Deyaar's day on Dubai's bourse after swinging into black


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Deyaar Interntional, the company part owned by Dubai Islamic Bank, reached its highest intraday level in a week as investors were buoyed by the company's swing to a net profit.

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Last Updated: May 12, 2011

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The company yesterday said it swung to a first quarter net profit of Dh26 million compared with a net loss of Dh100 million for the same period last year as it delivered new projects.

It was the most actively traded stock in Dubai with over 16 million shares changing hands as the shares rose more than 3 per cent to 31.2 fils in early trading.

In the capital, Dana Gas rose 1.5 per cent to 69 fils early trading session, as it said its first-quarter net profit almost tripled to Dh92 million compared with the year-ago period, beating most analyst expectations.

EFG Hermes had forecast its net profit at Dh62 million, Analysts at investment bank Nomura had forecast Dh25 million while Kuwait-based Global Investment House had pencilled in an Dh65.

But shares in the oil and gas company slipped to 68 fils as its chief executive Ahmed Al-Arbeed said the fuel producer is owed $150 million for oil it pumped in Iraq's Kurdish region.

Investors are making asset allocations depending on specific company news, said Sachin Mohindra, the lead manager for Invest AD's GCC Focus Fund, which manages $35 million assets under management.

"Most of the results are out of the way [but there is] trading on specific news flow," Mr Mohindra said, adding that investors are keeping an eye on liquidity, which has subsided since the high volumes during the Arab Spring.

The Abu Dhabi Securities Exchange traded flat at 2675.30 points, and the Dubai Financial Market General Index lost 0.2 per cent to 1,605.04 points.

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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In numbers: PKK’s money network in Europe

Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010

Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille

Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm

Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year

Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”

Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners

TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013 

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Name: Yousef Al Bahar

Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994

Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers

UAE currency: the story behind the money in your pockets
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