Abu Dhabi Co-Operative Society Announces AED135M Dividends at its Annual Meeting | Kanebridge News
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Abu Dhabi Co-Operative Society Announces AED135M Dividends at its Annual Meeting

AED135M approved dividend for distribution to shareholders

Press Release
Tue, Oct 15, 2024 1:00pmGrey Clock 3 min

Abu Dhabi Co-Operative Society, part of Mair Group held its annual general assembly meeting on Thursday, October 3rd, 2024, to announce and discuss the results of the fiscal year 2023. The meeting was led by Captain Mohammed Juma Al Shamisi, Chairman of the Board of Directors at Mair Group.

During the meeting, various strategic initiatives were approved, as well as reviewing the financial performance and successes achieved by Abu Dhabi Co-Operative Society throughout 2023. Future goals and ambitions were also discussed, which aim to further strengthen Mair Group’s position as a major contributor to the UAE’s food security system and ensure sustainable growth for its shareholders.

The most prominent topics of the meeting included:

• The approval of distributing AED135 million worth of dividends to the shareholders.

• The transformation of Abu Dhabi Co-Operative Society, into a public joint stock company – PJSC.

• Listing the company shares on the Abu Dhabi Securities Exchange – ADX.

• Partial shares to be listed to increase the attractiveness and demand for investors.

 

Captain Mohamed Juma Al Shamisi, Chairman of the Board of Directors at Mair Group

In this context, Captain Mohamed Juma Al Shamisi, Chairman of the Board of Directors at Mair Group, said: We extend our thanks and appreciation to our wise leadership for its unlimited support in facilitating the merger of Al Ain, Al Dhafra, and Delma Societies under the umbrella of Abu Dhabi Cooperative Society, and for strengthening the role of national institutions in enhancing the economic status of the United Arab Emirates, and achieving the well-being and sustainable development of society. This year has been an exceptional one in the journey of Abu Dhabi Cooperative Society, where we have achieved remarkable successes thanks to a clear strategic vision and the efforts of the  team, and we look forward to a promising future that holds many opportunities for success and sustainable growth for the group’s business in the UAE and the region as a whole, and to provide real value to our shareholders and partners.”

Nehayan Hamad Balrakad Alameri, Managing Director and CEO of Mair Group

In this regard Mr. Nehayan Hamad Balrakad Alameri, Managing Director and CEO of Mair Group said: “During our discussions at the meeting, we approved an ambitious expansion plan that includes the implementation of 10 new projects in Abu Dhabi and Al Ain, in addition to 7 other projects in Al Dhafra region. Our future journey is clear, strengthening our presence, achieving operational excellence, ensuring the sustainable growth of Mair Group, enhancing the well-being of our communities, and achieving the interests of our shareholders.”

It is noteworthy that Mair group achieved revenues of 1.2 billion dirhams in the first half of 2024, and net profit before interest, taxes, depreciation, and amortization amounted to 171 million dirhams. A comprehensive unification of Mair Group’s assets was also implemented and classified into specific sectors, including the retail and commercial real estate sector.



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FERRET, Switzerland —Nicolas Puech, an heir to the Hermès fortune and long considered one of Europe’s richest men, lives much of the year in one of the dozen houses that make up this tiny village in the Swiss Alps.

In the winter, it’s not accessible by road, so locals use snowshoes to trek into the nearest town for provisions. Few residents know anything about their reclusive neighbour, who has been reported to be worth roughly $13 billion.

“I know he’s very rich,” said Jean-Jacques Éleaume, who is in his 70s and moved to the village because his wife’s ashes were scattered there. “How or why, no idea.”

Mila Fedele, who owns a small mountain inn in the village where hikers stop for the night on their way around nearby Mont Blanc, said Puech usually came in about once a year for a coffee.

“I didn’t even know his name,” she said. “Now, of course, I’ve read like everyone else, I’ve seen the name in the newspapers….”

Puech, who is 81 years old and doesn’t have any children, is in the newspapers due to a stunning claim he made last year: He said he was out of money. As for his stake in Hermès, the luxury giant controlled by his family, he said he didn’t own the shares anymore, and he didn’t know who did.

It’s a mystery tale that could only unfold among the ultra wealthy, in the opulent settings of Italian palazzos and sprawling chalets in the Alps. At stake are 6 million shares in an iconic luxury brand famed for its colourful silk scarves and Birkin and Kelly handbags cherished by socialites. A massive inheritance that was once earmarked for philanthropy now could be lost forever.

Puech’s revelation has spawned questions being whispered about from Paris to Geneva. Did his one-time financial adviser, as Puech has contended, sell the shares and take the proceeds? Is Puech claiming they are lost as part of a plan to leave his wealth to a one-time employee without paying inheritance taxes, as the former adviser has claimed? Could Hermès archrival Bernard Arnault shed light on the situation, as Puech has requested?

Eric Freymond, who worked for decades as Puech’s financial adviser, filed a report with Switzerland’s child and adult protection authority in November 2023, alleging that the employee and his partner, who both live with Puech, had come to control the heir’s life to their own financial benefit. To circumvent his estate plan—laid out in a binding contract that is different from a will—Puech was also trying to legally adopt the man, Freymond alleged.

Puech, for his part, says Freymond himself pilfered the shares as part of a “gigantic fraud,” which could have started as far back as 25 years ago, when he assisted Bernard Arnault, the owner of Hermès rival, LVMH , in his efforts to covertly build a large stake in Hermès.

Even Hermès is in the dark. The company’s chief executive told analysts earlier this year that it can’t say for sure whether Puech still owns his shares.

Complicating the matter is the fact that Puech was issued so-called bearer shares in Hermès, a type of stock that does not need to be registered under a specific person or business and where the ultimate owner is unknown to the company. Dividends for bearer shares are typically paid through the financial intermediaries that hold them on behalf of the owner, which can sometimes lead to challenges in tracing ownership. The rest of the Hermès family hold “registered shares” which are issued in their names.

“Of course at least someone must know where they are,” says Nicolas Borsinger, who runs Puech’s private foundation, to which Puech had planned to leave his fortune until abruptly trying last year to cancel that commitment.

On a late summer day, horned cows grazed through roadside meadows when a Wall Street Journal reporter visited Puech’s big yellow house, by far the largest in the village. A small sign in the window had the word “Privé”—private—scrawled in red marker.

Before the reporter could knock, Puech emerged from the side of the house, appearing in good health and good spirits. He was friendly, and responded affirmatively when asked if he had a nice summer.

Asked if he could talk about the mystery surrounding his fortune, Puech said it wasn’t the right moment and climbed into a small white SUV. A trim middle-aged woman who was driving the car interjected that the reporter should contact their lawyer. The two drove off.

When contacted by the Journal, the lawyer representing Puech, Jörn-Albert Bostelmann, said he wouldn’t comment in depth on what he called a “murky affair” and a criminal matter.

“My client has no intention of going into the details,” he said. “He’s an 81-year-old man who prefers for things to unfold peacefully.”

A lawyer for Freymond said his client denied wrongdoing and disputes Puech’s version of events. “My client is tired of having to defend himself against unreal defamatory allegations that have no substance and are not supported by any proof,” he said.

This account is based on court records as well as interviews with people familiar with the matter.

The financial adviser is fired

Puech, pronounced “pwesh,” was born on Jan. 29, 1943, in Neuilly-sur-Seine, France. He is a great-grandson of Thierry Hermès, who founded the company in 1837 when he opened a workshop in Paris.

Over the years, the Hermès family split into three branches, one of which was the Puechs. Most of the Puech cousins weren’t involved in the business, enjoying quiet lives funded by increasingly sizeable dividends.

