CBUAE’s 2023 Achievements: Securing Financial Stability and Promoting Sustainable Growth

Islamic banking in Oman has seen significant progress, demonstrating notable growth despite its relatively small share of the overall financial sector. Tahir al Amri, Executive President of the Central Bank of Oman (CBO), emphasized this during his speech at the IFN Oman Forum 2024.

Al Amri shared key statistics and developments, highlighting the sector’s contribution to the Omani economy, its role in enhancing financial inclusion, and its expanding presence both domestically and internationally.

As of June 2024, the total assets of Islamic banks and windows in Oman increased by 11.4% year-on-year, reaching RO 7.8 billion, which now accounts for a substantial 18.1% of the nation’s total banking assets. The growth in financing was equally noteworthy, with Islamic banks providing RO 6.4 billion in total financing to the economy.

“The Islamic banking sector has demonstrated robust expansion, consistently supporting the economy with healthy growth compared to the previous year,” said Al Amri. He also noted that the total deposits in Islamic banking had risen by a third, further showcasing the confidence of depositors. Despite holding a smaller market share, the sector is efficiently mobilizing funds and increasing its impact on the national economy.

The capital adequacy of Islamic banks remains robust, with a capital adequacy ratio of 15.8% and a Tier 1 capital ratio surpassing the industry average. While impaired financing slightly increased from 2.1% to 2.8%, Al Amri pointed out that this figure remains lower than the non-performing financing ratio of conventional banks, highlighting the sector’s overall stability.

Profitability also showed positive momentum, with the sector achieving an 8.7% rise in profits during 2023. Islamic banks in Oman have expanded their operations, now offering services through approximately 100 branches, which include mobile banking, digital platforms, and in-branch services.

Al Amri emphasized the increasing sophistication of the sector, as the range of products and services continues to grow, catering to the evolving needs of businesses and individuals.

Beyond financial growth, Islamic banks have been instrumental in introducing Sharia-compliant financial products, an area that continues to attract interest from both domestic and international investors. The sector has also emerged as an alternative source of funding, contributing 40% to new deposits despite its relatively smaller market share.

Looking ahead, Al Amri outlined important regulatory initiatives aimed at further boosting the sector’s growth. The Central Bank of Oman is working on frameworks to facilitate the conversion of conventional banks and their branches into Islamic entities, a trend gaining momentum in many regional markets. Furthermore, the Central Bank is developing new Sharia-compliant liquidity tools, including Islamic certificates of deposits and treasury bills, which are expected to be launched soon.

“The Islamic banking sector, though starting with a modest market share, has shown significant growth and efficiency in mobilizing funds and contributing to the national economy,” said Al Amri. He concluded by expressing confidence in the sector’s future potential, particularly in helping to diversify Oman’s economy.

Dubai International Financial Centre (DIFC), the leading global financial center in the Middle East, Africa, and South Asia (MEASA) region, has unveiled a series of updates that strengthen its standing as the top destination for wealth and asset management firms.

Commenting on the announcement, Salmaan Jaffery, Chief Business Development Officer, DIFC Authority, said: “DIFC’s wealth and asset management community continues to experience rapid growth which outperforms the market and differentiates our position as the region’s preferred financial center for the sector. More than 400 firms in the sector now operate from DIFC, and to support the demand from hedge fund spinouts, fund platforms and boutique asset management firms, we are delighted to launch the DIFC Funds Centre.”

Influx of wealth and asset management firms continues – over 400 now in DIFC

DIFC continues to experience an influx of wealth and asset management firms. The Centre was home to 350 companies in the sector at the end of 2023 and this has rapidly grown to more than 400, outperforming the UAE financial free-zone market ten-fold. The Centre’s hedge fund ecosystem continues to boom with 60 pure play hedge funds now operating in DIFC, including 44 ‘billion-dollar club’ funds.

Reflecting the unparalleled breadth and depth of DIFC’s wealth and asset management ecosystem, recently authorized joiners include multi-strategy hedge funds, fund platforms, investment management regulatory hosting solutions and global asset managers. Company names include Allfunds, Aster Capital Management, Bluecrest, Eisler Capital (DIFC) Ltd, JNE Partners, Polen Capital Management, Principal Investor Management (DIFC) Limited, TCW Investments, Tudor Capital and Westbeck.

The DIFC Funds Centre – creating sector depth and supporting talent

Driven by exponential growth and an exceptional pipeline, including from hedge fund spinouts, fund platforms and boutique asset management firms, DIFC is opening a first-of-its-kind environment in the first quarter of 2025.

The DIFC Funds Centre will be ideal for companies and talent that are looking to scale-up, prefer access to a flexible range of working solutions, and enjoy peer-to-peer networking. Wealth and asset management applicants are welcome to join the waitlist now, with places being allocated on a first-come first-served basis.

The DIFC Funds Centre is the latest strategic initiative designed to develop the wealth and asset management sector, with other recent action plans including partnerships with the Alternative Investment Management Association (AIMA), Deal Catalyst, HFM and the Standards Board for Alternative Investments (SBAI).

Strong outlook for wealth and asset management in DIFC and Dubai

A report by LSEG outlines the latest trends in the global wealth and asset management landscape.

