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Israel's war cabinet met on Monday to discuss how to respond to Iran's direct attack against the country overnight on Saturday.
The cabinet, led by Israeli Prime Minister Benjamin Netanyahu, discussed retaliation options that are intended to be "painful" to Iran without sparking a full-blown war, Israeli outlet Channel 12 reported.
Israeli Defence Minister Yoav Gallant reportedly told US Secretary of Defence Lloyd Austin on Sunday that Israel had no choice other than respond to Iran after it launched hundreds of missiles and drones against Israel.
It was Tehran's first known direct attack against Israel and marked the start of a new chapter in the confrontation between the two countries.
Tehran has claimed that it gave its neighbours advanced warning of the attack, showing its desire to prevent a full-scale war.
Turkish, Jordanian and Iraqi officials confirmed that Tehran communicated a notice several days before the attack. But US officials refuted Tehran's claim and accused it of attempting to inflict considerable damage on Israel.
Tehran said the attack was in retaliation for the Israeli strike on the Iranian consulate in Damascus, on April 1, and that any further escalation would depend on the Israeli response.
Most of the drones and missiles were shot down before reaching Israeli territory, but a young girl was injured.
“Iran had issued the necessary warnings before the military action," Iranian Foreign Ministry spokesman Nasser Kanaani said on Monday. “Iran does not seek to develop tension in the region.”
Iranian Foreign Minister Hossein Amirabdollahian, who made phone calls to regional counterparts explaining Tehran's position, said Tehran gave fair warning to countries of the region and the US.
“About 72 hours before the … operation, Iran informed the neighbours and countries in the region that Iran's response is definite and certain in the form of legitimate defence”, he told state-run media.
Last week, Israel said it would retaliate with an attack on Iranian territory if it were attacked by Tehran, despite US concerns, sources said.
Aware of the possibilities
In Ankara, Turkey's Foreign Ministry said it had spoken to both Washington and Tehran before the attack. It conveyed messages as an intermediary to be sure reactions were proportionate, it added.
“Iran said the reaction would be a response to Israel’s attack on its embassy in Damascus and that it would not go beyond this. We were aware of the possibilities. The developments were not a surprise,” a Turkish diplomatic source told Reuters.
One senior official in US President Joe Biden's administration said Washington has contact with Iran through Swiss intermediaries but did not receive notice of the attack 72 hours in advance.
“That is absolutely not true,” the official said. “They did not give a notification, nor did they give any sense of … 'these will be the targets, so evacuate them.'”
Iran sent the US a message only after the strikes began and the intent was to be “highly destructive” said the official, adding that Iran's claim of a widespread warning may be an attempt to compensate for the lack of any major damage from the attack.
“We received a message from the Iranians as this was ongoing, through the Swiss. This was basically suggesting that they were finished after this, but it was still an ongoing attack. So that was [their] message to us,” the US official said.
Diplomatic flurry
Following the weekend attack, Iran was quick to increase its diplomatic contacts with its regional neighbours, with Mr Amirabdollahian speaking with his Saudi and Qatari counterparts on Sunday.
Saudi Arabia's Foreign Minister Prince Faisal bin Farhan received a phone call from Mr Amirabdollahian.
“During the call, repercussions from developments in the situation in the region and the increasing escalation against the backdrop of the crisis in Gaza Strip were discussed,” Saudi Arabia's Foreign Ministry said.
Qatar's Foreign Minister expressed his deep concern over regional developments and his commitment to “support efforts at achieving stability on all levels” during discussions with Mr Amirabdollahian, Qatari state media reported.
In a phone call with his Russian counterpart, Mr Amirabdollahian outlined the “objectives and the manner of military action of Iran on specific targets in the occupied territories”.
“This limited action is aimed at deterring, punishing and warning the Zionist regime,” the Iranian Foreign Minister told Russian Foreign Minister Sergey Lavrov.
“We had no doubt that Iran will respond to the Israeli regime's attack on Iran's embassy, and we believe that the process of carrying out this action was based on a responsible and restrained response,” Mr Lavrov said.
Jordan’s Foreign Minister Ayman Safadi said his country had summoned the Iranian ambassador to protest against Iranian comments that were seen as interference in the kingdom’s internal affairs.
In remarks given to state-owned Mamlaka public broadcaster, Mr Safadi was referring to comments in Iran’s official media that it warned Jordan would be struck next in the event it co-operated with Israel.
US Secretary of State Antony Blinken discussed Iran’s attack on Israel in separate calls with Jordanian, Saudi, Egyptian and Turkish counterparts, the US State Department said, during which he said that the US “does not seek escalation” and will continue to support Israel’s defence.
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Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
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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Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
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How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law