Shipping volumes from Iran at Dubai’s Jebel Ali Port fell by 300,000 standard container units last year as a result of fresh sanctions imposed on Iran, according to the port’s operator.
That is equivalent to 16 of the world’s largest container ships.
The EU imposed restrictions on Iran’s oil export revenues in January 2012, while the US imposed financial sanctions against all banks trading in the Iranian rial last June, in a move widely regarded to have crippled Iran’s banking sector.
“It took the June round of sanctions from the US and the EU to really choke trade off in Iran, which fell precipitously,” said Bryan Plamondon, a senior economist for the Middle East at IHS.
Before this, Jebel Ali and Dubai were conducting a busy trade in so-called “roll-on roll-off” cargo, in which vehicles make one leg of a journey by sea, with 50 per cent of Jebel Ali’s roll-on roll-off traffic destined for Iran.
“On the basis of [roll-on roll-off cargo], Dubai is the gateway to Iran,” said Dalibor Gogic, a maritime analyst at IHS.
The value of trade between the two countries “is not a negligible number”, Mr Plamondon said. “For non-oil trade figures, Iran was one of the top trading partners in both imports and exports.
“The business relationships are already established. You have Iranians working in Dubai and sending goods back and forth,” he said.
Trade between Dubai and Iran sank by nearly a third in 2012 to Dh25 billion, down from Dh36bn the year before, according to Dubai Customs.
Abdullah bin Damithan, a director at DP World, which runs Jebel Ali, was optimistic about the prospects for trade with Iran as sanctions ease, however. “If we look at the positivity of what’s happening now between the US and Iran, things are improving,” he said.
“We’ve seen the volume coming back slowly, we’ve seen the shipping lines crawling back to Iran. I believe Iran will return to the point where it used to be and even go further.”
Mr Plamondon was less optimistic. “Trade finance is still a big issue even for the sectors that aren’t sanctioned – so there will still be a lot of impediments even when Iran is open to business again,” he said.
In the long run, Iranian trade is likely to continue to pass through Jebel Ali due to a lack of maritime facilities, Mr Damithan said.
“Iran has not expanded its port infrastructure … so Jebel Ali has always been a transshipment gateway to Iran, and I believe this will continue for some years to come.”
Jebel Ali handled a record 13.6 million standard container units in 2013. The port will expand capacity to 19 million units by the end of this year.
abouyamourn@thenational.ae
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Director: Jafar Panahi
Stars: Vahid Mobasseri, Mariam Afshari, Ebrahim Azizi, Hadis Pakbaten, Majid Panahi, Mohamad Ali Elyasmehr
Rating: 4/5
Our Time Has Come
Alyssa Ayres, Oxford University Press
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UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
Last five meetings
2013: South Korea 0-2 Brazil
2002: South Korea 2-3 Brazil
1999: South Korea 1-0 Brazil
1997: South Korea 1-2 Brazil
1995: South Korea 0-1 Brazil
Note: All friendlies
Euro 2020
Group A: Italy, Switzerland, Wales, Turkey
Group B: Belgium, Russia, Denmark, Finland
Group C: Netherlands, Ukraine, Austria,
Georgia/Kosovo/Belarus/North Macedonia
Group D: England, Croatia, Czech Republic,
Scotland/Israel/Norway/Serbia
Group E: Spain, Poland, Sweden,
N.Ireland/Bosnia/Slovakia/Ireland
Group F: Germany, France, Portugal,
Iceland/Romania/Bulgaria/Hungary
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
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.”
