#49 - March 2019 by CPI Financial

WEALTH ARABIA ISSUE 49 | MARCH 2019

MARCH 2019

The next generation of investor

Gautam Duggal, Regional Head Wealth Management EMEA and UAE, Standard Chartered Bank

Gautam Duggal, Regional Head -Wealth Management EMEA and UAE, Standard Chartered Bank A CPI Financial publication

Dubai Technology and Media Free Zone Authority

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Contents ISSUE 49 | MARCH 2019

EDITOR'S LETTER Greetings all,

elcome to the 49th issue of WEALTH Arabia. I hope you all are having a wonderful and productive first quarter. It’s a fascinating time to be in the investment space, particularly because the answers are just not clear—where to find growth, especially where to find double-digit growth, is not easy, and for investors focused on returns, there’s a huge amount of uncertainty, even in markets previously thought to be the most reliable. We have a lot of voices on this subject, and I hope you find each of these perspectives as valuable as we do. We’ve had some good times as well. One of the best meals we’ve ever had was found at Dinner by Heston Blumenthal—now where’s that third Michelin star? The new Audemars Piguet series is gorgeous—and judging by how fast it sold out, at least 15 of you already know that. It’s rare to get a new watch that turns this many heads, but AP has done it again. Beyond that, there’s still much to explore. I hope you enjoy it. Till next time,

William Mullally

OPINION The Gulf's new partner

NEWS & ANALYSIS The latest analysis from the investment world

COVER STORY

10 The next generation of investor: Standard Chartered

INVESTMENT A looming threat Changing winds Global growth momentum subsiding China’s tariff problem still leaves attractive opportunities The UAE family office approach What does the future hold for Dubai real estate? Finding value in Asia

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24 36 wealtharabia.net

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P.O. Box 502491, Dubai Media City, UAE Tel: +971 4 391 4681 Fax: +971 4 390 9576

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EDITOR - WEALTH ARABIA

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SENIOR EDITOR

FOOD Lost wisdom

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NABILAH ANNUAR nabilah.annuar@cpifinancial.net Tel: +971 4 391 3726 ISLA MACFARLANE isla@cpifinancial.net Tel: +44 7875 429476

MOTORING Fit for a king How to make an entrance

52 56

EDITORIAL ASSISTANT

KUDA MUZORIWA kuda.muzoriwa@cpifinancial.net Tel: +971 4 391 3729

LIFESTYLE What does sustainability mean to our children?

PRODUCTS A new icon Fire and brilliance

68 74

EVENTS The WEALTH Arabia Summit 2019

WEALTH ARABIA ISSUE 49 | MARCH 2019

MARCH 2019

Rethinking sustainability Patrick Odier, Senior Managing Partner, Lombard Odier A CPI Financial publication

Dubai Technology and Media Free Zone Authority

WEALTH WARNING! Remember, if you wish to act on any of the information you read in WEALTH Arabia, consider taking independent advice first. WEALTH Arabia is written for a general audience and the information contained herein may not be appropriate for your personal circumstances.

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SHAIS MEMON, ACCA, CMA Shais.memon@cpifinancial.net Tel: +971 4 391 3727 RIZZA INFANTE rizza@cpifinancial.net Tel: +971 4 391 4682

Gautam Duggal, Regional Head Wealth Management EMEA and UAE, Standard Chartered Bank

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The path forward

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Advertorial

What if we could live beyond 120? Advances in bioscience and regenerative medicine mean we could be living much longer lives in the future. Barclays Private Bank has spoken to world-leading experts to help you see beyond today’s possibilities, and discover exciting, new opportunities for your finances, families and investments. Over the last 100 years, factors such as a healthier environment, better sanitation and antibiotics have all played a part in raising our life expectancy. Now leaps forward in bioscience and regenerative medicine, including gene therapy, stem cell research and organ regeneration, are fuelling growing interest from academics and investors in the specialist area of longevity, or the science of longer living. Scientists are working on ways to manipulate our biology to add healthy, active years to our lives, potentially leading to life expectancies of 120 or more. These longevity experts believe it could be possible to address some of the most common chronic diseases and conditions by looking at ageing itself. For example, AgeX Therapeutics is a biotechnology firm looking at how to reprogramme our bodies at a cellular level. Its researchers are trying to turn human tissue back to a younger, healthier state by applying the body’s own regenerative properties.

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Michael West, CEO of AgeX Therapeutics, says: “Induced tissue regeneration could not just add years to our life, but potentially have significant applications in addressing chronic diseases.” Meanwhile, artificial intelligence research firm Insilico Medicine is applying a field of AI called deep learning to clinical trial research to dramatically improve drug development, upgrading the painstaking and expensive process of getting new drugs to market through trial and error.

At the UK’s Oxford Sciences Innovation (OSI), Head of Network Intelligence Riwa Harfoush believes deep learning could lead to a revolution in healthcare. “There are tools and devices that used to be big, expensive, require experts to operate, and were quite exclusive. We’re seeing these become better, cheaper, smaller, more democratic and more accessible, and that’s really changing the way that we’re thinking about both treating and preventing diseases.”

The changing nature of work

Riwa Harfoush of Oxford Sciences Innovation

If life expectancies increase further over the coming years, the impact on the way we work could be profound. Lynda Gratton, Professor of Management Practice at London Business School and co-author of The 100-Year Life, predicts that the existing traditional stages of life will change. “We will see something much more flexible, where you come in and out of both education and work, all through your life”, she says. “The idea of working until

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you’re 80 might seem depressing, but it won’t be working non-stop and without breaks – people will do other things.” At the same time, automation is expected to bring sweeping changes, either replacing jobs done by humans or changing how they’re carried out, which means workers will need significant upskilling or reskilling. Companies will retrain employees to keep up with advances in technology, and lifelong learning is going to become a major trend, says Rajeeb Dey, founder and CEO of Learnerbly, which helps companies’ employees of every age to learn new skills. Traditional ideas like face-to-face teaching will remain important, he says, with hybrid approaches likely to be more successful than traditional or online approaches alone.

New types of housing

may be able to buy in services personalised to their health needs.”

The economic impact of longer living Health improvements, fewer births and higher life expectancy cause demographic shifts that could have fundamental implications for the global economy. Although the economic impact of ageing populations is concerning, there is an upside. If people are healthier for longer, they can remain in work and governments can collect more taxes and spend more. That’s tempered, however, by other consequences such as people saving more and borrowing less. “As a population ages, savings tend to rise and that brings down interest rates,” says Antonio Garcia Pascual, Chief Economist, Europe at Barclays. “That’s one reason why we are

already seeing central banks struggling to lift interest rates; the long-term equilibrium rate is under pressure from population dynamics.” If we live longer, we may increase our levels of savings, and a higher savings ratio leads to falling investment returns. However, Jim Mellon, investor and author of Juvenescence – Investing in the Age of Longevity, says: “If people are going to live until they’re 120 or 130, say, they have to ask themselves how they will pay for those extra years of life. One of the best ways of doing it is to invest in the very things that are going to keep them alive for longer.” He predicts billions of dollars will come into research into extending longevity and AI’s potential to accelerate drug discovery – making these businesses an interesting place to start for those investing for tomorrow.

A redrawing of the order and stages of our lives could also radically alter our demand for housing. The co-living accommodation sector is already one of the fastest growing areas of the real estate market because it offers the increased flexibility that today’s mobile professionals need. But the trend doesn’t end there. Multi-generational living arrangements are likely to become increasingly common, says Manisha Patel, Senior Partner at the architectural firm PRP, where three, four or even five generations live together and support each other during different stages of their lives. “We may also see more specialist housing for older people, where residents

What living beyond 100 means for your wealth and investments If the next generation routinely lives beyond 100, it will be because of huge leaps forward in healthcare, driven by advances in bioscience and regenerative medicine, with profound implications for the way they live and work. At the same time, another transformative trend, AI, will revolutionise the world around them. Barclays Private Bank can help you take advantage of trends like these, ensuring you make the most of your wealth and investments. “We are seeing key innovative technologies, including quantum computing, bioscience and AI, affecting daily life for individuals, small businesses, large corporates and governments,” says Karen Frank CEO, Barclays Private Bank and Overseas Services.

“As these technologies become more established and embed themselves into society, a new operating system for the planet starts to emerge. Barclays can help you to understand what this will mean for you, business, and society in 2019 and beyond.” Barclays Group, including its corporate and investment banking operations, has a huge range of insights and expertise worldwide. Our researchers can also draw upon a global network of experts and innovators, and are constantly looking for emerging themes and new opportunities. Our team-based approach brings together investment and credit specialists, wealth advisers, philanthropy experts, specialist solution teams and many others to help clients make the right decisions. “Barclays has a long history supporting innovation,” says Frank. “It is ingrained in our DNA and will help our clients navigate the opportunities innovation presents, now and in the future.”

Discover more about the true impact of living beyond 100 in Barclays Private Bank investigative series. Search ‘See Beyond’. Barclays offers private banking products and services to its clients through Barclays Bank PLC and its subsidiary companies. Barclays Bank PLC is registered in England and authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered No. 1026167. Registered Office: 1 Churchill Place, London E14 5HP. Barclays Bank PLC (DIFC Branch) (Registered No. 0060) is regulated by the Dubai Financial Services Authority. Barclays Bank PLC (DIFC Branch) may only undertake the financial services activities that fall within the scope of its existing DFSA licence. Principal place of business: Private Bank, Dubai International Financial Centre, The Gate Village Building No. 10, Level 6, PO Box 506674, Dubai, UAE. This information has been distributed by Barclays Bank PLC (DIFC Branch). Certain products and services are only available to Professional Clients as defined by the DFSA.

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OPINION

The Gulf ’s new partner

William Mullally

n the last year, we have seen increasing talk of the possibility of Chinese investment into the Gulf, and greater cooperation between the Gulf States and China on a number of projects to create diversity in the region. This talk has quickly turned substantive, as there is a clear greater effort, including high-level state visits, to have China and the region collaborate on everything from the Islamic economy to green energy. From an investment perspective, this could signal good things for the region, as China is potentially the partner the Gulf needs in order to achieve its respective visions. “China could be an interesting partner for the region because it’s a way for it not to be completely dependent on the United States. China also opens the door to moving upmarket. It's never easy to deal with the US or China, but the difference with China is they understand that you need to focus on green energy to develop the economy of the region,

and so they are an interesting partner for new technology in the UAE and Saudi Arabia,” Christopher Dembik, Head of Macro Analysis at Saxo Bank told me in a recent conversation. “To do that, you need an inflow of capital, and you should never be dependent only on one actor to do so. Chinese investment will work to rebalance the situation, and I think I could be quite interesting. Artificial intelligence could reshape the GCC economy. China is a way to help in that matter—for the United States, it focuses too much on energy in the region and they don’t understand the need for the region to diversify itself,” he continued. The GCC is committed to diversifying its economies, to building new industries and to developing its human capital. To accomplish that, it is going to need the right partners, partners focused on the same goals. As 2020 fast approaches, and the next phase for the region begins, the right groundwork is already being laid.

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NEWS & ANALYSIS

This downbeat oil market sentiment is despite OPEC’s strong compliance and commitment to the production cutback strategy. OPEC has achieved a remarkable 101 per cent of its production targets for February, with Saudi Arabia (159 per cent compliant), the UAE (123 per cent), Kuwait (128 per cent) and Angola (187 per cent) being the biggest compliant states while Iraq remained the weakest link achieving just 52 per cent if its cutback targets. Despite pressures from President Trump calling for the group to ‘relax’ and help reduce oil prices, OPEC remains focused on its strategy, with Saudi Arabia’s Energy Minister Khalid al Falih indicating the cuts will continue well into Q3 or perhaps even Q4 of 2019.”

From a fundamental perspective we maintain a positive outlook for gold given expectations for a weaker dollar, stable to lower bond yields and concerns about global stocks’ ability to forge higher amid current growth concerns. However, keep in mind that many investors buy gold in order to own an insurance policy against adverse movements across other investments such as stocks. And as long stocks continue to climb, gold is likely to struggle finding the strong bid which drove it higher up until February 20 when it peaked just below $1,350/oz.”

The decision to broaden our UAE operations is testament to our faith in regional growth and economic stability, and our confidence in the Emirates’ future as a key business location and wealth generator. Opening a branch office in the UAE’s capital will bring us closer to our clients, and allow us to serve them onshore with bespoke, local solutions.”

