Regional equity markets declined yesterday, tracking a weak showing on Wall Street over the weekend and negative indications out of the G8 meeting in Toronto. The Dubai Financial Market General Index declined 0.37 per cent to 1,533, failing to carry forward the momentum from last week. Deyaar Development, the second-largest Dubai-listed developer, which rose more than 13 per cent last week, dominated trading again. The company accounted for almost a third of the day's trading volume but closed flat at 34.5 fils.
Its larger counterpart, Emaar Properties, rose 0.3 per cent and helped the market recover some of its early losses. It closed at Dh3.27. Kuwait's Ekttitab Holding was among the major losers, declining 6.2 per cent to 36.2 fils, followed by du, down 4.1 per cent to Dh2.09. "We have pretty much completed the second quarter and there is not much to show for it," said Rami Awwad, a corporate adviser based in Abu Dhabi. "This is adding to weak investor confidence."
On the Abu Dhabi Securities Exchange General Index, which was down 0.09 per cent to 2,551, Aabar Investments was the major loser, declining 7 per cent to Dh1.58. Waha Capital retreated 3.3 per cent to 57 fils, while Sharjah Islamic Bank dropped 2.3 per cent to 82 fils. The G8's members, including the US, Germany, Canada and the UK, termed the global recovery "fragile" but made few suggestions for strengthening it.
Kuwait's main measure retreated 0.8 per cent, while Muscat's and Qatar's both dropped 0.3 per cent. The Bahrain index ended 0.4 per cent lower, and the Saudi market lost 0.5 per cent. skhan@thenational.ae
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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 biog
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Global state-owned investor ranking by size
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THE BIO
Favourite place to go to in the UAE: The desert sand dunes, just after some rain
Who inspires you: Anybody with new and smart ideas, challenging questions, an open mind and a positive attitude
Where would you like to retire: Most probably in my home country, Hungary, but with frequent returns to the UAE
Favorite book: A book by Transilvanian author, Albert Wass, entitled ‘Sword and Reap’ (Kard es Kasza) - not really known internationally
Favourite subjects in school: Mathematics and science
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