SEOUL // North Korea fired artillery shells in a suspected military drill today, spooking markets on an already tense peninsula, as the top US military official warned of more provocations from Pyongyang's "bad guy".
South Korea's military said an unknown number of artillery shells from the North fell on its side of a disputed maritime border off the west coast, adding the firing was most likely part of regular exercises.
The South is also conducting live-fire drills in the area.
"It does not appear to be a matter of great concern," a South Korean military official said. However, jittery markets fell on news of artillery firing, but within minutes local shares and the won had recovered their losses.
The firing came just over two weeks after the North bombarded a South Korean island, killing four people, and revelations of advances in Pyongyang's nuclear programme which give it a second route to make an atomic bomb.
The attack set off a flurry of diplomatic activity involving Seoul, Washington, Tokyo and the North's ally Beijing, and next week, a former U.S. special envoy to North Korea, current New Mexico Governor Bill Richardson, will meet government officials in Pyongyang, a senior U.S. official said.
The official, who did not want to be indentified, said Richardson would not be "delivering a message" on this private trip, but the Washington Post reported he had been invited by top North Korean officials involved in the nuclear programme.
The two Koreas frequently conduct drills in the area around the Northern Limit Line (NLL) off the North's west coast. Pyongyang does not recognise the sea border which was established without its consent after the 1950-53 Korean war.
The test firing came as Admiral Mike Mullen, chairman of the Joint Chiefs of Staff, arrived in Seoul to show his "commitment and solidarity" to South Korea.
Mullen said there was "no doubt in my mind (provocations) will continue unless leaders step forward and put Pyongyang in a position where they realise their behavior has to change".
"This guy's a bad guy and when you're dealing with bad guys, you can't wish away what they're going to do," Mullen said of the North's iron ruler Kim Jong-il.
"Because of the actions taken by North Korea recently ... they're making (the region) a more dangerous place," he added.
Mullen's trip to South Korea and Japan follows talks in Washington on Monday between Secretary of State Hillary Clinton and her Japanese and South Korean counterparts. All three voiced grave concerns over the North Korean attacks and called on China to take action against its wayward ally.
Yesterday, Beijing hit back at the United States and its Asian allies for their refusal to talk to North Korea, saying dialogue was the only way to calm escalating tension on the divided Korean peninsula.
But Mullen said the Chinese must do more because "their economy is dependent on stability".
"They are a world leader and leaders must lead - particularly to prevent crises and to prevent the kinds of destabilising activities that are very evident coming out of the leadership in Pyongyang," he said.
China views the North as a strategic buffer against the US-allied democracy South Korea and is Pyongyang's largest trade partner and benefactor.
Deputy Secretary of State Jim Steinberg will lead a US delegation to China next week to try to persuade Beijing to put more pressure on Pyongyang despite Chinese fears that this may destablilise North Korea, a US official said.
Washington, Seoul and Tokyo have been lukewarm towards Beijing's proposal for emergency talks between the six regional powers, worried that they could be seen as rewarding Pyongyang for its deadly attack on a South Korean island two weeks ago.
If you go
Flights
Emirates flies from Dubai to Phnom Penh with a stop in Yangon from Dh3,075, and Etihad flies from Abu Dhabi to Phnom Penh with its partner Bangkok Airlines from Dh2,763. These trips take about nine hours each and both include taxes. From there, a road transfer takes at least four hours; airlines including KC Airlines (www.kcairlines.com) offer quick connecting flights from Phnom Penh to Sihanoukville from about $100 (Dh367) return including taxes. Air Asia, Malindo Air and Malaysian Airlines fly direct from Kuala Lumpur to Sihanoukville from $54 each way. Next year, direct flights are due to launch between Bangkok and Sihanoukville, which will cut the journey time by a third.
The stay
Rooms at Alila Villas Koh Russey (www.alilahotels.com/ kohrussey) cost from $385 per night including taxes.
Dubai World Cup factbox
Most wins by a trainer: Godolphin’s Saeed bin Suroor(9)
Most wins by a jockey: Jerry Bailey(4)
Most wins by an owner: Godolphin(9)
Most wins by a horse: Godolphin’s Thunder Snow(2)
Wenger's Arsenal reign in numbers
1,228 - games at the helm, ahead of Sunday's Premier League fixture against West Ham United.
704 - wins to date as Arsenal manager.
3 - Premier League title wins, the last during an unbeaten Invincibles campaign of 2003/04.
1,549 - goals scored in Premier League matches by Wenger's teams.
10 - major trophies won.
473 - Premier League victories.
7 - FA Cup triumphs, with three of those having come the last four seasons.
151 - Premier League losses.
21 - full seasons in charge.
49 - games unbeaten in the Premier League from May 2003 to October 2004.
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.”
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
