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Bloomberg.com: Asia
Dec. 14 (Bloomberg) -- Gulf Finance House EC, a Bahrain- based investment bank, is building a $10 billion energy and software city in India, taking overseas investments by Persian Gulf states this year to a record $85 billion.
The Islamic investment bank scaled up its year-earlier plan to invest $2 billion on the outskirts of Mumbai solely for energy companies after getting ``tremendous response'' from investors, Peter Panayiotou, acting chief executive officer, told reporters in Mumbai.
Persian Gulf states, which earn $1.2 billion a day from oil exports, are buying overseas assets ranging from hotels to entertainment complexes at a record rate as they seek to diversify beyond energy. The cash-rich nations are tapping rising demand for office space and houses in India and China, the world's two fastest-growing major economies.
``Investors from the Gulf are flush with money from high crude prices and real estate is something that over a longer term can create value,'' said Mahesh Patil, who helps manage $800 million in stocks at Birla Sun Life Asset Management in Mumbai. ``With investing in the U.S. no longer being so attractive, they are probably looking at India and China.''
Middle East states, enriched by record oil prices, have more than doubled their overseas investments to a record $84.5 billion this year, including today's announcement, Bloomberg data show.
3,000 Investors
All of the $10 billion will be raised from 3,000 wealthy individuals and financial institutions in the Middle East, Panayiotou said.
An initial spending of $650 million will be done on the energy city and about $400 million on the software city, which will include telecommunications, he said. The cost of an entertainment park, that's also planned in the complex, hasn't yet been determined.
The bank has raised $630 million for the first phase of construction, Chairman Esam Janahi said. Gulf Finance is in the process of raising money for the second phase, he said. The project near Mumbai is expected to be completed in about five years.
``The response from strategic investors led us to expand the idea to include three additional projects.'' Janahi said. ``We raised more funds than we had planned to for the first phase of this project.''
Gulf Finance's announcement compares with the $15 billion of foreign direct investments India received in the financial year end March 31. The government expects foreign direct investments of $30 billion in the current fiscal.
Investors' Fancy
``Foreign direct investment flows into India is set to increase rapidly from now on,'' said D. H. Pai Panandiker, president at RPG Foundation, an economic policy group in New Delhi. ``India's growth potential has caught the fancy of foreign investors.''
India's economy has grown at over 9 percent since April 2005. India's pace of growth is almost three times the economic expansion in the U.S. and countries that share the euro, and falls only behind China's 11.5 percent gain last quarter among the world's top 15 economies.
The Indian project will be carried out jointly with Gulf Energy, an energy consulting company associated with the bank in the building of the $2.6 billion ``Energy City Qatar'' in the Persian Gulf state of Qatar.
Gulf Finance and Gulf Energy in July agreed to develop a business and residential district for energy companies in China for $5 billion.
The energy city in China is planned 30 kilometers (19 miles) from Beijing. The 13.4 square-kilometer area will include an international exchange, data units and a science park, Gulf Finance said on July 17.
Dec. 14 (Bloomberg) -- Gulf Finance House EC, a Bahrain- based investment bank, is building a $10 billion energy and software city in India, taking overseas investments by Persian Gulf states this year to a record $85 billion.
The Islamic investment bank scaled up its year-earlier plan to invest $2 billion on the outskirts of Mumbai solely for energy companies after getting ``tremendous response'' from investors, Peter Panayiotou, acting chief executive officer, told reporters in Mumbai.
Persian Gulf states, which earn $1.2 billion a day from oil exports, are buying overseas assets ranging from hotels to entertainment complexes at a record rate as they seek to diversify beyond energy. The cash-rich nations are tapping rising demand for office space and houses in India and China, the world's two fastest-growing major economies.
``Investors from the Gulf are flush with money from high crude prices and real estate is something that over a longer term can create value,'' said Mahesh Patil, who helps manage $800 million in stocks at Birla Sun Life Asset Management in Mumbai. ``With investing in the U.S. no longer being so attractive, they are probably looking at India and China.''
Middle East states, enriched by record oil prices, have more than doubled their overseas investments to a record $84.5 billion this year, including today's announcement, Bloomberg data show.
3,000 Investors
All of the $10 billion will be raised from 3,000 wealthy individuals and financial institutions in the Middle East, Panayiotou said.
An initial spending of $650 million will be done on the energy city and about $400 million on the software city, which will include telecommunications, he said. The cost of an entertainment park, that's also planned in the complex, hasn't yet been determined.
The bank has raised $630 million for the first phase of construction, Chairman Esam Janahi said. Gulf Finance is in the process of raising money for the second phase, he said. The project near Mumbai is expected to be completed in about five years.
``The response from strategic investors led us to expand the idea to include three additional projects.'' Janahi said. ``We raised more funds than we had planned to for the first phase of this project.''
Gulf Finance's announcement compares with the $15 billion of foreign direct investments India received in the financial year end March 31. The government expects foreign direct investments of $30 billion in the current fiscal.
Investors' Fancy
``Foreign direct investment flows into India is set to increase rapidly from now on,'' said D. H. Pai Panandiker, president at RPG Foundation, an economic policy group in New Delhi. ``India's growth potential has caught the fancy of foreign investors.''
India's economy has grown at over 9 percent since April 2005. India's pace of growth is almost three times the economic expansion in the U.S. and countries that share the euro, and falls only behind China's 11.5 percent gain last quarter among the world's top 15 economies.
The Indian project will be carried out jointly with Gulf Energy, an energy consulting company associated with the bank in the building of the $2.6 billion ``Energy City Qatar'' in the Persian Gulf state of Qatar.
Gulf Finance and Gulf Energy in July agreed to develop a business and residential district for energy companies in China for $5 billion.
The energy city in China is planned 30 kilometers (19 miles) from Beijing. The 13.4 square-kilometer area will include an international exchange, data units and a science park, Gulf Finance said on July 17.
