Stanbic(SBCJ.J) Dubai office banks on gold trade
07:54 a.m. Apr 25, 1998 Eastern
By Hilary Gush
DUBAI, April 25 (Reuters) - Standard Bank London officially launched its
Dubai representative office on Saturday to capitalise on growing demand
for direct imports of South African gold into the Gulf Arab emirate.
Conrad Strauss, chairman of the bank's parent Standard Bank Investment
Corp (SBCJ.J) (Stanbic), told a news conference direct imports of South
African gold into Dubai grew to 54 tonnes in 1997 from 13 tonnes the
year before. ''My impression is that figure will be significantly
improved upon this year.''
With 1997 imports of 660 tonnes, Dubai is the world's biggest
re-exporter of gold, mainly thanks to its proximity to India -- the
largest consumer of the metal. South Africa is a leading bullion
exporter, but has traditionally sent its product to Europe.
''South Africa has just become the number two supplier of gold to Dubai
ahead of the UK, but we are still way behind the Swiss,'' said Jeffrey
Rhodes, the Dubai general manager. ''But the equation is changing and
will continue to change.''
Dubai customs figures show South Africa provided 20.25 tonnes of the
total 153 tonnes Dubai first quarter imports.
Rhodes expected the value of Dubai gold imports from South Africa to
double this year from the $500 million seen in the last eight months of
1997.
''There will be no let-up in demand for gold from India,'' Rhodes said,
forecasting consumption of around 800 tonnes this year. The World Gold
Council (WGC) producer group puts Indian demand in 1997 at a record 737
tonnes.
But traders in the Dubai gold souk are worried the continuing easing of
gold import rules in India will mean less business for them.
''There is concern about what will happen to Dubai. I think (Dubai gold
import) demand is on course to at least match that of 1996 -- 350 tonnes
-- and I think demand will probably reach 500 tonnes,'' Rhodes said,
dismissing talk that the bank might have come to the party too late.
The Indian government in October freed up bullion import rules,
authorising three state-run agencies and eight banks to import and sell
gold freely in the domestic market.
Since then one more nominated agency and bank have been added to the
list, raising the number of Indian importers who have turned directly to
European banks and bypassed Dubai.
Apart from facilitating gold trade, Strauss said the Dubai office would
also handle trade financing and offshore banking services. ''We hope to
promote vigorous trade between our two important trading regions,'' he
said.
Standard Bank group economist Nico Czypionka said he expected the gold
price to rise to $340 an ounce by year-end and average around $325 for
1998 as a whole.
((Gulf newsroom, +971 4 607 1222, fax +971 4 626982,
dubai.newsroom+reuters.com))
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