Dubai is increasingly becoming a significant financial center for Chinese and regional issuers looking to list debt and equity securities. This trend signals growing confidence in the Chinese economy and the strengthening economic ties between China and the Middle East, according to the Dubai Financial Services Authority (DFSA).
Growing Interest in Yuan Bonds
The Dubai International Financial Centre (DIFC) is witnessing a surge in interest for yuan-denominated financial products. Mark Steward, CEO of the DFSA, noted that the recent listing of a 1 billion yuan (US$143 million) offshore yuan bond by Emirates NBD Bank on Nasdaq Dubai is a prime example of this trend. This issuance marked the bank’s return to the dim sum bond market and provided global investors with access to yuan bonds outside of mainland China.
Steward highlighted that this deal underscores the robust demand for the dim sum bond market beyond Hong Kong and Dubai’s keen appetite for China-related investments. “There is a very healthy demand, and that demand is being realised by a local bank,” he stated, emphasizing that it symbolizes the expanding economic corridor between China and the Middle East.
Investor Confidence and Diversification
The successful issuance of the 1 billion yuan bond, which carries a 2.4 percent coupon and matures in 2028, also points to a broader global trend of diversification away from the US dollar. Steward believes this demonstrates significant investor confidence in the Chinese economy and its role in global funding and investment activities.
Dubai’s Financial Market Landscape
While Dubai’s debt market is considered robust, its equity market is still developing compared to established hubs like Hong Kong. The DFSA, which regulates Nasdaq Dubai, oversees a diverse range of financial instruments including shares, derivatives, Islamic and conventional bonds, and real estate investment trusts. Steward, who previously held a position at Hong Kong’s Securities and Futures Commission (SFC), assumed his role at the DFSA in May, bringing valuable experience to the region’s financial regulatory body.