N.Z. target for rich Arab investors?

Press, 28 March 1980, Page 11

N.Z. target for rich Arab investors?

By

KEN COATES

in London

New Zealand and Australia can expect to be targets for oil-rich Middle East investors who are building ~ tip enormous funds because of 'the soar-, ing oil, according to London; finance ‘ market sources close ;to . the. Middle East pattetn’of ink vestment

New Zealand’s $lO2 million loan “from a Middle East country” brought no surprise in London banking circles.

Oil-rich countries were looking to invest over a wider area than in the past, and to- divest them* selves to a certain extent from the American econo* my, said one financial ex* pert. “They are looking to some of the more secure countries, such as Australia and New Zealand, to put ; their money into, par* ticularly if there is a two-

way relationship involving food.”

The expert said the Middle East investors had been buying gold extensively over the. last few years, particularly through the Bank of Germany, but there ■ had been an easing off- with a consequent drop in the golf price which they had propped up- • • The revenue from oil was building up to an enormous extent, so that even the income on holdings was a major factor, with, interest rates to 19 percent. ;■

. ,The. main Middle East countries that have government funds for investment are Saudi Arabia, Kuwait, Oman, Qatar, United Arab Emirates, Yemen, Iraq, and to a degree Jordan.

Told that a Saudi Ara* bian prince har been allowed to buy farmland in New Zealand, the finan-

cial expert agreed that it would be the kind of/;action an oil-rich shiekh would consider reasonable, particularly if he was to be instrumental in negotiating further. Middle East investment. ’ ' >■ ■ •

He there was every reason"for New- Zealand’s borrowing from Mid-East lenders. “They are pretty straight in their dealings, and Iran should not be looked on as symptomatic of tne whole lot..

“In particular, the Arabs like a close personal relationship and deal regularly with the same people, so that they get to know and trust them.”

New Zealand would offer a great potential for Middle East investors because the country had its own gasfields. ‘To a degree, the Arabs would like to invest’ in an oil-type basis country because it would represent more security for them.”