There is renewed confidence in the UAE's bond market. The news of Dubai World's US$26 billion debt restructuring in November not only depressed investors in the region but also its bond prices. Rumours that lenders were being asked to take haircuts on money they were owed pushed their value down further in the ensuing weeks. Now, fresh talk that a restructuring may happen without a haircut has breathed new life into the sluggish trade of UAE bonds.
The price for a bond due in 2011 issued by Nakheel - Dubai World's heavily indebted subsidiary - has risen almost 25 per cent in the past three weeks. In addition, the National Bank of Abu Dhabi (NBAD) on Saturday became the first UAE company to successfully pitch investors this year when its $750 million issue launched. The issue was quickly heavily oversubscribed, signalling an increasing appetite for Gulf debt.
The "entire region was so oversold", said Helen Holmes, a fixed-income fund manager with Emirates NBD. Prior to NBAD, the Saudi property company Dar Al Arkan was the only issuer in the region to test the market with a five-year, $450m sukuk, or Islamic bond. The company had to scale back its initial plan of raising $850m through the bond. "It is a sign of speculative confidence. We still don't know what will be the eventual outcome of Dubai World restructuring," said Hassan Awan, an associate at the asset management division of The National Investor in Abu Dhabi.
The lingering uncertainty has not stopped international and regional investors from scooping up UAE paper. Their interest coincides with a global rally in bonds, although Dubai issues have outperformed their peers. "Dubai has outperformed others simply because it had underperformed the most," said Nish Popat, the head of fixed income at ING Investment in Dubai. While the outlook is positive and several regional entities are already wooing international investors for fresh issues, the future trend will again be dictated by Dubai World.
"The market needs a confirmation soon," Mr Popat said. skhan@thenational.ae
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MATCH INFO
Barcelona 2
Suarez (10'), Messi (52')
Real Madrid 2
Ronaldo (14'), Bale (72')
A State of Passion
Directors: Carol Mansour and Muna Khalidi
Stars: Dr Ghassan Abu-Sittah
Rating: 4/5
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Avengers 3: Infinity War: an American superhero film released in 2018 and based on the Marvel Comics story.
Sholay: a 1975 Indian action-adventure film. It follows the adventures of two criminals hired by police to catch a vagabond. The film was panned on release but is now considered a classic.
Lucifer: is a 2019 Malayalam-language action film. It dives into the gritty world of Kerala’s politics and has become one of the highest-grossing Malayalam films of all time.
Gulf Men's League final
Dubai Hurricanes 24-12 Abu Dhabi Harlequins
Score
Third Test, Day 1
New Zealand 229-7 (90 ov)
Pakistan
New Zealand won the toss and elected to bat
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Engine 3.0L V6 turbo
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Fuel economy, combined 7.5L / 100km
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Uefa Champions League Group B
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SHOW COURTS ORDER OF PLAY
Centre Court (4pm UAE/12pm GMT)
Victoria Azarenka (BLR) v Heather Watson (GBR)
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Dr Afridi's warning signs of digital addiction
Spending an excessive amount of time on the phone.
Neglecting personal, social, or academic responsibilities.
Losing interest in other activities or hobbies that were once enjoyed.
Having withdrawal symptoms like feeling anxious, restless, or upset when the technology is not available.
Experiencing sleep disturbances or changes in sleep patterns.
What are the guidelines?
Under 18 months: Avoid screen time altogether, except for video chatting with family.
Aged 18-24 months: If screens are introduced, it should be high-quality content watched with a caregiver to help the child understand what they are seeing.
Aged 2-5 years: Limit to one-hour per day of high-quality programming, with co-viewing whenever possible.
Aged 6-12 years: Set consistent limits on screen time to ensure it does not interfere with sleep, physical activity, or social interactions.
Teenagers: Encourage a balanced approach – screens should not replace sleep, exercise, or face-to-face socialisation.
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Euro 2020 qualifier
Russia v Scotland, Thursday, 10.45pm (UAE)
TV: Match on BeIN Sports
2025 Fifa Club World Cup groups
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Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, Leon.
Group E: River Plate, Urawa, Monterrey, Inter Milan.
Group F: Fluminense, Borussia Dortmund, Ulsan, Mamelodi Sundowns.
Group G: Manchester City, Wydad, Al Ain, Juventus.
Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
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Fixture: Ukraine v Portugal, Monday, 10.45pm (UAE)
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Formula Middle East Calendar (Formula Regional and Formula 4)
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Engine: 6.75-litre twin-turbocharged V12 petrol engine
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Crawley Town 3 (Tsaroulla 50', Nadesan 53', Tunnicliffe 70')
Leeds United 0
Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
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The flights
Etihad (etihad.ae) and flydubai (flydubai.com) fly direct to Baku three times a week from Dh1,250 return, including taxes.
The stay
A seven-night “Fundamental Detox” programme at the Chenot Palace (chenotpalace.com/en) costs from €3,000 (Dh13,197) per person, including taxes, accommodation, 3 medical consultations, 2 nutritional consultations, a detox diet, a body composition analysis, a bio-energetic check-up, four Chenot bio-energetic treatments, six Chenot energetic massages, six hydro-aromatherapy treatments, six phyto-mud treatments, six hydro-jet treatments and access to the gym, indoor pool, sauna and steam room. Additional tests and treatments cost extra.
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.”
Springtime in a Broken Mirror,
Mario Benedetti, Penguin Modern Classics
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War on waste
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Swansea City v Watford (7pm)
Leicester City v Liverpool (8.30pm)
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