Arabtec Holding, the largest construction firm in the UAE, has announced second-quarter net profit of Dh183 million (US$49.82m), marking a 33 per cent decline from Dh273m in the same period last year. Net profit for the second quarter was up 14 per cent from the first quarter, resulting in a profit of Dh345m for the first six months of the year, the company said in a statement. Arabtec's order book has been hit hard by the downturn. According to Al Mal capital, cancelled projects in the UAE have reduced its value to about Dh31bn, compared to about Dh39bn at the end of 2008.
But the company has been quick to adapt by seeking work in other GCC construction markets. In March, it set up Arabtec Saudi Arabia, through which it hopes to generate Dh1.47bn in profit from projects this year. The company was also hit with delayed payments from property developers to the tune of Dh3bn. "The revenues and profits for the second quarter of 2009 are good considering the difficult times that the real estate and construction sectors are experiencing in the UAE and the GCC as a whole, and are in line with our expectations for 2009," said Riad Kamal, the chief executive of Arabtec Holding.
"These results were achieved in very difficult markets, and are attributed to the steps taken last year and still continuing, by the management of the company in relation to, more integration of our business units, reducing costs and improving productivity and efficiency, and to our continuous geographic expansion strategy in new attractive markets." aguffrida@thenational.ae
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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.”
Results
2.30pm: Handicap (PA) Dh40,000 1,700m; Winner: AF Mezmar, Adam McLean (jockey), Ernst Oertel (trainer).
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3.30pm: Handicap (PA) Dh40,000 1,200m; Winner: Gold Silver, Sam Hitchcott, Ibrahim Aseel.
4pm: Maiden (PA) Dh40,000 1,000m; Winner: Atrash, Richard Mullen, Ana Mendez.
4.30pm: Gulf Cup Prestige (PA) Dh150,000 1,700m; Winner: AF Momtaz, Saif Al Balushi, Musabah Al Muhairi.
5pm: Handicap (TB) Dh40,000 1,200m; Winner: Al Mushtashar, Richard Mullen, Satish Seemar.
LOS ANGELES GALAXY 2 MANCHESTER UNITED 5
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United: Rashford (2', 20'), Fellaini (26'), Mkhitaryan (67'), Martial (72')
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THE BIO
Favourite book: ‘Purpose Driven Life’ by Rick Warren
Favourite travel destination: Switzerland
Hobbies: Travelling and following motivational speeches and speakers
Favourite place in UAE: Dubai Museum
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Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
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Rating: 3/5
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Rating: 2.5/5
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1. Lewis Hamilton (GBR/Mercedes) 1:28.063 (18 laps)
2. Sebastian Vettel (GER/Ferrari) 1:28.095 (14)
3. Valtteri Bottas (FIN/Mercedes) 1:28.137 (20)
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