The federal Government is ready to offer support to the UAE banking system in the unlikely event Europe's debt crisis widens into a full-blown credit crunch, says the Minister of Economy.
Europe's banking system showed new signs of stress yesterday as France, Belgium and Luxembourg were forced to nationalise Dexia Bank, the world's largest lender to municipal authorities. "Our exposure there is very small," Sultan Al Mansouri said yesterday, adding UAE institutions did not have large holdings of European sovereign debt. Still, a government committee was prepared to provide more aid for local banks in the unlikely event Europe's crisis spread, he said.
Road to ruin or recovery?
Euro Zone The National charts Europe's struggles as it attempts to through of financial crisis. Learn more
"[The support mechanisms] will always be there," he added.
The UAE's economy will grow by about 3.5 per cent this year despite the EU's woes, Mr Al Mansouri said at a World Economic Forum event in Abu Dhabi yesterday. "I would be very happy to see 4 per cent but, remember, we still have a couple months to go, so I would stay on the safe side," he said. The IMF expects the economy to grow by 3.3 per cent this year and 3.8 per cent next.
"The UAE took precautionary measures to make sure that exposure to these kinds of situations [such as in Europe] was not high," Mr Al Mansouri said. The Abu Dhabi Government injected Dh16 billion (US$4.35bn) into five local banks in February 2009. Last week the Central Bank's board said banks were "in a good position" and "should not be negatively impacted by the recent turmoil in international markets".
But while the UAE has taken steps to minimise exposure to Europe, Mr Al Mansouri gave a vote of confidence to leaders there scrambling to prevent a sovereign default by Greece and a return to recession.
"I don't believe that the leaders in the EU would let something like that happen," he said. "Neither will the leaders in the US allow something like that. They know now the size of the problems they have to handle and they also know and are discussing the process of how to address it and provide the right solution."
For the UAE, domestic issues were a more pressing challenge, Mr Al Mansouri said. The biggest question facing the country's economy this year and next, he said, was how to deal with the continued effects of the domestic property bubble on banks and the property market.
Prices have fallen by about half in some places since their peak in 2008, and banks are still suffering from growing provisions for bad loans.
"Probably the biggest challenge we have is the real estate issue and, 'are we coming to the end of this situation'?" Mr Al Mansouri said. "[The property sector] has taken a large chunk of our GDP and our banking [system]. That needs to be addressed in a much more systematic and constructive way."
If economic growth is to strengthen in future years, he said the UAE needed to go "back to basics" and focus on fully exploiting economic activity in sectors where it already has a large presence - trade, tourism and services. "The size of these kinds of activities can be much bigger," he said. "Some of them can be twice the size of what they are now. We need to go back to basics. We need to understand all the criteria that they require to ignite this kind of economy."
In Europe, stock markets rose yesterday while the euro strengthened against the dollar and yen. Despite months of concern about a surfeit of sovereign debts and a lack of credible plans to reduce them, confidence has recovered slightly in recent days.
Angela Merkel, the German chancellor, and Nicolas Sarkozy, the French president, agreed on the need to recapitalise banks and promised to address Greece's spiralling debt crisis before the Group of 20 leading and emerging economies meeting next month.
Better-than-expected jobs figures and economic growth data from the US have encouraged wary investors. But worries linger that Europe's debt disease could spread.
"At least we have started to see the policymakers being more active, although not quite proactive," Gary Dugan, the chief investment officer at Emirates NBD, said in a note to clients yesterday. "Given that the French and German governments are promising action ahead of the G20 meeting in November, a further rally in risk markets such as equities is possible. However, we fear the euro-zone policymakers will not deliver a sufficiently meaningful set of measures to satisfy the markets. Consequently any rally may be short lived."
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Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
ARGYLLE
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Our House, Louise Candlish,
Simon & Schuster
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
Previous men's records
- 2:01:39: Eliud Kipchoge (KEN) on 16/9/19 in Berlin
- 2:02:57: Dennis Kimetto (KEN) on 28/09/2014 in Berlin
- 2:03:23: Wilson Kipsang (KEN) on 29/09/2013 in Berlin
- 2:03:38: Patrick Makau (KEN) on 25/09/2011 in Berlin
- 2:03:59: Haile Gebreselassie (ETH) on 28/09/2008 in Berlin
- 2:04:26: Haile Gebreselassie (ETH) on 30/09/2007 in Berlin
- 2:04:55: Paul Tergat (KEN) on 28/09/2003 in Berlin
- 2:05:38: Khalid Khannouchi (USA) 14/04/2002 in London
- 2:05:42: Khalid Khannouchi (USA) 24/10/1999 in Chicago
- 2:06:05: Ronaldo da Costa (BRA) 20/09/1998 in Berlin
The smuggler
Eldarir had arrived at JFK in January 2020 with three suitcases, containing goods he valued at $300, when he was directed to a search area.
Officers found 41 gold artefacts among the bags, including amulets from a funerary set which prepared the deceased for the afterlife.
Also found was a cartouche of a Ptolemaic king on a relief that was originally part of a royal building or temple.
The largest single group of items found in Eldarir’s cases were 400 shabtis, or figurines.
Khouli conviction
Khouli smuggled items into the US by making false declarations to customs about the country of origin and value of the items.
According to Immigration and Customs Enforcement, he provided “false provenances which stated that [two] Egyptian antiquities were part of a collection assembled by Khouli's father in Israel in the 1960s” when in fact “Khouli acquired the Egyptian antiquities from other dealers”.
He was sentenced to one year of probation, six months of home confinement and 200 hours of community service in 2012 after admitting buying and smuggling Egyptian antiquities, including coffins, funerary boats and limestone figures.
For sale
A number of other items said to come from the collection of Ezeldeen Taha Eldarir are currently or recently for sale.
Their provenance is described in near identical terms as the British Museum shabti: bought from Salahaddin Sirmali, "authenticated and appraised" by Hossen Rashed, then imported to the US in 1948.
- An Egyptian Mummy mask dating from 700BC-30BC, is on offer for £11,807 ($15,275) online by a seller in Mexico
- A coffin lid dating back to 664BC-332BC was offered for sale by a Colorado-based art dealer, with a starting price of $65,000
- A shabti that was on sale through a Chicago-based coin dealer, dating from 1567BC-1085BC, is up for $1,950
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.
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
UAE currency: the story behind the money in your pockets
The specs
Engine: 0.8-litre four cylinder
Power: 70bhp
Torque: 66Nm
Transmission: four-speed manual
Price: $1,075 new in 1967, now valued at $40,000
On sale: Models from 1966 to 1970
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%C2%A0profile
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The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
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.
Skewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village's Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
