Eurofighter, the European consortium vying to supply its Typhoon combat jets to the UAE, hopes to seal a £1.5 billion (Dh8.7bn) deal to sell the aircraft to Oman by the middle of next year.
Come fly with us:
Industry Insights Take to the skies with The National as it charts the aviation industry. Learn More
It is also seeking to restart discussions with Qatar next year about the sale of 36 Typhoons. Eurofighter is in competition with Boeing, Lockheed Martin and Dassault for the Qatar deal. Kuwait is also believed to be considering requesting a proposal for the Typhoon, say Kuwaiti government sources.
But the UAE is the biggest potential customer in the region as it looks to buy 60 jets for its fleet.
Eurofighter's hopes were raised on Wednesday when the terms on a rival proposal by Dassault were characterised as "uncompetitive" by Sheikh Mohammed bin Zayed, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces.
"People have seen what the aircraft has done in Libya and there's more interest being generated," said Wing Commander Anthony Gregory, a Eurofighter Typhoon adviser with the UK government, which is part of the Eurofighter consortium.
Gulf states are seeking to renew and expand their military firepower, creating opportunities for European and US defence manufacturers.
Eurofighter, a consortium of manufacturers in the UK, Italy, Germany and France, has steadily built its profile in the region since Saudi Arabia's air force ordered 72 Typhoons in 2006.
Oman entered talks with the UK ministry of defence in April last year about providing 12 of the aircraft. The country has been keen to replace its 24 Jaguar jets for some time. Eurofighter hopes to finalise the deal by the middle of next year, said Wg Cdr Gregory.
Both the Eurofighter Typhoon and the Dassault Rafale saw combat in Libya, with both aircraft makers pointing to their success in the campaign to disable Muammar Qaddafi's military.
But Dassault has yet to secure an international sale of the Rafale.
The French manufacturer has been in negotiations with the UAE since 2008 about a possible US$10bn (Dh36.73bn) purchase of 60 aircraft. The French had believed a deal to be close.
But a confirmed order has become less certain since Sheikh Mohammed's comments and after the UAE submitted a request to the UK government on November 9 asking for a costing for 60 Typhoons and a training package for 60 pilots to be in place by 2017. The same day, a request for proposals for the same number of jets was submitted to the US government for F-15 Eagles and F/A-18E/F Super Hornets, produced by the US plane maker Boeing.
"There is certainly a concern among those who have received the [request for proposals] that they are being used as 'stalking horses' in a radical attempt to squeeze a better price from Dassault," wrote Robert Hewson, the editor of the publication IHS Jane's Air-Launched Weapons, in a research note.
Any change in the UAE's fighter jet plans could affect a joint project between the European missile developer MBDA and Abu Dhabi's Baynuna Group.
A Rafale order was expected to lead to the establishment of a new missile system design and manufacturing base in the UAE.
"Before news of the [request for proposals], emerged the joint venture was hopeful that manufacturing work would start in 2012; this launch date had already been pushed back by earlier delays in securing a Rafale contract," wrote Mr Hewson.
tarnold@thenational.ae
Europe’s rearming plan
- Suspend strict budget rules to allow member countries to step up defence spending
- Create new "instrument" providing €150 billion of loans to member countries for defence investment
- Use the existing EU budget to direct more funds towards defence-related investment
- Engage the bloc's European Investment Bank to drop limits on lending to defence firms
- Create a savings and investments union to help companies access capital
Sleep Well Beast
The National
4AD
Company profile
Name: GiftBag.ae
Based: Dubai
Founded: 2011
Number of employees: 4
Sector: E-commerce
Funding: Self-funded to date
Results
5pm: Wathba Stallions Cup Maiden (PA) Dh 70,000 (Dirt) 1,000m, Winner: Hazeem Al Raed, Antonio Fresu (jockey), Ahmed Al Shemaili (trainer)
5.30pm: Handicap (PA) Dh 85,000 (D) 1,000m, Winner: Ghazwan Al Khalediah, Hugo Lebouc, Helal Al Alawi
6pm: Maiden (PA) Dh 70,000 (D) 1,400m, Winner: Dinar Al Khalediah, Patrick Cosgrave, Helal Al Alawi.
6.30pm: Handicap (TB) Dh 70,000 (D) 1,600m, Winner: Faith And Fortune, Sandro Paiva, Ali Rashid Al Raihe.
7pm: Maiden (PA) Dh 70,000 (D) 1,600m, Winner: Only Smoke, Bernardo Pinheiro, Abdallah Al Hammadi.
7.30pm: Handicap (PA) Dh 70,000 (D) 1,600m, Winner: AF Ramz, Saif Al Balushi, Khalifa Al Neyadi.
8pm: Maiden (PA) Dh 70,000 (D) 2,000m, Winner: AF Mass, Tadhg O’Shea, Ernst Oertel.
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.”
Friday’s fixture
6.15pm: Al Wahda v Hatta
6.15pm: Al Dhafra v Ajman
9pm: Al Wasl v Baniyas
9pm: Fujairah v Sharjah
.
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
