Standard Chartered Sees More Mideast Yuan Debt, Shankar Says

Standard Chartered Plc, the U.K.’s second-biggest bank by market value, expects more companies in the Middle East to raise funds in yuan, a senior executive said.

“Is the trajectory of this going north over the next five years? Yes. Absolutely,” Viswanathan Shankar, chief executive officer for the Middle East, Africa, Europe and the Americas, said in an interview at the World Economic Forum in Istanbul.

Emirates NBD PJSC sold 1 billion yuan ($157 million) of so-called dim sum bonds in March, the first sale of such securities in the Middle East, as the company sought to draw funds from China, a country with a trade surplus that has made it the world’s biggest savings pool.

Europe’s sovereign debt crisis hasn’t affected the financing of companies and projects in the Middle East “because the regional banks have stepped in,” Shankar said. Falling asset prices in the euro-area may create opportunities for Gulf Cooperation Council sovereign wealth funds and “high net-worth individuals” from the region to “pick up assets on the cheap in Europe,” he said.

The European crisis doesn’t appear to have slowed bond issuances in the Persian Gulf states, Shankar said.

“I see continuing activity, particularly if you look at some part of the GCC like Saudi, which has got a huge amount of investment actually going into infrastructure, you will actually see more activity,” he said.

Standard Chartered has “minimum” exposure to the financial crises in the euro area, Shankar said.

“Our direct exposure to the sovereigns of the troubled euro zone countries is zero,” he said.

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