Gulf business confidence rose in the first quarter of this year with Saudi at the top and the UAE at the bottom, but whether real signs of improvement are here to stay remains to be seen. The HSBC Business Confidence Index rose 5.1 points to 85.3 points in the first quarter, its highest level in more than a year, the bank said on Thursday. An online survey of 1,323 people conducted by research firm YouGov Siraj found that 39 percent of respondents expect to hire more people compared to 37 percent in the fourth quarter of 2009. “What we're seeing is real signs of improvement across the region,” Tim Reid, HSBC's co-head of global banking for the Middle East and North Africa, said in a statement. “It remains to be seen whether this is sustainable, but the increase in people expecting profits to rise and companies staffing up would suggest that the future is more positive.” Saudi Arabia's index rose 4.7 points to 96.3 points. Oman's rose 5.4 points to 91.1. Qatar's climbed 3.6 points to 88.3. UAE's increased 6.8 points to 76.6. Bahrain's index fell 3.6 points to 782.6 points. HSBC's index for the first quarter was clearly above 2009 levels, when the financial crisis hit Gulf states the hardest. Dubai's debt woes, revealed in November 2009, further worried already roiled investors. However, a plan to restructure billions of dollars worth of debt by Dubai World, the emirate's sprawling conglomerate, announced last month has helped calm investors. Shuaa Capital said in a study earlier this week that investor confidence in the Gulf surged last month, driven mainly by Dubai World's proposal to restructure its massive debt. The Dubai-based investment bank's GCC Investor Confidence Index jumped 15.2 points, its second biggest gain ever, to 120.8. The UAE index jumped 36 points to 120.4 points. While HSBC's index rose in the first quarter, it is still below the levels seen in 2007 and 2008, when the global credit crunch had not yet taken its toll in the region. SHUAA Capital said on Tuesday that its GCC Investor Sentiment Index gained a massive 15.2 points, its second biggest ever gain on record. Moreover, the Paris-based credit insurance group Coface said at a conference on Tuesday that the Middle East, particularly the Gulf, has been the region least hit by the economic downturn, “Middle East countries have shown resilience being able to maintain positive growth of 1.4 percent in 2009,” Coface said. The group has calculated what it calls the “growth shock” of the global financial crisis by taking the percentage point difference in GDP growth between 2007 and 2009. For the world, GDP growth declined 5.8 percentage points while it fell 3.6 percentage points for the Middle East, just ahead of emerging Asia.
