Mubadala Investment Company, Abu Dhabi's strategic investment company with Dh465.5 billion in assets, swung to a profit in the first half of this year on the back of strong operating income, gains from financial investments and favourable currency movements.
The company, which reported its first independent interim results after merging with International Petroleum Investment Company (Ipic), said first half profit stood at Dh4.2bn compared with a loss of Dh4.7bn in a year-earlier period, according to a statement released on Thursday.
First-half 2017 revenues climbed 14.4 per cent to Dh83.4bn from Dh72.9bn recorded for the same period in 2016, primarily driven by the company's investment platforms including the upstream and integrated oil and gas, semiconductors, and aerospace sectors. Total assets reached Dh465.5bn as of 30 June 2017, rising 3.5 per cent from Dh449.7bn at the end of last year, helped by dividends from financial investments, the statement added.
"The results from the first half of 2017 reflect the strength and scale of Mubadala Investment Company's diversified global portfolio and robust balance sheet," said Khaldoon Al Mubarak, the group chief executive and managing director. "We will continue to integrate, optimise and grow the company's assets under our global business platforms, to create and realise maximum financial and strategic returns to support diversification of the economy of Abu Dhabi and the country."
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Mubadala’s Nova and Borealis form US$1.7bn US petrochemicals JV with France’s Total
Mubadala reports Dh4.1bn income in 2016 as diversification pays off
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Mubadala Investment, whose portfolio of investments spans 13 sectors across more than 30 countries around the globe, invests primarily in sectors such as petrochemicals, petroleum, aerospace, ICT, semiconductors, metals and mining, renewable energy, healthcare and utilities. It manages diverse financial holdings and owns stakes in the local, regional and global firms including Austria's Borealis and OMV, Bahrain-based Investcorp Bank, UAE's Emirates Global Aluminium, telecom Operator Du, renewable energy firm Masdar and the country's biggest-listed contracting firm Arabtec Holding.
Mubadala Investment was formed through the merger of Mubadala Development Company and Ipic in the first half of this year to improve efficiencies and broaden its investment portfolio.
"In the first half of 2017, we worked to integrate the two portfolios under the Mubadala Investment Company," the company's chief financial officer Carlos Obeid said. "We managed our costs prudently, while monetising mature assets and growing our profit as we reduced our overall leverage."
The company, in June, sold a 40 per cent stake in Tabreed to France’s Engie for Dh2.9bn, but it still remains the largest shareholder in the UAE-based utility firm with a 42 per cent stake.
Masdar, in the first half, also reported the acquisition of a 25 per cent stake in the world’s first commercial-scale floating offshore wind farm in Hywind, Scotland in partnership with Statoil of Norway.
Mubadala Investment in May also made a Dh55.1bn commitment to the SoftBank Vision Fund, a Dh367.4bn investment vehicle that aims to acquire stakes in both private and public companies in emerging technology sector. Its financial investment arm, Mubadala Capital in April entered a deal with French private equity firm Ardian which said it would commit up to Dh9.1bn to private equity funds managed by the firm.
In petroleum and petrochemicals space, Mubadala Investment said its subsidiary Mubadala Petroleum received all necessary approvals for the development of the Cá Rồng Đỏ (CRD) oil and gas field offshore Vietnam, which will be operated by Spain's Repsol.
Nova Chemicals, in the second-quarter of this year made an Dh7.7bn investment to acquire one of the largest petrochemical facilities in the United States, in Geismar, Louisiana, enhancing its ability to serve US and international customers. Nova and Austria's petrochemical company Borealis also signed an agreement with oil major Total for a joint venture, covering polyethylene facilities along the US Gulf Coast, it said, adding that the joint venture will encompass Total’s existing facility and investment in a new ethylene cracker and Borstar PE plant.
What are NFTs?
Are non-fungible tokens a currency, asset, or a licensing instrument? Arnab Das, global market strategist EMEA at Invesco, says they are mix of all of three.
You can buy, hold and use NFTs just like US dollars and Bitcoins. “They can appreciate in value and even produce cash flows.”
However, while money is fungible, NFTs are not. “One Bitcoin, dollar, euro or dirham is largely indistinguishable from the next. Nothing ties a dollar bill to a particular owner, for example. Nor does it tie you to to any goods, services or assets you bought with that currency. In contrast, NFTs confer specific ownership,” Mr Das says.
This makes NFTs closer to a piece of intellectual property such as a work of art or licence, as you can claim royalties or profit by exchanging it at a higher value later, Mr Das says. “They could provide a sustainable income stream.”
This income will depend on future demand and use, which makes NFTs difficult to value. “However, there is a credible use case for many forms of intellectual property, notably art, songs, videos,” Mr Das says.
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Result
Qualifier: Islamabad United beat Karachi Kings by eight wickets
Fixtures
Tuesday, Lahore: Eliminator 1 - Peshawar Zalmi v Quetta Gladiators
Wednesday, Lahore: Eliminator 2 – Karachi Kings v Winner of Eliminator 1
Sunday, Karachi: Final – Islamabad United v Winner of Eliminator 2
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.”
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
'Morbius'
Director: Daniel Espinosa
Stars: Jared Leto, Matt Smith, Adria Arjona
Rating: 2/5
MATCH INFO
Champions League quarter-final, first leg
Manchester United v Barcelona, Wednesday, 11pm (UAE)
Match on BeIN Sports
Women%E2%80%99s%20T20%20World%20Cup%20Qualifier
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