ABU DHABI // Members of the Federal National Council are hoping to break their summer break time to take up a debate on a proposed bankruptcy law.
The council is not scheduled to meet until the third week of October, but the law, which will give protection to companies, their directors and employees in cases of insolvency, could be passed before then if it receives a presidential decree.
Members said they understood the Government’s haste with an important law but they believed they should be allowed to discuss it.
Dr Saeed Al Mutawa, a member from Sharjah, said that if the Government did not want to wait until the FNC reconvened, it had the right to issue the law without the council’s approval.
“Maybe they see a need [to rush] because of the fast pace economic developments,” said Dr Al Mutawa.
“Revision always enhances it, makes it better.”
He said the FNC’s role was to “help improve laws and aid the Government on which articles need to be enhanced”.
“Everyone will benefit from the bankruptcy law, so it is a better way to enhance it if we look at it,” he said.
If there was “a need for it to be rushed, there is no harm in issuing it”.
He said that introducing the law was essential for the country because current bankruptcy legislation was under a civil code and did not have a law dedicated to it.
“It is a very good law,” Dr Al Mutawa said.
“It will give a better positive investment atmosphere for everybody – foreigners and locals.
“It is the kind of law that complements the economic boom in the UAE.
“It will have two pluses – legislative and financial.”
Salem Al Shehhi, representing Ras Al Khaimah, said the Government could quickly pass the law if it would benefit the country “and then it could be presented in front of the council again for amendments”.
“Depending on the situation, there could be a pressing need to issue it [while the council is on break time].”
Nevertheless, such a decision would later be discussed at the council and the reasons for its urgency would be cited.
“If there are some issues that need to be added or amended the council could intervene,” said Mr Al Shehhi.
Overall, he said the law would preserve the rights of businesses but it should be strict about when a company had the right to announce it had gone bankrupt.
“Some companies could get involved in certain commercial matters and to save themselves from legal observation, they would then announce their bankruptcy,” said Mr Al Shehhi.
The council is waiting to hear if it will debate the proposed dumping draft law, which aims to protect the local market and products against predatory pricing, said Dr Al Mutawa.
hdajani@thenational.ae
Cryopreservation: A timeline
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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.”
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia