billion last year.

“There are a number of entities in Abu Dhabi who are considering acquisitions that are consistent with 2030,” Hegarty told the Reuters Middle East Investment summit, referring to the emirate’s Plan 2030 strategic development blueprint.

“Almost certainly you’ll see activity in 2011 and it will be outside this region and within it. There are a number industries around the world where Abu Dhabi has exposure and there are a number of assets within those industries that are attractive.”

Abu Dhabi is the largest and wealthiest emirate in the seven-member UAE federation and home to 90 percent of its oil resources. The Abu Dhabi Investment Authority is one of the world’s largest sovereign wealth funds.

“Any industrial process in energy, where you could find a competitive industry in Abu Dhabi or the UAE is fair game,” Hegarty added. “I wouldn’t rule out hospitality, telecoms clearly is in play at the moment.”

HSBC, one of the oldest banks in the region, has expanded operations in the UAE capital, lured by its vast wealth and deal potential.

The bank has been a mandated arranger for most significant bond issues this year, including Dubai’s first sovereign bond foray since its 2009 debt crisis.

Hegarty said bond issuance from the region will rise due to strong investor demand but the focus should shift to longer-term funding. Regional issuance totalled about $35 billion in 2009.

“I reckon you’ll end up there or thereabouts for this year. So 2011, assuming the year starts strongly, there’s no reason why the market can’t hit $40 billion,” Hegarty said.

“I would be expecting a number of issuances out of Abu Dhabi over the next 12 months.”

(Reporting by Rachna Uppal, Amran Abocar and Shaheen Pasha; Editing by Hans Peters)