Mihir Kapadia CEO and Founder of Sun Global Investments

Ole Hansen Head of Commodity Strategy at Saxo Bank

Arnaud Leclercq Capital Partner and Head of New Markets at Lombard Odier

il markets continue to remain weak, despite OPEC’s commitment.

old is trading at $1,300/oz as of the end of March, while a weaker dollar and lower bond yields have offset the continued headwinds from rising stocks.

ombard Odier is set to become the first Swiss private bank to open in the Abu Dhabi Global Market (ADGM), complementing its representative office in Dubai.

wealtharabia.net

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COVER STORY

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COVER STORY

The next generation of investor Gautam Duggal, Managing Director, Regional Head of Wealth Management, Africa Middle East and Europe, and Head Wealth Management UAE, Standard Chartered Bank speaks to WEALTH Arabia about how heâ&#x20AC;&#x2122;s catering to the needs of present and future HNWIs

PHOTO CREDIT: CPI Financial/F. Magsakay

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hat are the clients you work with most focused on in 2019? Wealth management is in a period of rapid change, driven by shifting investor preferences, margin compression, regulatory developments, and advancing technologies. While the nine-year bull run has diminished the intensity of these industry challenges, experience tells us that markets work in cycles. While many investors have been enriched with the continuation of the longest bull market, some investors are taking a more cautious stance during this time. As valuations rise, so does the likelihood of market volatility or

perhaps even a correction. In such an environment, one of the biggest challenges for clients is to obtain profitable growth. Clients are focused on earning returns through investment vehicles, which are not very volatile. Overall, they tend to be more cautious of how markets will move and hence are looking to invest in investment ideas that may protect their capital. What are the key pieces of advice youâ&#x20AC;&#x2122;re giving clients this year? In 2018, global central banks embarked on an interest aggressive rate hike phase. However, as the Fed switched to a more patient stance in January, central bankers across the globe took the opportunity wealtharabia.net

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COVER STORY

to revise their tightening bias and thus ease investors’ expectations— potentially prolonging the current cycle. We believe the environment for equities and corporate/EM bonds has improved. Resolutions on the geopolitical front—particularly on the trade front— could spark a break higher. As mentioned in our outlook report for 2019: A year to Prepare and React, we believe that continuing to diversify risky asset exposures is the most effective way to manage timing risk in a late-stage economic cycle. For income-seeking clients, a multi-asset income allocation can continue to help achieve regular income goals. Our preferred asset class is equity, which is likely to outperform o t h e r t r a d i t i o n a l a s s e t c l a s s e s. How have the needs of wealth management clients evolved recently? The wealth management industry is experiencing an unprecedented level of change. Depending on where you stand, these changes can be perceived as opportunities or threats. Shifting client demographics and preferences present new demands. Overall, wealth management clients are becoming more astute about financial planning, and they are seeking digital capabilities and better advisory options. As technology continues to change rapidly, wealth management fir ms must be agile to enhance the overall experience for clients. Today, the wealth management landscape is influenced by millennials, who are the ‘future high net worth individuals’. Increased financial awareness is leading to increased demand for more sophisticated and customised services. Millennials are tech-savvy, encumbered with debt, philanthropic, financially riskaverse, and have a culturally inclusive worldview. Thus, transforming products and engagement models to suit them is the only way to serve all segments more efficiently and effectively. You mentioned about millenials’ focus on values-based investing

(L-R) William Mullally, Editor, WEALTH Arabia. Gautam Duggal, Managing Director, Regional Head of Wealth Management, Africa Middle East and Europe, and Head Wealth Management UAE, Standard Chartered Bank

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COVER STORY

and an increasing interest in ESG (environmental, social and governance) solutions, what are you seeing in this space? The demand for ESG is being fueled by increased investor awareness and interest, government support in many markets as well as wealth changing hands to the next generation of more socially conscious millennials. Driven by millennial demand, we estimate that assets under management in SRI investment (socially responsible investing) could grow to as much a s $ 3 0 0 - 4 0 0 b i l l i o n by 2 0 2 0 . Industry research tells us that millenials are twice as likely to invest in companies or funds with ESG outcomes, and over 80 per cent cite investing with a focus on ESG impact as central to their investment decision making. In line with this, we are seeing a growth in ESG funds in global markets. How has Standard Chartered evolved to suit those changes? We are seeing first hand that there are three essential elements in a client-wealth manager relationship—performance, engagement, and trust. These elements need to complement each other to form a comprehensive client experience model. Clients are more aware of the need to invest their money rather than simpler products like savings accounts or fixed deposits. Many of our clients also think wealth management is getting more complex and are apprehensive about investing—anyone watching the business news on TV can get overwhelmed by the speed and amount of infor mation that is available. That’s where we can help—first, we break down this information overload so that our clients better understand how they can take advantage of these investment opportunities and then help them through this journey. For us, it starts with our core strength—advisory. T h e n ex t s t e p i s t o d i s c u s s the right solutions, based on the individual goals, investment profile and risk appetite. Therefore, it is very important that our solutions and platfor m must continuously wealtharabia.net

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COVER STORY

improve and innovate to suit the dynamic needs of our clients, as well as to be ahead of the competition. We are now competing with nontraditional digital wealth management solutions, like micro-investing apps and robo-advisors, who are increasingly gaining popularity. Our focus needs to be on matching what they offer in terms of convenience and access to investment insights and solutions. Therefore, we are continuously developing innovative digital channels and solutions to ensure our relevance to the next generation of investors. What are the key challenges you’re facing in this market? While market uncertainties have increased and global growth has moderated and become less balanced, the global economy is still expected to advance at a reasonably strong rate. The markets in our footprint continue to lead global growth and substantial opportunities remain across them. The UAE specifically has faced a challenging macro environment like a lot of other markets. Tough regional macroeconomic environment and strong competition is expected to sustain over 2019. Having said that, The UAE remains a trade hub and infrastructure gateway for Asia, Africa, and the Middle East and we are cautiously optimistic on the global macroeconomic environment. How are you working to overcome those challenges? While we are of course not able to shape the external environment, there is a lot we can do to continue to grow strongly and in a safe and sustainable manner; and that’s our focus. We recently announced our refreshed strategic priorities that reinforce our positions of strength and differentiation and that will drive profitable growth. We have our work cut out for us— we know what clients expect from us, the mindset must be agile so we can adapt quickly. The key is to be simple and fast and to deliver more sustainable profits. We are putting all our focus on 'thinking client' and

improving the client experience to create a differentiated proposition. The UAE fared strongly in your recent social mobility study. What were your takeaways from that study as it pertains to the affluent population in this market? In this dynamic environment, the emerging affluent are scaling the social ladder. Not only are they wealthier and better educated than their parents were, but the socially mobile are becoming increasingly prosperous across their own lifetimes. When we talk about The UAE, as a commodityrich market that also has an established business infrastructure, we have an impressive upward mobility rate of 57 per cent—which means more than half of the population is creating their own prosperity by achieving more in their education, careers and businesses. They are on an upward social trajectory and are hungry for financial tools and information. As a leading international bank helping clients prosper across the globe, we are presented with a ton of opportunities because of that. It opens up a completely new segment for us, and it’s an exciting space to be in. What differentiates the young a f f l u e n t i n t h e UA E f r o m other markets across Asia? These markets are all so unique and are in different stages of development. As per our Emerging Affluent Study in 2018, the young affluent in China tend to be more cautious about salary growth compared to India or Pakistan, for example. Interestingly, the definition of prosperity or ‘symbols of success’ appear to be very different in each country. For example; in Hong Kong, home ownership is the ultimate symbol of success, whereas in China, being able to buy luxury goods is more than twice as important than average. However, one common theme is that there really is dynamic movement happening in these economies, and that people are seizing the chance to thrive. Also, the young affluent are

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COVER STORY

more driven to make sure the future is even brighter for the next generation.

PHOTO CREDIT: CPI Financial/F. Magsakay

What is your perspective on the countr y’s future? W hat makes you most optimistic? The UAE has a bright future. It has a unique geographic location, a stable political system with wise leadership, a stable financial system, and a focus on business and trading. UAE strategy for the future is a long-term strategy launched under the directives of the President His Highness Sheikh Khalifa bin Zayed Al Nahyan. This continues to steer the nation’s transformational growth by identifying the needs and challenges of the future, addressing them through impactful long-ter m plans and successfully leveraging new opportunities for all-round development. Standard Chartered has a rich history here, with deep client relationships and a unique footprint in the region and across key origination centres in Asia, Europe and the Americas. This enables us to seamlessly support our clients. Africa and the Middle East are an important part of global trade and investment corridors, including those on China’s Belt & Road Initiative, and we are well placed to facilitate these flows. These are some of the reasons why we remain confident that the opportunities in the region will support long-term sustainable growth for us. What are your thoughts on the broader region? Is it the same story? We have a deep-rooted heritage of over 160 years in Africa & Middle East and are present in 25 markets. We are present in more Sub Saharan African markets than any other international banking group. We continue to grow strength to strength, and we see the need for wealth management is increasing in some of the markets. So yes, in some ways it is the same story but like I said, we must understand how each market is different and client profiles continue to evolve. Our focus must remain on delivering the right proposition and client experience according to that. wealtharabia.net

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INVESTMENT

PHOTO CREDIT: Jin Lee/Bloomberg

Though the market has fallen a number of times in the last 10 years such as this, we have managed to avoid a recession. How much longer is that possible?

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INVESTMENT

A looming threat Unless central banks do something, a global recession could be coming in 2020, according to Christopher Dembik, Head of Macro Analysis at Saxo Bank

ow much risk is there for a recession in 2020? A lot of investors are getting worried about the risk of recessions. We see the signs of a recession coming. There are a lot of signals, and a lot of leading indicators. To speak about one popular one—US yield curve. There are a lot of technical issues that do not make it such a good tool to predict recession, but we still think it would be unwise to dismiss the yield curve as a mechanism to forecast recession. If you look at one 10 year curve, it is at 0.06 per cent—quite low. We do not see a recession coming in 2019. There will be lower economic activity and hopefully we will have some central banks step up much further in the second semester, but if they don’t do that, there is risk of recession in 2020.

I think it will be the riskiest year for financial markets and economic activity. The problem with financial markets is that investors are still optimistic at the end of the day. Investors think there will be a deal between China and the United States, and they do not take enough issue with Brexit. We still think Brexit is very risky in the short term, and there could be a sell-off of UK assets. What negative signs do you see in Europe? Economic sentiment in Germany is ugly. The automotive sector is down, expectation regarding exports is negative. If Germany is down, economic activity will be much lower in other countries. We expect German economic activity will be at one per cent this year, while some other countries are still expected to be much higher— wealtharabia.net

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INVESTMENT

Dates of U.S. recessions as inferred by GDP-based recession indicator 1 .1 1 .0 0 .9 0 .8 0 .7

+ 1 or 0

0 .6 0 .5 0 .4 0 .3 0 .2 0 .1 0 .0 -0 .1 1970

1975

Source: Hamilton, James myf.red/g/nbQx

France is still forecasted at 1.6 per cent—which will not happen. We will have a lot of European countries and maybe the United States will push their targets lower for economic activity and it will be the trigger for policy easing. As a matter of fact, it is a risky economic period. This is the perfect moment for central banks to step in, and if they don’t do it, we will have a recession, and it will be very ugly. The banking sector in some countries such as Italy is not in very good state, and there are worries in other countries as well. When you discuss with any investors, they do not want to have bank stocks in their asset portfolio, because it is too big a risk. Where could investors look in the current climate, in light of this possibility? US bank stocks are quite good. There is higher capitalisation than before the crisis. Banks are much better able to deal with a recession than before. In the European community, it’s completely different. In the European

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Union, there is a lot of risk for bank stocks. French banks are extremely cheap but are performing very well and we know are able to mitigate any recession, even the deepest recession. I would avoid Italy and you need to be cautious with Germany, but there are always opportunities even in the weakest spots. You just need to pay attention to everything. Nowadays, the banking sector is extremely cheap, so if you choose the right banks, you may need to offset in the short term for a recession, but I think it’s a good bet in the mediumterm as it’s extremely cheap. People feel that the banking sector will fail with fintech and other innovations, but while it may take time for the banks to integrate innovation, they have the cash and market share to perform. I’m much more optimistic about the traditional banking sector than I am fintech. I think it will take ages before we see key leaders in the fintech industry who are able to face recession. The problem with the wave of technology happened after the crisis, so we aren’t sure how some technology

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companies, some of them over valued, will resist and face recession. I may be a bit conservative, but investments in the traditional banking sector are interesting. Some companies, especially French banks, are integrating innovation very fast, and understand that some offices need to close and things need to be easier for customers. They have changed the way they want to do business in the last five to six years. If you compare that with fintechs, they are much regulated—will you trust them during a period of recession? In a gloomy scenario, I think we will get back to what we know the best. We know the banking system works, and the stocks are undervalued—and that is the same story globally. If you are willing to take the risk, Italian banks are a lot better positioned than they were three years ago, as investors are way too scared to take that risk compared to their pricing. Investors just need concentration. Spanish banks have done an extremely good job since 2012 so they remain interesting.

