LONDON: The rush of financial firms setting up in Abu Dhabi to tap the emirate’s wealth funds and Middle East markets will continue at pace, the official in charge of expanding its financial hub has predicted.
Abu Dhabi, which holds 90 percent of the UAE’s oil reserves, has accelerated efforts to diversify its economy, leaning on its vast sovereign funds that together manage almost $2 trillion of capital.
Abu Dhabi Global Markets still lags Dubai, but the number of firms registered in the center rose by 32 percent last year, and the amount of assets managed by firms there grew 245 percent, as the likes of BlackRock, Morgan Stanley, AXA, PGIM and hedge fund Marshall Wace all set up or registered funds there.
Earlier on Tuesday, Harrison Street, a US firm focused on alternative real estate assets with about $56 billion in assets under management, said it was opening an office in Abu Dhabi.
The center reported last week that new operating licenses increased 67 percent in the first quarter of this year, taking the total number of firms there past 2,380.
“We still have very strong growth,” ADGM’s Chief Market Development Officer, Arvind Ramamurthy said, noting that the pipeline of new firms looked strong for the rest of the year, but refrained from giving a forecast for asset growth.
“Will it be 245 percent again this year? I wish. Let’s see,” he said in an interview late on Monday.
Firms from Japan, India, and China are also setting up in growing numbers, including asset managers and financial institutions, as well as crypto and artificial intelligence firms, Ramamurthy said, providing no further details.
With cryptocurrency regulations in place since 2018, Abu Dhabi has become a major center for such investment, with sector heavyweights such as Circle and Coinbase represented there, while Abu Dhabi-backed investment group MGX has recently invested $2 billion worth of crypto tokens — issued by US President Donald Trump’s World Liberty Financial venture — in the world’s biggest crypto exchange, Binance.

TOKYO: Oil prices softened on Wednesday as markets assessed the outcome of US-China trade talks, yet to be reviewed by President Donald Trump, with weak oil demand from China and OPEC+ production increases weighing on the market.

Brent crude futures declined 15 cents, or 0.2 percent, to trade at $66.72 a barrel, while US West Texas Intermediate crude fell 10 cents, or 0.2 percent, to $64.88 at 9:44 a.m. Saudi time.

US and Chinese officials agreed on a framework to put their trade truce back on track and resolve China’s export restrictions on rare earth minerals and magnets, US Commerce Secretary Howard Lutnick said on Tuesday at the conclusion of two days of intense negotiations in London. The two countries are world’s two largest economies and oil consumers.

“The current (price) corrections can be attributed to a mix of technical profit-taking and caution leading up to the US-China (official) announcement,” said Phillip Nova, senior market analyst Priyanka Sachdeva.

Trump will be briefed on the outcome before approving it, Lutnick added.

“In terms of what it means for crude oil, I think it removes some downside risks, particularly to the Chinese economy and steadies the ship for the US economy — both of which should be supportive for crude oil demand and the price,” said Tony Sycamore, a market analyst for IG.

On the supply side, OPEC+, which includes the Organization of the Petroleum Exporting Countries plus allies such as Russia, plans to increase oil production by 411,000 barrels per day in July as it looks to unwind production cuts for a fourth straight month, with some analysts not expecting regional demand to soak up these excess barrels.

“Greater oil demand within OPEC+ economies – most notably Saudi Arabia – could offset additional supply from the group over the coming months and support oil prices,” said Capital Economics’ climate and commodities economist Hamad Hussain in a note.

“However, given that any boost to demand will be seasonal, we still think that Brent crude prices will fall to $60 (a barrel) by the end of this year.”

Later on Wednesday, markets will be focusing on the weekly US oil inventories report from the Energy Information Administration, the statistical arm of the US Department of Energy.

US crude oil stocks fell by 370,000 barrels last week, according to market sources who cited American Petroleum Institute figures on Tuesday.

Analysts polled by Reuters on Monday expected that the EIA report will show US crude oil stockpiles fell by 2 million barrels in the week to June 6, while distillate and gasoline inventories likely rose.