This image grab taken from a UGC video reportedly shows an explosion in Iran's Isfahan province. AFP
This image grab taken from a UGC video reportedly shows an explosion in Iran's Isfahan province. AFP
This image grab taken from a UGC video reportedly shows an explosion in Iran's Isfahan province. AFP
This image grab taken from a UGC video reportedly shows an explosion in Iran's Isfahan province. AFP

Expect more covert Israeli operations against Iran after nuclear talks stall, say experts



Iran face more covert operations against targets in the country and its proxies in the region as the United States and Israel look to deter Tehran from building a bomb, defence experts told The National on Monday after strikes on an Iranian ammunition depot and the convoy of an Iran-backed militia in eastern Syria at the weekend.

The drone attack on the warehouse in Isfahan on Saturday night, confirmed by Iran, and air strikes on a convoy of lorries carrying arms into eastern Syria from Iraq on Sunday night, came as US Secretary of State Antony Blinken began a three-day visit to Egypt and Israel.

“I believe it is true what is being reported that the strike was done by Israel because if things were to escalate, having the Carrier Strike Group 10, the Ronald Reagan aircraft carrier, all of those bombers, all of those F-35s, all of that material in the region could help the Israelis if things got hot,” said Jonathan Lord, director of the Middle East Security Programme at the Centre for New American Security.

“I get the sense that the timing of the attack was probably calibrated to a time when they thought they had an insurance policy in the region in case things went poorly or continued to escalate."

The strikes come on the heels of the largest joint military exercise between the US and Israel, involving 6,400 US troops, more than 1,500 Israeli troops, more than 140 aircraft, 12 naval vessels, High Mobility Artillery Rocket Systems and multiple-launch rocket systems.

Israeli reminder to Iran

Analysts view the joint exercises and attacks against Iran as a way for Israel to send a reminder that it will not hesitate to influence the use of non-diplomatic routes if Tehran continues to stall talks with Western powers on an reviving the 2015 agreement to curb its nuclear programme, known as the Joint Comprehensive Plan of Action (JCPOA).

“We’re at a very sensitive time: the Iran nuclear talks are at an impasse; Iran is closer to a nuclear breakthrough than ever; Israel just got a new Benjamin Netanyahu-led government that clearly stated it would do everything to prevent Iran from acquiring the bomb; and the protests in Iran have weakened the Islamic Republic and may cause it to lash out to balance that perception,” Michael Horowitz, a geopolitical and security analyst, told The National.

Footage of the drone attack on what Iran identified as a “warehouse” and its aftermath corresponds to a site near a shopping centre in Isfahan.

Image grab taken from a UGC video posted, reportedly showing an explosion in Iran's Isfahan province. Photo: AFP
Image grab taken from a UGC video posted, reportedly showing an explosion in Iran's Isfahan province. Photo: AFP

Isfahan, 350km south of Tehran, is home to both a large airbase built for its fleet of American-made F-14 fighter jets and its Nuclear Fuel Research and Production Centre.

“In the absence of a real diplomatic option to curtail Iran’s nuclear programme, other countries, including Israel and perhaps the US will have to deter Iran from building a bomb through deterrence and covert actions — all of which bear a risk of escalation,” Mr Horowitz said.

Neither Israel nor the United States claimed responsibility for the latest attacks, Israel has acknowledged carrying out hundreds of air and missile strikes against Iran-backed and government forces in Syria, where the US military is also active.

A US official who spoke to the Wall Street Journal said Israel appeared to have been behind the drone strike.

Precedence of attacks

Damage seen in footage released by Iranian state media suggests that bomb-laden quadcopter drones were used to strike the target in Isfahan. Last February, Israel sent six quadcopter drones carrying explosives into a manufacturing and storage plant for military drones near the city of Kermanshah.

In 2021, a similar attack using quadcopter drones targeted a centrifuge-manufacturing plant in Karaj, while in 2019, quadcopters were used against a Hezbollah shipment in Lebanon.

There is a belief that Israel wants to send a message to Iran that it can reach anywhere in the country, especially sensitive areas.

“The joint [Israel-US] military exercise is a reminder that if it fails and the regime further ramps up its nuclear activity — for example, if it raises enrichment levels further and is seen to be moving towards weaponisation — there are non-diplomatic options to try to contain that threat,” said Naysan Rafati, senior Iran analyst at the Crisis Group.

Iraqi Shiite fighters of the Hashed al-Shaabi paramilitary force secure the border in Al Qaim in the Anbar province, near Al Bukamal. AFP
Iraqi Shiite fighters of the Hashed al-Shaabi paramilitary force secure the border in Al Qaim in the Anbar province, near Al Bukamal. AFP

On Monday morning, further drone strikes killed three people including a pro-Iran commander as they were been inspecting the site of the previous evening's strikes near the Iraq-Syria border that killed seven people, the Britain-based Syrian Observatory for Human Rights said.

