Difc pages final2

DIFC CONNECT

EXPO 2020 Comes to Dubai Financial sector upbeat about Emirateâ&#x20AC;&#x2122;s role

MENA insurance sector robust

Essa Kazim is new DIFC Chairman

The rise of Islamic banking

Complimentary copy

Issue 01, March 2014

Editor’s note Dubai awes the world again!

www.difc.com

DIFC News

Round up of the latest happenings in the DIFC community

10 12 16

Events

Insurance

March 2014

Banking

The rise of Islamic banking

Cover Story

Dubai to host Expo 2020 Business leaders upbeat on different sectors

MENA insurance sector robust amid demand

This is dummy text. Who does not love March? For starters, the month spells the impending demise of a long, hot, dusty summer, as also the arrival of delightful, übercool A/W fashion wear and accessories now rapidly filling up the store shelves and racks in our favourite high street luxury stores and anchor malls throughout the Arabian Peninsula. Being the switched-on fashionista that you are, you will no doubt be hunkering after the latest must-haves, be it RTW, gadgets or simply holidaying in true luxury away from the stresses and strains of urban life. This month’s pages are crammed as usual with the finest things in life – ranging from exclusive features about luxury houses’ major accomplishments that define who they are to a frank tête-à-tête with Hollywood celebrity Jennifer Aniston. For the man in your life – who, by the way – will be prone to picking this copy and leafing through its pages we will have his pulse racing with spreads about A/W13 trends for him as well as a choice piece about the 10 best places in the world to propose. If he does get down on his knee for you it could well be in one of these 10 locations. Now you know! Shaima Al Zarouni

Editor in Chief

Prepress Production

Shaima Al Zarouni

Nahas PA

Features Editor

Photography

Angelo Cabrera

MKI

Editorial Coordinator

Distribution Jashanmal National Company

Mohammed Raoof

Art Director Ifteqar Ahmed Syed

Published by DIFC

DIFC regrets that it cannot accept liability for errors or omissions contained in this publication, however caused. The opinions and views expressed in this publication are not necessarily those of DIFC. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general information only. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form – electronic, mechanical, photocopying, recording, or otherwise – without the prior permission of the publisher in writing. An exception is hereby granted for extracts used for the purpose of fair review. All material has been published in good faith as having been supplied for publication. Information correct at the time of going to press.

DIFC NEWS

Essa Kazim appointed Chairman of DIFC Authority Board of Directors

DIFC Authority issues consultation paper change Dubai International Financial Centre (DIFC) Authority has announced proposed amendments to the DIFC Real Property Regulations, for public consultation. The proposed amendments to the Real Property Regulations will impact the freehold transfer fee, increasing it from 3.5 per cent to 6 per cent. This proposed change is in line with international benchmarking and addresses the International Monetary Fundâ&#x20AC;&#x2122;s (IMF) concerns about overinflated markets and endeavours to secure the long term stability of the DIFC property market. The proposed DIFC Real Property Regulations have been posted for a period of 30 days public consultation 4

Under the directive of His Highness Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai and President of Dubai International Financial Centre (DIFC), His Excellency Essa Kazim, Governor of DIFC, has been appointed, in addition to his role as a Governor of DIFC, as Chairman of the DIFC Authority Board of Directors, along with six other board members, for a term of two years. His Highness the President thanked HE Al Ghurair former Chairman of the DIFC Authority for his efforts in realizing the objectives of the DIFC, noting that HE Al Ghurair will remain as the Vice Chairman of the DIFC Higher Board of Directors.

LCWM consolidates Gulf presence La Cloche Wealth Management (LCWM), part of the La Cloche Group, has established its position as a key regional player with the granting of a DFSA license. The Swiss based company built on the foundation of client trust, in addition to the preservation.

with the deadline for providing comments ending on February 22, 2014. The DIFC Authority aims to incorporate relevant comments from organisations to further refine the legislative proposal and eventually proceed to adopt the changes to the DIFC Real Property Regulations.

DIFC NEWS

Essa Kazim takes over as Governor of DIFC In his capacity as Ruler of Dubai, UAE Vice President and Prime Minister, His Highness Sheikh Mohammed bin Rashid Al Maktoum, has issued a decree appointing His Excellency Essa Abdulfattah Kazim as Governor of the Dubai International Financial Centre (DIFC), with effect from January 1, 2014. His Excellency Essa Abdulfattah

Kazim values the trust of His Highness Sheikh Mohammed bin Rashid Al Maktoum, which was evident in his appointment as the Governor of DIFC. He said, “I would like to extend my gratitude to His Highness Sheikh Mohammed bin Rashid Al Maktoum for entrusting me to continue the successes that the DIFC has achieved

over the past ten years, which has contributed to elevating Dubai’s standing as the destination of choice for finance and business. I will endeavor to carry on His Highness’ vision, in order to further enhance Dubai’s positioning and reinforce the UAE’s reputation, which has set an example globally.

Oaktree Capital Management opens Dubai office in DIFC Dubai International Financial Centre (DIFC) welcomes Oaktree Capital Management to its growing community of financial and professional services firms. In line with the company’s expansion plans in the region, the addition of this new office will allow Oaktree to now serve clients globally across 15 cities in 12 countries. The Oaktree Capital Management

office in DIFC will be headed by Senior Vice President, Yusef Al-Kudsi, who has been with the company for over five years and has extensive experience in managing institutional client relationships. Jeffrey Singer, CEO of DIFC Authority, said: “We are pleased to welcome Oaktree, a global leader in investment management, to our client base, which we believe will support the diversification of our

offering. Oaktree’s decision to base their Middle East operations in DIFC is also clear evidence of value that the Centre’s strategic location adds as a gateway to regional and international markets. With more companies choosing DIFC to establish a regional presence, there is an increasing emphasis on the pivotal role of regional wealth in contributing to the global economy.” 5

FINANCIAL NEWS

Al Basel Group launches Amani Investments

Coutts creates advisory board for ME Coutts has created an advisory board for its Middle East business. The board will help to broaden and shape Coutts’ ambitious plans, aiding hiring and driving financial performance by strengthening client relationships. The board will initially comprise nine influential members with long and varied experience of conducting business and advising clients in the Middle East. It is a consultative body that will meet twice a year to provide counsel to management in the region, the Coutts International Management Committee and the division’s Executive Committee.

Coutts will be represented by The Earl of Home, Chairman, Rory Tapner, Chief Executive and Michael Dismorr, Managing Director, Middle East. Commenting on the creation of the advisory board, Alex Classen, CEO, Coutts International said: “We are delighted that such high calibre professionals have agreed to work with us to develop our strategy and business. We will be growing the Advisory Board over time to include further regional representation as we continue to expand our commitment to this important market for Coutts.”

Al Hilal Bank – Kazakhstan shares expertise Al Hilal Bank – Kazakhstan, the first Islamic bank in Kazakhstan, recently joined a panel discussion on business opportunities in Central Asia at the Trade & Invest Central Asia forum, which took place at the Oberoi Hotel, Dubai. Bank CEO Prasad Abraham delivered a speech on ‘Understanding the Central Asian Region’ during a session on Doing Business in Central Asia. The panel discussion was a first in a series of monthly events focusing on business opportunities in various regions organized by Trade and Export Middle East magazine in association with Dubai Exports, an agency of Dubai’s Department of Economic 6

Development. The event initially explored the Central Asian countries of Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan and Tajikistan. Abraham shared Al Hilal Bank’s expertise in Islamic banking and its experiences in operating within the regional and local markets.

