Insight and opinion from The National’s editorial leadership
July 20, 2023
Although they can sometimes look it, official presidential and prime ministerial visits are never really breezy affairs. They are usually preceded by a flurry of correspondence, pre-negotiations, negotiations and choreography by the visiting and host countries’ diplomatic corps. The visit itself often draws attention not just locally but from around the world, every tea leaf carefully studied by journalists, analysts, businesspeople, and foreign diplomats. Everyone wants to know, when it’s wheels-up and the ink is dry, what deals were signed, what they’re worth and what they mean.
Just one of these visits would be a big enough deal on its own. This week, the UAE hosted three, by the leaders of India, Japan and Turkey in that order. Indian Prime Minister Narendra Modi’s visit on Saturday was short but sweet; he spent just a day in Abu Dhabi, but used the time to oversee the signing of agreements to ease UAE-India cross-border transactions. The arrangement, which will make it easier for such transactions to happen in local currencies, will be a boon not only to the business community – the UAE has become a favourite investment destination for Indian capital – but also for those sending remittances. UAE-to-India remittance flows are the second largest in the world, after payments from the US to Mexico.
On Monday, Japanese Prime Minister Fumio Kishida touched down in the UAE as part of a tour of Gulf capitals. In Abu Dhabi, he witnessed the signing of 23 agreements and memorandums of understanding, which covered a range of fields critical to the economic futures of both countries: areas like AI, space, transportation, and the circular economy. Mr Kishida and President Sheikh Mohamed also discussed the interests of the UAE and Japan, both currently members of the UN Security Council, in supporting peace, stability, co-operation and dialogue.
Everyone wants to know, when it’s wheels-up and the ink is dry, what deals were signed
Like Mr Kishida, Turkish President Recep Tayyip Erdogan visited the UAE in the context of a larger Gulf tour, in which he has discussed defence and investment deals with Ankara’s regional allies. The goal, Mr Erdogan said in advance of the trip, was “to increase all kinds of relations” between Turkey and the Gulf.
It is easy to see why. As this week’s round of visits shows, Asia’s economy is in the ascendancy, and the UAE and its Gulf neighbours are at the heart of the continent’s prosperity engine. According to the International Monetary Fund, Asia is expected to drive most of the world’s economic growth this year. China and India together will contribute about half of the world’s growth, and the Middle East is expected to contribute 7.8 per cent, which is more than Europe. Asia’s developing economies are expected to be the GCC’s largest trading partner in five years’ time, according to London-based think tank Asia House.
The growing connectivity between the Gulf and the rest of Asia – which extends from economic links to increasing security co-operation – is symptomatic of a broader phenomenon that has been taking shape for years: the centre of gravity in the global economy is shifting eastwards. For those preparing to ride the wave of the so-called “Asian century”, it will come as little surprise that the Gulf is a hub of action.
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.”
Wealth managers recommend late investors to have a balanced portfolio that typically includes traditional assets such as cash, government and corporate bonds, equities, commodities and commercial property.
They do not usually recommend investing in Bitcoin or other cryptocurrencies due to the risk and volatility associated with them.
“It has produced eye-watering returns for some, whereas others have lost substantially as this has all depended purely on timing and when the buy-in was. If someone still has about 20 to 25 years until retirement, there isn’t any need to take such risks,” Rupert Connor of Abacus Financial Consultant says.
He adds that if a person is interested in owning a business or growing a property portfolio to increase their retirement income, this can be encouraged provided they keep in mind the overall risk profile of these assets.
Dirham Stretcher tips for having a baby in the UAE
Selma Abdelhamid, the group's moderator, offers her guide to guide the cost of having a young family:
• Buy second hand stuff
They grow so fast. Don't get a second hand car seat though, unless you 100 per cent know it's not expired and hasn't been in an accident.
• Get a health card and vaccinate your child for free at government health centres
Ms Ma says she discovered this after spending thousands on vaccinations at private clinics.
• Join mum and baby coffee mornings provided by clinics, babysitting companies or nurseries.
Before joining baby classes ask for a free trial session. This way you will know if it's for you or not. You'll be surprised how great some classes are and how bad others are.
• Once baby is ready for solids, cook at home
Take the food with you in reusable pouches or jars. You'll save a fortune and you'll know exactly what you're feeding your child.
Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
COMPANY PROFILE
Name: Mamo Year it started: 2019 Founders: Imad Gharazeddine, Asim Janjua Based: Dubai, UAE Number of employees: 28 Sector: Financial services Investment: $9.5m Funding stage: Pre-Series A Investors: Global Ventures, GFC, 4DX Ventures, AlRajhi Partners, Olive Tree Capital, and prominent Silicon Valley investors.
