Iranian president Hassan Rouhani meets with European foreign policy chief Federica Mogherini before his swearing-in ceremony for a further term, at the parliament in Tehran, Iran. Reuters

Rouhani promises 'unified' response to breach of Iran nuclear deal



Iran's president Hassan Rouhani said his administration and the country would show a "unified" response to a breach of the 2015 nuclear deal with world powers.

"The world should know that any breach of the deal will face a unified reaction of the Iranian nation and government," Mr Rouhani said during his inauguration for a second term as president.

Iran's state TV reported that more than 130 high-ranking officials from various countries and international organisations attended the ceremony in Tehran. Among them was EU's foreign policy chief Federica Mogherini, who coordinates follow-up of the nuclear deal.

It was the first time in Iran's history that a large number of foreign officials attended a presidential inauguration.

"Those who intend to tear down the deal, should know that they are tearing down their political life," said Mr Rouhani, without elaborating.

US president Donald Trump has repeatedly described the nuclear deal as "bad" and during his campaign vowed to dismantle it.

Mr Trump signed a bill Wednesday that imposes mandatory penalties on those involved in Iran's ballistic missile programme and anyone who does business with them.

It would also apply terrorism sanctions to Iran's prestigious Revolutionary Guard and enforce an arms embargo. Iran has vowed to respond if the bill becomes law.

However, Mr Rouhani said his administration would maintain its "moderate" behaviour in response to any verbal challenge.

"We prefer peace to war and reform to rigidness," he said.

Mr Rouhani, 68, a moderate cleric who secured re-election on May 19, promised that his country would pursue a "path of coexistence and interaction with the world".

He has vowed that in his second term in office, Iran will "insist on constructive engagement with the world more than before".

Mr Rouhani was first elected in 2013 with nearly 51 per cent of the vote.

Iran's supreme leader Ayatollah Ali Khamenei formally endorsed him for his second term as president on Thursday. Mr Rouhani has to announce his new cabinet members to Parliament within 14 days and is expected to do so on Tuesday.

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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.”

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