Author Archives: Sabah al-Binali

Companies need to create the role of Entrepreneurial Leader

October 11, 2016 By in Management, Entrepreneurship Tags: , ,

Business is challenging. Being successful at business is extremely challenging. It takes a tremendous amount of time and energy to acquire new clients, retain existing clients, manage your team, manage your portfolio of projects and deliver the high-quality products and services that you need to remain competitive in the market.

Do you want an idea of how busy you are while running your existing business? How many unread emails do you have? Hundreds? Over a thousand? How old is the oldest email?

What about meetings? Excluding time reading and composing emails, what percentage of your day is taken up by meetings regarding existing business, for example, with clients or employees about existing products and services on offer? If you include travel time I have never even seen this percentage below 50 per cent and it is usually much higher, around the 75 per cent mark.

Now let’s get to the crux of this article. What percentage of the time do you spend learning, thinking or developing new business lines? What percentage of your resources are dedicated to evolving the business? I am talking about actual time and energy spent here, not wishful thinking. Is it 0 per cent? 1 per cent?

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UAE Lagging as a Financial Center According to Indicators

September 27, 2016 By in Economy Tags:

I am in New York, the primary financial centre in the world, visiting asset managers. The smallest of these managers has a total of about US$500 billion under management. According to the World Bank, the total market capitalisation of domestic listed companies in the UAE was about $195bn at the end last year. The UAE has two primary stock markets, a federal level market regulator in the SCA and at least two offshore financial centres in the DIFC and ADGM, each of which is regulated independently of the other and the SCA.

Maybe looking at total numbers doesn’t make sense as different countries have different GDPs. Fortunately for us the World Bank provides market size as a percentage of GDP. For the UAE, the total market cap of domestic listed companies is 53 per cent of GDP as of the end of last year; for the US it was 140 per cent. For Singapore, a country often held up as a model for the UAE to learn from if not emulate, market cap is 219 per cent of GDP.

For Saudi Arabia, which many assume lags the UAE in fin­ancial innovation, the number is 65 per cent. What saddens me is that the world average is 99 per cent and in terms of the size of our markets relative to GDP we are roughly half the global average.

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Why British Airways is losing to Emirates, Etihad and Qatar Airways

September 20, 2016 By in Management Tags: ,

I arrived at the airport at 10.50pm. My flight was scheduled for a 1:45am departure but I like to arrive early. It gives me time to sort out any issues, especially as I had a connecting flight with a three-hour window. And if there were no issues, well that was the perk of flying business – relaxing in the lounge.

I walked into the check-in area for first and business class. I didn’t see a counter for my airline open. It happens sometimes, they don’t start at exactly the three-hour pre-departure mark. So I sat and waited.

What transpired next was a complete breakdown in the operational effectiveness of the airline.

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A long-term plan for a stronger UAE economy

September 13, 2016 By in Economy Tags: , 1 Comment

Eid Mubarak.

It has been difficult this year to find topics on the economy or business to be positive about. For Eid Al Adha I feel that a more optimistic article is called for. So let us look to the future and to what might be.

One happy future is having oil prices to return to US$100+ and remain there. That would have an immense positive effect on the economy. But then that isn’t looking to the future. With, among many other factors, shale oil production costs dropping and Iran increasing output capacity, this isn’t an optimistic future. It is a fantasy.

I, however, believe that we can have an optimistic future without the need for massive oil price increases. I am not saying that it is an easy path but it is a realistic one. It consists of bringing together a host of solutions and interweaving them into a single integrated plan for the economy. You will recognise individual ideas that I have discussed in detail already. Now it’s time to put these pieces together into a plan.

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You need hard work to grow an economy

September 6, 2016 By in Economy Tags: 1 Comment

Last week saw some interesting news reports. A leading one was around Emirati Women’s Day. A raft of announcements in support of Emirati women declared the appointment, or intention to appoint, women to senior positions across the public and private sectors. Such decisions are welcome but are not enough to ensure gender equality. This requires the enactment of laws that criminalises gender discrimination and the creation of support departments for women who have been discriminated against. This is good for the economy. I have hear that women make up around 50% of the Emirati population and are therefore an important demographic.

