One of the busiest weeks since the financial crisis included announcements from Expo 2020 organisers, long-awaited visibility on Arabtec’s 1 million homes project in Egypt and a peace offer from beleaguered Saudi group Al Gosaibi, writes Business Editor Mustafa Alrawi
Arabtec eyes financing for Egypt project
On Wednesday the Dubai-listed builder confirmed it is in talks with lenders to finance the first phase of its US$40 billion project in Egypt to ultimately build 1 million affordable homes. The news that it is talking to banks signals that it is close to finalising an agreement with the government of the North African country and that work on the first 100,000 units should begin soon, offering some much needed visibility for shareholders on a strategically important project. They were set to meet today, at its AGM in the capital, a week after it was announced that the new board, to be voted on at the gathering, would not include chairman Khadem Al Qubaisi. The company’s founder Riad Kamal was also omitted for the list of nominees, however he told The National that he left the board 18 months ago, despite still being included as a member on Arabtec’s website.
Al Gosaibi extends peace offer
The Al Gosaibi family of Saudi Arabia offered a new twist in its six year tussle with its bitter enemy Maan Al Sanea when it extended an olive branch on Tuesday. An offer of a peace deal is on the table if negotiations can be entered to end the Middle East’s longest running corporate “frozen conflict”. Simon Charlton (pictured), the chief executive of the family partnership Ahmad Hamad Al Gosaibi and Brothers (Ahab), said that with the cost of legal action becoming counterproductive the time has come to reach a settlement of the marathon affair. The news came after Ahab announced it had reached an initial deal with its leading creditors to settle claims of more than US$6 billion of debts. With the Saudi stock market opening to foreigners from June, it will be a boost for investors that this saga, at one stage believed to include up to $20bn in outstanding debts, could soon be over.
Abu Dhabi rents to climb on low supply growth
As the Cityscape property show started in the capital on Tuesday, brokers warned that tenants in Abu Dhabi are likely to face further rent rises as the level of new housing supply falls to its lowest since 2009. This year housing stock growth will be 2.9 per cent compared to an average annual growth over the past five years of close to 5 per cent. Broker JLL estimated that average housing rents in the city increased 4 per cent during the first quarter and Asteco reported that occupancy rates for rented homes in prime projects stood at close to 100 per cent during the quarter. However, it is worth remembering the business cycle in the UAE typically ends in the summer when many expats leave. At that point occupancy rates fluctuate and realised rental prices adjust to reflect changing population levels. To view the property rental market in the first quarter of any year will always give a more bullish picture than in the third.
Dubai urges UAE businesses to join the ‘Expo effect’
Organisers of Dubai’s world fair in 2020 called on the business community of the UAE to partner up with the event and help build on the ‘expo effect’ which is expected to bring tens of billions of dollars of economic benefits to the country and create thousands of jobs across the region. At the expo site on Tuesday, chief executives of some of the biggest firms in the UAE, including Gerald Lawless, boss of hotel operator Jumeirah, Osman Sultan, du’s CEO, and Fadi Ghandour, founder of Aramex, were given a glimpse of what the event will look like and also how they can be an integral part of its success. Organisers have an ambitious vision for the event, expecting Expo 2020 to have an impact as far as central and south Asia and Africa as well as the Middle East. One business chief said “never doubt them, they always deliver”.
IMF downgrades growth forecast for country
On Saturday, the IMF urged Arabian Gulf governments to cut total public spending amid lower oil prices, offering a gloomier picture for the UAE’s economy this year. The IMF also cut its projections for the UAE’s growth this year to 3.2 per cent – a decrease of 0.3 percentage points against its January forecast - as crude remains around 40 per cent lower than its summer peaks in 2014. This is the second time in six months that the IMF has revised its growth forecast for the UAE downwards. In October, the IMF projected growth of 4.5 per cent – 1.3 percentage points higher than its current projection. The wider Middle East’s economic growth forecast has also been cut twice in the same period. The outlook will continue to be suppressed as long as crude remains below $70 a barrel. Brent for June settlement was at $62.73 on Wednesday on the London-based ICE Futures Europe exchange.
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Company profile
Company name: Dharma
Date started: 2018
Founders: Charaf El Mansouri, Nisma Benani, Leah Howe
Based: Abu Dhabi
Sector: TravelTech
Funding stage: Pre-series A
Investors: Convivialite Ventures, BY Partners, Shorooq Partners, L& Ventures, Flat6Labs
In-demand jobs and monthly salaries
- Technology expert in robotics and automation: Dh20,000 to Dh40,000
- Energy engineer: Dh25,000 to Dh30,000
- Production engineer: Dh30,000 to Dh40,000
- Data-driven supply chain management professional: Dh30,000 to Dh50,000
- HR leader: Dh40,000 to Dh60,000
- Engineering leader: Dh30,000 to Dh55,000
- Project manager: Dh55,000 to Dh65,000
- Senior reservoir engineer: Dh40,000 to Dh55,000
- Senior drilling engineer: Dh38,000 to Dh46,000
- Senior process engineer: Dh28,000 to Dh38,000
- Senior maintenance engineer: Dh22,000 to Dh34,000
- Field engineer: Dh6,500 to Dh7,500
- Field supervisor: Dh9,000 to Dh12,000
- Field operator: Dh5,000 to Dh7,000
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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.”
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
TOURNAMENT INFO
Women’s World Twenty20 Qualifier
Jul 3- 14, in the Netherlands
The top two teams will qualify to play at the World T20 in the West Indies in November
UAE squad
Humaira Tasneem (captain), Chamani Seneviratne, Subha Srinivasan, Neha Sharma, Kavisha Kumari, Judit Cleetus, Chaya Mughal, Roopa Nagraj, Heena Hotchandani, Namita D’Souza, Ishani Senevirathne, Esha Oza, Nisha Ali, Udeni Kuruppuarachchi
Cryopreservation: A timeline
- Keyhole surgery under general anaesthetic
- Ovarian tissue surgically removed
- Tissue processed in a high-tech facility
- Tissue re-implanted at a time of the patient’s choosing
- Full hormone production regained within 4-6 months
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Bookshops: A Reader's History by Jorge Carrión (translated from the Spanish by Peter Bush),
Biblioasis
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
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A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
