Abu Dhabi has launched a financial cluster, with a focus on FinTech, insurance, digital and alternative investment assets, amid plans for the emirate to attract more investment and diversify its economy away from oil.
The initiative, announced at Abu Dhabi Finance Week, was approved by Sheikh Khaled bin Mohamed, Crown Prince of Abu Dhabi and chairman of the Abu Dhabi Executive Council, Abu Dhabi Media Office reported.
It is expected to contribute Dh56 billion ($15.24 billion) to Abu Dhabi's economy by 2045 and create more than 8,000 skilled jobs across FinTech, asset management and other sectors. It is also expected to attract Dh17 billion in new investment.
The launch of the cluster represents a strategic step towards building an integrated global financial ecosystem that harnesses capital, innovation, advanced technologies and AI solutions, Sheikh Khaled said.
He also emphasised the continuing need to develop innovative economic infrastructure to further attract investors, start-ups and entrepreneurs in advanced FinTech.
The platform is to connect regulators, FinTech innovators and small and medium-sized enterprises into “one coherent structure" to help businesses grow in Abu Dhabi, Fatima Al Hamadi, head of financial services cluster at Abu Dhabi Investment Office, told The National at Abu Dhabi Finance Week.
Companies specialised in digital payments and tokenisation, as well as family offices and wealth management firms, will also be part of the cluster.
“It brings together local players, regulators and other global financial institutions into one coherent structure so they can work together to grow at scale,” Ms Al Hamadi said.
The cluster aims to develop institutional-grade digital asset infrastructure and advanced FinTech platforms, while establishing frameworks that other jurisdictions can leverage as a global benchmark, ADMO said.
The strategy will also support the development of green finance instruments to attract investors focused on environmental, social and governance factors.
It will also provide tailored financial infrastructure for the emirate’s other priority clusters, including agrifood, smart and autonomous mobility and life sciences.
The cluster also expands access to diverse funding sources, including alternative lending, venture debt and growth capital solutions, for small and medium enterprises, which represent 42 per cent of Abu Dhabi’s non-oil GDP, ADMO said.
Infrastructure for private equity, venture capital, real estate investment vehicles and other alternative assets will support institutional and qualified investors.
The cluster will also strengthen Abu Dhabi’s insurance and reinsurance capacity and further enable the development of investor-protected savings products for UAE nationals and expatriates, and establish retirement planning frameworks.
Regulatory oversight will be led by the Ministry of Finance, UAE Central Bank, ADGM and the Securities and Commodities Authority. Financing and funding partners include the Khalifa Fund for Enterprise Development alongside sovereign wealth funds and family offices.
The physical and digital infrastructure will be provided by the Abu Dhabi Pension Fund, Al Etihad Payments, Khalifa Fund for Enterprise Development, General Pension and Social Security Authority, Etihad Credit Insurance and Etihad Credit Bureau.
An innovation and research and development network will be led by Hub71, United Arab Emirates University, Khalifa University, Emirates Institute of Finance and ADGM Academy to strengthen R&D partnerships in areas such as digital assets, artificial intelligence, advanced analytics and financial infrastructure.
Local talent will also be developed in actuarial science, FinTech engineering, quantitative finance and related disciplines, ADMO said.
"Abu Dhabi already has a strong financial base, with more than $1.7 trillion in assets being managed by sovereign institutions," Ms Al Hamadi said. "What Fida [FinTech, insurance, digital and alternative asset management] is aiming to do it to build a modern financial infrastructure to make it easier for businesses to grow."
Companies specialising in wealth management have been setting up their businesses in the ADGM as Abu Dhabi's economy continues to grow. In October, Switzerland’s largest bank UBS opened an advisory office in Abu Dhabi's financial centre as it seeks to capitalise on the influx of wealthy people to the UAE.
The UAE, the Arab world’s second-largest economy, has been striving to boost FDI and attract more companies as it diversifies its economy away from oil.
To boost FDI, the UAE has unveiled initiatives including 100 per cent foreign ownership of companies, reduced visa restrictions and incentives for SMEs. It also unveiled the NextGen FDI programme, which seeks to speed up licensing, increase the issuance of bulk or golden visas, improve banking services and provide commercial and residential lease incentives for technology companies seeking to relocate to the country.
match info
Chelsea 2
Willian (13'), Ross Barkley (64')
Liverpool 0
Squad: Majed Naser, Abdulaziz Sanqour, Walid Abbas, Khamis Esmail, Habib Fardan, Mohammed Marzouq (Shabab Al Ahli Dubai), Khalid Essa, Muhanad Salem, Mohammed Ahmed, Ismail Ahmed, Ahmed Barman, Amer Abdulrahman, Omar Abdulrahman (Al Ain), Ali Khaseif, Fares Juma, Mohammed Fawzi, Khalfan Mubarak, Mohammed Jamal, Ahmed Al Attas (Al Jazira), Ahmed Rashid, Mohammed Al Akbari (Al Wahda), Tariq Ahmed, Mahmoud Khamis, Khalifa Mubarak, Jassim Yaqoub (Al Nasr), Ali Salmeen (Al Wasl), Yousef Saeed (Sharjah), Suhail Al Nubi (Baniyas)
What is an ETF?