From the late 1980s, Nicolas Puech spent much of his time at his farm located about an hour from Seville, in the south of Spain. The property, whose name means Four Winds in English, is secluded, and Puech enjoyed spending time among the eucalyptus and cork oaks, surrounded by his horses, pigs, goats, and his Labrador, called Nectar. He didn’t work.

“Horses are his passion,” said a person who has known him for decades. “Architecture, interior design, history, travel. I would say he leans more toward the artistic…. He has always been a bit frustrated, I think, growing up in a family where numbers were valued more than art.”

In 1993, Hermès went public, but the family kept a 74% ownership stake. Three years later, Puech inherited around 5% of Hermès when his mother died, making him one of the company’s largest individual shareholders. He inherited another 1% stake in the company when his sister died several years later.

In the absence of a partner or children, Puech set up a foundation and in 2017 named Nicolas Borsinger as chief executive to run it. Puech himself came up with the name, the Isocrates Foundation, in honour of the ancient Athenian orator who promoted the use of rhetoric as a solution to societal problems.

Borsinger, a quiet Swiss national who had a distinguished career working for the International Committee of the Red Cross, was told he would eventually have billions of dollars to distribute to causes including investigative journalism and other ways to combat misinformation and conspiracy theories.

Puech attended board meetings, as well as annual staff retreats. In September 2022, they convened at the Tuscan mansion of Puech’s wealth manager, Freymond, who was also a foundation board member.

Two people who were there said Puech seemed pleasant, engaged and happy.

Upon returning to his house in Geneva, Freymond found a letter in his mailbox. Puech was firing him, effective immediately.

Freymond had known Puech since the 1980s and considered him a friend as well as a client. Now Puech was dismissing him without even confronting him in person.

Then last fall, Borsinger, the head of the foundation, received his own letter.

In slanted handwriting across the top of the letter, Puech wrote: “Annulation pacte successoral.”

Translation: “Cancellation inheritance agreement.”

“I irrevocably declare the cancellation of this agreement in its entirety,” Puech wrote. “Not only because I was mistaken in believing that this agreement, in favor of my…foundation, could protect me and my assets, but also because I intend to make other testamentary arrangements.”

“We were shocked,” Borsinger recalls. “To start with, we didn’t even believe it was possible, and quite often I still can’t believe it.”

Beneath Puech’s signature, he stated that it had been written in the office of his new lawyer, Bostelmann, and in the presence of Jadil Butrak, a Moroccan national, and Butrak’s partner, Maria Paz.

Weeks later, Freymond filed a report to the Swiss welfare agency in which he claimed that Puech, or those around him, were taking steps to try to transfer Puech’s fortune to Butrak and Paz. Butrak had been hired by Puech many years earlier as a “laborer / gardener,” the report said, and Paz had also worked for him. It alleged that Butrak and Paz exerted more and more influence over Puech during the Covid-19 pandemic, when the heir lived in fear of catching the disease.

“They have—to everyone’s surprise—managed to make themselves ‘emotionally’ indispensable to him,” the report stated.

A section of the report titled “gradual isolation and extravagant spending,” detailed how Butrak and Paz received more than 54 properties from Puech over the years, including homes in Spain, Portugal and Montreux, Switzerland.

Finally, Freymond claimed that Puech, Butrak, and Paz had submitted an adoption request, so that Puech could legally become Butrak’s father.

Adopting Butrak would allow Puech to forgo most of the inheritance taxes on his wealth. It also would allow him to cancel giving his Hermès shares to his foundation as he had agreed. A bequest to children, even recently adopted ones, was one of the few ways Puech could unilaterally cancel the contract that laid out the original plan to give his holdings to the foundation.

“The obvious goal of this approach is to capture the ownership of the Hermès shares,” the report stated.

The lawyer for Puech, Bostelmann, said that Freymond’s allegations were “absurd” and that gifting dozens of properties would represent only 1% of Puech’s wealth. He said Puech, Butrak, Paz and her two children “have been living in a shared community, domestically, and happily together for around two decades.”

Does Arnault hold the clue?

Many in the Hermès family—including Nicolas Puech himself—suspected that clues to his fortune’s whereabouts could lie decades in the past.

And they suspect one person might have helpful information: Bernard Arnault, the chairman of Hermès’s archrival, LVMH.

In 2001, Arnault was on the hunt for acquisitions, having recently lost out in a battle for Gucci. And in June of that year, an LVMH employee in Geneva reached out to Freymond to ask whether the he would be “willing to assist and partner with LVMH in the goal of acquiring Hermès,” according to a lawsuit later filed by Freymond against LVMH and Arnault seeking to get a commission for his efforts. The lawsuit was later withdrawn.

Freymond respected Arnault, seeing him as a genius who was Europe’s answer to entrepreneurs like Bill Gates . He agreed to help by leveraging his relationships with the various Hermès heirs to acquire shares in secret, which he was able to do in part because he had so-called “discretionary management mandates” on Puech’s accounts and later a number of LVMH-affiliated accounts as well, according to the lawsuit.

The lawsuit alleged that Puech agreed to the plan, but “was unaware of the finer details of the trades and did not wish to know them, as long as his portfolio was managed in his best interest.”

Starting in June 2001, Freymond steadily built the Arnault stake up to just under the disclosure threshold of 5%.

In September 2006, Freymond met with Arnault at Château d’Yquem, LVMH’s wine property in Bordeaux, to talk about how to build the stake even bigger without being detected. Puech joined them for the first time, according to Freymond’s lawsuit.

Over a series of meetings, they came up with a complex plan to use equity swaps and collateral-backed trades to effectively disguise the transfer of Hermès shares into LVMH hands. According to Freymond’s lawsuit, some 13 million Hermès shares were transferred to banks and then on to LVMH in this way. Almost all of these transited through Puech’s bank accounts, the lawsuit states.

The multiyear operation didn’t become public until Oct. 23, 2010, when LVMH declared that it held 14.2% of Hermès and would increase this percentage to 17% in the following days. It later increased its stake to 23%.

Arnault and LVMH insisted that they had no intention of taking control of Hermès or seeking board representatives. But the Hermès family considered it an assault on family unity.

Hermès Chairman Bertrand Puech , Nicolas Puech’s late brother, told the French daily Le Figaro, “With friends like these, who needs enemies?”

Swiftly, the Hermès family set up a holding company to pool its shares. Those who participated relinquished their rights to sell the shares for several decades, making it impossible for anyone to take over the fashion house.

Nicolas Puech was one of the few family members who refused to participate.

He registered to vote for the May 2011 Hermès annual meeting as the personal holder of more than 5 million shares. His foundation was listed in the shareholder documents as owning an additional 900,000 shares.

The takeover thwarted, Arnault’s LVMH was fined 8 million euros for not properly disclosing its purchases of Hermès shares. The luxury giant agreed to distribute its Hermès shares to LVMH shareholders and promised in writing not to purchase further shares of the company for the next five years.

Still, some family members and Hermès executives suspected that Puech had betrayed them and sold his stake to Arnault. How else could they explain that Arnault had amassed such a large amount of shares, given that only about a quarter of the company’s shares were publicly available?

Despite taking credit for the subterfuge, Freymond has consistently claimed—and reiterated to the Journal—that the LVMH stake did not include Puech’s inherited family holdings, and that he never managed those shares.

In 2012, Hermès chairman Henri-Louis Bauer flew to Biarritz to confront Puech directly. He denied selling shares to LVMH, saying they were in a bank account in Geneva. Bauer said he followed up a few months later, and Puech promised to double check.

In 2014, Hermès asked Puech for a bank statement confirming how many shares he owned. He refused. Hermès stopped stating how many shares Puech owned in its annual report.

In October 2015, Hermès lodged a criminal complaint in Paris against an unnamed individual for “forgery and use of forged documents” stating the number of shares he held. The unnamed individual, according to people familiar with the matter, was Puech.

Investigators later broadened the case to include Freymond.

Puech at the time denied the allegations, writing to a judge in 2018 that he had “personally, on several occasions” verified his Hermès holdings.

Tip of the iceberg

Some people close to Puech say that he believes he was being truthful in all of his previous attestations to owning the shares, and only came to believe otherwise after his split with Freymond.

In 2023, a year after revoking Freymond’s mandates as financial adviser, Puech filed three lawsuits against him in Geneva, accusing his former adviser of “massive fraud.” The lawsuits also target another board member of the foundation, along with “all other individuals involved in the offenses described.”

One of the lawsuits says that in 2021, but mostly in 2022, Puech began to ask Freymond more questions about his wealth as he was trying to organize his estate.

“I blindly signed all the documents that Eric Freymond asked me to sign, without any further explanation, given the complexity of managing such a large fortune,” Puech wrote in the lawsuit. “Eric Freymond’s strategy was aimed at stripping me of my fortune. Me, his supposed friend.”

In his lawsuit, Puech called on the court to solicit testimony from Arnault and raid his house in Paris’s seventh arrondissement, as well as LVMH headquarters, to determine what he knows about the fate of the shares.

He asked the same for Freymond and his wealth-management firm in Geneva.

Arnault and LVMH didn’t respond to requests for comment.

For now, both sides continue to fight on the legal front. In throwing out Puech’s lawsuits, the court cited Puech’s inattention to his own financial affairs.

Switzerland’s child and adult protection authority has dismissed Freymond’s report without taking any action.

The foundation is in a holding pattern and hasn’t received any money.

Puech wrote in one of the lawsuits that he believed Freymond had created a trust or some other entity abroad that was now holding either the Hermès shares or the proceeds from their sale. He attached bank statements, including one from Panama, for accounts that he said he only learned about recently.

The documents he provided, he said, “likely represent only the visible tip of the iceberg.”

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In Retirement, It’s Time to Put Our Costs Under the Microscope

We discovered all sorts of things we are paying for that we don’t really need or use. But there’s one cost we’re not ready to face.

By KAREN KREIDER YODER
Fri, Nov 8, 2024 4 min

The first couple of years in retirement are often the most difficult. But they also can set the stage for how you’ll fill the years ahead—both financially and psychologically. Stephen Kreider Yoder, 67, a longtime Wall Street Journal editor, joined his wife, Karen Kreider Yoder, 68, in retirement in late 2022. In this monthly  Retirement Rookies   column, they chronicle some of the issues they are dealing with early in retirement .

Karen

“Um, Karen?” Steve said without looking away from his computer. He was using the unnaturally neutral tone that means he’s trying not to sound judgmental.

“Oh, no,” I responded. “What is it?”

His screen showed the month’s credit-card statement. “What’s this bill for $28?” he asked. Then, after a few clicks: “Hmm, looks like it’s each month since August last year.”

We were in the study pouring over our spending records to smoke out what we call “parasites”—recurring costs that quietly suck dollars and give little or nothing in return.

I had no idea what the $28 was for, I said, racking my brain for several minutes. “Oh, wait. Yes, last August was when my sewing machine stopped working.” I had found a website that promised advice on how to fix my Bernina Sport 802. It didn’t help, I took the machine to an expert and I forgot about the advice site.

Here it was, much later, leaching a monthly fee. I must have used the credit card thinking it was a one-off.

Parasites like this were also infesting us back when we were working. But ever since our salaries stopped, each dollar seems to have grown in value. And retirement has given us the time to finally ferret out the freeloaders and to analyse what a drain they are on our wallets.

We decided to review every credit-card transaction and bank debit of the past year—and cancel as many recurring charges as we can.

Some parasites are unwitting, like the help-site bill. Others are for services we once wanted and don’t use anymore—like our Netflix account, which we’d been talking about canceling for two years. It was just $15.49 a month, so did we really want to lose it? Yes. We pulled the plug in October. (Sorry, kids, if you were still tapping in.)

Some sponges aren’t obvious from our statements alone. I recently realised that boxes of our eco-friendly dishwasher detergent were piling up. I thought I was buying online when we ran out but had mistakenly OK’d a monthly subscription instead.

Even where a service is useful, there are sometimes free alternatives. I was paying $14.95 a month for audio books. I canceled and now borrow them free of charge from the San Francisco Public Library. We’ll save nearly $180 a year.

We began looking for leaches more broadly and identified a subspecies: the lost-opportunity parasite. After we retired, we began riding city buses and local rail more often, pulling out adult-rate transit cards we’d accumulated. Then it occurred to us that we were leaving money on the table by not getting half-price senior passes: $1.25 for the bus instead of $2.50. Duh!

More lost opportunity awaited in a stack of gift cards I had rubber-banded together in my desk drawer including several from Barnes & Noble bookstores and Peet’s Coffee. I took a bus to the nearest Barnes & Noble, learned there was $30 on the cards and did some early Christmas shopping. All together, the gift cards were storing $225.

The $28-a-month parasite tracing to my sewing machine proved easy to exterminate. I called the customer-care number, negotiated a partial refund of $84 and canceled the subscription.

That will save $336 a year, enough to pay an expert to fix my Bernina several times over.

Steve

There’s a parasite down in the garage, it occurred to me after a bill came in the mail from the DMV.

The letter asked for $162 to renew the registration on my vintage Honda CB750 for a year. I nearly paid it, as I’ve done annually, each year vowing to tune the bike up and get it back on the road within months.

It’s one of two old Honda motorcycles that I’ve written about before—how they once brought me joy in the restoring but now are mostly garage gewgaws.

Our anti-parasite crusade forced me to get honest with myself last month. I could no longer use the excuse that I’ll get to the 750 after I retire. I’ve had two years, and I’m not likely to get to it next year.

So I registered the bike for non operation at $27, saving $135. Now I need to phone our insurer and back out of the $436-a-year policy on the bike. Between those two parasitic bills, I have probably paid more than the value of the bike over the seven years that I haven’t ridden it.

Maybe I can get the other bike on the road, the CB350F. If not, I’ll assign non operational status to it when the DMV bills me for it.

Still, the hardest parasite to face may be the biggest one of all: our house.

We love being retired in San Francisco, and our thriving neighbourhood has proved to be the perfect environment for a couple of aging city slickers. We are walking distance to restaurants, shops, libraries, parks and pickleball courts, and a 20-minute bike ride to the beach or nearly any other place in a city full of vibrant districts. Circles of friends are nearby.

Our home is a Victorian museum piece with a classic San Francisco feel that makes us feel even more part of our city.

But it’s too big, and it is increasingly becoming a financial and psychological drain. What we dish out in mortgage payments, home and earthquake insurance, utilities and property taxes could rent us a decent house in the Midwest with money left over to travel half the year.

There’s also the constant maintenance, the bane of a vintage-house owner. Tourists and residents alike love this city’s Painted Ladies, but we owners must fight constant entropy to keep them made up with paint jobs and preserved detail.

That’s not to mention the costs within. A decrepit old breaker box had been nagging at me from the garage wall for years, silently reminding me every time I walked past that we needed to replace it with a higher-amp box that was up to modern code.

I put off the task because of the cost. I could do it myself when I had time, I imagined, and avoided thinking about it—easy to do when life was busy with workplace and family demands.

I finally hired an electrician, who came in September to replace the breaker box and the wiring that fed it. There’s still the balky ancient redwood gutter to fix, and some plumbing issues.

We’re not ready to sell out and move to the Midwest, which we might eventually do when we’re in our slower years. And we can’t stomach the pain of looking for a smaller place in San Francisco.

So we’ll live with this big parasite for now, the elephant in the room as we hunt down smaller leaches.