The Al Basel Group of Companies has revealed the launch of Amani Investments, the conglomerate’s latest addition to its diverse portfolio of business interests. Established to be the investment arm of the Al Basel Group, Amani Investments will be offering well tailored financial and investment solutions for companies and individuals, particularly from the UAE, KSA and Qatar. The company is looking to serve midrange and high-end clients, individuals or corporations by offering to manage their savings and assets portfolio and provide turnkey advice on investing in real estate, stocks and the like—helping their wealth grow at a safer yet faster pace.

Barclays launches ‘Compass’ Barclays recently revealed its monthly Wealth and Investment Management flagship research report titled “Compass”, which focuses on providing investment advice and recommendations to investors across the globe. The report marks the beginning of a return to normality as opposed to a divergence from it.

FINANCIAL NEWS

Eurisbank to be first Islamic Bank in the Eurozone

A consortium comprising a reputable bank, royal families, and a group of elite businessmen in the GCC, have announced that an agreement to set up the first Islamic bank in the Eurozone has been concluded. This announcement was made public during the Global Islamic Economy Summit 2013 held in Dubai from November 26 to 27, 2013. Deloitte has completed the feasibility study of the bank, which demonstrated high return on investment, taking advantage of being the first mover to the Eurozone countries. Set to be headquartered in Luxembourg due to its robust macro-economic environment and supportive regulatory framework for (Islamic) financial services, the founders, promoters and Deloitte have concluded a meeting with the CSSF (Luxemburg’s Supervisory Authority) which has welcomed the idea and gave the directions to prepare the documents required to submit the bank’s file to obtain the banking license. Eurisbank will establish its operation in line with Luxembourg’s aim to become the first Islamic Banking Capital in the Eurozone, delivering a spectrum of worldclass financial services in Retail, Corporate, and Private Banking, with a start-up capital totalling Euro 60 Million, and is set to have branches in Paris, Brussels, The Netherlands and Frankfurt. Deloitte and Excellencia Investment Management have been assigned to conduct all procedures through to finalizing the establishment of Eurisbank.

Gucci enters Bahrain tie-up Gucci, one of the world’s leading luxury fashion brands, has announced its direct entry into the Bahrain market, through the signing of a joint venture with the local partner Taleela Co. W.L.L., reinforcing their strong commitment to the development of the Gucci business in Bahrain. As a result of a multi-year franchise relationship with Taleela Co. W.L.L.,

Glenbeigh opens facility in Dubai World Central

Glenbeigh Records Management (GRM) recently officially opened its facility at Dubai World Central (DWC), the world’s first purpose-built aerotropolis, in the presence of H.H. Sheikh Ahmed bin Saeed Al Maktoum, Chairman of Dubai Aviation City Corporation, and the Irish Prime Minister Enda Kenny, who is visiting the UAE as part of a trade mission to the Middle East.

Gucci currently has one store in the Moda Mall (Bahrain World Trade Centre), which opened in 2009. The first Gucci store in Bahrain was opened in 1989 at the Sheraton complex, from where it was relocated. Luxury brands have been expanding rapidly in the GCC as they look to access the $1.5 trillion Gulf market and growing mass-affluent Gulf population.

Standard Chartered appoints MD for Iraq

Standard Chartered has appointed Ahmed Muallah as Managing Director and Head of its Wholesale Banking business in Iraq. In his role, Ahmed will be leading the Bank’s Wholesale Banking business and will be based in Baghdad reporting to Tarek Anwar, Co-Head of Wholesale Banking and Regional Head of Client Coverage for Middle East North Africa and Pakistan.

hat ir

EVENTS

SME Banking Executive Programme April 9 – 10, Dubai, UAE

This is the premier training event of its kind for banks, insurance companies and other financial service providers that are serious about succeeding with their customer base.

9th Annual Asset Integrity Management Summit

4th Annual Risk Management Forum

April 13 – 16, Muscat, Oman

March 23 – 25, London, UK

The region’s annual summit for asset integrity management emphasises to improve asset efficiency and extend life-cycle. The event will take place under the patronage of the Ministry of Oil and Gas and Petroleum Development of Oman.

The constantly changing regulatory framework, the diverse perception of risks emerging from different cultures and the wish to reach financial stability are all fuelling the need to explore more innovative strategies for dealing with risks in businesses. The conference will be a platform to get familiar with the most relevant and new regulatory.

2nd Annual Liquidity Management Forum March 15 – 17, Geneva, Switzerland

The event will focus on the new emerging strategies on liquidity management and focus on NSFR and LCR implementation. The participants will be able to gain an insight into the significant changes of the OTC market.

EVENTS

European Wealth and Asset Management Forum March 20 −22, Geneva, Switzerland

It is a must attend private banking event of the year. The forum will give the participants insights about market segmentation, new delivery models, digital change and digital change that provide competitive differentiation.

2nd Annual Bancassurance Forum March 27, Dubai, UAE The aim of the 2nd Annual Bancassurance Forum 2014 is to look at the impact of new requirements Bancassurance has to face and explore how the new financial and insurance sector can develop the Bancassurance market.

Mobile Commerce Summit ASIA 2014 March 19 −20, Kuala Lumpur, Malaysia

The biggest mobile commerce event in Asia is back! The most critical challenges facing businesses today will be addressed, through presentations from industry pioneers; Q&A’s and heated panel discussions featuring visionary thought leaders from communications and beyond.

4th Annual Enterprise Risk Management (ERM) Conference MENA 2014 March 2−5, Dubai, UAE

TCQ will organise its 4th Annual Enterprise Risk Management (ERM) Conference featuring three high-impact 2-day Master Classes. The conference aims to focus on linking strategy, growth and innovation and implementation in banking and financial sectors. 9

BANKING

The rise of Islamic banking With Islamic banking gaining prominence globally, the future of Islamic finance looks bright for Dubai

arlier this year, His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister, and Ruler of Dubai, said the UAE has what it takes to become a world hub for Islamic finance. Indeed, Dubai has launched a drive to develop its Islamic business sector, while Qatar looks to establish an international Islamic Bank, Oman has raised the operating standards of its own Islamic banking rules, and world renowned Saudi investment

firm Kingdom Holding has formed its own sharia board of scholars in a bid to raise more of its funds through Islamic finance. Islamic banking is on the rise, gaining in popularity among Muslims and non-Muslims at a rapid rate with an Ernst & Young report estimating that Islamic banks now command a 25 percent share of the banking market in the Gulf Cooperation Council (GCC) countries. (PIE CHART) But for many people Islamic finance is still a concept which is mired in

unfamiliar terms and principles, leading to confusion and hesitancy. To those without an Islamic or banking education, concepts such as riba, mudarabah and sukuk require a lot of explanation, but more and more people are taking the time to understand their meaning. The same Ernst & Young report projects that by 2015 the MENA Islamic banking industry will be worth US$990bn as the take up of Islamic banking surges, more than double the 2010 figure of US$416bn.

