Local bourses are expected to outperform in the coming months, amid investor bets that Dubai will win the World Expo 2020, brokers said.
Every five years for a period of six months, World Expos attract millions of visitors to exhibitions and events staged by hundreds of participants on a national, international and business and cultural level. They can have a major impact on the host city.
The Shanghai 2010 World Expo helped to transform a heavily industrialised city-centre area into a thriving cultural and commercial district while also bringing its theme "Better City, Better Life" to the attention of 73 million people.
A decision on Expo 2020, for which the UAE is bidding under the theme "Connecting Minds, Creating the Future" is expected to be made in November.
"The market has been pricing in the event, which will get the country back on the hype," said Nabil Al Rantisi, the managing director of brokerage at Mena Corp in Abu Dhabi. "If Dubai gets it, they will need to build more real estate, contracts will get more business and banks will start financing again. It's like the Olympics, but for the business and trade community."
The next event in 2015 will take place in Milan, Italy. The Expo has never been held in the Middle East, Africa or South East Asia.
Dubai is competing with Ayutthaya, Thailand; São Paulo, Brazil; Yekaterinburg, Russia; and Izmir, Turkey.
The Dubai Financial Market General Index has risen about 30 per cent so far this year, trading at 2,177.68. It traded 600 million shares on Thursday, more than double the average in recent months. The Abu Dhabi Securities Exchange has risen about 25 per cent in the same period, trading at 3,369.21.
"Just in the last four to five sessions, we traded close to Dh1 billion for the two markets combined," Mr Al Rantisi said.
"Dubai is marketing very heavily ahead of the announcement."
Sebastien Henin, a portfolio manager at The National Investor in Abu Dhabi, said he expected speculation on small-cap stocks to be in the spotlight in the lead-up to the announcement.
"The closer we will be from the election date, names in real estate, to construction, to cement will gain a lot of speculation," he said.
"Cement stocks have very cheap valuations right now, but if Dubai wins, they could really double in price."
Dubai's bid has six premier partners - Dubai Airports, Emirates Airline, Emirates NBD, Etisalat, DP World and Jumeirah Group. This approach to partnerships has gained valuable international exposure for the bid.
The Expo theme "Connecting Minds, Creating the Future" overarches three sub-themes - mobility, sustainability and opportunity.
"The Dubai Expo 2020 theme reflects the belief that tomorrow's challenges will be far too complex to be met in isolation," reads the official bid dossier.
"Whatever you can say on [Dubai] based on financials, at least they have always delivered," Mr Henin said. "When it comes to events, they have a clean track record. They have come to agreements and settled debt accords. They are strong with their bid."
Mr Henin's remarks echoed the Minister of State Reem Al Hashimy's statements during an interview with CNN's Marketplace Middle East programme: "Dubai has proven, in the last couple of years, its ability to rise above and beyond its challenges."
halsayegh@thenational.ae
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.”
COMPANY%20PROFILE
%3Cp%3ECompany%20name%3A%20Znap%3C%2Fp%3E%0A%3Cp%3EStarted%3A%202017%3C%2Fp%3E%0A%3Cp%3EFounder%3A%20Uday%20Rathod%3C%2Fp%3E%0A%3Cp%3EBased%3A%20Dubai%2C%20UAE%3C%2Fp%3E%0A%3Cp%3EIndustry%3A%20FinTech%3C%2Fp%3E%0A%3Cp%3EFunding%20size%3A%20%241m%2B%3C%2Fp%3E%0A%3Cp%3EInvestors%3A%20Family%2C%20friends%3C%2Fp%3E%0A
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
Paatal Lok season two
Directors: Avinash Arun, Prosit Roy
Stars: Jaideep Ahlawat, Ishwak Singh, Lc Sekhose, Merenla Imsong
Rating: 4.5/5
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.