Sharjah gets big credit ratings boost
Sharjah, January 8, 2014
Sharjah's credit ratings received a major boost when two leading international rating agencies Moody’s and Standard & Poor’s (S&P) affirmed long-term ratings on the emirate with a stable outlook.
Moody's has assigned the UAE emirate a long-term rating of A3, with a stable outlook, while S&P has assigned a long-term rating of A, also with a stable outlook. In both cases, Sharjah is rated as a sovereign government entity.
Announcing this on Wednesday, Sheikh Mohamed bin Saud Al Qasimi, the chairman of Sharjah Finance Department and member of the Sharjah Executive Council, said the credit rating exercise was the first that the Government of Sharjah had undertaken.
"These credit ratings firmly establish Sharjah within the top tier of sovereigns globally, affirming our position as a leading investment destination," he remarked.
“The credit rating process is a complex and testing one, and I am grateful for the hard work and dedication of both the agencies and my own staff. That hard work has paid off, as we were able to demonstrate to the credit rating agencies the very best of Sharjah,” added Sheikh Mohamed.
With a robust and diversified economy, the nominal GDP growth has been strong and steady, averaging 11 per cent from 2001 to 2012, with only a limited and short-lived impact from the global financial crisis.
Economic growth has been spread across a wide range of sectors, and in the financial year 2012 no individual sector represented more than 20 per cent of GDP, said Sheikh Mohamed.
"As such, Sharjah has one of the most diversified economies in the GCC region. The manufacturing sector is one of the most significant in the region, supported by 19 industrial zones and two thriving free zones," he remarked.
Sharjah, he stated, has taken advantage of its natural geographic advantages through world-class infrastructure and its membership of the UAE provides political stability, a business-friendly environment and financial strength.
"The emirate is unique in holding ports on both the east and west coasts of the UAE, in addition to its international airport, which serves over 100 cargo and passenger destinations within a 4-hour radius. These logistics hubs are well connected by the strategic road network, with enhancements to north-south routes and a new east-west routes in progress, and are fully integrated with the Airport Free Zone and Hamriyah Free Zone," he added.
According to him, Sharjah provides an affordable environment for people to live and do business with no income, sales or general corporate tax applied by the government, and only modest duties on imports and municipal services.
"Relatively low property prices combined with streamlined labour legislation keep business operating costs and wage bills down, and annual CPI inflation has remained below 5 per cent for the last five years," he stated.
A credit rating gives a widely recognised, internationally comparable assessment of the emirate’s economic and financial status.
"These ratings will strengthen our position as we embrace the economic opportunities and challenges of the future," said Sheikh Mohamed.
Waleed Al Sayegh, the director general of Sharjah Finance Department, said the ratings demonstrates that the emirate is a modern, open state, managing its finances in line with international best practice and will inturn open up fresh avenues to new investors and give confidence to existing ones.
The ratings will also help the emirate reduce the cost of borrowing and strengthen entities in the wider Sharjah public sector, and the private sector businesses based in the emirate.-TradeArabia News Service