As far as most of the outside world is concerned, what matters about the outcome of Japan's national election on October 22 is that it appears to give the prime minister Shinzo Abe another try at boosting his signature "Abenomics" policies and at recharging the world's third-largest economy.
Abenomics has not been a spectacular success since the mix of monetary and fiscal stimulus plus structural reforms was launched in 2013. But it has prevented the economy from falling back into the repeated recessions it suffered in prior decades.
A second attempt to soup-up Abenomics will be launched by the Japanese leader now that he is flushed with success from the election victory. But economic stimulus in Japan at this time is a means to a different end and no sudden spurt in economic growth can be expected, analsyts suggest.
"Abe is trying to create a legacy," says Jesper Koll, the head of the equities fund Wisdom Tree Japan. "His first legacy project was to get the economy out of deflation and the second is to change [the Japanese] constitution," using growth to sweeten the controversial change," he tells The National.
Mr Abe and his Liberal Democratic Party together with the party's governing coalition partner, Komeito, won what was widely described as a "landslide" win in the October lower house election, securing the "super majority" needed to launch a national referendum on constituional change.
But the vote was more a verdict on the poor election tactics of a divided political opposition in Japan. So great was popular cynicism over these tactics that voters opted to support an agenda that will even include raising Japan's very unpopular national consumption tax in 2019.
Mr Abe has promised to proceed with a scheduled sales tax increase unless the nation's economy suffers a shock as big as the 2008 collapse of the investment bank Lehman Brothers. The plan is to divert some of the proceeds to child care and education via THIS IS ILLEGIBLE***agrowth suppring **** "investment in education."
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The fiscal impact on an already highly indebted Japanese central government could be very damaging, some argue. But with a compliant Bank of Japan (BOJ) headed by the governor Haruhiko Kuroda willing, in effect, to finance government deficits, Mr Abe appears unconcerned by international concern on this score.
Meanwhile, some analysts including Mr Koll also remain unfazed by the debt issue and are optimistic about the outlook for the Japanese economy. "Political and policy stability is poised to add momentum to Japan’s domestic business investment cycle," he says.
"Already leading companies like Canon and Shiseido have announced some on-shoring, ie building new production capacity in Japan and the upgrade cycle for small and medium sized companies is poised to accelerate further."
Japanese monetary policy "is poised to decouple from the US Fed rate hike cycle", Mr Koll suggests. "No matter who is appointed as next BOJ governor [will] almost certainly continue the current support for Abenomics from the central bank.
"The election has strengthened 'Team Abe's conviction that its economic policy is on the right track, precisely because of Japan’s unique collaboration between fiscal and monetary authorities. Japan's policy dynamics are poised to deliver strong upside surprises to economic growth."
Even so, Mr Abe will need to guard against assuming that a strengthening Japanese economy is a mandate to enter the dangerous territory of constitutional change, some say.
"I think that debate in parliament will begin" on this issue, Zentaro Kamei, a senior researcher at the think tank PHP Institute and a former member of Mr Abe's LDP has been quoted as saying.
"If Mr Abe "starts talking about the constitution, people will say: 'You didn't ask me that.'"
Drivers’ championship standings after Singapore:
1. Lewis Hamilton, Mercedes - 263
2. Sebastian Vettel, Ferrari - 235
3. Valtteri Bottas, Mercedes - 212
4. Daniel Ricciardo, Red Bull - 162
5. Kimi Raikkonen, Ferrari - 138
6. Sergio Perez, Force India - 68
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.”
COMPANY%20PROFILE%20
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
On sale: Now
THE SPECS
Engine: 6.75-litre twin-turbocharged V12 petrol engine
Power: 420kW
Torque: 780Nm
Transmission: 8-speed automatic
Price: From Dh1,350,000
On sale: Available for preorder now
THE DEALS
Hamilton $60m x 2 = $120m
Vettel $45m x 2 = $90m
Ricciardo $35m x 2 = $70m
Verstappen $55m x 3 = $165m
Leclerc $20m x 2 = $40m
TOTAL $485m
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
more from Janine di Giovanni
The specs
Engine: 4.0-litre flat-six
Torque: 450Nm at 6,100rpm
Transmission: 7-speed PDK auto or 6-speed manual
Fuel economy, combined: 13.8L/100km
On sale: Available to order now
The Kingfisher Secret
Anonymous, Penguin Books
Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
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Schedule
%3Cp%3E%3Cstrong%3ENovember%2013-14%3A%3C%2Fstrong%3E%20Abu%20Dhabi%20World%20Youth%20Jiu-Jitsu%20Championship%3Cbr%3E%3Cstrong%3ENovember%2015-16%3A%20%3C%2Fstrong%3EAbu%20Dhabi%20World%20Masters%20Jiu-Jitsu%20Championship%3Cbr%3E%3Cstrong%3ENovember%2017-19%3A%3C%2Fstrong%3E%20Abu%20Dhabi%20World%20Professional%20Jiu-Jitsu%20Championship%20followed%20by%20the%20Abu%20Dhabi%20World%20Jiu-Jitsu%20Awards%3C%2Fp%3E%0A
The specs
Engine: 2.0-litre 4-cyl turbo
Power: 247hp at 6,500rpm
Torque: 370Nm from 1,500-3,500rpm
Transmission: 10-speed auto
Fuel consumption: 7.8L/100km
Price: from Dh94,900
On sale: now
The%20specs
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In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
Ms Yang's top tips for parents new to the UAE
- Join parent networks
- Look beyond school fees
- Keep an open mind