BANKING

Islamic banking is set up in accordance with the principles of sharia – the moral code and religious law of Islam – and many of its rules have been particularly laid out with business and trade in mind, something which attracts many small and medium sized enterprises. Tooran Asif, senior vice president, head of personal banking at Mashreq Bank explains the main concepts of Islamic banking. “The basic principle which differs between Islamic finance and conventional finance is that there’s no element of riba – which is interest. “The other differing principle is that is that it works on asset backed transactions, and then there are other things related to the element of trade. Some sectors are a definite no-no. There’s also a profit and loss sharing aspect between the two parties as well.” Mashreq Al Islami, the Islamic banking division of Mashreq, recently underlined its commitment towards its Islamic offering by announcing the launch of Islamic Gold – a new product which offers a full range of retail banking services. Asif explains the growth in the bank’s services mirrors that of the sector itself, and that people from outside Islam are signing up thanks to the comprehensive range of services now on offer. “Islamic finance has grown in the past 30 years,” he says. “Different sorts and groups of people have taken it either on their beliefs or because they find it competitive. We’ve reached a point where it’s not just about the ethical side of things. It’s also competitive in rates, returns, and services. It’s moved beyond what it used to be. “If you look at Islamic banking ten years back it was all about basic deposit accounts. Now we’re offering everything. It’s well developed now.” Advocates of Islamic banking cite the notion that the strict structure and rules make it fairer for those who use it as one of the main attractions, particularly the ban on riba. Riba can be translated as interest, usury, excess, increase or addition, and is seen in Islam as unjust and exploitative. Other principles which are viewed as beneficial to the individuals and

Tooran Asif, senior vice president, head of personal banking at Mashreq Bank

The basic principle which differs between Islamic finance and conventional finance is that there’s no element of riba – which is interest businesses rather than to the bank include mudarabah, which is profit sharing between partners, and musharakah, which is a relationship between two or more parties that divides the profit and loss fairly depending on each party’s contribution.

Another term which has been seen much more frequently in the press in recent months is sukuk – the Islamic equivalent of bonds – which have become more widely used by governments and large companies in the region. 11

BANKING

But with so much terminology to get to grips with, how can people be expected to understand exactly what Islamic finance is all about? Asif says: “We are doing different things to advocate and raise awareness around the products and finances. When we launched gold, we had our scholar explain the terms and principles of Islamic banking at various seminars around the UAE. “People need to self educate to a degree, but we also need to reach them through different forums. It’s a journey that’s going to continue and we’re all learning and developing along the way.” The scholar he mentions is one of three sheikhs who are vital to the bank’s Islamic offerings. The Mashreq Islamic proposition is overseen by a highly qualified and reputed Sharia Supervisory Board comprising off Chairman Sheikh Abdulla Suleman Al Manaei, who advises the government of Saudi Arabia, Sheikh Nizam Yaquby, and Sheikh Dr Mohammed Ali El Gari. For a bank to offer Islamic finance, it needs to go through an approval process, 12

which ensures the system adheres to Sharia rules and doesn’t allow banks to take advantage of its customers. “We need to get Sharia Board approval before we can do anything at all,” says Asif. “With conventional banking it’s the central bank which needs to approve what you’re doing, but with Islamic finance you need both Sharia Board and Central Bank approval. “It definitely helps that people know where they stand because of the structure. It gives a certain level of comfort. It also means that when it comes to presenting Islamic finance to the customer, it’s not hard to explain things.” And it’s clear to see that this comfort continues to draw more people to Islamic banking, something which Asif is pleased to see as it is in line with both the bank’s and the UAE government’s future plans. “Islamic finance is one of the top five strategies for the bank. The Islamic banking product penetration is on the rise, and our own focus on it has multiplied. The growth we’d seen in terms of take up is substantial.

“This will continue to rise and it all ties into what the government wants and what the economy wants. Banks are moving forward very aggressively with it.” So, what is the next development for Islamic finance? Asif adds: “The question now is can Islamic finance lead the market? It’s not been able to crack it quite yet. Islamic banks so far have emulated conventional banks, but the next step is finding things that can lead the way. “Some of the things we’re doing is looking at an Islamic credit card, and introducing Islamic Salaam points – a rewards points system. We need to look at the unique things that conventional banking can follow. “Islamic finance will definitely grow. Not just here but in other parts of the world too, although regulations will need to support it. If the regulator does not give approval then you can’t practice, and then you also have to see whether the customer interest is there. “Some markets will have to go through an evolution, but Islamic finance will definitely grow”.

BANKING

Conventional banking

• Money is a commodity besides being medium of exchange and s store of value. Therefore, it can be sold at a price higher than its face value and it can also be rented out. • Time value is the basis for charging interest on capital. • Interest is charged even if the organisation suffers losses by using bank’s funds. Therefore, it is not based on profit and loss sharing. • While disbursing cash finance, running finance or working capital finance, no agreement for exchange of goods and services is made. • All sorts of economic sectors can be financed. • The savings accounts operate on a pure interest model. • The compounding interest principles are common across various transactions. • The penal fees, late payment fee are taken into bank’s income.

Islamic banking

- Money is not a commodity though it is used as a medium of exchange and store of value. Therefore, it cannot be sold at a price higher than its face value or rented out. • Money is not a commodity though it is used as a medium of exchange and store of value. Therefore, it cannot be sold at a price higher than its face value or rented out. • Profit on trade of goods or charging on providing service is the basis for earning profit. • Islamic bank operates on the basis of profit and loss sharing. If the businessperson has suffered losses, the bank will share these losses based on the mode of finance used (Musharakah). • The execution of agreements for the exchange of goods and services is a must, while disbursing funds under Murabaha, Salam contracts (commodity/metal trading).

For a bank to offer Islamic finance, it needs to go through an approval process, which ensures the system adheres to Sharia rules and doesn’t allow banks to take advantage of its customers

• Islamic Finance doesn’t allow financing or engagement of certain sectors which are prohibited such as liquor, tobacco, gambling. • The savings accounts are on a Murabaha model where the bank is the Mudarib and customer is the Rabbul-Maal and bank and customers share profits in a pre-agreed ratio, banks are liable to disclose the ratios and the weightages used to declare profits. • It works on a flat profit rate basis. Compounding of interest is strictly prohibited and no compounding is allowed. • Though Sharia Boards have allowed charging the penal fee should there be a delay is payment commitments, Islamic Banks are not allowed to take those into their incomes and such income is payable to charity.

COVER STORY

EXPO 2020 to boost Dubai economy Business leaders upbeat on realty, retail, hospitality and banking sectors

ubai marked a turning point in its history by recently beating out competition from Brazil, Russia and Turkey; making the UAE become the first Middle Eastern nation to have won the bid to host the World Expo in 2020. Back in 2010, when China hosted the same 6-month Expo, that event attracted 73 million people and drew participation from 192 countries. Running the event cost US $1.89 billion, and it raked in profit of $158 million.

According to Chinese media reports, the total expenditure for this Expo was $58 billion. Operating profit was $164 million. More than these numbers, however, it was the sheer magnitude of economic and cultural development and job creation that made the event such a watershed. Dubaiâ&#x20AC;&#x2122;s upcoming Expo, meanwhile, is slated to attract almost 25 million people between April and October 2020, and authorities say total financing for the 6-month event will cost US $8.4 billion.

