UK Secretary of State for International Trade Anne-Marie Trevelyan says the UK wants a modern, comprehensive deal with Gulf states. Photo: Reuters
UK Secretary of State for International Trade Anne-Marie Trevelyan says the UK wants a modern, comprehensive deal with Gulf states. Photo: Reuters
UK Secretary of State for International Trade Anne-Marie Trevelyan says the UK wants a modern, comprehensive deal with Gulf states. Photo: Reuters
UK Secretary of State for International Trade Anne-Marie Trevelyan says the UK wants a modern, comprehensive deal with Gulf states. Photo: Reuters

Bahrain's Zayed Al Zayani hails 'joyous new chapter' as trade talks with UK start


Nicky Harley
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Bahrain's minister of industry, commerce and tourism has welcomed the start of preliminary talks on a free trade agreement with the UK.

Zayed Al Zayani is part of a delegation from the six Gulf Co-operation Council states taking part in trade talks in London as the UK seeks to bolster its position post-Brexit.

"It brings me great joy and pleasure to officially announce the official launch of FTA negotiations between GCC countries and the UK," he said.

Officials have been working on the initiative since Bahrain assumed the GCC presidency this year, he said.

Trade between the UK and GCC nations topped £30 billion ($40.83bn) last year, the British government said.

"We shall collectively embark on a new chapter, which will solidify our long-standing trade and investment co-operation and build upon the strong foundations forged over the past centuries," Mr Al Zayani said.

The talks, which started on Friday, marked the launch of what the UK government says is a "14-week consultation calling for the public and business to share their views ahead of negotiations starting in 2022".

"A trade agreement with the Gulf Co-operation Council is a huge opportunity to liberalise trade with a growing market for British business and deepen ties with a region that is vital to our strategic interests," said Anne-Marie Trevelyan, the UK's Secretary of State for International Trade.

"We want a modern, comprehensive agreement that breaks down trade barriers to a huge food and drink market and in areas like digital trade and renewable energy which will deliver well-paid jobs in all parts of the United Kingdom."

Since its exit from the EU, the UK has sought to bolster trade ties with partners including the US, Australia and countries in the Gulf.

It comes less than a month after the announcement of a UK-UAE investment partnership, in which the UAE will invest £10bn in British clean energy, technology, life sciences and infrastructure over the next five years.

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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Updated: October 09, 2021, 12:48 PM