12/09/2017 05:57 AST

The UAE has enhanced its position as the leading financial hub of the Middle East, with Dubai and Abu Dhabi claiming first and second regional spots in the twice-yearly Global Financial Centres Index (GFCI).

Dubai jumped seven slots in the rankings, to No.18 in the world, while Abu Dhabi moved up three positions to become one of the leading 25 international hubs.

The report, compiled by Z/Yen Partners, the London consultancy that compiles the index in conjunction with China Development Institute, said: “Abu Dhabi, second in the region, reduced the gap to first-placed Dubai to just nine points. Elsewhere in the Middle East, there were good rises for Bahrain and Riyadh.”

Riyadh, despite the increased financial activity associated with the Vision 2030 strategy to privatize large parts of the economy, slipped back one slot to 77th in the world, though it showed a significant improvement in its rating.

Mark Yeandle, the Z/Yen executive who was the report’s lead author and the co-creator of the Global Financial Centres Index (GFCI), said: “With Riyadh, it is a question of international professional perception rather than fundamentals. The world knows there are vast sums of wealth that will eventually have an impact on the financial markets there.”

The financial center in Qatar’s capital Doha fell back six places to rank 45th in the world. The rankings took into account less than one month of the sanctions imposed on the country by its Arabian Gulf neighbours over fears of terrorism funding.

“Dubai and Abu Dhabi are putting more effort into reputation management than Doha,” Yeandle said.

Arif Amiri, chief executive of the Dubai International Financial Centre (DIFC), the emirate’s financial free zone which was ranked last week at number 10 in the world by The Banker magazine, said: “We are encouraged to see how the rankings reflect the growing contribution of the finance industry in a number of locations across the region, using a model that originated in Dubai and the DIFC.”

Ahmed Alsayegh, chairman of Abu Dhabi Global Market (ADGM), where Yeandle presented the report’s findings, said: “We are excited that Abu Dhabi is ranked among the top 25 cities this year. This serves as an endorsement of Abu Dhabi’s initiatives and efforts to enhance its strengths as a financial center.”

The top five positions were largely unchanged, with London the leading global center, followed by New York. Hong Kong moved ahead of Singapore into third spot, while Tokyo remained fifth. But the gap between Western centers and their rivals in the East is narrowing, Yeandle said, with the Brexit fallout continuing to roil the European financial scene.

“Western European financial centers are still volatile. Frankfurt, Dublin, Paris and Amsterdam all rose, but Zurich, Geneva, and Luxembourg fell in the ratings,” he added.

“Overall assessments for the European centers continued to fluctuate as people speculate about which centers might benefit from London leaving the EU.”

The biggest rise among the leading 25 cities came from Frankfurt, up 12 slots to 11th; the three biggest fallers were San Francisco, Boston (both down 10 slots) and Chicago, down 17. Washington fell 16 places to 28th position. All centers in North America also fell, but the decline of Canadian cities was less severe than the falls of the US centers, the report revealed.

Yeandle claimed uncertainty over economic and trade policies in the Trump White House was responsible for New York’s fall in the ratings.

“There is an overall drop in confidence amongst the leading centers. Of the top 25 centers, 23 fell in the ratings and only two rose,” he said.

The compilers researched 108 cities for the 22nd edition of the index, using benchmarks provided by the World Bank, the Economist Intelligence Unit, the OECD and the UN.

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