Dubai can take London’s place of a financial center

One of the first interviews I did in the Middle East was of Moe Ghashim, the CEO of Shopgo, a firm that helps small businesses set up ecommerce operations. Ghashim talked about his plans and hopes for the company, which was already an early success story in MENA’s tech scene. After having founded the company in Amman, Ghashim wanted to open a location in Dubai, and then, quickly thereafter, London. The ultimate aim: an IPO on London’s stock exchange.

London’s startup organizations were also wooing him, ultimately successfully. “London is close to my markets and a cultural fit,” he told me.

London functions as a financial hub between the developed world and emerging markets, thanks to its closer geography to Africa, the Middle East and Asia, and its historic ties to those parts of the world. Many dually listed companies pick the London stock exchange, Britain’s financial regulations hold sway in many emerging markets deals, and many companies large and small, like Shopgo, use it as an entrance to Europe, a friendlier market than the United States.

The question, now, after Brexit, is whether London can keep that stature, and if it fades, what will take its place? There is Hong Kong, of course; Singapore — and then there’s Dubai, with its central location and connections to both Africa and Asia. I’ve already written about why I think most American business people are underestimating Dubai.

Now that the initial shock vote has faded, there are plenty of nuanced views of what will happen to England, Great Britain and the United Kingdom. There will be trade deals; and there’s a consensus of a recession, though I’m guessing it won’t be as bad as some of the predictions.

There’s also a consensus that seems more firmly rooted in reality: that London’s financial industry will be hurt. It seems inevitable. Big banks area already talking about moving some London operations; finance, one of the more heavily regulated sectors in any country, is acutely sensitive to the costs that regulations add. And financial services companies are often looking for homes that enable them to structure the latest versions of deals to the best tax advantages.



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