Security forces and rescue teams examine the wreckage of an Indonesian military C-130 Hercules transport plane after it crashed into a residential area in the North Sumatra city of Medan, Indonesia, June 30, 2015. More than 100 people are believed to have been killed. Roni Bintang/Reuters
Security forces and rescue teams examine the wreckage of an Indonesian military C-130 Hercules transport plane after it crashed into a residential area in the North Sumatra city of Medan, Indonesia, June 30, 2015. More than 100 people are believed to have been killed. Roni Bintang/Reuters
Security forces and rescue teams examine the wreckage of an Indonesian military C-130 Hercules transport plane after it crashed into a residential area in the North Sumatra city of Medan, Indonesia, June 30, 2015. More than 100 people are believed to have been killed. Roni Bintang/Reuters
Security forces and rescue teams examine the wreckage of an Indonesian military C-130 Hercules transport plane after it crashed into a residential area in the North Sumatra city of Medan, Indonesia, J

At least 116 feared dead in Indonesia military plane crash


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MEDAN, INDONESIA // At least 116 people are feared dead after an Indonesian air force plane crashed into a major city on Tuesday just two minutes after take-off and exploded in a fireball.

Buildings were left in ruins and cars reduced to flaming wrecks when the Hercules C-130 came down in a residential area of Medan, a city of two million on the island of Sumatra.

The manifest showed there were 113 people on board the transport plane – 12 crew and 101 passengers – when it crashed, Air force chief Agus Supriatna said. There were no survivors.

So far, 49 bodies had been recovered and taken to hospital. At least one child has so far been confirmed killed.

Many passengers were likely to be family members of servicemen and women, said a spokesman for Medan airbase, where the plane took off. Hitching rides on military planes to reach remote destinations is common in Indonesia, a sprawling archipelago that spans three time zones.

Three people were also killed on the ground when the 51-year-old plane went down near a newly built residential area, hitting a massage parlour and a small hotel.

A rescue operation swung into action, with ambulances ferrying bodies from the site, and crowds of anxious residents gathering around a police cordon to view the smouldering wreckage.

Residents of Medan described the terrifying moment when the plane came down, just after midday.

“It was very scary,” said Novi, an employee of an international school, describing how she heard the plane and saw it flying very low before the crash.

Another local resident Januar, 26, said the aircraft appeared to be in trouble just before the accident.

“I saw the plane from the direction of the airport and it was tilting already, then I saw smoke billowing.”

Medan’s police chief described the bodies as “crushed by debris of the buildings and the fuselage”.

Janson Halomoan Sinagam, said several of his relatives were on the plane when it left Medan headed for the remote Natuna island chain.

“We just want to know their fate,” he told MetroTV, weeping. “But we have not yet received any information from the hospital.”

Indonesian president Joko Widodo expressed sorrow at the accident, tweeting: “May the families be given patience and strength ... May we remain protected from disaster.”

The plane took off at 12.08pm from the airbase and crashed in the city about two minutes later, about five kilometres from the base.

Shortly after take-off, the pilot had asked to return to base, Mr Supriatna said, adding the aircraft might have suffered engine trouble.

But he said that the plane was in “very good condition” and had made several stops before arriving in Medan.

The air force temporarily grounded its remaining eight Hercules C-130 aircraft following the crash.

Medan is the biggest Indonesian city outside the main island of Java and is a major economic centre.

Tuesday’s crash was the second time in a decade that the city had suffered a fatal plane accident. In 2005, a Mandala Airlines domestic flight crashed shortly after take-off into a densely populated suburb, killing at least 150 including passengers, crew and people on the ground.

Indonesia has a patchy aviation safety record, and between 2007 and 2009, the European Union barred Indonesian airlines from flying to Europe because of safety concerns. The country’s most recent civilian airline disaster was in December, when an AirAsia jet with 162 people on board crashed into the Java Sea en route from Surabaya to Singapore.

Since 2008, there have been five fatal crashes involving air force planes, according to the Aviation Safety Network, which tracks aviation disasters.

At least 11 people were killed when a Fokker-27 military jet crashed into a housing complex in the capital Jakarta in June 2012.

And in April, an F-16 fighter jet caught fire as it was about to take off from an airbase in Jakarta, prompting the pilot to jump to safety as flames and thick smoke engulfed the plane.

The pilot escaped with minor injuries from the jet, which had been due to provide security at a summit of Asian and African leaders in Indonesia.

* Agence France-Presse with additional reporting by Reuters and Assocoiated Press

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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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Company profile: buybackbazaar.com

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