FNC to study inflation

ABU DHABI // A parliamentary committee is to examine the Government's policies on inflation. The Federal National Council's (FNC) financial, economic and industrial affairs committee will meet several times during the next few months before submitting its findings. Members had asked the Government to discuss inflation in July 2007, but the Cabinet only approved the FNC's request just before the last legislative season adjourned.

The committee is expected to hand its report to the FNC in the first session after the summer recess, which is scheduled for Nov 21. "We're very happy that the Government has approved discussing the issue," Rashid al Marar, an Abu Dhabi member, said yesterday, adding that it took more than a year for the Government to respond to the request. Sultan bin Saeed al Mansouri, the Minister of Economy, was scheduled to attend the FNC's debate.

Mr Marar said the committee would organise later this month a workshop in which economic pundits and academics were expected to give their opinions on means to control inflation, which has affected all sectors, from property to food prices. Tuesday's FNC meeting took place amid some positive consumer news as inflation eased as a result of a major drop in oil prices. When the members first approached Cabinet last year, inflation had hit a 20-year high of 11.1 per cent.

This year, the inflation rate is not expected to be as high, observers say. Food prices have already begun to stabilise and diesel fuel has fallen by 10 per cent since July. Global food prices were also likely to be steady due to an expected high crop yield this year. Meanwhile, the Government has pledged to suppress any attempts by food dealers to increase prices during Ramadan, which starts on Sept 1.

Experts have attributed inflation, in part, to rising property prices. Housing shortages could lead to further increases in property prices and rental costs. mhabboush@thenational.ae

Visa changes give families fresh hope

Foreign workers can sponsor family members based solely on their income

Male residents employed in the UAE can sponsor immediate family members, such as wife and children, subject to conditions that include a minimum salary of Dh 4,000 or Dh 3,000 plus accommodation.

Attested original marriage certificate, birth certificate of the child, ejari or rental contract, labour contract, salary certificate must be submitted to the government authorised typing centre to complete the sponsorship process

In Abu Dhabi, a woman can sponsor her husband and children if she holds a residence permit stating she is an engineer, teacher, doctor, nurse or any profession related to the medical sector and her monthly salary is at least Dh 10,000 or Dh 8,000 plus accommodation.

In Dubai, if a woman is not employed in the above categories she can get approval to sponsor her family if her monthly salary is more than Dh 10,000 and with a special permission from the Department of Naturalization and Residency Dubai.

To sponsor parents, a worker should earn Dh20,000 or Dh19,000 a month, plus a two-bedroom accommodation

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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The Federal National Council's financial, economic and industrial affairs committee is to examine the Government's policies on inflation.

Visa changes give families fresh hope

Kill

EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE

SPECS