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Israel's conflict with Hezbollah escalated significantly on Monday, turning into an open-ended war after the military launched its most intensive air assault yet on Lebanon. The strikes killed hundreds in the country, while the Iran-backed group fired rockets as far as the occupied West Bank, where hundreds of thousands of Israelis live in illegal settlements.
Hezbollah extended its fire into areas it rarely strikes, such as Haifa, Tel Aviv and the West Bank, where hundreds of thousands of Israelis live in illegal settlements. Of the 165 rockets fired by Hezbollah on Monday, 10 reached the West Bank, Israel’s military said. Some struck "open areas", as sirens sounded in parts of the West Bank.
While no injuries were reported after the Hezbollah launches, the attack sparked fears of further escalation. The Israeli strikes on southern Lebanon and the eastern Bekaa Valley killed at least 492 people, including 35 children and 58 women, as well as injuring more than 1,645, Lebanese Health Minister Firass Abiad said.
Monday marked the deadliest day of Israeli strikes on Lebanon since cross-border violence with Hezbollah began in October last year. The latest attack raises the risk of further intensification in the conflict with the group, which has recently suffered significant security and military setbacks.
Lebanese media described Israel’s wave of attacks as the largest “air invasion” since its July 2006 war with Hezbollah.
The Israeli military said its air force struck more than 1,100 targets. Strikes hit deep into southern Lebanon, including in Ghaziyeh, about 37km from the Israeli border, specifying that they included "buildings, vehicles, and infrastructure where rockets, missiles, launchers and unmanned aerial vehicles posed a threat".
The Health Ministry ordered all hospitals in southern Lebanon to suspend non-urgent operations and prepare to treat those injured by “Israeli aggression”, while the Ministry of Education announced the closure of all public and private schools and universities in southern and eastern Lebanon, as well as in Beirut's southern suburb of Dahieh.
Later on Monday, the Israeli army said it launched a strike on Dahieh. Hezbollah senior commander Ali Karaki, third in line in the group's command, was the target of the strike, Israeli media reported. The strike hit the Bir El Abed neighbourhood, a Hezbollah source told The National.
Israel has said its wide assault is to enable tens of thousands of northern residents displaced by the conflict to return to their homes, despite Hezbollah's continued ability to launch hundreds of rockets at northern Israel.
The group launched hundreds of rockets and missiles amid the Israeli air assault, with rocket sirens sounding in Haifa on Monday afternoon. Israel’s military said five rockets were fired at the Haifa area and 30 were launched at Upper Galilee.
Residents of Beirut and southern Lebanon said they received warnings from the Israeli army to leave their homes and businesses near so-called Hezbollah sites. The latest warnings were issued to people in the Bekaa Valley amid what Israel called “extensive, precise strikes” across Lebanon.
“We advise civilians from Lebanese villages located in and next to buildings and areas used by Hezbollah for military purposes, such as those used to store weapons, to immediately move out of harm's way for their own safety,” Israeli army spokesman Admiral Daniel Hagari said. He also announced Israel's intent to launch a wave of attacks that aim to eradicate Hezbollah's “strategic weapons”.
After the barrage of strikes, Israeli Prime Minister Benjamin Netanyahu said people in Lebanon should take the eviction orders "seriously". "Once our operation is finished, you can come back safely to your homes," he said in a video statement.
Residents near Beirut reported heavy traffic as people in the south of the country fled towards the capital.
Mohamed Ghamloush, a resident of the southern city of Sidon, told The National that people were rushing to leave and roads were blocked. “Cars are going in every direction. I'm more afraid of accidents than air raids,” he said. “It's completely insane.”
One of the Israel military's warnings was received by the answering machine at the office of caretaker Information Minister Ziad Makary, instructing those inside the building to leave, Lebanon’s state-run National News Agency reported. Mr Makary dismissed the calls as “part of the psychological warfare adopted by the enemy” and continued working at the ministry as usual.
Hezbollah, a political party and militia, is embedded in Lebanon’s government, institutions and society, leading many Lebanese to worry that Israeli strikes could lead to a high civilian death toll.
Last week, senior Hezbollah commander Ibrahim Aqil was killed, along with 16 other members of the group, in an Israeli strike on Dahieh. The attack also claimed the lives of dozens of civilians. The death toll is expected to rise as search efforts continue for nine people missing under rubble.
The attack came after thousands of booby-trapped pagers and walkie-talkies used by Hezbollah members exploded last week on two consecutive days, killing dozens of people, just after Israel announced a shift in focus from Gaza towards its conflict with Hezbollah.
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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.”