Today, even as the print and online media erupt with articles and posts congratulating Dubai, letâ&#x20AC;&#x2122;s see what the win means for a common expat resident. Financial impact: The big picture The UAE is one of the fastest-growing economies in the world. Nominal GDP in 2012 rose by 21% to reach $360 billion, compared with $298 billion in 2011, and the country boasts rich resources in natural gas and petroleum, while also achieving growth in construction, transportation, ICT, and international trade.

COVER STORY

With $11 billion fiscal surplus in 2011, the UAE is the top trading economy in the Middle East. The Emirates have invested heavily in infrastructure such as transport, connectivity and ICT. Last year, over 57 million visitors entered the UAE and by 2015, the country expects to have the world’s largest international airports in terms of footfall. Where the Expo is concerned, Bank of America Merrill Lynch stated last month that the Dubai government

is likely to provide US $6.8 billion in capital spending and $1.6 billion in operational costs for the event. This financing will ‘probably’ be done via short-to-medium-term overdraft facilities. If you include private sector projects, spending would touch $18.3 billion, while the total financial impact is estimated at $23 billion – equating to an annual 3.5% of GDP. To place this in context, Dubai’s economy is worth $90 billion and the Dubai Financial Market has already risen 85% so far this year. 15

COVER STORY

by Dubai to host Expo 2020. Those that have gained most are those likely to benefit most from the event, namely companies in sectors including transport, construction and real estate. “The market has already gone up massively this year, including many of the companies that could benefit from the Expo,” Ali Adou, portfolio manager at The National Investor, an Abu Dhabi investment firm, told Reuters in late September. Stocks that have shown tangible gains in the year so far include Dubai Investments, a conglomerate with far-ranging interests from glass making to Islamic re-insurance; local construction firms Arabtec and Drake & Scull International; and budget airline Air Arabia. Others such as Emaar Properties, with wide holdings in hospitality and retail, and logistics giant DP World would also be in the frontline to profit from a successful Dubai bid. There is precedent for local bourses rising sharply in the weeks before and after a country is awarded the rights to host a major event. In 2010, Qatar’s stock market increased 16 percent in the months prior to its winning World Cup 2022 bid, with the exchange rising a further 14 percent in the following weeks. Long-term gains are anything but guaranteed though. In the months after Expo 2010 closed in Shanghai, a number of large-cap stocks on the local stock market returned to their pre-Expo prices following a temporary spike. ICT From 2003 to 2010, ICT spending in the UAE grew at a CAGR of 19% to touch $12 billion. Between 2013 and 2015, spends are expected to touch $40 billion, with $30.4 billion spent on communications. Thanks to network and infrastructure upgrades to accommodate fiber optic connection and LTE mobile connection, the region is seeing rapid growth in this sector. Expo 2020 will only accelerate this growth, driving companies to invest and earn rewards in one of the fastestgrowing ICT markets in the world. 20 years ago, the UAE had zero Internet penetration. In 2012, it is at 85%, ahead of the US, Japan and South Korea. In mobile subscriptions, too, the country leads, with almost 170 subscriptions per 100 inhabitants in 2012. 16

Between 2013 and 2015, spends are expected to touch $40 billion, with $30.4 billion spent on communications BANKING AND EQUITIES Dubai Financial Market General index has risen 75 percent in the year-to-date on the back of improved economic indicators and rebound in the emirate’s property market. This increase can also partly be attributed to investors making bets on stocks based on a successful bid

REAL ESTATE AND CONSTRUCTION Following the emirate’s property market crash of 2008-2009, which saw prices fall by up to 60 percent, Dubai’s real estate market has rallied in 2013 on the back of strong economic fundamentals and a rising population. According to a recent report by Standard Chartered, average property prices in Dubai have risen by more than 30 percent in the last 12 months, which the lender attributed partly to anticipation over the possible hosting of Expo 2020. Soaring property prices in the wake of a successful Expo bid is not without precedent. In the 12 months prior to hosting the 2010 event, Shanghai saw its real estate values rocket by as much as 68 percent, leading the city’s mayor to introduce new tax and regulations in order to cool the market.

COVER STORY

EXPO 2020 will boost the economy in several ways

COVER STORY

An artist’s rendition of the EXPO 2020 site

The awarding of the event in Dubai could also help spur a new construction boom in the emirate, which saw numerous projects scrapped or stalled during the last downturn. The Expo site itself, to be located in Jebel Ali, will sprawl across 1.2 million sq m and house around 180 purpose built pavilions. The master plan for the site will not receive approval until the end of 2015, with work expected to commence shortly afterwards with completion for 2019.

AVIATION AND TRANSPORT In 2012, more than 51 million passengers travelled through Dubai International Airport (DIA), serving 220 destinations via 150 carriers. Even so, the emirate’s main transport hub is undergoing extensive redevelopment and expansion to accommodate the influx of millions of international visitors that will come with hosting Expo 2020. According to the organiser’s forecasts, over 17.5 million people will flock from around the world to visit Expo 2020 in

Dubai, or up to 300,000 every day. This is not to mention exhibitors from more than 180 nations. Preparations are already well under way for this, with aviation authorities busy expanding and upgrading existing air infrastructure. DIA is currently undergoing $7.8bn of renovation which will eventually allow the facility to cope with 90 million passengers per year. The improvements include the construction of Concourse 3 and Concourse 4 and expansions to Terminal 1 and 2. “If you look at the airport today, it is going to surpass its passenger goal for 2013 quite handsomely. Next year, it will eclipse Heathrow as the second busiest airport in the world,” says Saj Ahmad, chief analyst at aviation consultancy Strategic Aero Research. “That’s before you consider the several billion dollars earmarked for expansion at the airport.” To add to its existing hub, Dubai is also placing the finishing touches on the new Al Maktoum International Airport at Dubai World Central, just a short journey from the proposed Expo 2020 site in Jebel Ali. With an eventual capacity of 160 million passengers per year, the airport will easily surpass London Heathrow to become the largest in the world. Passenger operations are due to start at Al Maktoum in October

COVER STORY

111,000 new jobs in the hotel and restaurant sectors. Much of this work will be created by the new hospitality projects, between now and 2020, including the more than 100 properties planned as part of the Mohammed Bin Rashid City megaproject. Research by PKF based on data from previous Expo events shows that an additional 20 percent of annual international guests will arrive to Dubai over the six month period attracted by World Expo 2020. PKF also predicts that hotels during the period will operate at more than 90 percent capacity, putting pressure on room inventory.