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A Random Walk through UAE Economic Data

August 30, 2016 By in Economy Tags: ,

The news on the economy continues to be grim. I went searching for data to help us understand what is going on. I was surprised at what I found. You’ll have to read the article to find out if the surprise was pleasant or not.

In the absence of a team of research analysts to mine the data that I need (free marketing anyone?) I need to use what is available. One of the best sources of aggregate economic information is provided by the Central Bank of the UAE, available for free on their website.

As a start I took a look at their monthly statistical bulletin for June 2016, which they note is preliminary. I decided to look at some of the more oft repeated mantras and see if the data matched. Looking at what is happening with the banks should give us a good idea at what is happening generally.

One of the scariest pontifications is that the government is withdrawing its deposits, thus squeezing the economy by limiting the ability of banks to lend. Government deposits increased to 184 billion dirhams up 14% from 161 billion one year ago in June 2015. So, no, the government is not withdrawing deposits, it has added to them substantially. Pleasant surprise.

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GREs versus the Private Sector in the UAE

August 23, 2016 By in Government Tags: , , 3 Comments

Every once in a while I decide to torture myself and rummage through the IMF’s databases looking for interesting research and analysis. When I found a Selected Issues UAE Country Report by the IMF, I thought I’d try my luck.

The report, published this month, begins by looking at government-related entities (GREs), which is anything that the government owns shares in. It is important to note that the IMF repeatedly warns that it does not have all information on all GREs. It looks at about 60 companies, although one should bear in mind that the government holdings in some are too small to have any influence.

One of the early IMF comparisons that is striking is the return on assets (ROA) of the non-financial corporate sector across GCC countries over the period from 2007 to 2014. The UAE at 8.1% a year is higher only than Kuwait. Saudi Arabia at 9.6 per cent is about a fifth higher and Oman’s 13.3% is more than three-fifths higher. How then are we the commercial hub of the GCC?

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A Tribute to Andy Rooney: A Look into the UAE's Economy.

August 2, 2016 By in Finance Tags: , 1 Comment

It’s summer, it’s hot and who wants to wade through an 800 word article? So I’ll base this article on the infamous segment “A Few Minutes with Andy Rooney” from the hit show 60 Minutes, and I’ll simply give a series of light vignettes to whet the appetite and stimulate thought, without overwhelming the senses.

The UAE’s Telecommunications Regulatory Authority frequently bans voice and video over IP (VoIP), a cheap way to communicate with the world. This is significantly beneficial to the oligopoly of Etisalat and du. Yet a regulator is supposed to be protecting the consumers. Banning VoIP because it competes with regular phones is like banning email because it competes with faxes, telegrams and letters. Dear TRA, that was a plea to allow VoIP, not an excuse to ban email. It was also a polite reminder that the consumer is your client, not the telecom companies.

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A Little Reaganomics Please: Expansionary not Contractionary Policies

July 26, 2016 By in Economy Tags:

In April, news of a municipal fee was announced on residential rents for expatriates. Since the fee is a percentage of rent, this is, by definition, a real estate tax. This comes on top of the value-added and corporate taxes announced earlier. I wonder if there is some confusion between maximising taxes and maximising tax revenue. The difference is important.

The former US president Ronald Reagan oversaw one of the strongest economic growth periods in America. His plans, dubbed Reaganomics, were and remain hotly debated by economists. Understanding them is instructive. But first, let us agree on some terms.

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Ipic-Mubadala merger does not have to follow a template

July 19, 2016 By in Strategy Tags: , , 1 Comment

Ipic and Mubadala, two major Abu Dhabi investment funds, have been mandated to merge. The outcome does not have to be a single company. In this article I will look at an innovative option for the Ipic-Mubadala merger to result in more than one company and how such a multi-result merger can support Abu Dhabi’s Economic Vision 2030.

I recently wrote in detail on what strategies the NBAD-FGB merger could take and in a subsequent article I delved into a major challenge such a merger might face. The detail was possible because both NBAD and FGB are listed companies and have strong disclosure requirements.

When discussing Ipic and Mubadala, we are talking about two privately held institutions and as such there is less public information at this time. This does not stop us from conducting a thought experiment, if you will, to try to understand the options available.

The key issue we will look at today is that a merger does not have to be about acquiring market share or new business lines. A merger can be about rationalisation and refocus.

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