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For These Collectors, It’s Still All About the Cash

Rare banknotes can yield big bucks, if you know what to look for

By VIKRAM BARHAT
Fri, Nov 8, 2024 4 min

Even as the world increasingly moves toward digitised commerce, where transactions are conducted with the tap of a credit card and billions of dollars are moved electronically between banks, there is one group of people for whom hard cash is still king: collectors.

As an alternative asset class, collectible banknotes offer significant potential value to investors, and the market for these paper artefacts is thriving. Aris Maragoudakis , director of world currency auctions at Stack’s Bowers Galleries in Costa Mesa, Calif., estimates the hobby sees annual trade of well over $500 million globally.

In fiscal year 2016, the World Paper Money department at Stack’s recorded about $4 million in sales. By fiscal year 2024, this figure had risen to $14.5 million. The company reported an 18% increase in sales for world paper money (which doesn’t include U.S. paper-money numbers) in fiscal year 2023, followed by 25% growth in fiscal year 2024.

Elsewhere, the Noonans Mayfair London realised £5 million, or about $6.5 million, in world banknote sales in 2023, up from £2.5 million the previous year, a representative said.

The rise of digital technology has helped broaden the base of collectors. Online auctions, forums and databases have made it easier for collectors to connect, trade and research. Greater access to information about collectible money, as well as to collectible banknotes themselves, have transformed the hobby from a game of chance to a strategic pursuit where enthusiasts can actively search for and acquire valuable pieces.

“The advent of social media such as Instagram and WhatsApp have brought in a spate of new collectors, especially youngsters,” says Rezwan Razack , a specialist in vintage banknotes and chairman of the Indian chapter of the International Bank Notes Society, or IBNS.

While social media has made more people aware of older paper currencies and their histories, the declining use of physical banknotes has made them even more alluring and fascinating to collectors.

Where is the value?

Banknotes routinely become obsolete due to political shifts, security upgrades, monetary policies and technological advancements. The question is: Which ones are worthy possessions?

A plethora of factors underpin the desirability of collectible paper money. The major ones are:

• Condition:  The condition of a piece can have a significant impact on its value. “There are bills that sell for $1,000 with a fold or two, but finding one free of any folds, stains, or tears could be worth several times that,” says Maragoudakis.

The condition of a bill is evaluated based on a 30-point scale ranging from poor to uncirculated crisp. Within each condition, a bill is given a number grade; a higher number—on a scale typically from 1 to 70—means the banknote is in better shape.

For example, a 10,000-yuan note issued in 1951 by the People’s Bank of China, graded Very Fine 20, sold for $150,000 at a Stack’s Bowers auction. Three years later at another Stack’s Bowers auction, a similar note in better condition, graded Almost Uncirculated 50,  fetched $358,500.

• Serial number : Banknotes with striking serial numbers are often worth more to collectors than those without. On eBay, a rare polymer £20 bill  with the serial number AA44 444444  received 16 bids and sold for more than £317.

A set of four exceptionally rare  Chinese 1953 10 yuan notes from the People’s Bank of China  recently sold for $432,000 because in addition to their quality, they were consecutive in serial number.

• Scarcity : The appeal and worth of banknotes, as with other collectibles, are often tied to their rarity.

For instance, high-value banknotes were often printed in limited quantities due to their significant purchasing power, says Hakim Hamdani , director at large and a collector at the Netherlands branch of the IBNS. When these high-denomination notes are discontinued, many people cash them in rather than keeping them as collectibles.

Take the 1921 10,000-shilling note from British East Africa (now Kenya and Tanzania), of which few were printed and issued. At that time, it was equivalent to about $2,000, a substantial sum in 1920s colonial Africa. When they were demonetized, most were redeemed, making the few remaining in private hands highly desirable.

Dennis Hengeveld , president of World Banknote Auctions in Sacramento, Calif., says that depending on the condition, some of these notes have fetched between $35,000 and just over $100,000 at auctions.

A rare  $500 Canadian bill  from 1911  brought C$528,750  (about $386,400) at a recent auction, the largest sum ever paid for a Canadian banknote. The specimen features the image of Queen Mary and is one of only four of the bills known to exist.

• Error notes : Governments often withdraw banknotes from circulation to deter counterfeiting, but also due to printing anomalies such as incorrect signatures, numerical discrepancies, misprints and typographical errors. Such deviations can elevate their value among enthusiasts.

In the U.S., double denominations—such as a front displaying a $10 bill and the reverse displaying a $20 bill—are the most prized error notes. The value of some of these pieces could top $85,000, according to Heritage Auctions.

How can I get started?

Despite the potential for a lucrative return, experts say the primary motivation for building a collection should be enjoyment and an appreciation of the history that banknotes provide. It would be best to build a collection with the idea of having fun, says Hengeveld of World Banknote Auctions, which was recently acquired by Stack’s Bowers.

Of course, it’s essential to do your due diligence to avoid fraud. Always buy notes from established dealers and confirm their authenticity with reputable grading services. Independent grading companies such as Paper Money Guaranty and Professional Coin Grading Service provide authentication and grading to ensure notes are genuine and their condition accurately assessed.

Auction houses and local dealers offer currency notes in different price ranges. Online retailers (eBay, Amazon.com, Collectibles & Currency), dealers and galleries (Certified Coin Exchange, George H. LaBarre), and numismatic shows (the MIF Paper Money Fair and World’s Fair of Money) are other useful sources.

As well, there is no shortage of stories where people discovered highly valuable collectible banknotes in attics, books, dressers and photo frames of deceased family members. In Ontario, a rare Canadian $500 bill from 1911  was discovered among the personal belongings of a deceased individual. The nearly discarded banknote, one of only three in existence, brought $322,000 at auction.

Those looking to dip their toes into collectible money may find valuable insights in trade magazines including Bank Note Reporter and the Greensheet, or books such as the U.S. Error Note Encyclopedia and Standard Guide to Small-Size U.S. Paper Money.

Additionally, Paper Money Guaranty, the Smithsonian Learning Lab and other websites can offer a wealth of information on various aspects of grading, collecting and how to properly care for banknotes.

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Stocks Soar, Dollar Jumps as Trump’s Win Reverberates Through Markets

The Dow surges to biggest gain in two years, with bond yields and bitcoin also posting sharp climbs

By KAREN LANGLEY
Fri, Nov 8, 2024 4 min

Donald Trump ’s election victory powered the Dow Jones Industrial Average to its biggest gain in two years, with a broad market rally lifting shares of banks, industrial companies and small-cap firms that are expected to benefit from continued economic expansion.

The gains were widely distributed as Wall Street bet that Trump’s promises of deregulation and tax cuts will further ignite an economy that already has posted strong gains in recent years. But sectors that were expected to benefit from Democratic policies, such as electric-vehicle companies and clean-energy related industries, declined sharply.

The promise of four years of Republican rule drove the latest rise in Treasury yields, reflecting expectations of stronger growth and inflation, while gold prices fell as fears that the election results would be contested and spark social unrest weren’t realised.

“The markets are now trading full-on Trump trade,” said Stephen Dainton , a senior executive at Barclays who oversees the lender’s investment bank including its large trading division.

Big winners included banks, which investors bet were poised to benefit from reduced regulation and a fresh acceleration in growth. Shares of JPMorgan Chase , the nation’s largest lender, climbed 11% to a new record. Wells Fargo and Goldman Sachs both rose more than 12%.

The prospect of lighter regulation and protective tariffs helped drive gains in industrials, with equipment maker Caterpillar rising more than 8% to a new all-time high and 3M adding 5%. Domestic steelmakers Nucor and Steel Dynamics gained 16% and 13%, respectively. Railroads, including Norfolk Southern and CSX , surged.

Bitcoin rose as much as 9% and flirted with $75,000, topping a previous record from March. Trump has said that he wants to make the U.S. the “crypto capital of the planet” and has pledged to create a “strategic bitcoin reserve.”

At the same time, traders also sought out companies and assets they expect to suffer during a second Trump administration.

Fears of trade wars drove down shares of ocean freight firms, including Denmark’s A.P. Moller-Maersk and Germany’s Hapag-Lloyd . Copper prices had their worst day in more than two years, dropping 5.1% as metals traders in New York reconsidered demand forecasts that hinge on the Chinese economy and the clean-energy boom.

Investors’ belief that Trump may break with the Biden administration’s push into renewable energy and electric vehicles hit companies as far away as South Korea. LG Energy Solution fell roughly 7%, as did other local EV battery makers, and Hanwha Solutions, which makes solar panels, dropped by more than 8%. In the U.S., First Solar fell 11% while Enphase Energy lost 17%.

Shares of Tesla , the electric-vehicle maker helmed by Trump ally and donor Elon Musk , bucked the trend, climbing 15%.

Investors sold bonds, driving yields higher and widening the gap between yields on ordinary Treasurys and those on inflation-protected Treasurys. That is a sign they think that the policies of a second Trump term could put upward pressure on inflation.

Many investors also believe that Trump’s tax-cut-heavy policies will add to the deficit, with the threat of a larger supply of Treasurys helping push down bond prices. The yield on the 10-year Treasury topped 4.4% for the first time since July.

That hit firms and investments that are sensitive to higher bond yields. The S&P 500’s consumer-staples sector declined 1.7% and the utilities segment lost 0.6% The real-estate sector sank 3.4%. The country’s largest home builder, D.R. Horton , dropped nearly 5% and Zillow Group fell about 7%.

Surging yields intensified a climb in the U.S. dollar, which was also boosted by the prospect of rising tariffs. Economists say tariffs can lift the U.S. currency by hurting the economies of foreign countries and discouraging Americans from spending on imported goods.

The WSJ Dollar Index, which measures the U.S. dollar against a basket of 16 currencies, rose around 1.3%. The Mexican peso lost as much as 3.4% against the dollar to its lowest level since August 2022, according to Dow Jones Market Data, before recovering. Trump recently said he could impose 200% tariffs on vehicles made in the country. The potential for tariffs also drove down the Chinese yuan.

Early wins by Trump in key states assuaged fears that it could take days or weeks for the election to be called. The Cboe Volatility Index—known as the VIX, or the market’s fear gauge—plunged to its lowest level since late September.

The relative calm had investors hoping more gains lie ahead. The S&P 500 had already risen 21% through Election Day, its best performance in a presidential election year since 1936, when Franklin Roosevelt was in office. The Dow Jones Industrial Average was up 12%, its best election-year performance since 1996, when Bill Clinton was in the White House.

“There’s a lot of relief that there’s a clear-cut outcome and that markets can move on to things that are quite frankly more important than who sits in the White House,” said Ross Mayfield, investment strategist at Baird.

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Charles Forte on Carving His Own Path in the Family Hotel Business
By GEOFF NUDELMAN
Fri, Nov 8, 2024 3 min

There’s a tradition in the Forte family of starting on the lowest rungs of the hospitality ladder and working their way up.

In 1911, Rocco Forte emigrated from Italy to Scotland to open a cafe that would mark the first hospitality establishment in the namesake family business. He would go on to open several more restaurants in the U.K., which his son would continue to grow.

Although the hotel group has ebbed and flowed through the decades, it finds itself in a new era with all three adult members of the current generation working for the company.

Charles Forte, 32, is one of those three and followed in the steps of his grandfather by starting in hospitality service. At age 15, he was a waiter at London’s Brown’s Hotel—owned by Rocco Forte Hotels since 2003—and has worked in almost every area of the hotel and restaurant industry since.

Today, he is the group’s director of development, responsible for steering external partnerships and capital investments.

“My role is to find new opportunities and develop ourselves on a much smaller scale,” he says.

In January, Saudi Arabia’s PIF sovereign wealth fund took a 49% investment stake in Rocco Forte Hotels—a deal Charles helped complete. He says that the investment will help guide the group’s next growth phase, which includes a target of three hotels per year and expansion in the Middle East, among other regions. Through 2027, the group is opening four new properties in Italy and working on a project in Marrakesh, Morocco.

The family’s roots are Italian and that’s where many of the group’s most notable properties reside, although according to Charles, more than 40% of the company’s business is within the U.S.

Alongside his two sisters Lydia and Irene, Charles is connecting the Forte name to a new generation of luxury travellers through partnership deals with brands like the Macallan and smaller, longer-term property builds in Italy and elsewhere.

Penta caught up with Forte by phone from his office in London.

PENTA: Do you think working in a family business brings more challenges or opportunities?

Charles Forte: Being in a family business like this affords opportunities you wouldn’t have otherwise. My sisters and I worked in all the different departments of the hotels, and I realistically always wanted to join the business. At other times, I did want to be a filmmaker, but I wanted to be a part of the family legacy. My dad is a good mentor and I’ve never really looked back.

How do you differentiate yourself in an extremely competitive luxury hotel market?

It’s very challenging to differentiate ourselves. Sometimes I struggle to differentiate between us and other luxury brands because a lot of the products are very similar. There’s an international luxury aesthetic that’s very copy and paste, and a lot of the bigger guys are trying to create new brands within their own stable of brands. Our hotels are very design-oriented and not so traditional, for example.

What differentiates us is the family aspect. There’s a real family behind this, and it creates value in our brand. We have this “quiet luxury” aesthetic.

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What is your philosophy on hotel partnerships? Do you find yourself chasing partnerships with big-name brands to stay on par with your competitors?

Partnerships have value if they have relevance and the partner is relevant to the destination. We don’t chase partnerships because if we did, it would mean that something is missing from the hotel. These partnerships should be organic. I’m excited because we recently brought in a new director of marketing who worked at Six Senses, and that will help us do more meaningful and special collaborations and partnerships.

Do you think that’s creating more appeal for Rocco Forte Hotels among the younger generation of luxury travellers?

There’s a broad range of pace in this space, considering how competitive the operator landscape has become. We’re finding that younger travellers aren’t geared towards any specific trend. I think we’re slightly more classic in appeal. We’re not ostentatious. There’s no substitute for beautiful design and great service—we’re not looking to reinvent the world. Depending on which hotel they visit, some people know us as a brand, others as a specific independent hotel, and we’d like consumers to know which brand is behind the property.

In August, we opened Rocco Forte House Milan, which features more longer-stay keys, where stays can be two weeks, a month or a year. We’re finding that’s something more travellers want and we can build a nice client base for those who want longer stays.

This article has been edited for length and clarity.

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Fed Cuts Rates Again, This Time by a Quarter Point

Powell says he has no intention of leaving Fed before his term expires

By NICK TIMIRAOS
Fri, Nov 8, 2024 4 min

US: The Federal Reserve approved a quarter-point interest-rate cut Thursday, the latest step to prevent large rate increases of the prior 2½ years from weakening the labour market as inflation eases.

The decision, coming the same week as the election of Donald Trump to a second presidential term, followed an initial cut of a half-point in September and will bring the benchmark federal-funds rate to a range between 4.5% and 4.75%. All 12 Fed voters backed the cut.

Officials have said those moves are warranted because they are more confident that inflation will return to the central bank’s target and because they believe rates are still high enough, even with the latest cuts, to dampen economic activity.

The move was expected. Stocks and Treasury yields were steady after the announcement.

“We are committed to maintaining our economy’s strength,” Fed Chair Jerome Powell said at a news conference. He said officials are confident that with an “appropriate recalibration of our policy stance,” inflation can continue heading lower with a solid economy.

Trump’s election victory this week has the potential to reshape the economic outlook, with presumed GOP majorities on both sides of Capitol Hill enabling a broad shift on taxes, spending, immigration and trade. Economists are divided over whether the mix of policies will boost or weaken growth and drive up prices.

The shift in the outlook, in turn, has fuelled questions on Wall Street over whether the Fed will alter its earlier expectation that rates could be steadily dialled lower over the coming year or two.

Powell said it was too soon to say how the next administration’s policies would reshape the economic outlook.

“We don’t guess, we don’t speculate, we don’t assume” what policies will get put into place, Powell said. “In the near term, the election will have no effects on our policy decisions.”

Powell also said he had no intention of leaving the Fed before his four-year term as chair expires in May 2026. “Not permitted under the law,” Powell said when asked if he believed the president could remove him or other Fed personnel from their positions before their term expires.

Since the Fed cut rates in September, longer-dated bond yields have climbed notably, meaning the cost to borrow for a mortgage or car loan has gone up. Yields have increased in large part because better economic data has led investors to reduce their worries about a recession, which could have triggered larger rate cuts.

But some analysts think the bond-market selloff may also reflect concerns by some investors about higher deficits or inflation in a second Trump administration.

Either way, the market has generated an unusual result: Borrowing costs rose after the Fed cut rates. The average 30-year mortgage rate has jumped since mid-September, to 6.8% this week from 6.1%, according to Freddie Mac.

Over a similar time frame, investors in interest-rate futures markets have steadily reduced their expectations over how much the Fed will cut rates over the next year or so. They now see the Fed cutting rates to around 3.6% by 2026, up from an estimated trough of 2.8% in September, according to Citi.

Officials are trying to bring rates back to a more “normal” or “neutral” setting that neither spurs nor slows growth. But they don’t know what constitutes a normal rate. Policies that boost economic activity or prices could also lead officials to conclude that they should maintain a moderately restrictive rate stance. That means they would hold rates somewhat higher than a normal or neutral level.

Before the 2008-09 financial crisis, many thought a neutral rate might be around 4%, but after the crisis and an extremely sluggish recovery, economists and Fed officials concluded the neutral rate might be closer to 2%.

Interest-rate projections that officials submitted in September show most of them expected that if the economy expanded solidly with inflation continuing to cool , they could cut rates to around 3.5% next year.

Inflation based on the Fed’s preferred index was 2.1% in September, from a year earlier. A separate measure of so-called core inflation that strips out volatile food and energy prices was 2.7%. The Fed targets 2% inflation over time.

Because officials don’t have much conviction over where the neutral rate sits, they are likely to be guided by how the economy performs in the months ahead. If inflation keeps slowing and the demand for workers looks soft, officials could conclude it makes sense to continue cutting rates along the path they envisioned in September.

“We’re going to move carefully as this goes on so we can increase the chances that we get it right,” Powell said. “We’re trying to steer between the risk of moving too quicky…or moving too slowly. We’re trying to be on a middle path.”

If inflation progress stalls or ebullient financial markets raise concerns that inflation might get stuck above their target, officials might face more reservations around continuing to cut rates at a steady, meeting-after-meeting clip.

The most immediate focus is whether the Fed will cut again at its upcoming meeting in December. In September, 19 participants were about evenly divided over whether to cut rates one or two more times this year. Nine of them penciled in no more than one cut in either November or December, while 10 penciled in two cuts.

“There’s a lot to learn between now and the December meeting,” said Diane Swonk, chief U.S. economist at KPMG. “They can’t leave the door wide open, but they can’t close the door either.”

Powell said Thursday it was too soon to rule anything “out or in” at that meeting. Slowing down the pace of rate cuts is “something we’re just beginning to think about,” he said. “We’re on a path to a more neutral stance. That has not changed at all since September. We’re just going to have to see where the data lead us.”

Even before the election result, recent data suggested that cutting again would be a finely balanced decision because inflation looks like it might end the year slightly above officials’ projection, while the unemployment rate has edged lower recently, said Matthew Luzzetti, chief U.S. economist at Deutsche Bank.

The election result— which sent stock markets to new highs while raising the prospect of stronger growth, higher inflation and better labour-market outcomes—boosted the odds that the Fed forgoes a cut next month, he said.

“Those could present a strong case from a risk-management perspective to potentially skip that meeting,” said Luzzetti.

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Qatar’s Banking Sector Continues its Steady Growth in 2024

This steady climb highlights a robust foundation built on domestic assets

Fri, Nov 8, 2024 < 1 min

According to a recent report released by QNB Financial Services (QNBFS), Qatar’s banking sector achieved an important benchmark in September 2024, crossing the QR2 trillion mark in total assets, an increase of 1.2% from the previous month. This steady climb highlights a robust foundation built on domestic assets, which grew by 1.1% month-over-month, showing a healthy appetite for banking services within Qatar’s borders.

Asset growth in 2024 remains on pace with previous years, with a 2.9% increase so far, compared to 3.4% last year, and is in line with a five-year average of 6.8%. The sector’s resilience in liquidity is also notable, with liquid assets reaching over 30% of total assets by September—up from 29.8% in August—underlining the strong cash reserves available within the system.

Bank lending activity saw modest gains, driven largely by private sector demand, and showed a year-to-date growth of 4.8%, significantly outpacing 2023’s 2.5% increase. The provisioned safety net for loans, edging up to 4.2% by September, reflects a cautionary stance amid growth, especially in response to the potential risks in contracting and real estate loans.

On the deposit side, Qatar’s banks are experiencing a broad-based rise. Total deposits reached QR1,046.9 billion with increases across public, private, and non-resident deposits. This rise in deposits—up 6.2% this year after a dip in 2023—points to renewed confidence among depositors, further supported by incentives for foreign investors, such as tax breaks and investment capital benefits.

This multi-faceted growth in Qatar’s banking sector cements its status as a significant economic pillar, positioning the country as a resilient financial hub amid regional competition. In the years ahead, Qatar’s blend of strategic asset management, diverse deposit sources, and government-backed incentives creates a dynamic foundation for sustained expansion.

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EMEA IT Leaders Call for Stronger AI Regulations Amid Security Concerns

700 IT professionals, including 297 from the EMEA region, reveals a strong focus on security.

Thu, Nov 7, 2024 2 min

A recent survey from SolarWinds has highlighted strong support among IT professionals across Europe, the Middle East, and Africa (EMEA) for increased government regulation of artificial intelligence (AI). With a staggering 87% of respondents in favor of stronger regulatory frameworks, the survey underscores a pressing desire for action to manage AI’s complex and evolving risks.

The survey of nearly 700 IT professionals, including 297 from the EMEA region, reveals a strong focus on security, with 67% of respondents advocating for government-led security measures in AI. Privacy concerns closely follow, as 60% of EMEA IT professionals call for rules to protect sensitive information from AI-related risks. Equally significant, 60% of respondents believe regulation is essential to limit AI-driven misinformation, while 47% support government efforts to promote transparency and ethical standards in AI practices.

These insights come as governments in the EMEA region are rolling out ambitious plans for AI oversight. The European Union’s AI Act, for instance, aims to set global standards for AI safety and accountability. In Dubai, a Universal Blueprint for AI includes appointing a Chief Artificial Intelligence Officer in every government entity, reflecting the city’s commitment to secure AI governance. Meanwhile, Saudi Arabia has announced intentions to establish a $40 billion fund to accelerate AI investments, emphasizing the nation’s dedication to secure and ethical AI growth.

However, the survey also points to significant concerns about data quality, a foundational element for effective AI deployment. Only 33% of EMEA respondents express strong confidence in the quality of the data being used to train AI models. Notably, 41% of IT leaders experiencing AI-related issues cite algorithmic errors caused by insufficient or biased data, underscoring the need for better data standards to support AI success.

Rob Johnson, VP and Global Head of Solutions Engineering at SolarWinds

Data quality concerns contribute to broader barriers facing AI adoption in EMEA, with data reliability ranking as the third most significant challenge after security and cost. Additionally, 33% of respondents are uncertain about their organization’s readiness to handle the rising data demands posed by AI. This gap in database preparedness is further compounded by a lack of urgency within companies, with 43% of IT professionals indicating that their organizations are not advancing AI initiatives quickly enough due to ongoing data-related hurdles.

Commenting on these findings, Rob Johnson, VP and Global Head of Solutions Engineering at SolarWinds said, “It is understandable that IT leaders are approaching AI with caution. As technology rapidly evolves, it naturally presents challenges typical of any emerging innovation. Security and privacy remain at the forefront, with ongoing scrutiny by regulatory bodies. However, it is incumbent upon organisations to take proactive measures by enhancing data hygiene, enforcing robust AI ethics and assembling the right teams to lead these efforts.”

“This proactive stance not only helps with compliance with evolving regulations but also maximizes the potential of AI. High-quality data is the cornerstone of accurate and reliable AI models, which in turn drive better decision-making and outcomes. Trustworthy data builds confidence in AI among IT professionals, accelerating the broader adoption and integration of AI technologies,” Johnson added.

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Jeel and Audax Partner to Revolutionize Saudi Arabia’s Digital Banking Landscape

The partnership brings together Jeel’s forward-thinking digital technology and audax’s proven track record as a solutions provider.

Thu, Nov 7, 2024 3 min

Jeel, the digital innovation arm of Riyad Bank, and audax Financial Technology (“audax”), a comprehensive digital banking technology solutions provider backed by Standard Chartered, have entered into a strategic partnership aimed at revolutionizing the digital banking landscape in Saudi Arabia. The partnership brings together Jeel’s forward-thinking digital technology as an enabler of digital innovation, and audax’s proven track record as a solutions provider as the comprehensive plug-and-play banking solution powering Asia’s first Banking-as-a-Service (BaaS) offering by a global bank. This partnership offers a suite of comprehensive solutions for banks, financial institutions and non-bank entities in Saudi Arabia, with an initial focus on enabling advanced business models such as digital banks, BaaS, super apps, and open banking solutions.

Saudi Arabia’s financial sector is undergoing rapid transformation as part of Vision 2030, with a growing market for digital banking solutions driven by a tech-savvy population. The urgency of digital transformation is clear—banks must modernize to remain competitive in a fast-evolving economy, projected to reach $1.1 trillion in GDP by the end of 2024. The surge in digital wallets, from 315,000 users in 2018 to over 17 million by 2022, along with the rapid rise of real-time payments, emphasizes the immediate demand for innovative, scalable banking models.

With initiatives like the SAR 300 million fintech-focused fund and the National Technology Development Program (NTDP) providing crucial funding and support for start-ups, the urgency of digital transformation in banking is increasingly clear. These measures highlight the opportunity for banks to modernize and capitalize on the significant potential created by Vision 2030, positioning them to compete and thrive in a rapidly evolving financial landscape.

While banks serve as the first application, these offerings are adaptable for other financial institutions and non-bank entities, allowing for seamless integration into a variety of ecosystems and extending the benefits of digital transformation beyond traditional banking.

In the shorter term, institutions in Saudi Arabia will benefit from rapid migration from legacy systems, unlocking new digital capabilities and flexible business models. Through easy integration with third-party vendors and ecosystem players, clients will be able to offer innovative services such as open banking solutions and BaaS use cases such as Cards-as-a-Service and Wallets-as-a-Service. This flexibility positions them to compete with digital-native challengers, drive customer acquisition, and improve operational efficiency.

In the longer term, the partnership between Jeel and audax will allow Saudi Arabia’s institutions to leverage a wealth of data across their ecosystems, creating new revenue streams and business lines. This includes opportunities such as real-time underwriting through third-party data access, cross-selling products through contextual offers, and even expanding into fee-based services such as KYC-as-a-Service and real-time data provision to consumer and SME-focused companies.

George Harrak, CEO of Jeel, added: “At Jeel, we are committed to driving innovation and technological digital advancement. Our collaboration with audax enables us to deliver pioneering digital solutions that will enhance the agility and scalability across Saudi Arabia and the region. By integrating our cutting-edge technology with audax’s proven platform, we can accelerate the digital transformation of our customers, including banks, financial institutions and non-bank entities, and provide them with the tools they need to thrive in an increasingly competitive market.”

Kelvin Tan, CEO of audax Financial Technology, commented: “We are excited to bring our proven digital transformation capabilities to Saudi Arabia through this partnership. By working with Jeel, we aim to accelerate the pace at which Saudi institutions can modernize and scale their digital offerings, ensuring they remain competitive in the evolving business landscape. Our partnership will empower them to launch cutting-edge solutions quickly and efficiently, creating new revenue streams and improving operational resilience.”

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Gulf Bank Reports Q3 2024 Earnings and Highlights Key Financial Developments

Kuwait’s financial system remains resilient, bolstered by stable oil prices and the government’s renewed commitment to economic diversification through large-scale investments.

Wed, Nov 6, 2024 4 min

Gulf Bank held its third quarter 2024 earnings webcast on Monday 04, November 2024, to present and discuss the Bank’s financial performance. The webcast was organized by EFG Hermes and presented by Waleed Khaled Mandani, Acting Chief Executive Officer of Gulf Bank, and David Challinor, Chief Financial Officer of Gulf Bank. The discussion was moderated by Dalal AlDousari, Head of Investor Relations at Gulf Bank.

Operating Environment

Mr. Waleed Mandani, Acting Chief Executive Officer of Gulf Bank, commenced the webcast with key updates regarding Gulf Bank’s operating environment during the third quarter of 2024. Mandani stated: “Recent global economic developments have marked a turning point, particularly with central banks adjusting their monetary policies in response to evolving economic conditions. Most notably, the U.S. Federal Reserve recently implemented a 50-basis points rate cut, signaling a shift in focus from inflation control to supporting growth in the face of slowing economic momentum.”

Mr. Mandani added “On the local front, the Central Bank of Kuwait followed the Fed’s lead by announcing a 25-basis points rate cut. This action underscores the Kuwaiti regulator’s commitment to maintaining a balance between fostering economic growth and ensuring financial stability. Lower borrowing costs are expected to stimulate demand for credit, particularly in consumer lending, as well in vital sectors such as construction and real estate, areas that are crucial for driving the Kuwaiti economy forward.” He added: “Kuwait’s financial system remains resilient, bolstered by stable oil prices and the government’s renewed commitment to economic diversification through large-scale investments. This focus, particularly on advancing key initiatives under the New Kuwait Vision 2035, strengthens the prospects for local banks to continue playing a vital role in financing national development. Gulf Bank is well positioned to play a crucial role in financing these developments, leveraging our strong relationships with both public and private sector stakeholders.”

Loan Growth

When questioned about the loan growth during Q3 2024, Mr. Challinor noted: “Year to date gross loans and advances have grown 6%, which has been dominated by corporate lending with retail being relatively flat. Clearly the current rate environment has significantly reduced the appetite for retail borrowing, but we’d expect this to recover as rates start falling.” He added: “In terms of the outlook, we gave guidance at the beginning of the year that full year loan growth would be around mid-single digits. We’re on track to meet this and may even outperform subject to converting some of the pipeline in Q4.”

Operating Expenses

In terms of operating expense Mr. Challinor mentioned: “We’ve managed to keep operating expense growth to just 4%, year on year, which is very low compared to other banks in the system.”  He added: “There was, however, an increase in other expenses from Q2 to Q3 due to a combination of one-offs and increased consulting/advisory expenses, but the underlying operating expenses remained relatively flat.”

