What is the asset class and geography you are focused on?
I analyse commodities, currencies and equities across the Middle East and Africa, which is exciting since regional markets provide a pool of largely untapped investment opportunities. Being on the right side of a trending market in Saudi Arabian equities or in the Nigerian naira currency can be a lot more rewarding than widely followed trading instruments such as, say, the euro or yen, which are both crowded trades.
What is the outlook for the month ahead?
The US dollar is getting stronger, which will have a deflationary effect globally. This is a negative sign for commodities, which tend to move in the opposite direction to the US dollar, so we can expect lower prices for goods in the coming months. The energy sector forms a big part of the commodities market and includes Brent crude, light crude oil, natural gas and heating oil. These are all likely to remain under pressure, followed by a possible weakness in the price of industrial metals. Such weaknesses will continue to negatively affect equities in energy-exporting countries, and provide a negative outlook for commodities. However, selective sectors and countries in our investment landscape will benefit from the low energy prices. For example, energy-importing countries with current account deficits, such as Egypt, Turkey, Morocco and Tunisia, should benefit.
What are the main risks, either upside or downside, to the outlook?
On the positive side for global equities, risk assets have been known to perform well in the last month of the year, so we may see a cyclical year-end rally take place. However, emerging markets and the commodities market will need more than one month of strength to reverse a three-year-long downtrend. There is a risk that energy prices will continue to deteriorate and that there will be a major breakdown by copper below a key resistance level. Historically, copper has been a leading indicator of economic outlook.
What is the best investment at the moment?
I see strength in the US dollar and this is likely to be a long-term theme. More and more central banks around the globe are aiming for weaker local currencies. The euro is weakening against the US dollar, closely followed by the yen and many other emerging-market currencies.
What was the best investment you were ever involved in?
I was involved in a strategic investment in gold for Invest AD and both the entry and exit levels worked out well for us. As this was a closed trade, I can give a bit more detail on the trade idea, as well as its execution and the timing. As a theme, this was an inflation hedge for us. Entry was based on a technical breakout from a long-term consolidation range, slightly above US$850 levels. Our investment horizon was two to five years, so I implemented an approach and subsequent monitoring that followed a long-term trend. Our exit was based on a fundamental change in the demand and supply dynamics in commodities. On a micro level, the exit was timed after a major technical breakdown between $1,500 and $1,400.
What was the worst?
My worst trade ideas have mainly been opportunity costs. I focus on price breakouts in my analysis, and breakouts are often followed by sharp trends. After a strong breakout I look for follow-through, but sometimes the price loses its momentum and enters into another consolidation phase. Charts constantly evolve, but trades that reach their predefined price targets are the best. The worst ones are those that do not get stopped out or do not meet their price target. I never let a trade idea incur major losses. I do accept failed breakouts and honour stop-losses. In that sense, a trade idea that reaches its target or a trade idea that fails and gets stopped out, are both good. Losses are part of the game. The worst trades are those that move sideways for a prolonged period of time.
ssahoo@thenational.ae
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
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 White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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
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Financial considerations before buying a property
Buyers should try to pay as much in cash as possible for a property, limiting the mortgage value to as little as they can afford. This means they not only pay less in interest but their monthly costs are also reduced. Ideally, the monthly mortgage payment should not exceed 20 per cent of the purchaser’s total household income, says Carol Glynn, founder of Conscious Finance Coaching.
“If it’s a rental property, plan for the property to have periods when it does not have a tenant. Ensure you have enough cash set aside to pay the mortgage and other costs during these periods, ideally at least six months,” she says.
Also, shop around for the best mortgage interest rate. Understand the terms and conditions, especially what happens after any introductory periods, Ms Glynn adds.
Using a good mortgage broker is worth the investment to obtain the best rate available for a buyer’s needs and circumstances. A good mortgage broker will help the buyer understand the terms and conditions of the mortgage and make the purchasing process efficient and easier.
The bio
Who inspires you?
I am in awe of the remarkable women in the Arab region, both big and small, pushing boundaries and becoming role models for generations. Emily Nasrallah was a writer, journalist, teacher and women’s rights activist
How do you relax?
Yoga relaxes me and helps me relieve tension, especially now when we’re practically chained to laptops and desks. I enjoy learning more about music and the history of famous music bands and genres.
What is favourite book?
The Perks of Being a Wallflower - I think I've read it more than 7 times
What is your favourite Arabic film?
Hala2 Lawen (Translation: Where Do We Go Now?) by Nadine Labaki
What is favourite English film?
Mamma Mia
Best piece of advice to someone looking for a career at Google?
If you’re interested in a career at Google, deep dive into the different career paths and pinpoint the space you want to join. When you know your space, you’re likely to identify the skills you need to develop.
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Volvo ES90 Specs
Engine: Electric single motor (96kW), twin motor (106kW) and twin motor performance (106kW)
Power: 333hp, 449hp, 680hp
Torque: 480Nm, 670Nm, 870Nm
On sale: Later in 2025 or early 2026, depending on region
Price: Exact regional pricing TBA
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
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