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Changing winds Niels Zilkens, Head Arabian Gulf, UBS Global Wealth Management writes for WEALTH Arabia about how sustainable investing will change everything

ustainable investing will become the default investment style in 10 years from now. This is not only my personal view but also the view of affluent investors in the UAE to which we have asked this question earlier in 2018. There are a couple of very powerful arguments that support this claim. By nature human beings have a very strong tendency towards fairness and altruism. Contrary to public opinion, private and institutional investors are no different. Many years ago, behavioural economists coined the term ‘homo economicus’, i.e. the economic man – creating a caricature of a type of human that would always seek to attain their goals at the highest and by way of profiting from their interpersonal interactions irrespective

of their counterparties’ payoff. In short, that they seek maximum personal profit at minimal cost. There are many shortcomings with this model and the reality is much brighter than this—countless studies have shown that people are indeed, intrinsically, very much concerned with doing the right thing in the spirit of helping, even if this means sacrificing more personal gains. Traditionally, this kind of kinship is what holds traditional society together. Private and institutional investors clearly and continuously demonstrate a strong preference to act in a fair and altruistic way. This is why we can be so confident that this hard wire of human behaviour will strongly foster the expansion of sustainable investing going forward.

Nobody wants to invest in companies with the single intention to maximise personal gain knowing that the companies’ activities are detrimental to stakeholders, employees or the environment. Indeed the fact that UBS’ recently launched survey Investor Watch showed that the main reason why wealthy individuals are not yet fully investing in a sustainable manner is a lack of available options. This demonstrates that the demand is there. The landscape is already changing rapidly as more and more asset managers, banks and other investment houses, including UBS, are beefing up their sustainable investment product shelf to offer options across all asset classes such as fixed income, equity and private markets. One of the main players wealtharabia.net

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in this field is UBS, in particular, thanks to a commitment to support the investments needed to meet the UN Global goals on Sustainable Development. The only way we can help the global community achieve these it to make sure we have the right solutions for the right personal preferences. There is also a misconception that these behavioral traits only apply to private individuals and not to professional outfits such as family offices or asset managers with highly sophisticated management teams. However, available data suggests that institutional investors do indeed have a very strong incentive to invest in a sustainable manner. Of the $82 trillion of total value of global stock exchanges about one-fourth is already invested under SI strategies. Interestingly, 80 per cent of these assets are lying with institutional investors—an overwhelming majority. There is a clear influx of funds flowing into sustainable investing by a diverse range of investor profiles. Second, investing in a sustainable way is not just for the developed world. In fact, our research has shown that adoption rates are significantly higher among investors based in emerging markets such as China or Brazil. Indeed the UAE’s adoption rate is significantly above that of the global average. Reasons for this fact are manifold. The most obvious is that investors domiciled in developing economies are more exposed to the negative effects that companies can have on society and the environment if they are not managed according to minimal ESG (environmental, social and governance) standards. As a result, being confronted with issues on poverty or the effects of, for example, air pollution, will make it more likely for investors based in developing countries to invest in a sustainable manner. This, in combination with the fact that private wealth is growing at a fast pace in emerging markets, makes the case for sustainable investing even

stronger. This effect is amplified in economies where the demographics are more biased towards the younger age groups—often the case in emerging markets – since the young are especially interested in mission driven and value-based investing. The third aspect concerns the myth that sustainable investments yield lower returns than traditional investments. Empirical evidence of more than 2000 studies researching this hypothesis suggests that this

is not the case. In fact, a majority of this academic work strongly points towards the opposite, e.g. in the long run, sustainable investing yields higher returns than traditional investments. An explanation for this is that sustainable investments provide a certain hedge against large devaluations or even bankruptcies of companies as a result of scandals, reputational damage or the detrimental effects of lawsuits. Examples of failed companies that

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investments is already fading and the growing industry that screens companies and to make their value systems and strategies more transparent will allow investors to distinguish better between companies, resulting in a broader investor base. As Al Gore, one of the frontrunners of the ESG trend, passionately declared at the WEF in 2018, “Sustainability is the biggest single investment opportunity in all history.” We at UBS fully support this notion and long been

Available data suggests that institutional investors do indeed have a very strong incentive to invest in a sustainable manner. Of the $82 trillion of total value of global stock exchanges about one-fourth is already invested under SI strategies. Interestingly, 80 per cent of these assets are lying with institutional investors—an overwhelming majority. Niels Zilkens, Head Arabian Gulf, UBS Global Wealth Management Niels Zilkens

have been involved in damaging the environment, harming the health of their customers or displaying major governance related issues such as accounting fraud are manifold. Having an investment strategy that focuses on companies that integrate environmental, social and governance considerations into their strategy and practices reduces these downside risks significantly and as a result provide a superior financial return to investors in the long run.

Lastly, another major factor that influences company’s performances is the effectiveness of its workforce. Businesses that make social factors a strategic priority, i.e. that foster good workplace conditions, engage workers in volunteering programs and pro-actively support their careers tend to have higher engagement levels, less turnover and as a result a higher productivity. As the myth that traditional investments outperform sustainable

committed to investing in the knowhow to build up our expertise in this investment field. Clients clearly care and we are in full support of the fact that they should not have to compromise their pursuit of financial returns to achieve their objectives. Despite the fact that sustainable investing is already no longer a niche area, we firmly believe that we are still at a nascent stage and much more is about to come. We are ready for it for the new ‘normal’ of investing. wealtharabia.net

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Global growth momentum subsiding 24

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Though the world economy may slow in 2019, the GCC regionâ&#x20AC;&#x2122;s growth should remain solid, Bryan Stirewalt, Chief Executive Officer, Dubai Financial Services Authority writes

ccording to recent IMF forecasts, global economic activity is projected to grow 3.7 per cent in 2018. Yet despite a solid outcome in aggregate, further upside to global growth appears limited and it appears that the global economy is near the peak of the current cycle. This is exacerbated by tightening global liquidity as well as increasing geopolitical and trade tensions, which are likely to act as a speed limit on growth over the coming years. This is highlighted by recent data flow, which is indicative of slowing growth across most large advanced economies, while aggregate emerging market growth is currently being held up by India. As a consequence, the narrative of synchronous global growth has now made way for more divergent outcomes between countries. Among the advanced economies, growth momentum in the United States has continued to hold up. Annualised GDP through June and September remained solid, supported by a sizeable contribution from household spending. This is in part due to recently enacted tax cuts as well as monetary policy remains accommodative, albeit tightening. PHOTO CREDIT: Simon Dawson/Bloomberg

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The outlook for investment growth remains robust though is likely to slow due to softening mining investment. This was evident through the September quarter statistics and further weakness in oil prices is likely to weigh further on mining investment in subsequent quarters. Capacity constraints in the US economy persist, with the labour market continuing to tighten while wage pressures are continuing to build. Core inflation has largely tracked the Federal Open Market Committees’ (FOMCs) two per cent target in recent months and with wage pressures building, the risk to inflation is on the upside. Unsurprisingly then, monetary policy continues to be tightened while further tightening is likely in 2019, with the FOMC expecting to raise interest rates twice this year. In the other major advanced economies, the pace of growth evident through late 2017 has eased, though growth remains sufficiently strong to facilitate ongoing tightening of the labour market. In Europe, a softer first quarter in 2018—in part related to the weather—has persisted throughout the year. High-frequency indicators, such as industrial production, business surveys and retail sales data are indicative of a broad-based slowdown in economic growth across the continent. This is also reflective of weaker growth in trade volumes relative to the start of the year. While aggregate growth has slowed, it is more a reflection of growth rates easing from a recent peak, rather than a reflection of a deeper slowdown. This is evident in further reductions in unemployment while measures of labour market costs have accelerated. This has yet to flow through to higher core inflation, with the increase in headline inflation largely attributable to rising energy costs. As a result of slower growth, and inflation remaining stubbor nly below the European Central Banks’ target, monetary policy continues to be highly accommodative and is likely to remain so. Echoing Europe, high-frequency indicators of the Japanese economy also suggest an easing in growth,

US PMI shows a more robust growth backdrop than in Europe

Index 64 62 60 58 56 54 52 50 48 46 2013

2014

2015

2016

Eurozone

2017

Germany

2018

2019

USA

Source: Markit, Julius Baer; PMI = Purchasing Managers' Index

with some downside risk to growth evident through the third quarter of 2018. This reflects a series of extreme weather events such as flooding, typhoons and a major earthquake, which is likely to impact measures of economic activity in the short-term. Despite this, the underlying strength of the Japanese economy remains robust and this is reflected in improving labour market outcomes, represented by a solid rebound in wages growth over recent months. This should be supportive of household spending going forward. As with Europe, core inflation remains low with headline inflation accelerating on rising energy costs. The absence of any acceleration in inflation means that easy monetary conditions are likely to persist for the foreseeable future. Following a stellar year, emerging markets appear to have turned a corner in 2018, with measures of economic activity exhibiting signs of a slowdown and prospects softening somewhat. Tailwinds to emerging market growth, such as ample US dollar liquidity, accelerating global growth and trade, and low volatility in financial markets are fading. This has taken its toll on emerging markets as a whole, as

evidenced by recent sell-offs in emerging market assets. In addition, those economies which had relied too heavily on external debt to fund growth have become especially vulnerable. Yet, despite a softer profile for emerging market growth, an emerging markets crisis appears unlikely. With the exception of a few weak links, emerging market economies appear sufficiently resilient to withstand ongoing tightening of monetary conditions. Factors typically associated with episodes of emerging market crises—such as low foreign exchange reserves, high foreign currency debt and high inflation—are localised to only a few economies with limited spillover potential. Those economies which had relied too heavily on external debt to fund growth have become especially vulnerable. Yet, despite a softer profile for emerging market growth, an emerging markets crisis appears unlikely. With the exception of a few weak links, emerging market economies appear sufficiently resilient to withstand ongoing tightening of monetary conditions. As with advanced economies, the slowdown in emerging markets is fairly broad-based, though there are

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some exceptions. One such exception to softening emerging market growth in 2018 had been India, with solid growth rates evident through both June and September. More recently, however, the Indian economy has not been immune to the broader slowdown. Measures of economic activity, such as industrial production and business surveys, indicate a slowdown in activity and high oil prices coupled with a sharp deterioration in currency is likely to weigh on household disposable incomes. Much hinges on the outcome of the recent monsoon season, which had recorded lower-than-average rainfall. This could result in slower GDP growth in the December quarter given the sizeable contribution of agriculture to GDP. Chinese growth has also slowed, as authorities have taken steps to contain the build-up of risks in the Chinese financial system. This is notable in the sharp pull-back in fixed asset investment by state-owned enterprises, which had been a stimulus to growth in recent years. At the same time ,activity in the industrial sector has been subdued, reflective of weak industrial production elsewhere. In contrast, services activity growth has held up reasonably well, which Chinese authorities attribute to ongoing growth in the information technology sector. In response to slowing aggregate growth and potential threats from an escalating trade war, Chinese authorities have announced a series of policies to ease the pace of slowing. These included a targeted easing of fiscal policy, a reduction in reserve requirement ratios for Chinese banks and liquidity injections into the banking system. Further slowing of Chinese growth is expected, though growth should remain relatively high by global standards. In the other large emerging markets, conditions have softened considerably, particularly in the large Latin American economies, Turkey remains under external pressure and South Africa has recently emerged from a technical recession due in large part to a large decline in agricultural production.

Bryan Stirewalt

With a number of emerging markets slowing, it is unsurprising that capital flows have slowed, adding further pressure to such markets. However, in aggregate the outlook for emerging markets as a whole remains solid and this should support global growth in the coming years. Slowing growth in China is likely to be offset by India and other East Asian economies while some recovery is anticipated in Latin America. However, one should be cautious of downside risks to growth. With global trade tensions ratcheting up and tighter US dollar liquidity, the potential for a sharper slowdown and policy mistakes are ever present, which could result in slower-than-expected growth, even if a crisis appears unlikely. Closer to home, higher oil prices through the third quarter helped to boost confidence across the GCC and also provided some respite for regional

fiscal balances. At the same time, rising oil production also provided a boost to aggregate GDP growth across the region. Some of this is likely to unwind, however, given the fall in global oil prices through the December quarter. Nonetheless, for non-oil output, regional g rowth should remain fairly solid. This is due to plans for expansionary fiscal policy across the region, with GCC governments having increased spending over the past year. This implies that the impact of fiscal drag on g rowth should slowly fade over time, though further fiscal reform will be required in the coming years. A heavy emphasis across the region on expanding the SME sector, and the role new financial technologies may play in facilitating this, provide opportunities for growth of the financial services sector, following relatively soft credit growth in recent years. wealtharabia.net

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Chinaâ&#x20AC;&#x2122;s tariff problem still leaves attractive opportunities As Chinese New Year has come and gone, the ongoing trade war and a domestic slowdown continue to play out. But how is China approaching these events, and what has it learned from the past? Jin Xu, Portfolio Manager, Asian Equities, Columbia Threadneedle Investments speaks on what investors need to know

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s C h i n a ’s s o f t g r o w t h simply due to the trade war or is it something more fundamental? The trade dispute has of course contributed to the slowdown. Towards the end of last year, we saw China frontload its export activities to the US in a bid to beat January’s tariff rise, now those Jin Xu tariffs have been imposed, we will see some impact this year. But there are two other factors. Firstly, at the start of 2018 the Chinese government launched a series of deleveraging measures to try and control the country’s overall debt, as well as tighten control of banking and off-balance sheet funding, and focus on quality growth. These monetary policies naturally led to slower growth. Secondly, there is uncertainty around corporate capital expenditure intentions. Corporations are unsure about the long-ter m picture and t h e o u t l o o k fo r o rd e r s, s o a re withholding spending. However, the government is willing to make a deal with the US to resolve trade issues, work towards finding a solution, and avoid any further sharp rises in tariffs on China’s exports. Will this willingness to engage with the US head off further tariffs, or are they inevitable? The situation between China and the US is more than simply about trade; it also covers the protection of intellectual property, market openness and industrial policies. It will take time to negotiate solutions to these issues, but we don’t think things will deteriorate significantly from here.