An exchange traded fund is a type of investment fund that can be traded quickly and easily, just like stocks and shares. They come with no upfront costs aside from your brokerage's dealing charges and annual fees, which are far lower than on traditional mutual investment funds. Charges are as low as 0.03 per cent on one of the very cheapest (and most popular), Vanguard S&P 500 ETF, with the maximum around 0.75 per cent.
There is no fund manager deciding which stocks and other assets to invest in, instead they passively track their chosen index, country, region or commodity, regardless of whether it goes up or down.
The first ETF was launched as recently as 1993, but the sector boasted $5.78 billion in assets under management at the end of September as inflows hit record highs, according to the latest figures from ETFGI, a leading independent research and consultancy firm.
There are thousands to choose from, with the five largest providers BlackRock’s iShares, Vanguard, State Street Global Advisers, Deutsche Bank X-trackers and Invesco PowerShares.
While the best-known track major indices such as MSCI World, the S&P 500 and FTSE 100, you can also invest in specific countries or regions, large, medium or small companies, government bonds, gold, crude oil, cocoa, water, carbon, cattle, corn futures, currency shifts or even a stock market crash.
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
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Iron Man
Reduced risk of dementia
Alcohol consumption could be an issue
Hulk
Cardiac disease, stroke and dementia from high heart rate
Spider-Man
Agility reduces risk of falls
Increased risk of obesity and mental health issues
Black Panther
Vegetarian diet reduces obesity
Unknown risks of potion drinking
Black Widow
Childhood traumas increase risk of mental illnesses
Thor
He's a god
Cultural fiesta
What: The Al Burda Festival
When: November 14 (from 10am)
Where: Warehouse421, Abu Dhabi
The Al Burda Festival is a celebration of Islamic art and culture, featuring talks, performances and exhibitions. Organised by the Ministry of Culture and Knowledge Development, this one-day event opens with a session on the future of Islamic art. With this in mind, it is followed by a number of workshops and “masterclass” sessions in everything from calligraphy and typography to geometry and the origins of Islamic design. There will also be discussions on subjects including ‘Who is the Audience for Islamic Art?’ and ‘New Markets for Islamic Design.’ A live performance from Kuwaiti guitarist Yousif Yaseen should be one of the highlights of the day.
ANALYSTS’ TOP PICKS OF SAUDI BANKS IN 2019
Analyst: Aqib Mehboob of Saudi Fransi Capital
Top pick: National Commercial Bank
Reason: It will be at the forefront of project financing for government-led projects
Analyst: Shabbir Malik of EFG-Hermes
Top pick: Al Rajhi Bank
Reason: Defensive balance sheet, well positioned in retail segment and positively geared for rising rates
Analyst: Chiradeep Ghosh of Sico Bank
Top pick: Arab National Bank
Reason: Attractive valuation and good growth potential in terms of both balance sheet and dividends
The specs
Engine: Direct injection 4-cylinder 1.4-litre
Power: 150hp
Torque: 250Nm
Price: From Dh139,000
On sale: Now
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The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
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Diriyah%20project%20at%20a%20glance
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RESULTS
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Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Dunki
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Polarised public
31% in UK say BBC is biased to left-wing views
19% in UK say BBC is biased to right-wing views
19% in UK say BBC is not biased at all
Source: YouGov
The specs
Engine: 2.3-litre, turbo four-cylinder
Transmission: 10-speed auto
Power: 300hp
Torque: 420Nm
Price: Dh189,900
On sale: now
Infiniti QX80 specs
Engine: twin-turbocharged 3.5-liter V6
Power: 450hp
Torque: 700Nm
Price: From Dh450,000, Autograph model from Dh510,000
Available: Now
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
What is a robo-adviser?
Robo-advisers use an online sign-up process to gauge an investor’s risk tolerance by feeding information such as their age, income, saving goals and investment history into an algorithm, which then assigns them an investment portfolio, ranging from more conservative to higher risk ones.
These portfolios are made up of exchange traded funds (ETFs) with exposure to indices such as US and global equities, fixed-income products like bonds, though exposure to real estate, commodity ETFs or gold is also possible.
Investing in ETFs allows robo-advisers to offer fees far lower than traditional investments, such as actively managed mutual funds bought through a bank or broker. Investors can buy ETFs directly via a brokerage, but with robo-advisers they benefit from investment portfolios matched to their risk tolerance as well as being user friendly.
Many robo-advisers charge what are called wrap fees, meaning there are no additional fees such as subscription or withdrawal fees, success fees or fees for rebalancing.
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
Emergency phone numbers in the UAE
Estijaba – 8001717 – number to call to request coronavirus testing
Ministry of Health and Prevention – 80011111
Dubai Health Authority – 800342 – The number to book a free video or voice consultation with a doctor or connect to a local health centre
Emirates airline – 600555555
Etihad Airways – 600555666
Ambulance – 998
Knowledge and Human Development Authority – 8005432 ext. 4 for Covid-19 queries