this year, with Dubai’s Emirates Airline expected to make the move to the hub sometime around 2015. Analyst Ahmad says that rival host cities for Expo 2020 in Russia, Brazil and Turkey come nowhere near to matching Dubai not only in terms of their airports, but also their geographic location and flag carriers. “With Emirates in particular, leveraging Dubai’s unique geographic location to pull in and take traffic through Dubai, the other candidate cities do not even have a flagship airline capable of doing the same,” he adds. MORE JOBS, BETTER SALARIES A MEED report said the Expo is expected to generate more than 277,000 jobs across sectors like construction, hospitality, aviation and electricity. Travel and tourism is likely to be a big gainer, with 40% of the new jobs going to that sector. In the hotel and restaurant sectors, 111,000 new jobs will come up. Of course, more jobs mean more expats – and Dubai is no stranger to diversity, with 95% of the current population already comprising expats. This influx will have a ‘multiplier effect’ on the economy and boost the GDP, at the same time raising the overall quality standards and productivity of the workforce. And it is not only jobs that will increase; salaries too are slated to rise. As living costs escalate, companies

are likely to go beyond the current increments of 5% per annum. TOURISM AND HOSPITALITY Dubai welcomed more than 10 million international visitors for the first time during 2012, according to official estimates, representing an increase of over 9 percent compared to the year before. Not only this, but Dubai’s hotels reaped a bumper AED18.82bn ($5.12bn) in revenues, a 17.9 percent year-on-year hike. This is just the start of the glitzy emirate’s tourism push, however, as by the time the Expo is held in 2020 Dubai means to have doubled its number of visitors to 20 million annually. Much of this ambition will depend on whether it is awarded the rights to host the event come November. Given that the Expo would be held over six-month period between October and April, one analyst believes that the positive impact on the emirate’s hospitality sector will be enormous, and even surpass that of the World Cup 2022 in Qatar. “If Dubai wins the chance to host this event, I would expect the impact to be significantly greater for Dubai than hosting the FIFA World Cup would be for Qatar,” says Guy Wilkinson, managing partner at Dubai-based hospitality consultancy Viability. Figures from Dubai authorities estimate that winning the rights to host Expo 2020 will create a whopping

EXPOS OF THE PAST – EFFECTS AND IMPACT Did you know that the Eiffel Tower, the telephone, ice cream and Heinz Tomato Ketchup were all created for various World Expos? First hosted in London in 1851, World Expos are among the oldest international events, and often, the largest gathering of people on the planet. Over time, the Expos have evolved – through the eras of industrialization and of nation-branding, to modern times when the impact is as much economic as cultural. In the past few years, Expos have been used to showcase new inventions, even to showcase a city or region to prospective investors and tourists.

Burj Khalifa lit up after the successful EXPO 2020 bid

INSURANCE

MENA insurance T sector robust amid demand Insurance penetration is on the rise, demographics are favorable and the economy remains on a steady growth trajectory. 20

he second MENA Insurance Barometer, published recently by the Qatar Financial Centre (QFC) Authority at the opening of the eighth MultaQa Qatar Conference in Doha, revealed a strengthening of confidence in the regionâ&#x20AC;&#x2122;s insurance sector. According to the survey, compulsory insurance requirements and continued investments into infrastructure projects will drive demand. The Barometer is based on 38 in-depth interviews with senior insurance executives and intermediaries operating in the region. Three-quarters of the executives polled expect regional insurance premiums to outgrow gross domestic product (GDP) over the next 12 months. Between 2007 and 2012 the regionâ&#x20AC;&#x2122;s economies grew at an inflation-adjusted growth rate of 4.7 percent per annum - markedly

INSURANCE

faster than the global average of 3.3 percent. Personal lines are set to benefit from additional compulsory insurance requirements, while commercial insurance will receive a boost from new infrastructure and construction projects. The region’s greatest strengths are its continued economic growth and the solid rise in direct insurance markets. Moderate natural catastrophe exposures and a young and growing population are further assets. Opportunities arise from the large pipeline of major infrastructure and construction projects, the low insurance penetration levels of about 1.3 percent (premiums as a share of GDP), a mere fifth of the global average of 6.5 percent, and the population growth, fuelled by a continued influx of expatriates. The region’s insurance markets also display weak spots: Current insurance prices, both in personal and commercial lines, are perceived as insufficient. However, as rates might have hit bottom, an increasing number of executives expect stable to rising prices and hence improvements in profitability. Despite the weak pricing, only 16 percent of respondents expect MENA insurance markets to consolidate over the next 12 months as improved levels of capitalization and the family ownership of many regional insurers stand in the way. Moreover, the prospects for foreign insurers in the region seem to be deteriorating. Only 35 percent of executives polled expect that foreign insurers will gain market share over the next 12 months, down from 50 percent a year ago. A number of foreign players have suffered losses and are reviewing their approach to the region. Takaful is viewed with greater skepticism, too. Only 22 percent of survey participants expect this market segment to outgrow total insurance premiums in the next 12 months. According to the interviewees, business models still fail to offer genuine product differentiation based on the principle of mutuality.

Shashank Srivastava, Chief Executive Officer and Board Member of the QFC Authority, said: “Based on their strong fundamentals, the MENA Insurance markets will continue to grow. The QFC Authority remains committed to supporting this growth

by offering a world-class business infrastructure. The Barometer enhances market transparency as a key prerequisite to doing insurance business and, therefore, is an essential part of our commitment to the sector.”

The region’s greatest strengths are its continued economic growth and the solid rise in direct insurance markets. Moderate natural catastrophe exposures and a young and growing population are further assets 21

INTERVIEW

Q&A

A Q&A with Jim Yong Kim, President of the World Bank Group

ith more than one billion people in the world living on less than $1.25 per day, Jim Yong Kim, President of the World Bank Group, has stated that extreme poverty is “the defining moral issue of our time”. A physician and anthropologist, Dr. Kim has dedicated himself to international development for more than two decades, helping to improve the lives of under-served populations worldwide. DIFC Connect caught up with Dr. Kim on the margins of the annual high-level segment of the General Assembly during which, in addition to participating in numerous meetings and events, he 22

joined musicians and movie stars before more than 60,000 spectators at the Global Citizen Festival at New York’s Central Park to promote the Bank’s twin goals of ending extreme poverty by 2030 and boosting shared prosperity. Question: In May, you travelled to Africa’s Great Lakes region with Secretary-General Ban Ki-moon. What do you think are the most pressing needs in the Democratic Republic of the Congo (DRC) and the wider region? It was always intended that the UN, a political organization focused on justice and development, would work together

with the financial organizations in order to make the world a better place. Jim Yong Kim: We had the opportunity to travel together with the Secretary-General and the United Nations. The first stop was the Democratic Republic of the Congo. There are so many needs there. This is a country where 70 per cent of the population lives in extreme poverty; where some 7 million children are still out of school. There are needs everywhere; 2.4 million people need food aid. It stretches from just being able to provide food for families to getting children into school to other issues like energy.

INTERVIEW

While the Democratic Republic of the Congo has the largest potential for hydroelectric power in the world, there are still millions of people who have no access to power. So the list is very long, but our sense in going in was that we needed to make a really bold start. So in addition to the money that the DRC is already getting from the World Bank Group, we were very happy to put on the table an additional $1 billion for the entire region. We hope that that really begins addressing some of the needs. Specifically, we are focusing on energy. We are also focusing on health and education for the population. We are focusing on cross-border trade… One of the problems is that, while a free and open trading system would help to create jobs and help to spur economic growth, the barriers to trade between the countries in that area are enormous. So we are even going to help in lowering some of those barriers. Our sense is that by going together, we sent a very strong message – that we are interested in the peace but we understand that peace, justice and development go hand in hand. And I think we sent that message very strongly. Question: During the visit, the Bank announced $1 billion in new funding to help countries in the region. How do you go about determining how much money to give and ensure that it is used wisely so that it benefits the maximum number of people? Jim Yong Kim: When we were able to put $1 billion on the table, we really worked hard to try to find as many resources as we could put together because we know that that region needs so much. The value of putting the $1 billion for regional initiatives, I think, cannot be overstated. That region really needs to come together. Rather than being involved in conflict and war, the region needs to understand that if they act together, if they move together, there is so much more that each of them could receive from joint action across the region. So that was one of the messages we were trying to send. If you look at the things that we actually put the money on the table for – energy, education, health, cross-

border trade – those issues are critical for not only those three countries that we visited [DRC, Uganda and Rwanda] but for the entire region. We wanted to be bold and ambitious in our efforts to

for me, it was absolutely natural for me to go to the Secretary-General right away and begin talking about ways we could work together. One of the things he’s been saying is