David Challinor, Chief Financial Officer of Gulf Bank

Margins

Regarding margins and the impact from the recent rate cut, Mr. Challinor remarked: “On a year-to-date basis the margin is flat to last year, but we did lose a few basis points from Q2 to Q3. As I said on the Q2 investor call, the cost of funds peaked in Q1, and since then we’ve had 2 quarters in succession of falling cost of funds. The market remains very liquid and clearly the expectations are for further rate cuts. So, on the cost of funds side, we’d expect this to continue to fall.” He added: “Now, clearly, we saw the CBK lower the discount rate by 25 basis points in September after the Fed lowered by 50. So, the local discount rate now sits at 4%. We’d expect this to continue to move lower but perhaps not at the same pace as the Fed. After the local rate cut, we repriced our corporate assets and all new retail business will now be booked at the new prevailing rate.”

Credit Cost

When asked about the credit cost and reasons behind the pickup this year, Mr. Challinor noted: “The credit costs for Q3 were KD 14.2m which were higher than what we saw in both Q1 and Q2. If we look at retail and corporate in turn. For retail, the Q3 credit cost continued to be elevated but was lower than Q1 and Q2.” He added: “On the corporate side, we had an account that moved into stage 3 which had been classified as stage 2 for a significant period of time. Now, if we look at the asset quality indicators, they continue to remain very strong. The NPL percentage is 1.3%. The stage 2 percentage has further dropped and is now only 2.9%, which is probably the lowest in the Kuwaiti banking system, and certainly the lowest the bank has seen since the introduction of IFRS 9.”

Potential Merger with Boubyan Bank

Regarding the latest updates related to the potential merger with Boubyan Bank, Mr. Waleed stated: “We have first made an announcement on 30th July, 2024 regarding the Board’s approval of a proposed potential merger with Boubyan Bank to create a unified, Sharia-compliant entity, and the recommendation to move forward to carry out the needful actions to commence the initial feasibility study and necessary due diligence for the merger, aligned with the Central Bank of Kuwait’s (CBK) guidelines for the merger process. Additionally, on 17th September 2024 we signed a Memorandum of Understanding (MOU) with Boubyan Bank, establishing the foundation for independent assessments to ensure that the best interest of both banks’ shareholders and investors is maintained. And most recently, we have announced CBK’s approval to the selection of the consultancy firms that will be carrying out the feasibility study and due diligence for the potential merger including Goldman Sachs as the Investment Consultant, PricewaterhouseCoopers as the Financial and Tax Consultant, International Counsel Bureau as the Local Legal Consultant, and Freshfields Bruckhaus Deringer as the International Legal Consultant.” He added: “I would like to reiterate our commitment to complying with all applicable laws and the instructions of the Central Bank of Kuwait, as well as the relevant regulatory authorities. We will also ensure that any significant developments in this regard are disclosed in a timely manner.”

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Stablecoins Lead UAE’s Crypto Surge with $9.8 Billion in H1 2024

Which represents a 55% spike over the US$6.3billion received over H1 2023.

Wed, Nov 6, 2024 3 min

2024 is proving to be a landmark year for stablecoins in the UAE. Through the first half of the year, the value of stablecoins received by services (particularly CEX and DEX) in the country totalled over US$9.8billion, a 55% spike over the US$6.3billion received over H1 2023. Consequently, stablecoins now account for the largest share of crypto activity in the UAE (51%), which stands significantly higher than both Bitcoin (19%) and Ether (9%), which are typically considered to be the most recognized and popular cryptocurrencies.

“Stablecoins have already done impressively well through the first half of the year. And with the Central Bank of the UAE (CBUAE) releasing its Payment Token Services Regulation, which clarifies the rules for issuing, custodying and converting payment tokens in UAE, this would potentially pave the way for broader participation and innovation,” said Arushi Goel, Head of Middle East & Africa Policy at Chainalysis.

Interestingly, retail-sized transfers (US$10K and below) accounted for a meagre 6% of value received, while professional-sized (US$10k to US$1million), institutional-sized (US$1million to US$10million) and large institutional-sized (US$10million and above) accounted for 40%, 34%, and 20% respectively. It is, however, important to note that in terms of volume of stablecoin transfers in the UAE, retail sized transactions were by far the majority (93%). This indicates a highly active market for retail investors who are likely using stablecoins as a means to trade in and out of other virtual assets.

Also notable is the fact that over three quarters (78%) of stablecoin transfers tracked by Chainalysis through H1 2024 took place on centralized exchanges (CEXs). By comparison, according to Chainalysis’ 2024 Geography of Crypto Report, between July 2023 to June 2024, just 47% of overall crypto transactions in the UAE took place on centralized exchanges.

Offering insight into these findings, Goel said, “In line with global trends, stablecoins are helping expand the crypto user base, with centralized exchanges serving as a convenient and regulated on-ramp for individuals and businesses who have not traditionally utilized virtual assets. Merchant services are growing, and both people and businesses are now using centralized exchanges for business payments and remittances. The significant proportion of stablecoin activity on CEXs suggests they are being increasingly used for settlements and transfers. This contrasts with decentralized exchanges (DEXs), where activity is typically centered around trading.”

In the UAE, where the Dirham is pegged to the US Dollar, it comes as no surprise that the top three most popular stablecoins are also dollar-pegged. Tether (USDT), which enjoys the largest market cap among all stablecoins globally, is also highly favored in the UAE, where through H1 2024, it accounted for 61% of all stablecoins transacted. Dai (DAI) — a decentralized stablecoin running on Ethereum (ETH), which unlike USDT and USDC utilizes an algorithmic rather than an asset-based approach to stay dollar-value linked — placed a distant third in terms of transaction volume.

“The concentration of stablecoin investments in the UAE around the world’s most popular variants indicates that a lower bar to entry and more frictionless experience helps draw in investors. It will therefore be very interesting to see the market reception to Dirham-backed stablecoins, which is expected to become a reality, with the AE coin receiving in-principal approval from the Central Bank,” added Goel. “Once these gain widespread market acceptance, among both institutions and consumers, the benefits they bring could be truly impressive. Remittances, eCommerce transactions, real estate purchases, the payment of government services, and tokenized assets are just a few of the high impact use cases. And as the crypto ecosystem has demonstrated time and time again, the potential for ongoing innovation and transformation of the financial ecosystem can be unprecedented.”

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UAE Banking Sector Reaches a New Milestone in Capital and Reserves

A Historic Growth Reflecting Resilience and Key Role in National Economic Stability

Wed, Nov 6, 2024 < 1 min

The UAE banking sector has reached a historic financial threshold, surpassing AED500 billion in total capital and reserves as of July 2024. This remarkable achievement marks a significant step in the sector’s expansion, underscoring its fundamental role in the UAE’s economic framework.

Data from the Central Bank of the UAE (CBUAE) highlights a 10.5% year-on-year increase in capital and reserves, rising from AED454.9 billion in July 2023 to AED502.6 billion in July 2024. Additionally, the sector saw growth of AED13.3 billion during the first seven months of 2024, reflecting a consistent upward trajectory since the end of 2023, when the total stood at AED489.3 billion.

The capital strength of national banks is a major factor in this growth, as they hold 86.3% of the total capital and reserves, reaching AED433.7 billion in July 2024. This is a 10.4% increase compared to the previous year. Foreign banks, too, contributed significantly, holding 13.7% of the total with AED68.9 billion and experiencing an 11.1% growth year-on-year.

Excluding subordinated borrowings and deposits, these figures, inclusive of current-year profits, highlight the core strength of the UAE banking sector. The sector’s resilience not only strengthens the national economy but also positions it as a pivotal player in regional financial stability. This milestone serves as a testament to the sector’s capacity to support sustainable economic progress within the UAE.

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