PHOTO CREDIT: SeongJoon Cho/Bloomberg

How might the Gover nment tackle China’s debt, and does it see it as problematic? China’s debt challenge has been covered extensively over the past few years. It is not a black swan as the Government, corporations and investors know all about it. That said, the Government has noted the challenge it presents and is keen to control and improve the situation. Since the beginning of wealtharabia.net

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last year when the economy, corporate profits and global demand were good, it sought to control leverage. But the external situation has changed and supportive measures are now planned. Normally liquidity is injected into the monetary pool, and banks start to push that liquidity out by lending to companies wishing to expand – after all, companies need to absorb liquidity if it is to convert into credit and increased economic activity. But what is interesting at present is that corporations (and subsequently consumers) are relatively cautious about taking on more debt. Instead they are focusing on cash flow and return, because the outlook is uncertain. Another new trend is that corporations are more willing to invest in R&D and product innovation rather than on expanding manufacturing capabilities. How is the trade war perceived inside China? There are two views. One is that it presents a challenge and will cause an economic slowdown making it more difficult to do business, and to export or import key components. On the flipside, there is the view that it is a good opportunity to reform policy framework. A recent example of this is China’s willingness to open market access for foreign companies. Tesla is about to start building a factory in Shanghai in which it will own a 100 per cent stake; previously car makers such as General Motors or Ford had to obtain joint venture (JV) partnerships. This follows on from BMW increasing its JV stake from 50 per cent to 75 per cent, and in the financial services sector UBS being approved for a 51 per cent majority stake in a local securities joint venture. All of which is illustrative of China taking the US’s request for corporate change seriously, and its receptive attitude towards the trade negotiations. We are also hearing more talk around greater respect for IP protection —once again China is listening to the US on such issues. But it is also the right

Growing from strength to strength

900

30 China's per capita GDP as percent of U.S. (in PPP)

600

Poverty population (in millions of persons, right hand scale)

300 China's per capita GDP as percent of U.S. (nominal)

0 1980 1985 1990 1995 2000 2005 2010 2015 2016 2017

Source: CEIC, National Bureau of Statistics of China statistical yearbook, 2018

time for Chinese companies who are increasingly involved in more innovative products, so domestically they are seeking greater IP protection. In short, it is less than a year since the trade disputes began, but already China is moving forward. Do the Huawei IP theft charges disrupt China’s moves to become m o re a c c o u n t a bl e, o r i s i t illustrative of the need to carry on? It’s more the latter. Chinese tech companies are increasingly paying attention to factors such as intellectual property, internal compliances and market rules. As they increasingly become part of the global supply chain, so they are learning the rules and improving the management systems. It’s important to recognise Chinese technology companies are not saying ‘let’s close the door’; they are listening, they want to improve.

Will China’s policy reform change the way they approach this slowdown? Yes, and it is already different. Following the global financial crisis there was one plan: a big stimulus package. This time the supportive policies are piecemeal; it is data-led thinking instead of a single big stimulus hit which then leads to overcapacity. So perhaps we might not get a V-shaped recovery like last time when everything rebounded sharply, but it is more sustainable and there is quality behind the supportive policy. Does this impact portfolios and asset allocators’ positioning on China? After some outflows in the second half of last year, this has recently balanced out. Why? First, the earnings slowdown has already happened over the past two quarters. Everyone is aware of the trade situation and

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negotiations are continuing. Second, in terms of valuations, China is at around 10x forward P/E, and over the past decade its P/E range has been around 9.5-14.54—so, valuation-wise it’s attractive. Third, the dollar cycle is near the peak, which is positive for emerging markets. Although there is uncertainty, there is also a structural fundamental growth opportunity: China’s domestic consumption. According to the IMF, in 2017 GDP per capita in China was around $9,000. In the UK it was around $40,000 and in the US it was around $60,000. Over the next decade, China’s

domestic consumption pie should continue to grow steadily; it is unlikely to regress. Indeed, the GDP PPP for China in 2017 was $16,696, and in 2023 is projected to be $26,178.5 So that gives us opportunity. Meanwhile, China is already globally the largest single consumer market. Annual new car sales in China are 28 million units, in the US it is 17 million. Chinese consumers are buying more iPhone units than the US. Lots of Chinese companies have been developing better quality products and innovative business models to catch the growth.

All of which adds up to an economy of such a scale that its individual component cities have comparable GDPs to whole countries. In our Asian and China portfolios we have been successful in applying the above themes, from technology and insurance to the consumer sectors. So, whether we’re talking about the rise of ecommerce, the increasing demand for life insurance products as people become wealthier, or the demand for luxury high-end goods, as an active fund manager with in-depth local knowledge, this structural trend will continue to create attractive investment opportunities for our clients. wealtharabia.net

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Mehsan Arshad

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The UAE family office approach Mehsan Arshad, Chief Investment Officer for multiple family offices in the UAE, shares the strategy he and leading HNWIs in the country are following with their investments

ou have always been focused on high returns. Do you find that is still p o s s i bl e i n t o d ay ’s market, and how do you navigate the current investment climate? My private office strategy is that they need 40 per cent returns on their investment, because previously they were seeing 100 per cent returns on their investment in the UAE. Why? Because of the speculative market. Dubai was never a market for investors, but due to speculation, local investors made money after money. But now, as the market is much different from what it once was, one has to change one’s strategy. Any private office has to have proper due diligence before they do anything—that is a core thing that is missing. If a Sheikh wants me to invest $100 million in the United States and asks for returns of 25

to 30 per cent, and I have a project that can provide those kinds of returns, there is always a high risk—it’s a fundamental truth. What I try to teach my private offices is that investment has to be made diligently with proper study. Secondly, we have to see whether it is bringing some sort of improvement to society or not. If it is bringing improvement, then it will definitely bring good returns to your stakeholders. If you are only after returns, it will not happen. The world has changed. What are the strategies the family offices you work with in the UAE right now? I work with one Sheikh who comes from a large conglomerate in Al Ain. They have always wanted to invest only in the UAE and only in the real estate sector. They also have a policy that they will not

serve specific beverages, be involved in nightclubs, or serve non-Halal meats. Now, they are having harder times. They are surviving because they are big enough, but they are running at a loss in their hotel business. It’s good they’ve adopted this policy over many years, but now for the first time, they are looking at the outside market as well. They are no longer into the traditional way of doing business—they have evolved to a new modern way of thinking. They now want to park their money in stocks—buying tangible assets in lucrative markets. I have had them invest into the Indian market, Telangana specifically, when I was not aware it was progressing as well as it is. The market there now is like Dubai in the mid-2000s, and investment there is giving good returns. It is not a blind investment—it has to follow the aforementioned formula. wealtharabia.net

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Wi t h a n o t h e r f a m i l y o f f i c e I work with, they have changed their strategy from focusing on the international market to focusing now on the UAE. Apart from real estate, they want to invest into theme parks and into innovation, as well as human development. We have been doing this for the past 12 months. We have started studying container home for tourists, and have given the proposal to Yas Island, and they liked our proposal. The second thing we are doing, again with the same area, is a surf park. There is no surf park available in the UAE, but there is a huge requirement. We have given a proposal and it has been given initial approvals. Once it is ready, we will be implementing that as well in both Abu Dhabi and Dubai. When it comes to human development, they want to put money into training in order to get benefit from thatâ&#x20AC;&#x201D;increasing deserving candidates who had not had access to be trained in certain skills. Dubai will never let you down. Dubai is a place where everyone becomes a millionaire. People arrive with one dirham and grow to that level. The city is also at a very strategic location which will never die. As long as Dubai is there, the people will progress. If you invest with sense, you will see returns in Dubai. Do you see investments in Dubai that people are not looking at closely enough? I feel that investors should get into digital assets. They should market their asset digitally, and they should make a mechanism wherein they can make use of their dead inventory in a productive way by having security tokens on the blockchain side. There is a company we have invested with and we would like to bring all the UAE assets into one portfolio and convert them into REIT. Investors plus end users can benefit from this, because everyone is short of liquidity at the moment. We have come up with a mechanism that can definitely solve this dead inventory issue in the UAE, and investors coming into the UAE should not only look into real estate but into various opportunities

Dubai will never let you down. Dubai is a place where everyone becomes a millionaire. Mehsan Arshad

that the UAE government is offering with regards to free trade zones, manufacturing plants, as well as natural resources available in the UAE which can be explored and then exported to different countries. What sort of resources? In Al Ain there is natural warm water. In Japan there are fish that can only survive in that sort of water. You need to look at what is there in the world that can be synced with the present natural resources of the UAE. If that fish farming is done in Al Ain, that would bring good returns for the farmers, and then turn into so much more.

Mehsan Arshad

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What does the future hold for Dubai real estate?

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Real estate markets in Dubai are expected to face another tough year in 2019 says S&P Global Ratingsâ&#x20AC;&#x2122; Real Estate Analyst Sapna Jagtiani, with the pace of supply driving future rental and price developments

PHOTO CREDIT: Tymonko Galyna/Shutterstock

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e expect the Dubai real estate markets in 2019 to fare no better than in 2018, wrought with supply demand imbalances, economic slowdown, US dollar appreciation and lower population growth. Additionally market sentiment is weaker due to volatile oil prices. While Dubaiâ&#x20AC;&#x2122;s GDP growth does not directly depend on oil, the indirect effects of lower oil prices could include diminishing purchasing power and weakened investor sentiment leading to reduced interest in the region and slowing business activity of non-oil companies. In Dubai, the residential real estate sale prices dropped an estimated 12 wealtharabia.net

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Prime Dubai yield trends

Industrial

Retail

Education & Healthcare

All-property yield in Dubai (%)

Residential

Hospitality

Office

4 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Note: The above graph comprises Knight Frank's view of yield trends across a number of real estate sectors. It is not intended to be definitive and represents wider sector themes only. Yields where possible are based on transactional activity. Where no or limited transactional activity exists the data is based on Knight Frank's view of a Grade A (or relative) hypothetical building let at a fair market rent to a credit worhty tenant in an international freehold or long leasehold area. It excludes super prime transactions which may trade at a premium. The data should not be relied on for any valuation purposes and is indicative only. Source: Knight Frank Research

per cent to 14 per cent in the last 12 months, according to Astecoâ&#x20AC;&#x2122;s Q3 2018 report on the emirate, a trend we expect to continue in the absence of positive triggers. Residential prices first weakened in 2015 in line with the drop in the price of oil, and the trend did not reverse even though oil prices recovered and stabilised earlier this year. More recently, the demand for residential units was affected by slower economic growth and heightened geopolitical risk in the region. The number of new under-construction units has significantly increased in the last two years as developers announced incentives such as payments after handover and service charge discounts. This means there will be significant new stock delivered in the next two to three years, constraining price and rental growth.

Residential prices first weakened in 2015 in line with the drop in the price of oil, and the trend did not reverse even though oil prices recovered and stabilised earlier this year. Sapna Jagtiani, Real Estate Analyst, S&P Global Ratings

In the office segment, we donâ&#x20AC;&#x2122;t believe rents have bottomed out yet. While the expected new supply is limited, the emerging popularity of co-working space is acting as a disruptor for those offering traditional office space. For the hotel segment we expect to see lower average daily rates (ADRs) as supply continues to increase faster than demand. We understand 25,200 new hotel rooms will come onto the market until 2020 as per JLLâ&#x20AC;&#x2122;s Q3 2018 report on the sector in Dubai. The increased competition and squeeze on profitability will likely keep the hotel sector under pressure in 2019. The retail real estate sector is also expected to face pressure on the back of a sluggish economy which impacts disposable income, the growth of online shopping, and tourists becoming more cost-sensitive.

