The US on Thursday unveiled sanctions against people and companies accused of helping to ship Iranian oil to China, the latest measure focused on Tehran's oil sector, as President Donald Trump ratchets up his “maximum pressure” campaign.
Mr Trump this week signed a memorandum ordering the US Treasury Secretary to hit Iran with sanctions and enforcement measures on those breaching existing penalties. But he has also appeared conciliatory towards Iran, saying he wants a “verified nuclear peace agreement” and for the country to be “great and successful”.
Thursday's action takes aim at a network of more than a dozen people and firms that are accused of enabling the shipment of millions of barrels of Iranian oil to China. The targets include Iranian and Indian citizens, crew management firms and a collection of ships.
“The Iranian regime remains focused on leveraging its oil revenues to fund the development of its nuclear programme, to produce its deadly ballistic missiles and unmanned aerial vehicles, and to support its regional terrorist proxy groups,” Treasury Secretary Scott Bessent said.
During his confirmation hearing, Mr Bessent criticised the sanctions policies of former president Joe Biden's administration and called for the US to have a more “muscular” sanctions regime against Iran as well as Russian entities and oil.
State Department spokeswoman Tammy Bruce said in a statement that the US “will use all tools at our disposal to hold the regime accountable for its destabilising activities and pursuit of nuclear weapons that threaten the civilised world”.
The memo Mr Trump signed this week states, among other things, that Iran should be denied a nuclear weapon and intercontinental ballistic missiles, and that the Treasury campaign should aim to bring “Iran’s oil exports to zero”.
But Mr Trump also indicated that he was open to a different relationship with Tehran and that he was “torn” about signing the memo.
“Iran cannot have a nuclear weapon,” Mr Trump said. “We don't want to be tough on Iran. We don't want to be tough on anybody, but they just can't have a nuclear weapon.”
He said he had hoped not to sign the memo.
“Hopefully, we're not going to have to use it very much,” Mr Trump said. “We will see whether or not we can arrange or work out a deal with Iran and everybody can live together, and maybe that's possible and maybe it's not possible.”
Meanwhile, Mr Trump's moves to freeze spending on foreign aid and overhaul – maybe even end – the US Agency for International Development have been lauded in Iranian state media. The reports say the decisions will halt funding for the country's opponents – activists and others supported through programmes as part of the US government's efforts to help foster democracy worldwide.
Also on Thursday, a bipartisan group of US lawmakers announced they were introducing a bill taking aim at what they said were Iran's nuclear weapons ambitions.
“A nuclear-armed Iran is a threat to Israel and the world. We must keep all options on the table to address this crisis,” congressman Mike Lawler said.
Khamenei warns of retaliation if US takes action against Iran
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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