DP World may make a return to Russia after its chairman Sultan bin Sulayem met the president Vladimir Putin to discuss investing in the country’s remote far east region.
Speaking at the meeting in Vladivostok, Mr Putin mandated the deputy prime minister Yuri Trutnev and transport minister Maxim Sokolov to provide the Dubai-based port operator with investment facilities and remove any hurdles to its potential business operations in region.
In July the Russian parliament passed a legal framework giving 15 cities near Vladivostok’s capital Primorsky “free port” status.
The move, which offers tax and customs advantages, is aimed at encouraging overseas investment that will enable Vladivostok to compete more effectively with the likes of Hong Kong – a long-established free port – and Busan in South Korea.
Speaking three years after the Dubai-based port operator pulled out of its operations in the port of Vostochny, the largest container terminal in Russia's far east, Mr bin Sulayem said that DP World was ready to contribute to the new venture.
“DP World has got the expertise and resources, which position us to be a key player in the execution of Russia’s development plans, particularly for its eastern region’s port and free zone industry,” he said.
In October 2012 DP World sold a quarter stake in the Vostochnaya Stevedoring Company to the Russian-based majority owner Global Ports Investment for US$230 million.
DP World’s planned move into Russia would be the latest in a series of global expansions.
The company currently operates 65 ports worldwide including the London Gateway in the UK and Jebel Ali in Dubai.
Last week the company, together with joint-venture partners, officially opened the Rotterdam World Gateway terminal.
It is also looking to expand in Senegal in Africa and in Latin America.
DP World has been in talks with the Iranian authorities regarding plans to expand across the region once sanctions are lifted. Iran’s ports on the Caspian Sea and Arabian Gulf make a natural link to DP World’s ports in the region.
“If they can tick all the right political boxes, it would make sense for DP World to move back into Russia,” said Sanyalak Manibhandu, research manager at NBAD Securities.
“Historically the company has shown it is good at finding new places in the world to invest, and taking profit from them when it makes sense so that they can move on and go elsewhere.”
In August DP World posted a 6.8 per cent increase in first-half net profit but cautioned that it did not expect to keep up that pace in the second half, because of weaker global economic growth and the economic slowdown in China.
At the time DP World said that it plans to boost global capacity from 76 million twenty foot equivalent units (TEU) to 85 million by the end of the year. It is targeting 100m TEU of capacity by 2020, depending on market conditions.
lbarnard@thenational.ae
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How to join and use Abu Dhabi’s public libraries
• There are six libraries in Abu Dhabi emirate run by the Department of Culture and Tourism, including one in Al Ain and Al Dhafra.
• Libraries are free to visit and visitors can consult books, use online resources and study there. Most are open from 8am to 8pm on weekdays, closed on Fridays and have variable hours on Saturdays, except for Qasr Al Watan which is open from 10am to 8pm every day.
• In order to borrow books, visitors must join the service by providing a passport photograph, Emirates ID and a refundable deposit of Dh400. Members can borrow five books for three weeks, all of which are renewable up to two times online.
• If users do not wish to pay the fee, they can still use the library’s electronic resources for free by simply registering on the website. Once registered, a username and password is provided, allowing remote access.
• For more information visit the library network's website.
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Secret Pigeon Service: Operation Colomba, Resistance and the Struggle to Liberate Europe
Gordon Corera, Harper Collins
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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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Washmen Profile
Date Started: May 2015
Founders: Rami Shaar and Jad Halaoui
Based: Dubai, UAE
Sector: Laundry
Employees: 170
Funding: about $8m
Funders: Addventure, B&Y Partners, Clara Ventures, Cedar Mundi Partners, Henkel Ventures
UAE currency: the story behind the money in your pockets
Three ways to limit your social media use
Clinical psychologist, Dr Saliha Afridi at The Lighthouse Arabia suggests three easy things you can do every day to cut back on the time you spend online.
1. Put the social media app in a folder on the second or third screen of your phone so it has to remain a conscious decision to open, rather than something your fingers gravitate towards without consideration.
2. Schedule a time to use social media instead of consistently throughout the day. I recommend setting aside certain times of the day or week when you upload pictures or share information.
3. Take a mental snapshot rather than a photo on your phone. Instead of sharing it with your social world, try to absorb the moment, connect with your feeling, experience the moment with all five of your senses. You will have a memory of that moment more vividly and for far longer than if you take a picture of it.