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Prime office yield spreads, major global cities

We expect occupancy and rentals to deteriorate especially as new supply in the tune of 1.1 million sqms of gross leasable area (GLA) is expected to be delivered until 2020 Sapna Jagtiani

Shanghai

Hong Kong

Paris (CBD)

Frankfurt

Tokyo

Prime office yield

Source: Knight Frank Research

We expect occupancy and rentals to deteriorate especially as new supply in the tune of 1.1 million sqms of gross leasable area (GLA) is expected to be delivered until 2020, according to JLL. Despite the challenging market conditions, our neg ative rating actions for the GCC-based real estate companies currently rated by S&P Global Ratings remained limited in 2018, given market derived volatility had already been factored in to our ratings. Most companies rated by S&P Global Ratings in the sector also benefit from a high share of relatively stable real estate rental activities that helps to mitigate the development exposure. During 2018, governments across the Gulf introduced several initiatives to support real estate markets. Notably, the UAE has reduced government fees down to 2.5 per cent of the annual rent

London (West End)

New York

Paris (La Defense)

Singapore

London (city)

Sydney

Dubai

8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2%

Yield spread compared to 10-year bendmark

of commercial establishments from five per cent, and relaxed regulations around foreign ownership in businesses located outside of free zones. It has also approved a long-term residency visa program, which, amongst other schemes, offers five to 10 year resident visas for foreign investors who invest between AED 5 million to AED 10 million ($1.4-2.8 million) in real estate projects. In 2020, the sector may also see some benefit from the potential increase in economic activity and positive business sentiment resulting from the Dubai Expo 2020, which is expected to attract 25 million or more visitors to the emirate. Whilst these schemes and events are likely to be positive for real estate demand, rental and price developments are likely to be driven more by the pace of new supply coming in to the market. wealtharabia.net

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INVESTMENT

Finding value in Asia Finding truly strong investments across the continent is proving more difficult. Mark Matthews, Head of Researchâ&#x20AC;&#x201D;Asia, Julius Baer, points out how to navigate

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INVESTMENT

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INGAPORE Real Estate Investment Trusts, or REITS, are good value. Singapore REITs are one pocket that may be boring, but if you reinvest the dividend, and you had been doing that since the sector started in 2003, you would have made 560 per cent. There are things in Asia that have done much better in the US. Singapore is the only big REIT market in Asia, though Australia has a big one as well. Australia has been great, but now Australian prices are going down. What Singapore did about five or six years ago is they put in very strict meausres to control property prices from going up too much so they avoided a bubble. Now Australia has a bubble that has deflated. Singapore remains the best REIT market in Asia.

semiconductors. I don’t think it’s a buy just because it’s cheap. HONG KONG There is a lot of value in Hong Kong. Some of it is China-related, but I think it’s gotten down to levels where it’s ok. HSBC, which is listed in Hong Kong, as about a six per cent dividend yield. TAIWAN Taiwan is very much an Apple play and a semiconductor play. A lot of that depends on your view on Apple. Generally smart phones appear to have reached some level of saturation, because there was no growth in smart phone sales in 2019. We’re not expecting any growth in this year either. The basic problem is they’ve become too expensive. In 2013, affordable, mid-range phones costing between $200 to $600 were 50 per cent of the product offering. In 2017, which is the last data available, this share of the product offering went down to 20 per cent. The problem is, I believe, that the smart phone makers got greedy, and they were making phones that were so expensive, so good, and so packed full of memory that you don’t need to buy a new one every year.

KOREA There’s a ton of value in Korea right now. In fact, it’s the emerging market that’s trading to the deepest discount to its historic average price range. Korea trades at a 20 per cent discount to its long-term price/earnings ratio. However, Korea is basically a deep cyclical country—cars, chemicals,

Taiwan is very much reliant on smart phones. In terms of semiconductors, there is a lot of oversupply there too. The semiconductor manufacturers did not expect this to happen, and expected sales to stay very strong so they added a lot of capacity. They also expected gaming to remain very strong which it has not. Taiwan and Korea I would say no. JAPAN I would say investors should look into Japan. It has two things going for it. The first thing is weird—they’re really old. Twenty-five per cent of the population is 65 years or older. Ironically, what that’s forced them to do is automate. The corporate profit margins in Japan have risen from an average of three per cent in the 1950s to an average of eight per cent. They’re very aggressively automating which is increasing their margins. The other thing is that, because Japan was just in this huge funk over the last 20 years and no one wanted to invest anything, they’re sitting on a lot of cash. Corporate Japan, in terms of large corporates, 15 per cent of their market cap is in cash. Mid caps are at about

Total Name

SGX Code

Market Cap (S$M)

Return 29 Jun-3 Dec 18 (%)

Keppel REIT

K71U

3,986.1

9.0

-2.7

42.8

32.6

4.7

0.8

Capital Land Commercial Trust

C61U

6,590.2

6.5

-4.5

58.3

62.7

4.9

1.0

Suntec REIT

T82U

4,753.7

5.7

-12.8

33.7

51.2

5.6

0.9

Frasers Commercial Trust

ND8U

1,254.4

4.9

0.4

32.0

57.4

6.9

0.9

Mapletree North Asia Commercial Trust

RW0U

3,609.8

2.7

-1.1

50.4

82.4

6.7

0.9

IREIT Global

UD1U

464.5

0.4

2.2

38.3

0.0

8.0

1.1

Manulife US REIT

BTOU

1,360.8

-5.8

-5.7

0.0

7.2

1.0

3.4

-3.4

36.5

40.9

6.3

0.9

Average

Total Return Total Return 3Y Total Return Div Ind Yld (%) YTD (%) 5Y (%)

P/B (x)

Source: Bloomberg & StockFacts (data as of Dec 2018)

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PHOTO CREDIT: Tom Black Dragon/Shutterstock

Thailand is set to be categorised as an ageing society within five years, according to the United Nations.

wealtharabia.net

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20 per cent. This will be increasingly deployed, I believe, for buy backs or higher dividends because there is a lot of pressure from the Government and shareholders to do it. Already, the Tokyo stock market’s dividend yield, at 2.5 per cent, is higher than the S&P—and 10 years ago it was nothing. I think it will go up because they’ve got too much cash. Japan is not the best story in the world it’s not the worst, but it still has the second largest stock market in the world.

MALAYSIA Malaysia has nothing interesting. Relatively small population, good demographics. They’re young but it’s not a big country, with a population of around 25 million. They have an employee provident fund which every month buys the market. No other country in Asia does that except for Australia. That naturally creates an expensive market, so it doesn’t have value for investors.

THAILAND In Southeast Asia, although it gets lumped together as ASEAN, each market is extremely different. Thailand, for example, is a fairly mature economy with an aging demographic with a massive current account surplus at around 11 per cent, which gives it a very strong currency. It has a pretty good dividend yield at 2.5 per cent— it’s stable, relatively unexciting, but fine. There are not going to be any problems. You get a good yield, and there are interesting angles such as tourism, health care, and that would be an example of a safe Asian country. It’s boring, you will make money over time, but it probably won’t shoot out the lights.

INDONESIA Then there’s Indonesia, which should be the most interesting market in Southeast Asia because it’s the biggest country with 250 million people and very well endowed with natural resources, but the problem with that country is that the business basically run by a community that is not comfortable with the way that politics are going. The opposition in the Government are trying to ride a religious ticket, which the business community doesn’t like. I don’t think it looks very appealing right now. Singapore has a g reat REIT sector, but apart from that a fairly boring economy.

THE PHILIPPINES On the opposite end of the spectrum is the Philippines, where they do have a current account deficit, as well as an incredibly strong population demographic. It’s around 100 million people now, and will probably be 200 million in 30 to 40 years. Their population looks like a real Egyptian pyramid—the largest segment of the population is babies. Their working age population will peak 35 years after even India—they have incredibly strong demographics. They speak good English, and have a pretty good educational system. That will be a country that is a much rockier ride than Thailand, but I see that as being a nice balance. Thailand will be slow and steady, and the Philippines will be rocky but a very good place to invest over a 10 year view.

INDIA India is in its own orbit. All the other Asian countries are closely tied to China, but India does its own thing. It is a country that has a lot of political risk now which I didn’t think was going to happen, but the polls now show risk. Long term it shouldn’t make much difference but in the short term businesses are delaying things to see who is going to win. It reminds me of Canada, in that Justin Trudeau came out of nowhere and was all of a sudden Prime Minister. In India, the daughter of Rahul Gandhi is a woman named Priyanka Gandhi, who has been made the head of the Congress Party in their largest state, and is becoming wildly popular. People love her because she’s smart, charismatic, young and appeals to people because her grandmother was Prime Minster in the 70s, who she reminds people of. The party has come up in the polls. Domestic flows

Average Annual Population Growth Rates (PGR), by Five-Calendar Year Intervals, Philippines: 2010-2045

Table 2. Average Annual Population Growth Rates (PGR), by Period

Growth rate

2015-2010 2020-2015 2025-2020 2030-2025 2035-2030 2040-2035 2045-2040

1.73 1.59 1.41 1.21 1.02 0.84 0.65

Table 3. Projected Population for Selected Age groups, by F 2010 Number Percent to total into equities have turned negative after Age/Sex

three years of positive, and people Total population 93,135,100 100.0 101,5 are worried now. On10,767,800 the surface, 11.6 4-0 11,3 India14-0 looks to be the fastest growing 33.6 31,335,400 32,2 economy 7.3 per cent 62.0 64-15 in Asia, with a 57,773,900 64,4 GDP60growth number, but as they are 6.7 and over 6,261,500 7, 65 and overand through 4,025,800 4, demonetising the goods 4.3 Female 49-15 23,972,000 26,2 and services tax, they are bringing the 25.7 unofficial economy into official registry. Because things were not included in the economy because they were not Age groups, by Fi Table 3.before Projected Population for Selected taxed, they are now being recognised. It looks like the economy is getting bigger, 2030 Age/Sex Number is atPercent to total Nu but apparently, unemployment a 45 year high, and it doesn’t seem that Totalare population 131,9 people consuming 125,337,500 or investing on 100.0 4-0 11,043,800 8.8 10,6 the ground. I don’t think its’ growing 14-0 33,629,800 26.8 32,7 as fast64-15 as it appears to be. It’s the only 65.5 82,146,900 87,4 country inover Asia where the price/ 11.4 60 and 14,246,100 16,8 earnings ratio than what it 7.6 65 and over is higher 9,560,800 11,6 was with a 10 per cent premium Female 49-15 32,141,600 to an 25.6 33,7 average over the past ten years. CHINA In bonds, there’s better value in emerging markets than developed markets. European bonds trade at extremely low yields because all of the quantitative easing that was done there. In the United States, because of all the low interest rates, there was a lot of refinancing. We like emerging market debt, and the spread of emerging overdeveloped is pretty attractive in the ‘B’ and ‘BB’ rating space, especially in China.

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Table 2. Average Annual Population Growth Rates (PGR), by Five-Calendar Year Intervals, Philippines: 2045-2010 Period Period

Growth rate Growth rate

2015-2010 2015-2010 2020-2015 2020-2015 2025-2020 2025-2020 2030-2025 2030-2025 2035-2030 2035-2030 2040-2035 2040-2035 2045-2040 2045-2040

1.73 1.73 1.59 1.59 1.41 1.41 1.21 1.21 1.02 1.02 0.84 0.84 0.65 0.65

INVESTMENT

Projected Population for Selected Age groups, by Five-Calendar Year Intervals, Philippines: 2010-2045

Table 3. Projected Population for Selected Age groups, by Five-Calendar Year Intervals, Philippines: 2045-2010 Table 3. Projected Population for Selected Age groups, by Five-Calendar Year Intervals, Philippines: 2045-2010 2010 2015 2020 Age/Sex 2010 2015 2020 Number Percent to total Number Percent to total Number Percent to total Age/Sex Number Percent to total Number Percent to total Number Percent to total Total population 93,135,100 100.0 101,562,300 100.0 109,947,900 100.0 Total 93,135,100 100.0 101,562,300 100.0 109,947,900 100.0 4-0 population 10,767,800 11.6 11,327,300 11.2 11,475,800 10.4 4-0 10,767,800 11.6 11,327,300 11.2 11,475,800 10.4 14-0 31,335,400 33.6 32,282,200 31.8 33,311,200 30.3 14-0 31,335,400 33.6 32,282,200 31.8 33,311,200 30.3 64-15 57,773,900 62.0 64,406,300 63.4 70,572,500 64.2 64-15 57,773,900 62.0 64,406,300 63.4 70,572,500 64.2 60 and over 6,261,500 6.7 7,639,300 7.5 9,508,800 8.6 60 6,261,500 6.7 7,639,300 7.5 9,508,800 8.6 65 and over 4,025,800 4.3 4,873,800 4.8 6,064,200 5.5 65 and over 4,025,800 4.3 4,873,800 4.8 6,064,200 5.5 Female 49-15 23,972,000 25.7 26,274,800 25.9 28,269,600 25.7 Female 49-15 23,972,000 25.7 26,274,800 25.9 28,269,600 25.7

