Moustafa Ramadan prepares shisha in an Abu Dhabi Cafe.
Moustafa Ramadan prepares shisha in an Abu Dhabi Cafe.
Moustafa Ramadan prepares shisha in an Abu Dhabi Cafe.
Moustafa Ramadan prepares shisha in an Abu Dhabi Cafe.

New ruling on shisha smoking


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DUBAI // Cafes in Dubai face heavy fines and even closure when new rules restricting the smoking of shisha come into effect tomorrow because many have failed to make the necessary changes. The rules ban the smoking of shisha outside many cafes. Where smoking is allowed indoors, new ventilation regulations will apply.

However, Dubai Municipality said many businesses would fall short on the new rules. Rehda Salmain, the head of health and safety at the municipality, said: "Hotels and shopping centres have been very good while some cafes in residential areas have not made changes. "We have been visiting these places throughout Dubai and asking them to comply before the grace period ends." The municipality rules state that the smoking of shisha in cafes in residential areas has been banned outright.

Mixed commercial and residential areas allow indoor use with the correct ventilation but outdoor smoking is banned. The rules do not affect cafes in designated tourism zones. The shisha rules follow general smoking regulations introduced in May last year. Smoking was banned in public offices, shopping centres, restaurants and hotels. The ban was later extended to billiard and snooker halls, internet cafes and online gaming centres.

Shisha cafe owners were given a year's grace to move their businesses or make changes to comply with the new laws. However, owners of cafes and restaurants in Dubai Marina, an area popular with shisha smokers, said the laws were confusing. Salda Kaldun, owner of Al Hakawati Cafe, said: "I am not going to make any changes because the law is unclear. "It kept changing and I still don't know what I have to do. I will wait for a clearer law until I will make the changes."

Another restaurant owner, who did not wish to be identified, said the municipality had failed to tell him what he must do. "The laws keep changing and maybe it is because we are in a freezone. I believe this is a residential area but it can also be commercial because there are some businesses near by." Angela Kirwan, 31, a non-smoker from South Africa, welcomed the laws. "I've been here two years now and I have seen a major difference in smoking habits here. People are more aware of smoking since the bans came in and I am glad it is spreading to other parts of society," she said.

eharnan@thenational.ae

Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.

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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.”