The internet's share of advertising expenditure in the Arab world is expected to rise fourfold in the next four years, a new report says. The surge is expected because of a doubling of broadband penetration in the region, which means more people using faster internet connections to view more online content.
The Arab Media Outlook, produced by the Dubai Press Club and Value Partners, a management consultancy based in Milan, was bullish on the prospects for online advertising, projecting that the sector's share of total advertising expenditure in the region would rise from 1 per cent to 4.2 per cent by 2013. "The online platform today accounts for advertising revenues of about 1 per cent, on a pan-regional level," said Santino Saguto, the managing director for Value Partners in the MENA region. "Because of broadband penetration, we expect a very significant growth, going up to at least 4 per cent, probably higher."
As of last year, 12 per cent of households in the region had broadband internet access, but by 2013, that figure will rise to 29 per cent, said the report, which was released yesterday. The study looked at data from 15 countries and territories in the Middle East and North Africa: Bahrain, Egypt, Jordan, Lebanon, Kuwait, Morocco, Oman, the Palestinian Territories, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the UAE and Yemen.
Qatar, the UAE and Bahrain have so far been the clear leaders in broadband adoption, with 84, 69 and 68 per cent of their respective households having access to the technology last year, the report said. By 2013, Saudi Arabia will have caught up to these near-western levels of penetration, with 71 per cent of Saudi households expected to have broadband by then. As of last year, just 37 per cent of Saudi households had broadband.
This rapidly improving infrastructure will attract more money to the media sector and increase the amount of locally produced, Arabic-language content, said Maryam bin Fahad, the executive director of the Dubai Press Club. "It is all based on the broadband increase in this region," she said. "Once that is available in this region, we think that major development will happen in terms of media industry and the availability of content, which will affect advertising revenue." However, an increasingly robust internet brings with it the challenges that have been radically reshaping the media sector in the West.
Although the report's projections suggested that daily newspaper circulation would continue to rise in the region, the 5.5 per cent annual growth enjoyed between 2007 and last year will drop to a more modest 2.3 per cent through to 2013, the report said. The internet is already having an impact on the print industry. Forty per cent of the news readers surveyed said they accessed news online last year.
Overall, the report presented a picture of cautious optimism for the region's advertising industry. The report noted that although the Arab region's media sector was among the hardest hit in the world last year, seeing a 13 per cent drop in advertising revenue compared with 2008, it was also among those poised to bounce back the fastest. The report said that while regional advertising spending would only just clear US$5 billion (Dh18.36bn) this year - still shy of the nearly $5.3bn spent in 2008 - by next year it would bounce back up to $5.6bn.
Regional media companies have already begun to adapt to the growing importance of digital distribution. More than 80 per cent of the media company executives surveyed said they believed the region's readers should turn to websites as a source of news, not simply newspapers. "The online and mobile sector is still not to be compared with the TV industry or the print industry, but companies are gradually building their capabilities," Ms bin Fahad said.
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Dr Amal Khalid Alias revealed a recent case of a woman with daughters, who specifically wanted a boy.
A semen analysis of the father showed abnormal sperm so the couple required IVF.
Out of 21 eggs collected, six were unused leaving 15 suitable for IVF.
A specific procedure was used, called intracytoplasmic sperm injection where a single sperm cell is inserted into the egg.
On day three of the process, 14 embryos were biopsied for gender selection.
The next day, a pre-implantation genetic report revealed four normal male embryos, three female and seven abnormal samples.
Day five of the treatment saw two male embryos transferred to the patient.
The woman recorded a positive pregnancy test two weeks later.
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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Killing of Qassem Suleimani
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Skewed figures
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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Global events: Much of the UK’s economic woes were blamed on “increased global uncertainty”, which can be interpreted as the economic impact of the Ukraine war and the uncertainty over Donald Trump’s tariffs.
Growth forecasts: Cut for 2025 from 2 per cent to 1 per cent. The OBR watchdog also estimated inflation will average 3.2 per cent this year
Welfare: Universal credit health element cut by 50 per cent and frozen for new claimants, building on cuts to the disability and incapacity bill set out earlier this month
Spending cuts: Overall day-to day-spending across government cut by £6.1bn in 2029-30
Tax evasion: Steps to crack down on tax evasion to raise “£6.5bn per year” for the public purse
Defence: New high-tech weaponry, upgrading HM Naval Base in Portsmouth
Housing: Housebuilding to reach its highest in 40 years, with planning reforms helping generate an extra £3.4bn for public finances
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