2025 Number 2025 Percent to total Number Percent to total 117,959,400 100.0 117,959,400 100.0 11,360,700 9.6 11,360,700 9.6 33,908,600 28.7 33,908,600 28.7 76,379,400 64.8 76,379,400 64.8 11,717,100 9.9 11,717,100 9.9 7,671,400 6.5 7,671,400 6.5 30,253,400 25.6 30,253,400 25.6

Table 3. Projected Population for Selected groups, Five-Calendar Year Philippines: 2045-2010 - continued Projected Population for Selected AgeAge groups, bybyFive-Calendar YearIntervals, Intervals, Philippines: 2010-2045 - continued

Table 3. Projected Population for Selected Age groups, by Five-Calendar Year Intervals, Philippines: 2045-2010 - continued 2030 2035 2040 2045 Age/Sex 2030 2035 2040 2045 Number Percent to total Number Percent to total Number Percent to total Number Percent to total Age/Sex Number Percent to total Number Percent to total Number Percent to total Number Percent to total Total population 125,337,500 100.0 131,903,900 100.0 137,532,200 100.0 142,095,100 100.0 Total 125,337,500 100.0 131,903,900 100.0 137,532,200 100.0 142,095,100 100.0 4-0 population 11,043,800 8.8 10,622,300 8.1 10,119,600 7.4 9,523,800 6.7 4-0 11,043,800 8.8 10,622,300 8.1 10,119,600 7.4 9,523,800 6.7 14-0 33,629,800 26.8 32,777,800 24.8 31,534,200 22.9 30,008,500 21.1 14-0 33,629,800 26.8 32,777,800 24.8 31,534,200 22.9 30,008,500 21.1 64-15 82,146,900 65.5 87,431,100 66.3 92,142,500 67.0 95,869,100 67.5 64-15 82,146,900 65.5 87,431,100 66.3 92,142,500 67.0 95,869,100 67.5 60 and over 14,246,100 11.4 16,833,100 12.8 19,654,200 14.3 22,595,700 15.9 60 14,246,100 11.4 16,833,100 12.8 19,654,200 14.3 22,595,700 15.9 65 and over 9,560,800 7.6 11,695,000 8.9 13,855,500 10.1 16,217,500 11.4 65 and over 9,560,800 7.6 11,695,000 8.9 13,855,500 10.1 16,217,500 11.4 Female 49-15 32,141,600 25.6 33,783,500 25.6 34,930,900 25.4 35,335,300 24.9 Female 49-15 32,141,600 25.6 33,783,500 25.6 34,930,900 25.4 35,335,300 24.9

In the top tier cities of China, Guangzhou, Shenzhen, Beijing and Shanghai, demand is greater than supply, so if you find a good developer in those markets with a good reputation, you can get about seven per cent. Beyond that in China, I would not recommend it as a market. In equities, we moved our rating on Chinese equities from neutral to overweight. The move was prompted by three things. First, negotiations on trade relations between China and the US appear to be moving toward a successful outcome. US President Donald Trump said new tariffs set to take effect on 1 March 2019 would be delayed. While no new deadline was given, CNBC reported the US and China are discussing a meeting between President Trump and Chinese President Xi Jinping at President Trump’s home in Florida late next month. So a deal could occur then. Second, on Friday, 22 February 2019, President Xi Jinping said the financial sector is “a core aspect of a country’s competitiveness… financial security is an important part

of national security”, and “the financial system is a major fundamental system in the process of economic and social development”. They were his first comments on the financial sector since the trade war started, and they are clearly supportive. Third, Chinese trade, credit and money supply data for January were in line or better than expected. Economists caution not to read much into January data, given distortions from both the Western and Lunar New Year calendars. Nevertheless these numbers lend credence to the idea that the economy is bottoming out, as does mainland Chinese tourist arrivals into Macau this Lunar New Year versus last year’s, which rose two per cent year-on-year. In late February, China’s State Council called an urgent meeting with securities regulators, signalling it may wish to avert the same bubble that happened in 2015. Nevertheless, the MSCI China index is still 15 per cent below its average of the past 24 years, and A-shares are 30 per cent below their 2015 high. wealtharabia.net

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FOOD

Lost wisdom

Dinner by Heston Blumenthal, recently reopened at the Mandarin Oriental in London, became one of the best restaurants in the world by digging deep into England’s history

n the food world, especially at its very pinnacle, we often get caught up in answering the question: ‘what’s new?’ Dinner by Heston Blumenthal, which has thoroughly earned its two Michelin stars at the Mandarin Oriental in London, answers a different question entirely—what have we forgotten? For the elite of the Middle East, London is a second home. Dubai, in particular, has a huge amount of London influence in it, with some of the top chefs of the city opening restaurants and traveling to the UAE constantly. London, too, is a very internationally influenced city from a haute cuisine 46

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Almond Rice & Flesh

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perspective, with some of the greatest restaurants from many different cuisines. But though London’s international influences are part of its appeal, one does get the feeling that some of Britain’s culinary history has been lost. Dinner by Heston Blumethal, though it has many modern flourishes in its cooking, follows a very high concept—to look into the ancient, forgotten cookbooks of the UK and dig up recipes lost to time, bringing the wisdom of the ancient British kitchen back to life. It’s always been Heston Blumenthal’s stock and trade to find something beat up and forgotten and turn it into a sought-after gem. In 1995, he purchased a rundown pub in a the small village of Bray and turned it into one of England’s five three-star Michelin restaurants, The Fat Duck, which has been ranked before as the number one restaurant in the world. Dinner, recently reopened after the Mandarin Oriental London’s renovations, was opened in 2011, began as a concept in Blumenthal’s head much earlier. In the late 1990s, Heston Blumenthal first started his fascination with historic gastronomy. The savoury ice creams of the late 1800s, the theatre of the Tudor dining experiences and the dishes of Alice’s adventures in Wonderland all with him, and started to inspire his cooking. Together with Ashley Palmer-Watts, the two chefs created a menu that takes those discoveries and fascinations of history into something completely new, researching 14th century cookbooks such as those by the royal chefs of King Richard II to Lewis Carroll’s flights of fancy. Blumenthal started to work with food historians, tapping into the world of the British library and the team at King Henry VIII’s Hampton Court Palace. Each item on the menu has a date next to it—that’s the date when the recipe they found was first published. To be honest, if it weren’t for Blumenthal’s reputation, WEALTH Arabia may not have tried some of the dishes on the menu. Not that we are particularly fussy, but the Rice

A view of the kitchen

& Flesh (c.1390) includes almond, saffron, veal sweetbreads & smoked eel. Not exactly a combination you’d ever expect to work, but just like everything o n t h i s m e nu , i t exc e e d s yo u r expectations wildly. Certain dishes one can’t help but order based just on how simple they sound, knowing they wouldn’t be there if they were not superlative. The Roast Cauliflower (c.1730) with smoked brown

butter, red wine, truffle & macrows, was one such main course—the sort of simplicity you know must hide some particular substance underneath. For each thing you order on this menu, that hunch is correct. We also tried the Roast Halibut & Green Sauce (c.1440), made with braised chicory, parsley, pepper, onion & eucalyptus—sold on the delightful description of the green sauce and its

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Eggs in Verjuice

Frumenty

Mushroom Broth

lost history by our server. Much like a well-constructed RPG, be sure to travel to each corner of the menu and ask your server the story behind the dish—the staff is incredibly well versed in the intricacies of each dish, and the stories are often as interesting as the food itself. For dessert? Order one thing from the start—one at minimum—the Tipsy Cake from 1810. Talking to one staff

member, I asked her what she liked best. I was told: “If I were dying, and I could only have one meal left on earth, I would start with the Tipsy Cake. Then, for my main course, I would have a Tipsy Cake. Finally, to finish off, two more Tipsy Cakes.” We took her advice, and we might also make the same request. It defies explanation how a little personal cake could be so good. The most generous

we have ever been at WEALTH Arabia in our entire lives was offering a wedge of the cake to our dinner guest. The magic of the kitchen is not something hidden away.. The dining room features floor-to-ceiling glass walls, giving diners a view of the kitchen and its unique pulley system. Modelled after a version used by the royal court, the pulleys rotate the spit over an open-fire. The ivory-painted walls are wealtharabia.net

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Tipsy Cake Lamington Cake

decorated with custom-made porcelain wall sconces in the shape of antique jelly moulds, giving it a classic English feel. Why the name? Blumethal himself describes it a bit more humbly. “In the past, the main meal -dinnerwas eaten at midday, before it got too dark. But affordable candles and, later, gaslight saw dinner shift. By the mid1800s people were dining later. People working in the cities were taking a ‘lunch’ to work and having their main meal at 5.00pm when they got home, while in rural areas the main meal was still taken at midday,” says Blumenthal. “Even today, depending where you are in the British Isles, ‘dinner’ might be served at lunchtime, suppertime or, indeed, dinnertime! This made ‘Dinner’ the natural choice for its typically British quirky history and linguistic playfulness. If nothing else, I hope it’s easy to remember,” says the master chef. 50

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WEALTH ARABIA

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MOTORING

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MOTORING

FIT FOR A

KING the director of Jordan’s Royal Automobile Museum, takes WEALTH Arabia through King Hussein I’s legendary collection, one of the finest in the world Raja Gargour,

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MOTORING

ussein I of Jordan, who ruled from 1952 until his death in 1999, is renowned to this day for compiling one of history's greatest car collections. Nearly the entire line up now sits in its own museum in Amman, Jordan, doubling as a story of the life of the King himself, as these stellar automobiles also coincide with some of the most important moments in his life. W h e n W E A LT H A r a b i a s a t down with the director of the Royal Automobile Museum in Amman Raja Gargour, he traces the beginning of the collection, and King Hussein bin Talal’s love of cars to begin with, to the King’s grandfather, King Abdullah I. The 70 cars held in the museum, including 20 more that are rotated in and out “to keep things interesting,” Gargour says, trace the development of the automobile, and life in Jordan, from 1916. “I think HMK Hussein loved cars since childhood. His first car was the Rover on exhibit. He got bored of it very quickly and went on to faster and more exciting models such as the Bristol and the Aston Martin,” says Gargour. His love of cars quickly became an official part of Jordan itself. “As years progressed he had a keen sense of everything mechanical, from cars to airplanes, to tanks, etc. he loved

German engineering and all the official cars became Mercedes for a long time,” says Gargour. To Gargour, King Hussein’s collection was a reflection of who he was as a person. “If you see King Hussein in any of these cars, you realise how special he was. Whether driving a race car at Rumman Hill Climb, or when he sat on the roof of the armored Mercedes coming back from his first Mayo Clinic treatment, or driving himself through Amman traffic, cars were always special to him,” says Gargour. Highlighting the most significant pieces in the collection, he picks three depending on what kind of significance one wants to highlight. “ I t d e p e n d s wh at s t o r y yo u want to tell!! Sports? His 300SL Gullwing. Official? The 1961 Lincoln Continental convertible. Private? The cars that his family were married in,” says Gargour. Though his tastes changed depending on the era, there are a number of significant favorites that do not appear in the collection—a ‘couple of Porches’ that were beloved by the King are now ‘long gone,’ Gargour laments. Gargour himself has been following the collection long before it became his profession.

“I used to be aware of all the cars since childhood, and see them in parades as a kid. Then I got involved with classic cars in LA and became an automotive specialist and became a consultant to his motor pool on all these old vehicles.

King Hussein of Jordan next to one of his prized cars.

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MOTORING

Slowly, and after HMK Hussein passed away, I was asked to come to Amman to set up the museum Does the same love continue through the family? His son, King Abdullah II, prefers motorbikes to cars, according

to Gargour, but is still one of the best drivers in the country. â&#x20AC;&#x153;HMK Abdullah II was was the Jordanian champion in rallies in 1986 and 88. The Opel Manta rally car is on exhibit.â&#x20AC;?

