As far as most of the outside world is concerned, what matters about the outcome of Japan's national election on October 22 is that it appears to give the prime minister Shinzo Abe another try at boosting his signature "Abenomics" policies and at recharging the world's third-largest economy.
Abenomics has not been a spectacular success since the mix of monetary and fiscal stimulus plus structural reforms was launched in 2013. But it has prevented the economy from falling back into the repeated recessions it suffered in prior decades.
A second attempt to soup-up Abenomics will be launched by the Japanese leader now that he is flushed with success from the election victory. But economic stimulus in Japan at this time is a means to a different end and no sudden spurt in economic growth can be expected, analsyts suggest.
"Abe is trying to create a legacy," says Jesper Koll, the head of the equities fund Wisdom Tree Japan. "His first legacy project was to get the economy out of deflation and the second is to change [the Japanese] constitution," using growth to sweeten the controversial change," he tells The National.
Mr Abe and his Liberal Democratic Party together with the party's governing coalition partner, Komeito, won what was widely described as a "landslide" win in the October lower house election, securing the "super majority" needed to launch a national referendum on constituional change.
But the vote was more a verdict on the poor election tactics of a divided political opposition in Japan. So great was popular cynicism over these tactics that voters opted to support an agenda that will even include raising Japan's very unpopular national consumption tax in 2019.
Mr Abe has promised to proceed with a scheduled sales tax increase unless the nation's economy suffers a shock as big as the 2008 collapse of the investment bank Lehman Brothers. The plan is to divert some of the proceeds to child care and education via THIS IS ILLEGIBLE***agrowth suppring **** "investment in education."
______________
Read more:
Japan GDP unexpectedly puts it atop G7
Corporate scandals drag Japan Inc's reputation through the mud
Apple said to discuss $3 billion stake in Bain's Toshiba bid
______________
The fiscal impact on an already highly indebted Japanese central government could be very damaging, some argue. But with a compliant Bank of Japan (BOJ) headed by the governor Haruhiko Kuroda willing, in effect, to finance government deficits, Mr Abe appears unconcerned by international concern on this score.
Meanwhile, some analysts including Mr Koll also remain unfazed by the debt issue and are optimistic about the outlook for the Japanese economy. "Political and policy stability is poised to add momentum to Japan’s domestic business investment cycle," he says.
"Already leading companies like Canon and Shiseido have announced some on-shoring, ie building new production capacity in Japan and the upgrade cycle for small and medium sized companies is poised to accelerate further."
Japanese monetary policy "is poised to decouple from the US Fed rate hike cycle", Mr Koll suggests. "No matter who is appointed as next BOJ governor [will] almost certainly continue the current support for Abenomics from the central bank.
"The election has strengthened 'Team Abe's conviction that its economic policy is on the right track, precisely because of Japan’s unique collaboration between fiscal and monetary authorities. Japan's policy dynamics are poised to deliver strong upside surprises to economic growth."
Even so, Mr Abe will need to guard against assuming that a strengthening Japanese economy is a mandate to enter the dangerous territory of constitutional change, some say.
"I think that debate in parliament will begin" on this issue, Zentaro Kamei, a senior researcher at the think tank PHP Institute and a former member of Mr Abe's LDP has been quoted as saying.
"If Mr Abe "starts talking about the constitution, people will say: 'You didn't ask me that.'"
Profile
Name: Carzaty
Founders: Marwan Chaar and Hassan Jaffar
Launched: 2017
Employees: 22
Based: Dubai and Muscat
Sector: Automobile retail
Funding to date: $5.5 million
Results
Male 51kg Round 1
Dias Karmanov (KAZ) beat Mabrook Rasea (YEM) by points 2-1.
Male 54kg Round 1
Yelaman Sayassatov (KAZ) beat Chen Huang (TPE) TKO Round 1; Huynh Hoang Phi (VIE) beat Fahad Anakkayi (IND) RSC Round 2; Qais Al Jamal (JOR) beat Man Long Ng (MAC) by points 3-0; Ayad Albadr (IRQ) beat Yashar Yazdani (IRI) by points 2-1.
Male 57kg Round 1
Natthawat Suzikong (THA) beat Abdallah Ondash (LBN) by points 3-0; Almaz Sarsembekov (KAZ) beat Ahmed Al Jubainawi (IRQ) by points 2-1; Hamed Almatari (YEM) beat Nasser Al Rugheeb (KUW) by points 3-0; Zakaria El Jamari (UAE) beat Yu Xi Chen (TPE) by points 3-0.
Men 86kg Round 1
Ahmad Bahman (UAE) beat Mohammad Al Khatib (PAL) by points 2-1
Men 63.5kg Round 1
Noureddin Samir (UAE) beat Polash Chakma (BAN) RSC Round 1.
Female 45kg quarter finals
Narges Mohammadpour (IRI) beat Yuen Wai Chan (HKG) by points.
Female 48kg quarter finals
Szi Ki Wong (HKG) beat Dimple Vaishnav (IND) RSC round 2; Thanawan Thongduang (THA) beat Nastaran Soori (IRI) by points; Shabnam Hussain Zada (AFG) beat Tzu Ching Lin (TPE) by points.
Female 57kg quarter finals
Nguyen Thi Nguyet (VIE) beat Anisha Shetty (IND) by points 2-1; Areeya Sahot (THA) beat Dana Al Mayyal (KUW) RSC Round 1; Sara Idriss (LBN) beat Ching Yee Tsang (HKG) by points 3-0.
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.”
Dubai Bling season three
Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
COMPANY PROFILE
Founders: Alhaan Ahmed, Alyina Ahmed and Maximo Tettamanzi
Total funding: Self funded
Did you know?
Brunch has been around, is some form or another, for more than a century. The word was first mentioned in print in an 1895 edition of Hunter’s Weekly, after making the rounds among university students in Britain. The article, entitled Brunch: A Plea, argued the case for a later, more sociable weekend meal. “By eliminating the need to get up early on Sunday, brunch would make life brighter for Saturday night carousers. It would promote human happiness in other ways as well,” the piece read. “It is talk-compelling. It puts you in a good temper, it makes you satisfied with yourself and your fellow beings, it sweeps away the worries and cobwebs of the week.” More than 100 years later, author Guy Beringer’s words still ring true, especially in the UAE, where brunches are often used to mark special, sociable occasions.
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
Game Changer
Director: Shankar
Stars: Ram Charan, Kiara Advani, Anjali, S J Suryah, Jayaram
Rating: 2/5
Ahmed Raza
UAE cricket captain
Age: 31
Born: Sharjah
Role: Left-arm spinner
One-day internationals: 31 matches, 35 wickets, average 31.4, economy rate 3.95
T20 internationals: 41 matches, 29 wickets, average 30.3, economy rate 6.28
The specs
Engine: 3.8-litre twin-turbo V8
Power: 611bhp
Torque: 620Nm
Transmission: seven-speed automatic
Price: upon application
On sale: now
