Saudi reforms won’t come at a cost to Abu Dhabi, ADGM CEO says

ABU DHABI, United Arab Emirates — Saudi Arabia’s efforts to rival the United Arab Emirates as the region’s top business and financial hub won’t have a “dramatic negative impact” on Abu Dhabi, Mark Cutis, chief executive of Abu Dhabi Global Market (ADGM) told CNBC on Sunday in an exclusive interview.

“Here, it’s easy to move your family, it’s easy to live here, and you have the rule of law, the pools of capital and the visa situation – it’s a package,” Cutis said.

His comments, the first since becoming ADGM CEO in June this year, come amid a growing economic rivalry between Saudi Arabia and United Arab Emirates, as both countries recover from the pandemic seeking to boost non-oil sector growth.

Saudi Arabia said its government would stop doing business with international companies that didn’t have regional headquarters in the kingdom by 2024 — a move seen widely as an attempt to draw multinationals to Riyadh from Dubai. Last month, the UAE hit back by launching a plan to attract $150 billion in foreign investment over the next nine years and reformed its visa programs to attract and retain foreign talent.

The UAE was also forecast to bring in $33 billion of investment from Dubai’s Expo 2020, as well as a 1.5% boost in GDP, according to pre-pandemic estimates by EY. The same advisory firm cost the Expo at $6.8 billion, but it’s too soon to say if the Middle East’s biggest event will provide a return on investment.

“The non-financial return is very important — from a signaling standpoint — showing the world that the country is open again, we came through the pandemic, and we’re back in business,” Cutis said.

The UAE economy is expected to grow 2.1% this year and 4.2% in 2022, according to the UAE Central Bank.

“Business actually has been surprisingly robust,” Cutis added. “I would put us in the category of people who have emerged from the post-pandemic world on the right side of things, so overall, thumbs up,” he said.

Abu Dhabi Global Markets, an international financial center based on Al Maryah Island in the capital Abu Dhabi, is home to 3,448 registered companies as of Q1, 2021 and manages over $75 billion in assets, according to ADGM’s website.

Consolidation coming?
Cutis also offered a frank assessment of the UAE capital markets, saying consolidation of the country’s three major exchanges could be on the cards in the future.

“Eventually the economics and the imperatives of efficiency outweigh other considerations,” Cutis told CNBC about the possibility of the three exchanges in the UAE merging at some point.

Speculation of a merger among the exchanges can be traced back as far as a decade, with the Abu Dhabi Exchange (ADX) effectively competing with neighboring Dubai Financial Market (DFM) and Nasdaq Dubai for listings and trading activity.

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