Businesses in the United Arab Emirates are more confident of brighter trade prospects than their peers in financial hubs Hong Kong and Singapore, world banking giant HSBC said in a survey published Sunday.
Almost three-quarters of UAE importers and exporters expect trade volumes to increase or stay the same, compared to 53 percent in Hong Kong and 64 percent in Singapore, according to the HSBC Trade Confidence Index.
"Traders in the UAE seem to have the highest confidence among all countries (surveyed) especially Hong Kong and Singapore," Kersi Patel, a regional manager at HSBC Middle East, told a media conference.
"UAE traders are expecting most business to come from the Middle East and sub-Saharan Africa."
The survey that gauges sentiment and expectations of small and medium sized enterprises (SMEs) on foreign trade activity and business growth in the next three months found that the UAE scored 115.2 points on a scale of up to 200 points, compared with 99.9 points in Singapore and 93.1 points in Hong Kong.
The bullish outlook in the UAE, the second-largest Arab economy and a top oil exporter, was a result of the country's strategic geographical position at the crossroads of three continents and the government's investment in trade-supportive infrastructure, HSBC said.
The UAE, the world's third-largest re-export zone, was battered by the global economic downturn that brought a six-year oil-fuelled boom to a screeching halt last year, but analysts say signs of recovery have emerged.
The Middle East, the survey also found, remains the key area for sales growth, surpassing the rapidly growing economy of Greater China and the developed economies of Western Europe.
"Developing economies such as the UAE are reporting brighter prospects for trade business because in many cases their economies are not as heavily reliant on Western markets as some of the other countries in the survey," said Simon Cooper, deputy chairman and chief executive officer of HSBC Middle East.
"In the UAE, government measures to stimulate the domestic economy are also buoying business confidence."
The UAE central bank and the finance ministry have together launched 120 billion UAE dirhams ($32.67 billion) of emergency funding since September to help banks deal with tight credit conditions. It also cut interest rates.
The government of Abu Dhabi in January pumped 16 billion dirhams (4.36 billion dollars) into some of the emirate's banks to boost confidence in the financial sector.
The survey found trade businesses in the UAE are more optimistic than others about the outlook for their financing needs, with 39 percent saying they are more confident of improved access to trade finance over the next three months compared to 16 percent in Hong Kong and 18 percent in Singapore.
While oil contributes 40 percent to the UAE's economy, trade contributes 16 percent, and SMEs generate 20 percent of the GDP in the Middle East region, bank officials said.
The HSBC survey polled more than 2,000 trade businesses in 24 cities across the UAE, Australia, Hong Kong, India, mainland China, Singapore and Vietnam.