The Tokyo Olympics postponement could cost Japan anything between $2 billion and $6 billion. AFP
The Tokyo Olympics postponement could cost Japan anything between $2 billion and $6 billion. AFP
The Tokyo Olympics postponement could cost Japan anything between $2 billion and $6 billion. AFP
The Tokyo Olympics postponement could cost Japan anything between $2 billion and $6 billion. AFP

Japan scientist says Tokyo Olympics unlikely to be held in 2021


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A Japanese professor of infectious disease is “very pessimistic” the postponed Tokyo Olympics will take place in 2021.

“To be honest with you, I don’t think the Olympics is likely to be held next year,” Kentaro Iwata, a professor of infectious disease at Kobe University, was quoted as saying on Monday by the Associated Press.

“Holding the Olympics needs two conditions; one, controlling Covid-19 in Japan, and controlling Covid-19 everywhere.”

Toshiro Muto, the chief executive of the Tokyo Olympic organising committee, expressed similar reservations earlier this month. Since then, the organising committee and the International Olympic Committee have said there is no Plan B other than working towards the Olympics to open on July 23, 2021.

“I am very pessimistic about holding the Olympic Games next summer unless you hold the Olympic Games in a totally different structure such as no audience, or a very limited participation,” Iwata said, speaking at a forum arranged by the Foreign Correspondents’ Club of Japan in Tokyo.

“You have to invite so many athletes from many, many places, which is not very compatible with this Covid-19 infection. Japan might be able to control this disease by next summer. And I wish we could. But I don’t think that will happen everywhere on Earth.”

Japan was spared during the initial stage of the coronavirus outbreak. But cases are now spiking, particularly in Tokyo and other large cities, As of Monday, there were about 12,000 detected infections in Japan and 250 deaths.

Japan is officially spending $12.6 billion (Dh46.2bn) to host the Olympics, although a government audit put the figure at twice that. Local estimates indicate the postponement will cost $2bn to $6bn, with the Japanese government picking up almost all the bills.

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.”

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