A leading Chinese financial group is in advanced preparations to launch a Dubai-focused investment fund, highlighting global interest in a rebound in Gulf economies.

Dubai said last November it would call a standstill on billions of dollars in debts, prompting a bail-out loan of $10bn from oil-rich Abu Dhabi.

The crisis of confidence surrounding the city’s $100bn-plus debt pile capped a year of deep recession as the overheated real estate sector finally crashed.

First Eastern Investment Group, an independent Hong Kong-based group, is aiming for a $250m fund, of which it will supply anchor capital of $50m.

Financial Times