Marka, which narrowed its second-quarter loss down to Dh12 million from Dh126m in the prior-year period, had initiated a restructuring of its business last year.  Sammy Dallal / The National
Marka, which narrowed its second-quarter loss down to Dh12 million from Dh126m in the prior-year period, had initiated a restructuring of its business last year.  Sammy Dallal / The National

Marka to propose reducing capital to extinguish Dh450m accumulated losses



Marka, the Dubai-listed retailer which announced a restructuring last year, proposed a capital reduction through cancellation of shares to reduce accumulated losses of more than Dh450m, it said on Sunday in a statement to the Dubai Financial Market, where its shares are listed.

The company also proposed raising issued share capital up to Dh250m through the issuance of new shares, subject to adoption of the capital reduction. It didn't provide details about the number of shares to be issued or the pricing.

Both recommendations are subject to approval by shareholders at Marka’s annual general meeting on April 30.

In February, Marka posted deepening losses for 2017 despite starting a restructuring programme last year after failing to turn a profit since listing on the Dubai stock exchange in 2014.

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Last October, the company’s shareholders backed restructuring efforts that commenced earlier in the year, including plans to sell under-performing assets, restructure debt and contain the company’s costs.

"We expect to see positive outcomes from these activities during the remainder of 2017 and beyond," chairman Khaled bin Kalban told The National in October.

However, the company in February reported that last year's net loss widened to Dh218.3m compared with a net loss of Dh150.9m a year earlier, with the bulk of losses (Dh153m) attributed to the first half of 2017 and Dh65m in the second half of last year.

Total revenues stood at Dh94.3 million for the year ended 31 December 2017, compared to Dh294.1m in 2016.

Marka expanded into retail, food and beverage and children’s entertainment outlets in recent years but has been impacted by falling disposable income levels in the UAE.

It operates several fashion, hospitality and sports retail brands, including Carven, Essentiel Antwerp, food and beverage chain Reem Al Bawadi, Morelli’s Gelato and Taste of Italy by Heinz Beck.

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Director: Jared Hess

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The five pillars of Islam

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3. Hajj 

4. Shahada 

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AT4 Ultimate, as tested

Engine: 6.2-litre V8

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Transmission: 10-speed automatic

Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

The specs: 2019 GMC Yukon Denali

Price, base: Dh306,500
Engine: 6.2-litre V8
Transmission: 10-speed automatic
Power: 420hp @ 5,600rpm
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How much sugar is in chocolate Easter eggs?
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  • The 188g Smarties egg has 113g of sugar per egg and 22.8g in the tube of Smarties it contains
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