PHOTO CREDIT: Sotheby's

1955 Mercedes-Benz 300SL Gullwing

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MOTORING

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MOTORING

How to make an entrance The XT5, Cadillac’s top model, is finally debuting in the Gulf, but will it live up to its global success?

he XT5, Cadillac’s bestselling model globally, has, since its debut, been a hit in the Middle East. In 2015, the first XT5 was first shown at the Dubai Motor Show to huge cheers. Now, though it took a bit longer to get here this time, the 2018 model has finally arrived in the region. The XT5 rests, first and foremost, on the reputation that Cadillac has

built since its foundation in 1902. When Henry Ford left his company, his key investors decided not to leave cars all together, hiring new collaborators and founding Cadillac, a name that has continued to release some of the best mass-produced luxury vehicles in the United States to this day. What’s new? The 2018 model features new enhancements on both the exterior and interior, including

a rear camera mirror, Apple CarPlay and Android Auto compatibilities, autoheated steering wheel and front- and rearseat USB capabilities—the necessary technological enhancements and every day luxuries that drivers require in 2019. The design has also put a greater emphasis on fuel economy, driving dynamics and interior space, keeping the model a crossover with a unique lightweight design structure. wealtharabia.net

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MOTORING

To achieve its lightweight design, a combination of laser welding, ultrahigh-strength steel and advanced analytics were used to ensure a stronger structure, excellent crash performance, and less overall bulk. The look of the XT5 is leaner than past Cadillac SUVs, built for a different sort of driving experience than the more tank-like models of yore. Like all Cadillac models, the interior is built with cut-and-sewn wrapped panel instead of a reliance on the molded surfaces that dominate mainstream American vehicles in particular, showing a focus on clean, modern elegance and craftsmanship. Interior surfaces inside the XT5 are wider and more horizontal in orientation, emphasising space-efficiency. Under the hood, the XT5 is powered by a 3.6-liter V6 engine with an SAE-certified peak output of 310 horsepower (231 kW) and 367 Nm of torque. Cadillac’s stop/start technology automatically stops and starts the engine when the vehicle is stationery, saving fuel and reducing emissions, while enhancing the quietness expected of a luxury vehicle, a welcome innovation. The standard twin clutch allwheel drive system continuously and automatically delivers excellent traction across a variety of conditions. While

engineered specifically for strong performance in wet, snowy or icy conditions, it also provides enhanced stability in dry weather. Due to the twin clutch design, the AWD system is capable of transferring up to 100 per cent of available torque to either the front or rear axle. Also, across the rear axle, the electronically controlled rear differential can direct up to 100 per cent of available torque to either wheel laterally. This capability is designed for ‘split-coefficient’ surfaces, such as the common occurrence when water, ice or snow is more prevalent on one side of the road surface than the other.

The standard transmission is an eight-speed automatic transmission with Electronic Precision Shift, an electronically controlled transmission shifter that reduces noise and vibration. The standard twin clutch all-wheel d r i ve s y s t e m c o n t i nu o u s l y a n d automatically delivers traction across multiple conditions. Safety technology continues to be the brand’s strong suit. Cadillac’s patented new industry-leading Rear Camera Mirror system is standard on 2018 XT5 Platinum models. In addition, the car features the brand’s Driver Awareness and Driver Assist packages to aid vision and collision avoidance. These include

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automatic front and rear braking for low-speed conditions, Lane Keeping Assist, Rear Cross Traffic Alert, Side Blind Zone Alert, full-speed range Adaptive Cruise Control and Automatic Parking Assist. The car relies on the unique lightweight design of its chassis for increased fuel economy and the ultimate driving experience. The crossover’s design and structure embody the company’s expertise for lightweight and agile driving dynamics. The XT5 is 126 kg lighter than the SRX. The XT5 is more than 295 kg lighter than the Mercedes-Benz GLE-Class, achieving this with no

2018 CADILLAC XT5 SPECIFICATIONS OVERVIEW Model:

Cadillac XT5

Body style / driveline:

5-door, 5-passenger front engine transaxle; front-wheel-drive/all-wheel-drive midsize luxury crossover

Construction:

steel body-frame-integral (BFI); galvanized steel front fenders, hood, roof, door panels, one-piece body side outer panels and lift gate

EPA vehicle class:

sport utility vehicle

Manufacturing location:

Spring Hill, Tennessee, USA

ENGINE 3.6L V6 VVT DI (LGX) Distribution

ROW

Displacement (cu in / cc): 222.6 / 3649 Bore & stroke (in / mm): 3.74 x 3.37 / 95.0 / 85.8 Block material:

cast aluminum

Cylinder head material:

cast aluminum

Valvetrain:

DOHC, four-valves per cylinder, continuously variable valve timing (VVT); cylinder deactivation

Ignition system:

coil-on-plug

Fuel delivery:

direct high-pressure fuel injection

Compression ratio:

11.5:1

Horsepower (hp @ rpm): 310 @ 6700 (SAE certified) Torque (lb-ft / Nm @ rpm): 271 / 367 @ 5000 (SAE certified) Recommended fuel:

regular unleaded

Maximum engine speed 7200 (rpm): GM-estimated fuel economy (city / hwy) L/100km :

AWD: 13.07 / 9.05

compromise to body rigidity and crash performance. The rear-seat legroom in the 2018 XT5 is an impressive 1003 mm— compared to 975 mm in the Mercedes-Benz GLE. The rear seat reclines and slides fore and aft, as well. Cadillac’s crossover embodies the brand’s expertise for lightweight and agile driving dynamics. It is 45 kg lighter than the Audi Q5—despite the Cadillac being seven inches longer—

and more than 295 kg lighter than the Mercedes-Benz GLE-Class, with no compromise to body rigidity or crash performance. Will the car perform in the Gulf as well it has performed in other markets? It is tough to say. But though it may not be the best luxury SUV on the market, the dependability, technological innovations and focus on safety make the XT5 a safe bet as an every day family car in the region. wealtharabia.net

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LIFESTYLE

What does sustainability mean for children? Alana Sorokin, Founder of Joseph & Alexander, writes for WEALTH Arabia on the lifestyle perspective on sustainability

PHOTO CREDIT: oneinchpunch/Shutterstock

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hen we talk about ‘future generations’, we are talking about the children of today and in the future. We know just how central children are to sustainable development, which is why sustainability is so important in everything that we do. Prince William and Planet Earth narrator Sir David Attenborough recently discussed the future of the planet and what can be done to save it at the World Economic Forum’s annual meeting in Switzerland. Furthermore, last year, the Sustainable Development Goals, more commonly known as the Global Goals, were adopted by the world leaders and will be put into action from this year till 2030. So, how do we

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get the future generations, our children, to champion and follow through with these sustainable goals? Sustainability can be a hard concept for adults to grasp, let alone children. The talks I have with my two young children about our ʻgreen lifestyleʼ take time and patience, but they are worth the effort. Here are a few of the most effective strategies I’ve found for incorporating eco-friendly practices into our family routine. I suggest focusing on one new habit at a time and gradually building from there. For my family, sustainability is a continual conversation Alana Sorokin, Founder of Joseph & Alexander

Teaching children about ʻthe three Rsʼ–reduce, reuse, and recycle—can be an excellent jumping-off point for a sustainability discussion. Alana Sorokin

but it’s one of the most important ones we can have. Here are three of my favourite tips to get my children thinking and acting sustainable. HELP THEM LEARN ABOUT THE BIG ISSUE Young people are our future, so it’s worthwhile helping them to understand how they can look after their planet. Whether it’s making recycling more fun or teaching them about all the amazing fruit and vegetables they can eat, be sure to let them know that they can make a positive difference to the world. For example, you can use a trip to the beach (wearing their sustainable swimwear) as an opportunity to teach them about the consequences of littering and other nature-damaging activities. Bring along some gloves and a bag to pick up rubbish, the children will enjoy feeling the impact that they have on the earth as they help clean up their own neighbourhood. GET THEM OUTSIDE This simple activity goes a long way in teaching sustainability. Sharing in and appreciating a love of the outdoors will inspire kids to care for the Earth. You can also do planned outdoor activities such as growing your own organic food. This helps save on the distance food has to travel to get to you. Plus, it teaches kids to interact with nature. Teaching children about ʻthe three Rsʼ–reduce, reuse, and recycle—can be an excellent jumping-off point for a sustainability discussion. Finding ways to reduce your waste, reuse items, and recycle helps introduce children to being environmentally conscious. For example, children can become well-versed in repurposing materials and turning them into art supplies! Whether you’re using bottle caps, used paper, paper towel rolls, or something else entirely, the sky’s the limit with recyclable goods for crafts. Remember, children are never too young to learn how to live sustainably and showing them the small ways that they can look after the environment will set them up for a bright and healthy future ahead.

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THE BUSINESS OF BANKING Banker Middle East is the MENA regionâ&#x20AC;&#x2122;s most prestigious financial title. Read by senior bankers & financiers across the Middle East, for more than a decade it has been the most informative source of news, developments and strategic thought from within the financial community.

Banker Middle East is a controlled circulation publication. You may apply to subscribe via our website or by emailing subscriptions@cpifinancial.net

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SPOTLIGHT

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SPOTLIGHT

Centering social impact Nadine Labaki, perhaps the most prominent Arab filmmaker, has used her camera and her voice to further humanitarian efforts, with a renewed commitment to philanthropy

mpact investment has become more popular in recent years, just as philanthropy continues to be a key part of the HNWI landscape. One key point of these efforts is in eliminating poverty, a cause that can be easy to ignore for many. In the last 13 years, Nadine Labaki has, through her filmmaking and social efforts, become one of the most prominent global voices in the Arab world. With her latest effort, she has turned the attention on this issue, looking at the conditions that refugees and the extremely poor live in in Lebanon, pointing towards an issue in both the country and the wider region. Labaki is no stranger to humanitarianism. In 2014, Labaki was the goodwill ambassador for the bi-lingual and multimedia campaign by The Brave Heart Fund, based out of the Children’s Heart Center at the American University of Beirut Medical Center to create awareness and helps to fund operations and procedures for under privileged children with Congenital Heart Disease.

With her latest effort, Capernaum, nominated for an Academy Award, Labaki wanted to focus first and foremost on the next generation. “It was a need for me to talk about children. That was the igniting point of this whole journey. I wanted to become their voice because they are playing the highest price for our faults, our decisions, our conflicts our wars. We are dragging them like puppets in our stupid decisions and our nature. I just want to be in their head—how do they see this world? How do they see us? What happens in the head of this child looking at me not looking at him— because this is what we do, we ignore them. The situation is so hard, you feel you’re so small, you feel you can’t do anything, so you just keep going. “You say, what can I do? I can’t do anything. You don’t know what to do—you’re so lost in your values. Do I give him money? Do I help him? Why am I helping just him and not the thousands of other children? You don’t know how to react, so you don’t look. How does it feel to be that invisible? How does it feel to be in the place of

the child that died a few years ago on the shores of Turkey? I remember this picture was a big igniting point for me, because I thought—if this child could talk, what would he say? How would he address us? What would he say about the journey he went through?,” says Labaki. Labaki lived and filmed the real setting that her film depicted, keeping the story as true to live as possible. “We were shooting so close to reality, sometimes it was impossible to stop life. Sometimes we were shooting scenes that were not fiction anymore, even though they were written. The script was based on reality, because we did three years of research while we were writing the script. We were going to everywhere in Lebanon, speaking to children, going to the most unfortunate neighborhoods and places, going to prisons, to detention centers, to homes, to shelters, to neighborhoods talking to children, to the parents going to court. I spent hours in courts just sitting there and watching whatever happened. Everything that we wrote was so much built on everything that we saw that wealtharabia.net

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when we were shooting, the film was becoming reality,” says Labaki. “If you have to be a mattress on the shoot because we need it, it has to be a mattress that has lived the same situation. You can’t bring a mattress and make believe that it has lived something—everything has to be part of that experience. Everything. Even the drawings on the walls are drawings made by other kids who lived in those apartments who have been through the same situations.” Labaki herself is having a hard time going back to the ‘glitz and glam’ life of a prominent public figure, making our conversation about travel turn more serious. “I don’t know what to do. It’s difficult to let go. I don’t think I will decompress ever. When you’ve been through such a life-changing experience or journey, you can’t go back. I’m done—I’m doomed forever. I’m cursed by this experience. When you’ve lived with those circumstances for such a long time, researching for three years, filming for six months, living with them in the sewers practically, surrounded by the haunting sound of children crying the whole time we were shooting—it was part of the soundtrack in a way. You don’t notice it anymore. You see children crying the whole day, getting beaten up, neglected, getting left at home—every day we heard of a child who died of extreme neglect—who fell out the window, put his hand in an electrical socket, or set a fire by accident because he was there alone. Every day we were living those stories. “After living in those circumstances for a very long time, you have a hard time going back to your life and just being the same person—the other person. You change forever. Whatever I am now is very schizophrenic. Yes, of course. You can’t enjoy it the same way anymore— there’s this guilt in the back of your mind the whole time—do I have the right to live this? Do I have the right to be happy? Do I have the right to enjoy my children, my family. Do I have a right to eat a normal meal? You have this guilt feeling. Do I have the right to put on 66

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I’ve grown and changed and become a different person—not just psychologically, physically. It takes so much from your life and your energy—it really has to be a need. I truly believe that cinema can make a change.