"A commander in an Iran-backed group and two of his companions, all of them non-Syrian, were killed this morning after renewed drone strikes," the opposition war monitor said.

According to experts, the latest strikes on the border crossing between Al Qaim and Al Bukamal in Syria has hallmarks of the air campaign Israel has sustained over Syria since January 2013 that has targeted various Iranian weapons shipments.

US and Israeli aircraft fly over Israel as part in the joint exercise Juniper Oak Tuesday. AP
US and Israeli aircraft fly over Israel as part in the joint exercise Juniper Oak Tuesday. AP

In November, Israeli military chief of staff Lt Gen Aviv Kochavi confirmed a strike by Israeli warplanes on a convoy of lorries at the same crossing based on what he called “perfect intelligence”.

“Stepped-up attacks, especially inside Iran, could be a result of Israel ratcheting up the pressure as the Joint Comprehensive Plan of Action is all but dead and Iran continues uranium enrichment — Rafael Mariano Grossi of the IAEA warned last week that Iran already has enough enriched uranium to build ‘several’ nuclear bombs, undoubtedly crossing Israeli red lines,” Paul Iddon, a columnist who writes about Middle East military and political affairs, told The National.

Sunday's strike targeted five white refrigerated lorries with missiles in the Hari area of Al Bukamal, one kilometre from the border crossing with Iraq, an officer who defected from the Syrian regime's military and who monitors the area said. The lorries were carrying Syrian number plates and yellow fires erupted in the area.

"They could have been carrying weapons, or spare parts for weapons, or primary material for narcotics," the officer told The National. "It is impossible to know, but they definitely were not hauling frozen food from Iraq."

‘Reminding Europe’

The drone strikes in Isfahan drew a reaction from Ukraine, which accuses Iran of supplying hundreds of drones to Russia to attack civilian targets in Ukrainian cities far from the front. A senior aide to President Volodymyr Zelenskyy linked the incident directly to the war there.

"Explosive night in Iran," Mykhailo Podolyak tweeted on Sunday. "Did warn you." Mr Podolyak’s comments led to Iran to summon Ukraine's charge d'affaires in Tehran on Monday.

Dr Hamidreza Azizi, an expert on Iran and the Middle East at the German Institute for International and Security Affairs, said the attack could be a ploy by Israel to advertise its tough-on-Iran credentials to partners who might otherwise criticise it over its policies against Palestine.

"Considering Iran's involvement in the war in Ukraine by supporting Russia, even the Europeans and the United States are feeling the importance of addressing these elements of Iran's activities more strongly than before. In the past, especially Europe was mostly concentrated on Iran's nuclear programme," he told The National.

"Now that this sense of threat is also there in Europe, by doing this kind of activities Israel can remind its European and American allies that it can help them contain the Iranian threat. In return, of course, what Netanyahu and the Israeli government in general would expect from its allies is to sort of ignore what's going on in Palestine and the Israeli violence against the Palestinians."

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How to keep control of your emotions

If your investment decisions are being dictated by emotions such as fear, greed, hope, frustration and boredom, it is time for a rethink, Chris Beauchamp, chief market analyst at online trading platform IG, says.

Greed

Greedy investors trade beyond their means, open more positions than usual or hold on to positions too long to chase an even greater gain. “All too often, they incur a heavy loss and may even wipe out the profit already made.

Tip: Ignore the short-term hype, noise and froth and invest for the long-term plan, based on sound fundamentals.

Fear

The risk of making a loss can cloud decision-making. “This can cause you to close out a position too early, or miss out on a profit by being too afraid to open a trade,” he says.

Tip: Start with a plan, and stick to it. For added security, consider placing stops to reduce any losses and limits to lock in profits.

Hope

While all traders need hope to start trading, excessive optimism can backfire. Too many traders hold on to a losing trade because they believe that it will reverse its trend and become profitable.

Tip: Set realistic goals. Be happy with what you have earned, rather than frustrated by what you could have earned.

Frustration

Traders can get annoyed when the markets have behaved in unexpected ways and generates losses or fails to deliver anticipated gains.

Tip: Accept in advance that asset price movements are completely unpredictable and you will suffer losses at some point. These can be managed, say, by attaching stops and limits to your trades.

Boredom

Too many investors buy and sell because they want something to do. They are trading as entertainment, rather than in the hope of making money. As well as making bad decisions, the extra dealing charges eat into returns.

Tip: Open an online demo account and get your thrills without risking real money.

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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Updated: January 31, 2023, 1:02 PM