It was always intended that the UN, a political organization focused on justice and development, would work together with the financial organizations in order to make the world a better place

join with the Secretary-General’s peace initiative and we were very happy that we were able to put together over $1 billion. Question: How do you envision the Bank and the UN enhancing their cooperation in the future? Jim Yong Kim: You know, from the first time that I heard about the possibility of me becoming President of the World Bank Group, and certainly soon after it was announced that I would be the President, the Secretary-General called me. We have been talking ever since. But this is a person that I have known. And if you go back to the time when the Secretary-General was first elected, all of us in the Korean diaspora – the larger Korean community – have been so proud and inspired by him. So

that this is what the world has always intended for the UN and the World Bank to be – institutions that have different mandates but work hand in glove together. So we have been talking from the very first day of my Presidency on how we can enhance World Bank-UN cooperation. We have done it in many ways. But the culmination was this trip this past May. That worked so well, and we learned so much about each other, that we are going to continue to do it. We are planning other trips, we are thinking about other ways we can bring the organizations together. It was always intended that the UN, a political organization focused on justice and development, would work together with the financial organizations in order to make the world a better place. 23

CAPITAL MARKETS

Exiting UAE capital markets

Considering de-listing can be an option for UAE listed companies

ompanies regularly review their business objectives and strategies in an effort to maintain a sustainable and competitive business model. Whether taking a short or long term view, an option for listed companies in the UAE is to consider de-listing. In this article, Hadef & Partners explains the process of exiting UAEâ&#x20AC;&#x2122;s capital markets. As a general rule, a UAE public joint stock company should list its shares on any of the UAE financial markets immediately after its incorporation. In the event the company fails to apply for listing within (30) days

from the date the Emirates Securities & Commodities Authority (ESCA) notifies the company of the same, then the competent licensing authorities in the UAE may, upon a request from ESCA , decide ceasing the companyâ&#x20AC;&#x2122;s business operations. However, there are always exceptions to the general rule, which exempt companies wholly owned by the federal government or the governments of the relevant emirates from listing their shares on the UAE financial markets. UAE FINANCIAL MARKETS There are primarily two markets in

the UAE: i) Dubai Financial Market (DFM); and ii) Abu Dhabi Securities Exchange (ADX), which are both regulated by the UAE Federal Law No. (4) of 2000 concerning the establishment of Emirates Securities & Commodities Authority and its implementing regulations (ESCA Law). Hence, a company in which its shares are listed on the UAE financial markets should always comply with the ESCA Law. TYPES OF SECURITIES There are four types of securities that can be listed on the financial markets: i) shares of UAE public companies; ii)

CAPITAL MARKETS

shares of foreign public companies; iii) bonds and debenture instruments; and iv) other types of securities approved by ESCA . Similarly, any listed securities on ESCA regulated financial markets could be delisted or suspended from listing for a temporary period of up to six months or more in certain cases provided under ESCA Law. ESCA may upon its sole discretion, temporary suspend the Listing of any securities in the markets in the event of exceptional circumstances which threatens the proper conduct of the business on such markets. ESCA may also suspend trading of any listed securities if it deems that the trading of such securities does not serve the public interest, or constitutes a severe inequitable act or breach of the shareholders’ rights. The delisting is always initiated upon ESCA ‘s sole discretion. However, the suspension is either initiated upon ESCA ‘s sole discretion or voluntary upon the company’s decision. The final decision to suspend and/or delist the company’s shares from trading on the UAE financial markets shall always be determined upon ESCA ‘s sole discretion. DELISTING OF SECURITIES ESCA may permanently delist the securities of any company due to the following reasons: i) If the company is wound up voluntary by the adoption of an extra ordinary general assembly resolution. This may be due to the fulfillment of the company’s objects, expiry of its term or sustaining heavy losses where the remainder of the capital is not sufficient to carry out its activities; ii) If the company substantially changes its core business or main objects for which it was incorporated initially. The change of the main objects of the company should be disclosed to the UAE financial markets in order to procure proper conduct of the business on the UAE financial markets and to protect the relevant investors. Such substantial change of activities is deemed to

be a material change in the main business activities of the company in which the shareholders invested in, or the new activities may be against some shareholders’ principles (e.g. change from Islamic Finance to Conventional Finance practices); iii) If the company merges with another company or companies which results in liquidating both companies and incorporating a new company and assigning the liabilities of both liquidated companies to the newly incorporated company. The merger should be adopted by an extra ordinary general assembly resolution by a majority of three quarter of the shareholders present in such meeting; iv) If the company ceased carrying out its business due to being distressed, without being declared insolvent or being liquidated; and v) if the listing of the company’s securities has been suspended in the UAE financial markets for a period of six months or more. SUSPENSION OF SECURITIES ESCA has the sole discretion to temporary suspend the listing of any securities in the UAE financial markets, due to any of the following reasons:

i) The company fails to meet any of the listing conditions/ requirements provided for under ESCA Law. ESCA initiates, periodically (and upon a third party request), investigations against the companies listed on the UAE financial markets in order to verify if such companies comply with ESCA Law; ii) The company defaults on payment of fees due from it to ESCA , the UAE financial markets, or the clearance department therein; iii) The net value of the shareholders’ equity is reduced to less than 50% of the company’s share capital which may lead it also to go into voluntary or involuntary winding up; iv) The market price of the securities is reduced to less than 60% of its par value or has suddenly increased in value, in which the reduction or the sudden increase will have negative impact on the relevant investors and thus deemed to be a severe inequitable act to them. Such change in market price should also be disclosed to the UAE financial markets for the same reason above; v) The EGM resolves to decrease the company’s share capital; vi) The EGM of the company resolves, to sell major and substantial part(s) of the company’s assets.

