Standard Chartered top Mena bond sales arranger for first time in almost a decade

For the first time since 2008, Standard Chartered is topping the list of bond sales arrangers in the Middle East and North Africa.

The Asia-focused lender climbed four places from 2017 and has already built up a substantial lead on the competition just four months into the year, according to data compiled by Bloomberg. JP Morgan, last year’s Mena league table leader, sits at No 5.

The variety of bond issues this year, including governments, companies, banks, Islamic issuers, high yield, private placements as well as sales in Taiwan and China, has suited Standard Chartered’s diverse product offering, Salman Ansari, the bank’s head of capital markets for Africa and the Middle East, said in Dubai.

Bond sales from the Mena region, which includes the two biggest Arab economies of Saudi Arabia and the UAE, have climbed 20 per cent this year to $58bn as governments sought to bridge budget deficits caused by low oil prices, and issuers attempted to beat an expected rise in interest rates. Sales climbed to a record $101bn last year, led by Saudi Arabia, which raised $21.5bn.

“Historically, we have seen issuance concentrated in one sector, while this year you have seen a broad spectrum of sectoral issuances across financial institutions, sovereigns and corporates,” Mr Ansari said at the Dubai International Financial Centre. “If you look at the number of deals, we have always been in the top quartile, but sometimes rankings do get lopsided because of one or two big deals.”

Standard Chartered has also been helped by the growing number of borrowers from the Arabian Gulf choosing to raise money through Formosa bonds in Taiwan, where Standard Chartered participated in five of seven deals, according to data compiled by Bloomberg. It was also one of the managers for a Sharjah Government issue that raised money in China through Panda bonds.

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Sales of power plants, football clubs and more set to fuel big year for regional deals

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Mr Ansari forecast bond sales this year to be similar to the last couple of years. Sales in 2017 were up 26 per cent from the previous year’s $81bn, and almost triple the amount raised in 2015, according to data compiled by Bloomberg.

“In the last few years, the Mena region has really raised its profile in the global debt investor community,” Mr Ansari said. There is a sustainable investor base for Mena credit from Asia, Europe and the US, and “while markets have been slightly more challenging this year, investor appeal has continued to remain solid given the strength of the underlying” regional credits, he said.

Coal Black Mornings

Brett Anderson

Little Brown Book Group

The rules on fostering in the UAE

A foster couple or family must:

be Muslim, Emirati and be residing in the UAE
not be younger than 25 years old
not have been convicted of offences or crimes involving moral turpitude
be free of infectious diseases or psychological and mental disorders
have the ability to support its members and the foster child financially
undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially

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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Teaching your child to save

Pre-school (three - five years)

You can’t yet talk about investing or borrowing, but introduce a “classic” money bank and start putting gifts and allowances away. When the child wants a specific toy, have them save for it and help them track their progress.

Early childhood (six - eight years)

Replace the money bank with three jars labelled ‘saving’, ‘spending’ and ‘sharing’. Have the child divide their allowance into the three jars each week and explain their choices in splitting their pocket money. A guide could be 25 per cent saving, 50 per cent spending, 25 per cent for charity and gift-giving.

Middle childhood (nine - 11 years)

Open a bank savings account and help your child establish a budget and set a savings goal. Introduce the notion of ‘paying yourself first’ by putting away savings as soon as your allowance is paid.

Young teens (12 - 14 years)

Change your child’s allowance from weekly to monthly and help them pinpoint long-range goals such as a trip, so they can start longer-term saving and find new ways to increase their saving.

Teenage (15 - 18 years)

Discuss mutual expectations about university costs and identify what they can help fund and set goals. Don’t pay for everything, so they can experience the pride of contributing.

Young adulthood (19 - 22 years)

Discuss post-graduation plans and future life goals, quantify expenses such as first apartment, work wardrobe, holidays and help them continue to save towards these goals.

* JP Morgan Private Bank

The specs

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Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
Premier League-standard football pitch
400m Olympic running track
NBA-spec basketball court with auditorium
600-seat auditorium
Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills