Live updates: follow the latest news on Russia-Ukraine
As financial shocks go, last week will go down in history.
Last Wednesday’s expulsion of Russia from the MSCI Emerging Markets Index — a benchmark for trillions of dollars in investment funds — was the coup de grace.
Russia has been usurped as the leading oil play in emerging markets by the combined markets of the GCC. For the 24 countries spanning the three regions left in the MSCI Emerging Markets Index, this triggered an immediate rebalancing.
While index compilers have dropped countries from key indexes before — most recently Pakistan and Argentina in 2021 — this is usually after months of deliberation.
The speed of Russia’s removal has immediate implications — money flowing into index-tracking funds will no longer go to Russia. Instead, a higher share will go into GCC stocks.
The outcome was that GCC countries, led by Saudi Arabia, now account for 7.6 per cent of the influential index. Five years ago, the region constituted only 1.6 per cent while Russia accounted for 3.9 per cent.
The reweighting reflects a changing global financial landscape. GCC markets have become far more investor-friendly in the past five years, with Saudi Arabia and Kuwait gaining EM status even as the bar for EM entry rose.
As a group, the GCC is now one of the most exciting, dynamic emerging markets as it continues to diversify away from an energy-price driven economy.
Meanwhile, GCC dollar currency pegs free investors from worrying about foreign exchange devaluation. EM investors who previously overlooked the GCC region — too small, too rich, too commodity-dependent — are now looking at these countries with a new set of eyes.
At EFG Hermes’ fifth Virtual Investor Conference last week, three core themes emerged.
First, the commodity conversation. Rocketing prices are triggering a cost-of-living crisis across the world, but are also creating windfalls for GCC governments that were squeezed by successive oil price collapses in 2014 and 2020.
Consumer companies in the GCC and across Frontier Emerging Markets pointed to the impact that rising inflation is having on disposable incomes, as well as the disruption that Covid-19 and now the Russia-Ukraine crisis is bringing to global supply chains.
Economies face the double whammy of corporates raising prices while interest rate rises loom large on the horizon.
For some lower-income countries, there is an immediate impact from the conflict in Eastern Europe. Take wheat, where Russia and Ukraine are, respectively, the biggest and fifth-biggest exporters in the world.
Egypt, the world’s largest wheat importer, receives 86 per cent of its supplies from these two countries. With Black Sea shipments currently halted, Egypt is being forced to tear up its budget assumptions for subsidies as wheat futures markets flirt with $400 a tonne.
This explains why the price of unsubsidised bread rose by 50 per cent in Egyptian shops last week.
Bangladesh and Pakistan are also major importers of food and energy, and they will struggle to finance the widening gap.
Meanwhile, GCC countries face a challenge that other countries would love to have — sticking to their plans to diversify their economies away from oil, rather than spending this year’s oil windfall.
GCC countries also face the challenge of managing energy supply at a time of political uncertainty — they want to keep the Opec+ system alive, but they do not want oil prices to rise to levels where demand is destroyed.
Costlier crude is a double-edged sword for many frontier emerging markets outside the GCC. Headline inflation is rising, affecting food and fuel prices globally, but healthier GCC economies can mean foreign workers in the Gulf sending more money back to cities and villages in Egypt, Pakistan, Bangladesh and the Philippines.
What was also evident to investors are the bright growth prospects in Africa. The continent’s growth story is not limited to commodities, but in many cases the increases in prices will help.
The continent has more than one quarter of the world’s arable land. Eleven of its countries rank among the top 10 sources for at least one major mineral. Properly harnessed, the money from a commodity price boom can feed longer growing trends of millions of Africans entering the consumer goods market, where opportunities are being created in many sectors from banking to telecoms.
Thirdly, world events are creating new trade routes and opportunities for services exporters in many countries.
Driven by its strong education base, Ukraine is well-known in Europe as a technology powerhouse and a key provider of information technology outsourcing services. Russia and Belarus have also been important centres for similar industries.
For many years, entrepreneurs opening technology businesses looked no further than Ukraine, Russia and Belarus for their back and middle office support infrastructure.
The Russia-Ukraine crisis has forced businesses to pivot away from these mainstays of the global IT services market, creating opportunities for companies in Morocco, Egypt, Pakistan and Vietnam among others.
The MSCI Emerging Markets Index has reflected major shifts in the world economy since it was launched in January 2001.
In recent years, the GCC economies have come of age, displacing Russia, an index veteran, as the best play on rising oil prices. Opportunities prevail even when markets are in turmoil.
Simon Kitchen is managing director and head of strategy at EFG Hermes Research
Key facilities
- 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
Most sought after workplace benefits in the UAE
- Flexible work arrangements
- Pension support
- Mental well-being assistance
- Insurance coverage for optical, dental, alternative medicine, cancer screening
- Financial well-being incentives
Where to donate in the UAE
The Emirates Charity Portal
You can donate to several registered charities through a “donation catalogue”. The use of the donation is quite specific, such as buying a fan for a poor family in Niger for Dh130.
The General Authority of Islamic Affairs & Endowments
The site has an e-donation service accepting debit card, credit card or e-Dirham, an electronic payment tool developed by the Ministry of Finance and First Abu Dhabi Bank.
Al Noor Special Needs Centre
You can donate online or order Smiles n’ Stuff products handcrafted by Al Noor students. The centre publishes a wish list of extras needed, starting at Dh500.
Beit Al Khair Society
Beit Al Khair Society has the motto “From – and to – the UAE,” with donations going towards the neediest in the country. Its website has a list of physical donation sites, but people can also contribute money by SMS, bank transfer and through the hotline 800-22554.
Dar Al Ber Society
Dar Al Ber Society, which has charity projects in 39 countries, accept cash payments, money transfers or SMS donations. Its donation hotline is 800-79.
Dubai Cares
Dubai Cares provides several options for individuals and companies to donate, including online, through banks, at retail outlets, via phone and by purchasing Dubai Cares branded merchandise. It is currently running a campaign called Bookings 2030, which allows people to help change the future of six underprivileged children and young people.
Emirates Airline Foundation
Those who travel on Emirates have undoubtedly seen the little donation envelopes in the seat pockets. But the foundation also accepts donations online and in the form of Skywards Miles. Donated miles are used to sponsor travel for doctors, surgeons, engineers and other professionals volunteering on humanitarian missions around the world.
Emirates Red Crescent
On the Emirates Red Crescent website you can choose between 35 different purposes for your donation, such as providing food for fasters, supporting debtors and contributing to a refugee women fund. It also has a list of bank accounts for each donation type.
Gulf for Good
Gulf for Good raises funds for partner charity projects through challenges, like climbing Kilimanjaro and cycling through Thailand. This year’s projects are in partnership with Street Child Nepal, Larchfield Kids, the Foundation for African Empowerment and SOS Children's Villages. Since 2001, the organisation has raised more than $3.5 million (Dh12.8m) in support of over 50 children’s charities.
Noor Dubai Foundation
Sheikh Mohammed bin Rashid Al Maktoum launched the Noor Dubai Foundation a decade ago with the aim of eliminating all forms of preventable blindness globally. You can donate Dh50 to support mobile eye camps by texting the word “Noor” to 4565 (Etisalat) or 4849 (du).
F1 The Movie
Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
Rating: 4/5
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%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EJames%20Gunn%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Chris%20Pratt%2C%20Zoe%20Saldana%2C%20Dave%20Bautista%2C%20Vin%20Diesel%2C%20Bradley%20Cooper%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
The specs
Engine: 2x201bhp AC Permanent-magnetic electric
Transmission: n/a
Power: 402bhp
Torque: 659Nm
Price estimate: Dh200,000
On sale: Q3 2022
GOLF’S RAHMBO
- 5 wins in 22 months as pro
- Three wins in past 10 starts
- 45 pro starts worldwide: 5 wins, 17 top 5s
- Ranked 551th in world on debut, now No 4 (was No 2 earlier this year)
- 5th player in last 30 years to win 3 European Tour and 2 PGA Tour titles before age 24 (Woods, Garcia, McIlroy, Spieth)
The specs
Engine: 4 liquid-cooled permanent magnet synchronous electric motors placed at each wheel
Battery: Rimac 120kWh Lithium Nickel Manganese Cobalt Oxide (LiNiMnCoO2) chemistry
Power: 1877bhp
Torque: 2300Nm
Price: Dh7,500,00
On sale: Now
Killing of Qassem Suleimani
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
'Worse than a prison sentence'
Marie Byrne, a counsellor who volunteers at the UAE government's mental health crisis helpline, said the ordeal the crew had been through would take time to overcome.
“It was worse than a prison sentence, where at least someone can deal with a set amount of time incarcerated," she said.
“They were living in perpetual mystery as to how their futures would pan out, and what that would be.
“Because of coronavirus, the world is very different now to the one they left, that will also have an impact.
“It will not fully register until they are on dry land. Some have not seen their young children grow up while others will have to rebuild relationships.
“It will be a challenge mentally, and to find other work to support their families as they have been out of circulation for so long. Hopefully they will get the care they need when they get home.”
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The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
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House-hunting
Top 10 locations for inquiries from US house hunters, according to Rightmove
- Edinburgh, Scotland
- Westminster, London
- Camden, London
- Glasgow, Scotland
- Islington, London
- Kensington and Chelsea, London
- Highlands, Scotland
- Argyll and Bute, Scotland
- Fife, Scotland
- Tower Hamlets, London
MATCH INFO
England 241-3 (20 ovs)
Malan 130 no, Morgan 91
New Zealand 165 all out (16.5ovs)
Southee 39, Parkinson 4-47
England win by 76 runs
Series level at 2-2
ESSENTIALS
The flights
Emirates flies from Dubai to Phnom Penh via Yangon from Dh2,700 return including taxes. Cambodia Bayon Airlines and Cambodia Angkor Air offer return flights from Phnom Penh to Siem Reap from Dh250 return including taxes. The flight takes about 45 minutes.
The hotels
Rooms at the Raffles Le Royal in Phnom Penh cost from $225 (Dh826) per night including taxes. Rooms at the Grand Hotel d'Angkor cost from $261 (Dh960) per night including taxes.
The tours
A cyclo architecture tour of Phnom Penh costs from $20 (Dh75) per person for about three hours, with Khmer Architecture Tours. Tailor-made tours of all of Cambodia, or sites like Angkor alone, can be arranged by About Asia Travel. Emirates Holidays also offers packages.
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Titanium Escrow profile
Started: December 2016
Founder: Ibrahim Kamalmaz
Based: UAE
Sector: Finance / legal
Size: 3 employees, pre-revenue
Stage: Early stage
Investors: Founder's friends and Family
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
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Killing of Qassem Suleimani
At a glance
- 20,000 new jobs for Emiratis over three years
- Dh300 million set aside to train 18,000 jobseekers in new skills
- Managerial jobs in government restricted to Emiratis
- Emiratis to get priority for 160 types of job in private sector
- Portion of VAT revenues will fund more graduate programmes
- 8,000 Emirati graduates to do 6-12 month replacements in public or private sector on a Dh10,000 monthly wage - 40 per cent of which will be paid by government
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Key Points
- Protests against President Omar Al Bashir enter their sixth day
- Reports of President Bashir's resignation and arrests of senior government officials
The bio
Job: Coder, website designer and chief executive, Trinet solutions
School: Year 8 pupil at Elite English School in Abu Hail, Deira
Role Models: Mark Zuckerberg and Elon Musk
Dream City: San Francisco
Hometown: Dubai
City of birth: Thiruvilla, Kerala
What is a Ponzi scheme?
A fraudulent investment operation where the scammer provides fake reports and generates returns for old investors through money paid by new investors, rather than through ligitimate business activities.
Aston martin DBX specs
Engine: 4.0-litre twin-turbo V8
Transmission: nine-speed automatic
Power: 542bhp
Torque: 700Nm
Top speed: 291kph
Price: Dh848,000
On sale: Q2, 2020
'Panga'
Directed by Ashwiny Iyer Tiwari
Starring Kangana Ranaut, Richa Chadha, Jassie Gill, Yagya Bhasin, Neena Gupta
Rating: 3.5/5
Hamilton profile
Age 32
Country United Kingdom
Grands Prix entered 198
Pole positions 67
Wins 57
Podiums 110
Points 2,423
World Championships 3
UAE currency: the story behind the money in your pockets
FIXTURES
Fixtures for Round 15 (all times UAE)
Friday
Inter Milan v AS Roma (11.45pm)
Saturday
Atalanta v Verona (6pm)
Udinese v Napoli (9pm)
Lazio v Juventus (11.45pm)
Sunday
Lecce v Genoa (3.30pm)
Sassuolo v Cagliari (6pm)
SPAL v Brescia (6pm)
Torino v Fiorentina (6pm)
Sampdoria v Parma (9pm)
Bologna v AC Milan (11.45pm)