PROFESSIONAL SERVICES

Managing risks A new alternative framework to risk management By Robert S. Kaplan and Anette Mikes

hen Tony Hayward became CEO of BP, in 2007, he vowed to make safety his top priority. Among the new rules, he instituted were the requirements that all employees use lids on coffee cups while walking and refrain from texting while driving. Three years later, on Hayward’s watch, the Deepwater Horizon oilrig exploded in

the Gulf of Mexico, causing one of the worst man-made disasters in history. A U.S. investigation commission attributed the disaster to management failures that crippled ‘the ability of individuals involved to identify the risks they faced and to properly evaluate, communicate, and address them.’ Hayward’s story reflects a common problem. Despite all the rhetoric and

money invested in it, risk management is too often treated as a compliance issue that can be solved by drawing up lots of rules and making sure that all employees follow them. Many such rules, of course, are sensible and do reduce some risks that could severely damage a company. But rules-based risk management will not diminish either the likelihood or the impact of a disaster such as Deepwater

PROFESSIONAL SERVICES

Horizon, just as it did not prevent the failure of many financial institutions during the 2007–2008 credit crisis. In this article, we present a new categorization of risk that allows executives to tell which risks can be managed through a rules-based model and which require alternative approaches. We examine the individual and organizational challenges inherent in generating open, constructive discussions about managing the risks related to strategic choices and argue that companies need to anchor these discussions in their strategy formulation and implementation processes. We conclude by looking at how organizations can identify and prepare for non preventable risks that arise externally to their strategy and operations.

strategic benefits from taking them on. A rogue trader or an employee bribing a local official may produce some shortterm profits for the firm, but over time, such actions will diminish the company’s value. This risk category is best managed through active prevention: monitoring operational processes and guiding people’s behaviors and decisions toward desired norms. Category II: Strategy risks. A company voluntarily accepts some risk in order to generate superior returns from its strategy. A bank assumes credit risk, for

Managing risk: Rules or dialogue? The first step in creating an effective risk-management system is to understand the qualitative distinctions among the types of risks that organizations face. Our field research shows that risks fall into one of three categories. Risk events from any category can be fatal to a company’s strategy and even to its survival. Category I: Preventable risks. These are internal risks, arising from within the organization, that are controllable and ought to be eliminated or avoided. Examples are the risks from employees’ and managers’ unauthorized, illegal, unethical, incorrect, or inappropriate actions and the risks from breakdowns in routine operational processes. To be sure, companies should have a zone of tolerance for defects or errors that would not cause severe damage to the enterprise and for which achieving complete avoidance would be too costly. But in general, companies should seek to eliminate these risks since they get no

example, when it lends money; many companies take on risks through their research and development activities. Strategy risks are quite different from preventable risks because they are not inherently undesirable. A strategy with high expected returns generally requires the company to take on significant risks, and managing those risks is a key driver in capturing the potential gains. BP accepted the high risks of drilling several miles below the surface of the Gulf of Mexico because of the high value of the oil and gas it hoped to extract. Strategy risks cannot be managed through a rules-based control model.

Instead, you need a risk-management system designed to reduce the probability that the assumed risks actually materialize and to improve the company’s ability to manage or contain the risk events should they occur. Such a system would not stop companies from undertaking risky ventures; to the contrary, it would enable companies to take on higher-risk, higher-reward ventures than could competitors with less effective risk management. Category III: External risks. Some risks arise from events outside the company and are beyond its influence or control. Sources of these risks include natural and political disasters and major macroeconomic shifts. External risks require yet another approach. Because companies cannot prevent such events from occurring, their management must focus on identification (they tend to be obvious in hindsight) and mitigation of their impact. Why risk is hard to talk about? Multiple studies have found that people overestimate their ability to influence events that, in fact, are heavily determined by chance. We tend to be over-confident about the accuracy of our forecasts and risk assessments and far too narrow in our assessment of the range of outcomes that may occur. We also anchor our estimates to readily available evidence despite the known danger of making linear extrapolations from recent history to a highly uncertain and variable future. We often compound this problem with a confirmation bias, which drives us to favor information that supports our positions (typically successes) and suppress information that contradicts them (typically failures). 27

WEALTH MANAGEMENT

Rethink growth It’s time to analyse economic development and the implications for sustainable investing By Glenn Silverman, CFA

e live on a finite planet with finite resources, where continued economic growth is no longer sustainable. As such, we need to rethink how we define growth. As financial professionals

and stewards of our clients’ capital, we need to take a more balanced approach to investing one that focuses both on sustainable capitalism and on sustainable growth. Financial markets and industry

commentators are obsessed with the notion of growth. The idea is that if we don’t grow our economies, we somehow stagnate, we “rust,” and as a result, our stature in the world is diminished. Yet as Jeremy Grantham, chief investment

WEALTH MANAGEMENT

strategist at Boston-based GMO, states: “Rapid growth is not ours by divine right; it is not even mathematically possible over a sustained period.” Australian environmentalist and businessman Paul Gilding has an excellent book on the subject titled The Great Disruption: Why the Climate Crisis Will Bring on the End of Shopping and the Birth of a New World. Part of his argument is that we have a system design error: “You cannot have infinite growth on a finite planet. Not ‘should not’, or ‘better not’, but cannot.” Growth may thus prove more difficult to achieve than many think; cheap fossil fuel is inarguably something from the past, and debt levels in many critical areas of the global economy are at record highs. So, why do we have this fixation on growth? Is growth the ‘be all and end all’ and the panacea to all the world’s woes? We are told by governments and their central bankers that if the world can only get (massive) growth going, all will be resolved. Surely, this can’t be so. What lessons did we learn from the global financial crisis of 2007–2008? The Great Recession, as it is now known, so shocked world leaders that they implemented numerous measures to try to deal with the consequences. In the process, we added lots of acronyms and phrases to the financial lexicon― quantitative easing (QE), Operation Twist, long-term refinancing operations (LTROs), the European Financial Stabilisation Mechanism (ESFM), and more. Each of these measures was launched with great fanfare and greeted with rapturous applause by the markets as being the ultimate solution to the growth problems afflicting the world’s biggest economies. These programs have now morphed into even more extreme measures and language. At Investment Solutions, we refer to them as the ‘nuclear options,’ words that suggest we will do whatever it takes! Desperate measures for desperate times, indeed. At the root of the problem is how we define growth. The most common and widely accepted measure is GDP (gross domestic product). But this is a flawed measure in many respects because it focuses entirely on the income statement

instead of on the balance sheet, adds expenditure to the growth numbers (whether those numbers are savings or funded by debt), and ignores many other important measures, such as quality, equality, and happiness. GDP figures are also boosted by increases in government spending, even though one could cogently argue that this spending is, in fact, a tax on the economy and hence could be seen as a reduction in growth of the producing part of the economy rather than an addition. A number of other growth measures are available, including the Genuine Progress Indicator (GPI), the UN’s Human Development Index (HDI), the Organisation for Economic Co-Operation and Development’s Better Life Index, and the Happy Planet Index. Why should GDP and its measure of growth be the official standard or only measure of growth? And how does GDP account for the damage to the capital account, the environment, and the fabric of our society through the evident inequalities that characterize the current system? With a world population of about 7 billion people, forecasted to grow to 9 billion by 2050, the challenges we face are unprecedented. We can bury our collective heads in the sand, but the problems, unfortunately, won’t go away. The status quo is clearly unsustainable, and the cracks are starting to appear more frequently.

As investment professionals, we need to take a far more balanced approach, one that focuses both on sustainable capitalism and sustainable growth 29

CAREERS

HOW TO PROGRESS IN THE CORPORATE WORLD Busting the top 3 leadership myths one myth at a time By Tom McBride

he image of the ruthless managerial personality that exudes confidence and competence is certainly one of the deeply held stereotypes of leadership to this day. The image of the know-it-all leader who has the answer to almost any question and always knows the right way to guide the company in the right direction is frequently broadcast in the media and to some extent, within companies themselves. That said, egotistic leaders who think they are invincible often find

themselves surrounded by mediocre team members than those who nurture a more group-driven approach. Here are several leadership myths that could be holding your company back.

