Soldiers carry a coffin during the funeral of the victims of Friday's mosque attack in Rawalpindi.
Soldiers carry a coffin during the funeral of the victims of Friday's mosque attack in Rawalpindi.
Soldiers carry a coffin during the funeral of the victims of Friday's mosque attack in Rawalpindi.
Soldiers carry a coffin during the funeral of the victims of Friday's mosque attack in Rawalpindi.

Mosque attack suspects arrested


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RAWALPINDI, PAKISTAN // Pakistani authorities have arrested more than half a dozen suspects in connection with the terrorist attack targeting senior military officers in Rawalpindi last week, according to investigators.

At least 36 people, including 16 children, were killed and more than 80 wounded last Friday when four suicide bombers armed with grenades and machine guns attacked worshippers in a mosque frequented by army officers and their families. The insurgents used a Toyota Corolla that bore a fake Islamabad licence plate. Security officials have arrested the last registered owner of the vehicle in Islamabad. "He is claiming innocence as the car was sold four times after he sold it in 2004," the investigator said, speaking on condition of anonymity.

A pall of gloom enveloped this garrison city, adjacent to Islamabad, and headquarters of the country's military, as funerals of serving and retired military officers and their relatives took place over the weekend. Yousuf Raza Gillani, the prime minister; Gen Ashfaq Pervez Kayani, the chief of army staff; and other top military brass attended the funerals. The president, Asif Ali Zardari, who is facing an increasing political isolation, was conspicuously absent.

Gen Kayani vowed not to be deterred by the attack. "Our faith, resolve and pride in our religion and in our country are an asset, which are further reinforced after each terrorist incident," he said. While there was a public outpouring of grief and expressions of solidarity with the families of the dead, the seemingly unending terrorist attacks across the north of the country are testing the nerves and morale of ordinary citizens.

The audacious suicide and gun attack has shaken Rawalpindi, even as it has become a frequent target of insurgents in recent months as the Pakistani military continues its operation against the Taliban in South Waziristan along the border with Afghanistan. Never before were so many senior officers killed in a terrorist attack, although attempts have been made to assassinate the top tier of the military hierarchy. A serving major general and a brigadier general were among the victims.

Many people here are wondering how such a security failure could have occurred on the heels of a similar attack on the military headquarters. In October, a group of armed gunmen had managed to breach the general headquarters of the Pakistani military in Rawalpindi and took a dozen hostages. The 20-hour siege ended with a commando operation, but the incident affected the public image of the army. On Friday, two militants detonated their explosives in a mosque, while two more continued to spray bullets at dozens of worshippers.

A few hours later, both attackers were killed by security forces, which had cordoned off the neighbourhood. In evening talk shows on national television channels, anchors and participants condemned the attack as "heinous and barbaric", and asked how those claiming to be Muslims could target worshippers in a mosque. Pakistani analysts have begun to question the utility of Pakistan's alliance with the United States as anti-American sentiment is running high. Many Pakistanis consider the wave of terrorism a consequence of the US military presence in neighbouring Afghanistan and US insistence that Pakistan "do more".

After US president Barack Obama's speech at the West Point military academy last week, in which he outlined a troop surge in Afghanistan, fears of instability have escalated in Pakistan. Only military officials frequented the Rawalpindi mosque, located in the Qasim Market neighbourhood in the west of the city. Special security passes were required to enter the mosque, according to Lt Col Baseer Haider, a military spokesman. But the attackers managed to circumvent the security by using a ladder to scale a wall behind the mosque. "We are looking into the possibility of someone from inside passing information to the militants and assisting them. It cannot be ruled out," an official belonging to the joint investigation team said on condition of anonymity.

"It is improbable that the attackers were able to evade the security radar without inside help." Low level officials within the Pakistani armed forces have long been thought to have sympathies with Islamist militants and several such officials in the army and air force have been arrested in recent years in connection with terrorist attacks. Some analysts, however, see a silver lining and portrayed the latest strike as a sign that the militants are desperate and attacking wildly as the latest military operation in their stronghold of South Waziristan chokes them.

"The Tehreek-e-Taliban Pakistan is facing a strategic dead end as it is veering towards nihilistic violence," said Arif Rafiq, a political analyst based in Washington. "In recent months, they have killed Pakistani civilians and security personnel on an almost daily basis. At the same time, the organisation has drastically lost territory and public support," he said. "Meanwhile, the army's resolve is growing firmer, which is due in part to the backing of the masses and media".

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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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