PHOTO CREDIT: Fares Sokhon

Nadine Labaki

these clothes? To put on this make up? Do I have the right to be a person who lives in the limelight? I think what puts me at peace with who I am is the fact that I need to use my voice. I need to use this character that I have become or this person that I am in the right way. I have to use it. I have to use this voice, and help become the platform for them to express themselves through me. It’s the only way to make peace. It’s difficult to let go—you can’t let go—you can’t. A travel destination is coming in her future, however. “Where do I like to travel? Now, it’s my home, it’s my family. But there’s no relax. I think I need to take a long vacation somewhere—” Without social impact, Labaki is no longer interested. In Dubai, Labaki and her team arranged special charity benefit screenings of the film—and plans to continue to raise awareness and promote philanthropy continuing now after the film’s success. “I’ve grown and changed and become a different person—not just psychologically, physically. It takes so much from your life and your energy—it really has to be a need. I truly believe that cinema can make a change. When you feel this, and when you can’t let go of this idea, you feel responsible. Whatever you will do next has to have some kind of social impact. I feel this mission—I feel that cinema can have this impact on other people’s lives. When you know you have this responsibility, whatever you’re going to do next, or whatever project you’re going to tackle next, or subject, or theme, has to count,” says Labaki. Some lives have already changed. The young star of the film Zain Al Raffeaa has already been resettled to Norway after living in tough conditions as a Syrian refugee in Lebanon. Resettlement helps those in this situation, but currently only e per cent of refugees worldwide have had access to that opportunity. “Now [resettlement] is not happening to a great degree but when it happens, you can see how it changed Zain’s life,” said Ninette Kelley, director of UNHCR’s New York office. “Who doesn’t want to be part of that story?” wealtharabia.net

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PRODUCTS

A new icon Audemars Piguetâ&#x20AC;&#x2122;s new Code 11.59 collection has reached the Middle East, and it is APâ&#x20AC;&#x2122;s best line since the Royal Oak in 1972

The white-faced 'selfwinding' model

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PRODUCTS

he only way to know when true change comes is if there is resistance. When something new is added to the conversation, when something goes against the grain, the first reactions and the loudest reactions are usually negative. Such is the case nearly each time that Audemars Piguet releases something truly new. When the Royal Oak, now the Swiss brandâ&#x20AC;&#x2122;s most iconic and enduring design, was introduced in 1972, there was push back. That continued when the Millenary collection was released in 1995, with its oval cases and domed sapphire crystal.

Every model is hand-crafted.

CODE 11.59 by Audemars Piguet is about human challenges. It tells the passionate stories of the dedicated watchmakers who dared to follow their convictions, joined forces and persevered, always pushing their own limits. FranĂ§ois-Henry Bennahmias, Audemars Piguet Chief Executive Officer

When the Code 11.59 collection was first unveiled, it was unlike anything Audemars Piguet had released to date. Of course, it was still undeniably AP, but something about it felt different, perhaps plain. It is only after you handle one, look closely at what went into its development, to the exquisite details of each watch, that it becomes clear what an astounding achievement the Code 11.59 collection truly is. As we visited one of the AP boutiques in Dubai, one week after the first 20 or so had been released, only 70

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one remained for sale. The shopkeeper told us that they’ve been turning down sales, as some collectors tried to buy out the entire inventory themselves. As we have covered in these pages time and time again, it is clear that collectors across the region are getting more discerning, and vintage watches are gaining steam. It takes a special watch to catch the eye of the region, and the 11.59 has done just that. According to AP, ‘Code’ is a code in and of itself—C for Challenge, O for Own, D for Dare and E for Evolve. How has it evolved? First of all, it is the first watch AP has designed for both men and women. With an arched ergonomic case suitable for all wrist sizes despite its 41mm diameter, the watches are gorgeous on just about anyone. Composed of 13 references, including five complications and three brand new calibres all launched in one go, the collection will slowly be rolled out throughout 2019. The collection features a large choice of six in-house calibres of the latest generation, including a selfwinding watch with date indication, a selfwinding chronograph, a selfwinding flying tourbillon, a perpetual calendar, a tourbillon openworked and a minute repeater supersonnerie. Each movement has its own special detail with its own finishing techniques, including ‘traits tirés,’ ‘Côtes de Genève,’ circular graining, circular satin, and diamond-polished angles. If anything defines the look of the collection, it is the case—an octagonal middle case embedded within a round case back and bezel. It is just welded to an extra-thin bezel, with open worked lugs that add a degree of complexity. The bezel, lugs and case are satinbrushed, chamfered and polished, refined techniques usually found on calibres. It seems that the trend in style, even for the top watches in the world, is growing less gaudy—the Code 11.59 collection, when we wore it on our wrist, struck us first just how unflashy it was, a watch you can wear

Selfinding Flying Tourbillon, front and back

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It is only when you look closely that you notice how unique it is, and how charming its quirks are. Looking at the face from any angle, the time remains visible and the face seems tilted, part of the watch’s optical illusion.

for any occasion that won’t overpower the situation. It is only when you look closely that you notice how unique it is, and how charming its quirks are. Looking at the face from any angle, the time remains visible and the face seems tilted, part of the watch’s optical illusion. It is the kind of feature that will surely become iconic for decades on from now, as it is clear, even from the first few models, that the Code 11.59 collection will become a true classic. A s Au d e m a r s P i g u e t C h i e f Executive Officer François-Henry Bennahmias put it, “CODE 11.59 by Audemars Piguet is about human challenges. It tells the passionate stories of the dedicated watchmakers who dared to follow their convictions, joined forces and persevered, always pushing their own limits.” “To break the rules, you must first master them.” wealtharabia.net

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PRODUCTS

Fire and brilliance WEALTH Arabia ventures inside Sothebyâ&#x20AC;&#x2122;s Diamonds in London, with a look at its latest exclusive collection in collaboration with designer Lily Gabriela

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PRODUCTS

Lily Gabriela

n one of the premiere destinations in the world for fine jewellery, in the front of Sotheby’s legendary auction house on London’s New Bond Street, sits Sotheby’s Diamonds. Slowly but surely, collectors from the Middle East and all over the world have been moving to the boutique, nestled behind two impenetrable locked doors for security, to find some of the most unique offerings in the diamond space. “It grew from Hong Kong in 2005, then opened a salon in New York, and then opened the London Boutique at the end of February 2017, in direct competition with the other jewelry house,” says Faris Saif of Sotheby’s Diamonds, who began his career handling and selling diamonds and jewels in Saudi Arabia. What makes Sotheby’s Diamonds different? First and foremost, it is its access. Sotheby’s, as an auction house, has brought some of the most famous diamonds to the public over the last few years, gaining a huge amount of publicity in the process. “We saw the rough come to auction, a 1000 carat rough that was very well publicised, though the sales did not go as well as we’d hoped. Because Sotheby’s Diamonds is Sotheby’s, we are very competitive over the other auction houses in that we have access to the rough, and can cut polish and sell it ourselves. We did that and sold it a month later,” says Saif. Because of that, they have been able to build relationships directly with the best diamond mines in the world, as well as renowned artisan cutters Diacore. “We offer a very competitive price and have complete access to the diamond’s coming from De Beers mines which are bought from site holders. In wealtharabia.net

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the mines, a site holder has privileged access to what De Beer’s roughs from the mines. It’s sold in a tenor, so people come in to auctions or privately buy the wonderful roughs,” says Saif. Sotheby’s Diamonds produces its own unique jewellery as well, though it is through partnerships with different designers that they keep the line fresh. “Styles have changed due to designers. The first designes, whose DNA is still in our jewellery, is James Givenchy of Taffin. He is a very contemporary jeweller who likes setting things with very colourful bands or diamonds set in reverse—things that hadn’t been tried in the jewellery industry, says Saif. Setting diamonds in reverse allows you to see the fire of the diamond more. ‘When light hits it, diamonds can give you two things—one is called fire, the other is brilliance. Fire is the spectral hue. When you see orange, red, green flying off a diamond, that is from the perfect symmetry within. The light is flowing through, refracting off the facets. Brilliance is light reflection,” says Saif. The brand also has multiple collaborations coming up, including with Lily Gabriela, a London-based designer raised in Brazil and Monaco. She was drawn to the energy and culture of London where she founded Lily Gabriella Fine Jewellery, designing private commissions by appointment. Gabriela herself fell for diamonds at a young age. “I was lucky enough to grow up surrounded by beautiful jewels. My family are huge appreciators of art and design and both my mother and grandmother have a wonderful selection from some incredible designers. When I was young, I absolutely loved to dress up in my grandmother’s jewellery; there was an antique tiara of hers that was my particular favourite,” says Gabriela. Gabriela’s passion for design also came early. “I actually designed the Spira ring for my final university project – to me jewellery is a mini piece of sculpture that you can hold in your hands and carry with you. I believe the front of a jewel

THE HALCYON EARRINGS The bold stylised geometric design of the Halcyon Earrings is inspired by the iconic intricate lines of the Chrysler Building. Each of these diamond pavé set earrings mounted in 18 carat yellow gold centres a radiant cut diamond: one Fancy Yellow weighing 3.53 carats, the other, Fancy Light Yellow weighing 3.03 carats.

THE HOLI EARRINGS Inspired by the riot of colours of the Hindu Holi festival, the Holi earrings feature two cushion cut yellow diamonds: one Fancy Yellow weighing 5.01 carats, the other Fancy Light Yellow weighing 5.03 carats. Full of energy and vibrancy, the jewels are set with a striking array of pink sapphires and white diamonds, while the use of enamel and 18 carat rose gold adds depth and texture to the composition. The joyful movement and their pastel colourway are also evocative of the paintings by Swedish abstract artist Hilma af Klint and Anish Kapoor’s beguiling 'powder' sculptures.

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THE HONEYCOMB RING The honeycomb structure of this ring echoes to the natural geometric structures in the work of Santiago Calatrava and Jean Nouvel’s building for the Louvre Abu Dhabi. The fiery 6.12 carat pear shaped Fancy Intense Yellow diamond adds a striking element to the 18- carat yellow gold hand carved mount, enhanced with full cut white diamonds Lily Gabriella’s jewellery celebrates colour and as in many of her signature designs, the pieces in the collection combine striking colourful gemstones with unconventional materials.

THE SOLAR CUFF The Solar Cuff Reminiscent of the Art Deco sunrise motif, this sculptural 18 carat yellow gold hinged cuff with ajouré detailing has been designed to highlight and maximise the natural beauty of the 21.15 carat oval yellow diamond at its centre. The stone is surrounded by white and yellow sapphires to recreate the fragmented shapes with multiple perspectives so typical of the architecture of that era.

should be as beautiful and considered as the back – as a 3D piece of sculpture would be,” says Gabriela. For the project with Sotheby’s, Gabriela follows the same method she always uses in terms of design inspiration. “It begins organically, often seeing a loose stone, or seeing an exhibition that I love. I would then think about the concept for a while before sitting down and sketching out ideas in my studio. I love the V&A Jewellery room and the stones room in the Natural History Museum. My studio is filled with objects and books that I love that also inspire me,” says Gabriela. Sotheby’s Diamonds is also unique in that it takes inspiration from the diamonds, rather than sourcing diamonds to fit inspiration, according to Saif. “We don’t do what most jewellery houses do. It’s all picked from the rough—Diacore gets the rough, and we pick the diamonds before we think of design. Most jewellery houses design and then source. For instance, you may want a flower broach with pink diamonds, and then they go look it. For us, the focal point is all the diamonds themselves,” says Saif. Gabriela found a fruitful muse in Sotheby’s diamond collection. “It is a privilege to work with such rare and precious diamonds; seeing such an awe-inspiring spectrum of natural colours is incredibly exciting. I love using colour; it is hugely important to me. Seeing such a precious form of colour in my designs is a dream come true,” says Gabriela. “I don’t believe there should be rules in design! I love to use both complementing and contrasting colours in a single piece—it is interesting to be able to use unusual materials alongside the finest gemstones and diamonds. I enjoy creating statement yet timeless jewellery; pieces that are elegant but impactful and particularly the challenge of creating something new, experimenting with design,” says Gabriela.

wealtharabia.net

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EVENTS

The WEALTH Arabia Summit is coming to the Armani Hotel on 19 November

fter a successful event that brought together people from across the individual investment landscape to discuss the most pressing issues with substantive and actionable analysis, we are pleased to announce the next edition of the WEALTH Arabia

Summit will be held at the Armani Hotel in Dubai on 19 November. Once again, we will continue to grow and evolve, making sure that the Summit remains a vital part of your calendar, and an excellent chance for you to interact with your peers in the investment world.

The WEALTH Arabia Summit was begun with the idea to be a candid platform for the worldâ&#x20AC;&#x2122;s greatest investment minds from every sector to share their knowledge and debate the future. We promise that the fourth edition of the Summit will be its best yet.

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PHOTO CREDIT: CPI Financial/Florante Magsakay

The WEALTH Arabia Summit 2018

25/03/2019 19:19

Supported by

Organised by

Providing you with actionable investment advice

SAVE THE DATE 19 November 2019 Armani Hotel Dubai, United Arab Emirates

250+

HNWIs in Attendance

25+

Industry-leading speakers

#WealthArabia

www.wealtharabiasummit.net

FOR MORE INFORMATION,

email us at events@cpifinancial.net or call us on +971 4 365 4538

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