For the time being, Saudi Arabia's stock market remains almost entirely closed to international investors.
However, that has done little to prevent banks from hiring staff and redrawing their strategies in anticipation of the kingdom easing restrictions on access to its capital markets, the largest in the Middle East.
With a degree of giddiness, some banks have speculated publicly that the long-awaited opening could happen as early as next month.
Amid sagging volumes on local equity markets, the Dubai International Financial Centre is buzzing with excitement about developments in the UAE's larger neighbour. VTB Capital, an investment bank controlled by the Russian government, has hired four investment bankers to focus on the Saudi stock market from Dubai.
Among them is Ali Salaam, a former executive director at Credit Suisse.
The opportunities for international banks as Saudi Arabia opens are substantial, said Khalid Murgian, an executive director at Goldman Sachs Asset Management.
"We love open markets, and would appreciate the opportunity to set up a Mena [Middle East and North Africa] fund to have direct exposure to Saudi Arabian equities," he said.
At present, international investors can access Saudi Arabia's market only indirectly by using instruments that mimic the performance of the underlying shares.
Lacking the ability to receive direct investment from international fund managers, Saudi Arabia does not feature on the MSCI Emerging Markets or Frontier Markets indexes.
Nonetheless, the kingdom's exchange commands much higher levels of trading activity than languid UAE markets.
The value of shares traded daily on the Tadawul All-Share Index has hovered at about US$1.5 billion (Dh5.51bn) to $2bn during the past few months.
Even during the peak of the boom in 2007, traded values on the Dubai Financial Market rarely touched those highs.
Saudi Arabia's Capital Market Authority recently approved the listing of international companies on the Saudi market, setting many speculating that an opening was imminent.
Auxiliary financial services companies have also increased their focus on Saudi Arabia.
The market data giant Thomson Reuters is betting on a potential Saudi opening leading to high demand for its trading platforms, said Samer Abuzahra, the group's head of Mena equities. Saudi Arabia is a key focus for the group's sales on the Autex trading network order routing platform.
"We're hearing a lot about regulations easing up on foreign investors. Once they can start trading, the international players will need means to communicate these orders to Saudi," Mr Abuzahra said. "We're trying to meet the requirements of international players." The company is seeking to supply the Saudi Tadawul's top 10 brokers.
International investors have sought to reap gains from a vast government spending drive, announced at the height of the Arab Spring last year in an effort to stave off social unrest. The Saudi Tadawul has gained 6.8 per cent since the start of the year.
Speculation about a potential Saudi opening has also been a factor driving gains on the Tadawul since the start of the year, according to a report from InvestAD.
The asset manager believes that the market could be opened by the second quarter, or at least before the end of the year.
ghunter@thenational.ae
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In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
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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.”
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What is dialysis?
Dialysis is a way of cleaning your blood when your kidneys fail and can no longer do the job.
It gets rid of your body's wastes, extra salt and water, and helps to control your blood pressure. The main cause of kidney failure is diabetes and hypertension.
There are two kinds of dialysis — haemodialysis and peritoneal.
In haemodialysis, blood is pumped out of your body to an artificial kidney machine that filter your blood and returns it to your body by tubes.
In peritoneal dialysis, the inside lining of your own belly acts as a natural filter. Wastes are taken out by means of a cleansing fluid which is washed in and out of your belly in cycles.
It isn’t an option for everyone but if eligible, can be done at home by the patient or caregiver. This, as opposed to home haemodialysis, is covered by insurance in the UAE.
