DUBAI // Until two weeks ago, Ahmed Samir, an Egyptian chef from Cairo's Dokki neighbourhood, was sending home most of his monthly pay.
It was crucial income for his family in Egypt. But the ongoing political unrest there, as demonstrators demand an end to the 30-year rule of the president Hosni Mubarak, has temporarily cut the family lifeline.
"I was sending them money, but when I found that banks might be robbed, and everything was closed down, I got scared," said Mr Samir, 29, who was sending Dh3,000 of his Dh4,200 monthly salary to relatives in Egypt.
With banking networks unavailable for much of the past two weeks, remittances have been held back, sharply reducing the flow of money to Egypt.
Even now, as banks are reopening, Egyptian expatriates say service is still unreliable and patchy. Many worry that it is not safe for their families to go to the banks to withdraw money.
Some are turning to friends who are travelling back home to deliver crucial supplies and cash.
Sudhir Shetty, the chief operating officer of the money-transfer service UAE Exchange, said services were still not fully functional, and instant money transfers continued to be irregular. "Now it has been resumed but it is not in full swing," he said.
Mr Shetty said that as soon as banking services return to normal, all the funds entrusted to the company will be wired to Egypt.
Mr Samir said he worries about sending money back home.
"The country is not secure," he said. "If a member of my family goes out of the house, he might be harmed." He said he had seen videos of protesters being run over by police cars.
"The economy and tourism have been hurt, but these are legitimate demands of course," he said of the protests. "I hope God helps the country and the people are safe."
Ahmed El Didi, an Egyptian project engineer based in Dubai, said he sends about Dh7,000 back home every two months to build a home.
When the protests flared up, his bank told him he could not send the money as all branches were closed.
"I asked what I should do since I have commitments, and I was told that was my problem, basically, but not to worry since the entire country was closed down," he said.
Though banks have now reopened, Mr El Didi said, a bigger problem is that relatives back home are running out of money.
"There is a curfew and there is no money in the ATMs," he said.
He decided against sending money to his family because there was no guarantee it would actually reach them.
He said he may "have to look at other options" such as sending money back with travellers to Egypt.
Rachel McArthur, a half-Egyptian UAE resident, said several of her friends were sending money to family back home this way.
"Lots of people are not trusting sending money via banks or places like Western Union, for example, purely due to the fact that we do not know whether these places would be open in Egypt," she said.
It was also difficult to find people going to particular locations, she said.
Egyptians did not have enough cash ahead of the protests because they did not expect looting. Also, since the banks have reopened, there has been a rush to withdraw money that has depleted the banks' available cash.
Most ATMs are still empty, and a lot of big supermarket chains, which accept credit or debit cards, are closed or have been vandalised, she said.
Ms McArthur regularly sends money back home, but said her family does not need immediate cash.
She is planning, however, to send money to Egypt with a cousin who is travelling there from London.
Prices are also rising in the country as shortages take hold, creating even more distress for poorer families and the unemployed.
"I can't begin to imagine what it is like for those who are unemployed or taking care of family members who are very sick," she said.
kshaheen@thenational.ae
The White Lotus: Season three
Creator: Mike White
Starring: Walton Goggins, Jason Isaacs, Natasha Rothwell
Rating: 4.5/5
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.”
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
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.
No%20Windmills%20in%20Basra
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MATCH INFO
Championship play-offs, second legs:
Aston Villa 0
Middlesbrough 0
(Aston Villa advance 1-0 on aggregate)
Fulham 2
Sessegnon (47'), Odoi (66')
Derby County 0
(Fulham advance 2-1 on aggregate)
Final
Saturday, May 26, Wembley. Kick off 8pm (UAE)
Kill%20
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COMPANY%20PROFILE
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