Myth #1: All leaders are charismatic

Charisma is often thought of as the major trait of successful leadership, but many of the greatest leaders of our time were humble, down to earth men and women who shied away from the public eye and

yet have taken their companies to new heights. The problem with charismatic leaders is that while their influence and persuasion abilities make it easy to gain approval and buy-in, but thatâ&#x20AC;&#x2122;s only the case if your company is heading in the right direction. Unfortunately, if your company is going through rough times, charisma will also get you there faster. In order to achieve enduring success as a leader you need to spend more time learning and listening, rather than cheerleading. 31

CAREERS

Myth #2: Leaders are born, not made

Are leaders born or made? On one side of the debate, you mostly have traditionalists who believe that leaders are born with a “special quality,” a trait of persistence and determinedness that makes them natural born leaders. On the other side, educators believe that most leadership qualities can be nurtured, given adequate amounts of key personal traits, such as intelligence and self-motivation. Here’s our response to this question: it’s not an accurate question, that’s why it yields bad answers. The fact is that you do not know what you are born with until you are put in the position of leadership and have the willingness to express it. This means that leadership is learnable, but you must not take comfort in the idea that you can develop, but rather, you should understand your current assets and what are you willing to do or give up to achieve leadership at the highest level.

Myth #3: Leaders have all the answers

Many people believe that great leaders possess the right answers to almost 32

every question. While this image may be appealing, the reality is different. Great leaders go through phases of time where they feel mixed up, down and insecure of themselves. They wonder why other leaders seem to have an easier time doing their jobs. They search for answers and feel lonely; even if they seem confident on the outside. What makes these leaders powerful is their understanding of their own limitations. They understand that they might not have all the answers, and that it takes a diverse team of truly innovative individuals to come up with amazing solutions. They listen more than they speak with the goal to understand, not to respond.

They wonder why other leaders seem to have an easier time doing their jobs. They search for answers and feel lonely; even if they seem confident on the outside

GADGETS

Toshiba introduces the Tecra Z40 mobile workstation Toshiba Gulf has launched the Tecra Z40, a 14-inch laptop designed for heavy data users who work with large databases, multiple spreadsheets and large presentations. Equipped with the power-saving fourth generation Intel Core i7 VPro processor and weighing 1.47kg, the Tecra Z40 delivers full performance and complete mobility. Running on Windows 8, the Tecra Z40 provides a platform for efficient multitasking. It features a ClickPad that supports various scrolls, zoom options and launch functionalities. Because a ClickPad is buttonless and wider than regular touchpads, users have a larger area for navigation. Additionally, with the Tecra Z40’s Accupoint for improved usability, typing, chatting, and multitasking have become faster and easier.

Panasonic launches new compact digital cameras Panasonic has launched two new models in the Lumix digital compact camera range – DMC- LZ40 and TZ55. The DMC-LZ40 features a 42x optical zoom lens that is integrated with an optical image stabiliser. The resolution of the CCD has been upgraded to 20-megapixel and the intelligent auto mode offers face detection, optical image stabiliser, intelligent scene selector and intelligent exposure features. The creative control and creative retouch options are available with 15 different filter effects. In addition, the creative panorama mode that comes with 13 filter effects allows users to be creative. The 3.0-inch 460K-dot LCD assures high visibility in different lighting conditions, making it suitable for both shooting and playing back images. The camera also has the option of highresolution HD video capture at 720p.

Logitech unveils protective case for Samsung tablets Logitech has launched the Logitech PRO, a slim protective case with a built-in Bluetooth keyboard for the new 12.2-inch Samsung Galaxy NotePRO and Samsung Galaxy TabPRO. Mike Culver, Vice President of Logitech Tablet Products, said: “Samsung designed these new tablets with a 12.2-inch, crystal clear display to enhance productivity and media consumption, and with this in mind we created Logitech PRO.” He added: “Logitech PRO helps protect both sides of a tablet, while maintaining a slim design for daily use on the go. Couple that with its full-size keyboard and dedicated shortcut keys, and it is the perfect combination to maximise productivity and protection in a case that perfectly complements the mobility of a Samsung Galaxy NotePRO and Galaxy TabPRO.” The Logitech PRO keyboard features a row of Android shortcut keys, including recent apps, quick panel and email keys. The protective case is wipe able and the SecureLock system keeps any Galaxy NotePRO or Galaxy TabPRO firmly fastened to the folio with lightweight and low profile clips. 34

GADGETS

Motorola introduces Moto G in the UAE Motorola, a Google owned company, recently launched the Moto G, a smartphone for people who want an affordable, no-compromise smartphone. The smartphone delivers a premium smartphone experience for a third of the price of current high-end phones. The stylishly designed smartphone has a brilliant 4.5-inch HD display – the sharpest in its class – that goes edge-to-edge so one can enjoy movies, photos, video chats and more. The newest Qualcomm Snapdragon 400 processor features a quad-core CPU for seamless multitasking and to enjoy the web, videos and games, with all-day battery life. The elegant curved back makes it easy to hold without compromising on the design. Moto G is equipped with Android 4.3 Jellybean, the most up-to-date Android for any phone in its class and comes with a guaranteed upgrade to Android 4.4 KitKat. There are no skins to clutter or slow the experience. Google’s

mobile services such as Gmail, YouTube, Google Maps, Chrome and Hangouts guarantee a great performance by the device. The dual SIM support offers the option to use the preferable network of choice. Unique Motorola apps, including Motorola Migrate, allow the transfer of photos, videos, SIM contacts, call history, texts and more in three easy steps. In addition to this, users get 50GB free storage on Google Drive for two years.

The affordable price of Moto G allows users to experience the full advantages of mobile internet, with the power to multi-task and run the latest games and apps smoothly at a good price. Consumers can also customise their Moto G phones to reflect their own unique style by changing the back of the phone to match their taste. The attractive back covers – called Motorola Shells – are available in a wide variety of colours and styles.

Standalone tablets take firepower away from traditional laptops

Sony unveils splash-proof portable wireless speakers Sony has launched the SRS-BTS50 ultraportable Bluetooth speaker featuring Near Field Communication (NFC) technology designed to stream powerful, dynamic sound experiences from compatible smartphones, tablets and computers on the go. With Sony’s One-Touch Listening, the speakers use NFC technology to easily pair and connect a NFC-enabled smartphone or tablet with a simple touch to eliminate the complex pairing process. Once paired, NFC makes connect or disconnect a breeze.

Microsoft has launched the Logitech PRO, a slim protective case with a built-in Bluetooth keyboard for the new 12.2-inch Samsung Galaxy NotePRO and Samsung Galaxy TabPRO. Mike Culver, Vice President of Logitech Tablet Products, said: “Samsung designed these new tablets with a 12.2-inch, crystal clear display to enhance productivity and media consumption, and with this in mind we created Logitech PRO.” He added: “Logitech PRO helps protect both sides of a tablet, while maintaining a slim design for daily use on the go. Couple that with its full-size keyboard and dedicated shortcut keys, and it is the perfect combination to maximise productivity and protection in a case that perfectly complements the mobility of a Samsung Galaxy NotePRO and Galaxy TabPRO.” The Logitech PRO keyboard features a row of Android shortcut keys, including recent apps, quick panel and email keys. The protective case is wipe able and the SecureLock system keeps any Galaxy NotePRO or Galaxy TabPRO firmly fastened to the folio with lightweight and low profile clips. 35