Business owners in Fujairah were counting the cost of the flooding in the emirate that left a trail of destruction and forced them to close for three days.
Shops along Fujairah Corniche were among the worst hit by the floodwaters that caused shock and devastation earlier this week.
It was back to business on Saturday morning for restaurant and shop owners, who were hoping to see a return to some kind of normality, after several days of chaos caused by the deluge.
While some will be able to cover the cost of the repairs and replace damaged stock through their insurance, others told The National they would have to bear the expenses from their own pockets.
We’re open again for business but most of our customers are staying at home because of the flooding
Shihab Kadavanda,
Ahla Zahra Groceries
“We had fridges, air-conditioning units damaged by about two feet [60 centimetres] of flooding across the entire store,” said Mohamed Musthafa, manager of Universal Electronics near the corniche.
“We suffered about Dh150,000 worth of damage to our stock, just from the water seeping across the main showroom and storage area.
“We were also closed for three days which was a significant loss of income as we take about Dh40,000 minimum a day on average.”
While the water damage to stock was covered by his company’s insurance, there was no way they would be able to recover the lost earnings, he added.
Emergency teams have been working around the clock since Tuesday night to rescue hundreds of people in various flood-affected areas of Fujairah, Ras Al Khaimah and Sharjah.
Seven people were found dead as a result of the flooding, authorities announced on Friday.
More than 800 people were rescued and thousands more were placed in temporary accommodation, after widespread flooding caused by the unseasonal summer deluge.
Unexpected trade
Many of the businesses on Fujairah Corniche remained closed on Saturday, their entrances still waterlogged, making them all but impossible to reach for most customers.
However, some were open for business and determined to make up for lost earnings and time.
“We had no electricity for three days and it only came back on last night,” said Abul Razzaque, owner of Sahal Mobile Phones.
“The water was more than two feet high and it damaged a lot of equipment, especially mobile phone parts that we use for repairs.
“The damage isn’t covered by insurance so it’s going to have to be paid for by us. I reckon we’ve suffered damage around the value of Dh25,000.”
It was not all doom and gloom for Mr Razzaque though, as he said his company had picked up some unexpected trade as a result of the flooding.
“We’ve not had many customers this morning so far, but we’ve had a few who all want us to repair their phones that were damaged by the flooding,” he said.
The floodwaters caused more than financial damage to another business along the corniche.
“We had a computer with most of our files on it destroyed by the flooding,” said Naranya Sami, owner of Eye Care Centre opticians.
“I estimate the damage will end up costing us about Dh10,000 in total,” including lost earnings.
When The National visited the store, staff were busy repairing water damage to dozens of spectacle cases on the front counter as well as what was left of the company’s computer.
He said it may take a few days before customers return to the shops.
“We’re open again for business but most of our customers are staying at home because of the flooding,” said Shihab Kadavanda, manager of Ahla Zahra Groceries.
“You can’t blame them. People don’t want to wade through several feet of water to get to a shop.”
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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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