Iran's supreme leader Ayatollah Ali Khamenei on Sunday formally endorsed Masoud Pezeshkian as the Islamic republic's ninth president, after he won a snap election earlier this month pledging reforms.
Mr Pezeshkian, a reformist who will be sworn in before parliament on Tuesday, is taking office at a time of heightened tension in the Middle East as fighting escalates between Israel and Iranian allies.
The endorsement ceremony, held in Tehran, was broadcast live on state television as banks and most government offices were shut to tackle a heatwave.
"I endorse his excellency Dr Masoud Pezeshkian as the president of the Islamic republic of Iran," said a decree by the supreme leader, read out by the director of his office.
Although a moderate, Mr Pezeshkian is not expected to bring about any radical shifts in foreign, domestic, or nuclear policy, as the supreme leader remains at the helm of all state affairs.
Foreign policy is not a matter decided by the Iranian president, but by Iran’s Islamic Revolutionary Guard Corps who answer to Mr Khamenei.
In his speech during the ceremony, Mr Khamenei reiterated Iran's anti-Israeli stance and praised Palestinian armed group Hamas for its resistance in Gaza.
Mr Pezeshkian vowed to adhere to the law and religious values, vowing that his administration will serve the people and "take no path but the path of justice and fairness".
Following the ceremony, acting president Mohammad Mokhber handed over to Mr Pezeshkian.
Mr Pezeshkian won a run-off race against ultraconservative Saeed Jalili on July 5 to replace president Ebrahim Raisi who died in a helicopter crash in May alongside other top officials.
Mr Raisi was a hardliner and his replacement has sparked hopes of a thaw in relations between Iran and the West, particularly with regards to nuclear issues.
During the ceremony, Mr Khamenei suggested he may be open to improving ties.
"We have no intention to oppose some European countries. The reason I did not mention European countries as a priority is that they have not treated us well for many years," he said.
If European countries did not "have this bad attitude" then mending ties "would be one of our priorities," he added.
Mr Khamenei stressed the importance of adopting an "active and effective" response to regional developments and that diplomacy should prioritise neighbouring countries.
He secured about 54 per cent of the 30 million ballots cast.
Later on Sunday, Mr Pezeshkian appointed reformist Mohammad Reza Aref, 72, as his first vice president, according to Iranian state media.
Mr Aref previously served as a vice president under former reformist President Mohammad Khatami from 2001 to 2005. The appointment marks the new president's first official act since assuming the position.
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Director: Christian Carion
Starring: James McAvoy, Claire Foy, Tom Cullen, Gary Lewis
Rating: 2/5
Opening Rugby Championship fixtures:Games can be watched on OSN Sports
Saturday: Australia v New Zealand, Sydney, 1pm (UAE)
Sunday: South Africa v Argentina, Port Elizabeth, 11pm (UAE)
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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.”
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Richard Flanagan
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