Citi’s private banking business in the Middle East is enjoying growth as high-net worth individuals shift strategy and expand their international portfolios amid the plunge in oil prices, bank officials said on Monday.
Citi’s private banking assets under management and revenue in the Middle East grew more than 20 per cent last year compared with a year earlier, with the UAE registering 30 per cent growth as family offices set up base in the country.
“We have seen particularly the high net worth institutional families reconsider their strategies,” said Anthony Habis, the global family office head in Mena at Citi Private Bank.
“The core continues to be their operating business in the region. They are starting to think now maybe the satellite, the international pieces need to be a lot more than 5 or 10 per cent or 20 per cent.”
Citi’s private banking team in the region could grow over the next 12 to 18 months depending on clients’ needs, he added.
Household wealth in the Middle East and North Africa slid 2.2 per cent to US$4.4 trillion in mid-2015 from the year-earlier period as the oil price plunge trimmed wealth, according to an October report by the Swiss private bank Credit Suisse. Despite the drop in wealth creation, the number of millionaires in the region is expected to grow by more than half in the next five years, the report said.
Citi Private Bank clients in the region are seeking to diversify and invest in less risky assets as they look to offset the oil price rout hitting regional economies.
“They [private banking clients] are less concerned about the performance of those portfolios, but more concerned about having them sit in the right structure and insulated from the local environment,” said Mr Habis.
Clients in the region are also favouring investments in real estate, particularly in the US, as they provide better yields than fixed income thanks to the still low interest rate environment.
Citi is advising its clients to stick to US, European and Japanese equities and to be selective in their fixed income investments despite the recent global turmoil and volatility in equities.
The US economy will be the key driver of global growth, with an expected increase in corporate earnings, said Jeffrey Sacks, the Europe, Middle East and Africa capital markets strategist at Citi Private Bank.
“European equities have got decent earnings growth potential,” said Mr Sacks. “There are several drivers for that – low rates, low oil price driving private consumption and a weak euro that is supporting exporters.”
dalsaadi@thenational.ae
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What is 'Soft Power'?
Soft power was first mentioned in 1990 by former US Defence Secretary Joseph Nye.
He believed that there were alternative ways of cultivating support from other countries, instead of achieving goals using military strength.
Soft power is, at its root, the ability to convince other states to do what you want without force.
This is traditionally achieved by proving that you share morals and values.
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Jigra
Starring: Alia Bhatt, Vedang Raina, Manoj Pahwa, Harsh Singh
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Name: Almnssa
Started: August 2020
Founder: Areej Selmi
Based: Gaza
Sectors: Internet, e-commerce
Investments: Grants/private funding
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
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Our legal consultant
Name: Dr Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Gulf Men's League final
Dubai Hurricanes 24-12 Abu Dhabi Harlequins
COMPANY PROFILE
Name: HyperSpace
Started: 2020
Founders: Alexander Heller, Rama Allen and Desi Gonzalez
Based: Dubai, UAE
Sector: Entertainment
Number of staff: 210
Investment raised: $75 million from investors including Galaxy Interactive, Riyadh Season, Sega Ventures and Apis Venture Partners
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LA LIGA FIXTURES
Friday Athletic Bilbao v Celta Vigo (Kick-off midnight UAE)
Saturday Levante v Getafe (5pm), Sevilla v Real Madrid (7.15pm), Atletico Madrid v Real Valladolid (9.30pm), Cadiz v Barcelona (midnight)
Sunday Granada v Huesca (5pm), Osasuna v Real Betis (7.15pm), Villarreal v Elche (9.30pm), Alaves v Real Sociedad (midnight)
Monday Eibar v Valencia (midnight)
What is graphene?
Graphene is a single layer of carbon atoms arranged like honeycomb.
It was discovered in 2004, when Russian-born Manchester scientists Andrei Geim and Kostya Novoselov were "playing about" with sticky tape and graphite - the material used as "lead" in pencils.
Placing the tape on the graphite and peeling it, they managed to rip off thin flakes of carbon. In the beginning they got flakes consisting of many layers of graphene. But as they repeated the process many times, the flakes got thinner.
By separating the graphite fragments repeatedly, they managed to create flakes that were just one atom thick. Their experiment had led to graphene being isolated for the very first time.
At the time, many believed it was impossible for such thin crystalline materials to be stable. But examined under a microscope, the material remained stable, and when tested was found to have incredible properties.
It is many times times stronger than steel, yet incredibly lightweight and flexible. It is electrically and thermally conductive but also transparent. The world's first 2D material, it is one million times thinner than the diameter of a single human hair.
But the 'sticky tape' method would not work on an industrial scale. Since then, scientists have been working on manufacturing graphene, to make use of its incredible properties.
In 2010, Geim and Novoselov were awarded the Nobel Prize for Physics. Their discovery meant physicists could study a new class of two-dimensional materials with unique properties.
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Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
The specs
Engine: 3.5-litre twin-turbo V6
Power: 380hp at 5,800rpm
Torque: 530Nm at 1,300-4,500rpm
Transmission: Eight-speed auto
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On sale: Now
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