The UAE has emerged as a notable booking center, witnessing 9 per cent growth in AUM, higher than any other booking center in 2023. The report highlights how DIFC is benefitting from wealth inflows into Dubai and the wider region, including as a growing number of millionaires, centi-millionaires, family offices and prominent financial players. Dubai is home to 62 per cent of these HNWIs. The UAE is forecast to see the largest net gain of millionaires, welcoming a further 6,700 in 2024.

Dubai stands out in the report as an example of a growing fund manager and investor base. Dubai has a double advantage in terms of providing investor access due to vast pools of both public and private capital. The city is a stable, business-friendly location accessing over 40 regional sovereigns, including Dubai’s own the Investment Corporation of Dubai and Dubai Investment Fund. Clients can also tap into USD 3.5trn worth of private capital pools, since Dubai is capital of private capital – the city is home to region’s highest concentration of wealth.

The report also highlights the importance of lifestyle options that are commensurate with high-caliber talent and their families – an area that Dubai excels in.

A new partnership between iACCEL Gulf Business Incubator (iACCEL GBI), a leading market accelerator in Dubai, and TrustIn, the Middle East’s first regulated digital escrow platform, has been announced. This collaboration aims to democratize and simplify escrow services by offering a more accessible and user-friendly digital platform.

Over the past 17 months, iACCEL GBI has onboarded over 20 startups from around the world, providing them with strong support to accelerate growth and expansion in the UAE and GCC regions.

TrustIn, certified by FSRA and ADGM, seeks to streamline the payment process through a comprehensive escrow platform that offers a seamless and cost-effective transaction experience for consumers, local businesses, and companies. By enforcing rigorous Know Your Customer (KYC) and Know Your Business (KYB) standards, TrustIn enhances the safety and transparency of financial transactions, making it a preferred choice for businesses in need of trustworthy and reliable escrow solutions.

Commenting on the partnership, Deepak Ahuja, CEO of iACCEL GBI, said, “The UAE has rapidly emerged as a global hub for innovation and trade, attracting businesses from across the world. However, one of the significant challenges within this thriving ecosystem is the risk associated with open trade, especially for SMEs and the retail market. TrustIn is stepping in to solve this problem by providing a regulated digital escrow platform that ensures transparency, security, and legal protection for all parties involved in B2B, B2C or C2C transactions. By leveraging TrustIn, businesses in the UAE can now engage in trade with greater confidence, knowing that their payments and deliveries are safeguarded. This not only fosters trust but also accelerates the growth of SMEs, reinforcing the UAE’s position as a leading destination for business and innovation and holds significant potential for expansion into other geographies. We, at iACCEL GBI, are committed to supporting them in this journey.”

Anishkaa Gehani, co-founder of iACCEL GBI, shared her thoughts on the partnership, stating, “At iACCEL GBI, we believe in empowering businesses with innovative solutions that foster growth and trust. Our partnership with TrustIn marks a significant step in making secure, transparent transactions accessible to all. By leveraging our partnership with TrustIn, we aim to ensure that businesses in the UAE and GCC confidently engage in trade, driving economic growth and innovation across the region.”

Momeen Ahmad, CEO of TrustIn, added, “Joining hands with iACCEL GBI is a significant milestone for TrustIn. We look forward to leveraging their network and capabilities to expand our footprint across the UAE and GCC. Together, we aim to make escrow services more accessible and reliable for businesses of all sizes, ultimately driving growth and innovation in the region.”

Parvez Akram Siddiqui, Co-Founder and Chief Technology Officer of Trustin, said “At TrustIn, our mission has always been to provide secure, transparent, and reliable escrow services to businesses and consumers across the Middle East. By combining TrustIn’s innovative digital escrow platform with iACCEL GBI’s vast network and market expertise, we are well positioned to revolutionize the transaction landscape in the region. This collaboration not only enhances trust and security in financial transactions but also empowers businesses to grow with confidence, knowing that their interests are protected at every step.”

Through this partnership, iACCEL GBI and TrustIn aim to revolutionize secure transactions in the Middle East and offer a seamless and secure payment gateway for businesses in the region.

Bahrain’s ila Bank, powered by Bank ABC, has introduced a new investment service that allows customers to invest in government securities issued by the Central Bank of Bahrain (CBB) on behalf of the Government of Bahrain.

With this offering, ila becomes the first bank in Bahrain to establish a direct connection with the CBB, providing customers with a seamless, one-stop solution for investing at the touch of a button.

Through the ila app, customers can access a full overview of upcoming securities and place bids or purchase Government Treasury Bills, Development Bonds, and Islamic Securities (Sukuk) directly. The bank’s fully digital platform streamlines the entire process, allowing for instant investment and easy monitoring without the need for paperwork or physical visits.

Additionally, ila helps customers enhance their returns by not charging custody fees on held investments. Real-time updates on securities, deadlines, returns, and maturity dates are also available through in-app notifications.

Nada Tarada, ila Bank’s Head of Business and Customer, commented: “At ila, we are committed to meeting the financial needs of our customers in a holistic manner. Helping them save and invest is a crucial part of enabling their financial independence. We are proud to offer this investment channel to our customers in Bahrain, empowering them to invest in a range of instruments with just a click. Investing in government securities has never been as convenient and easy as it is now with ila Bank.”

Customers interested in investing in Government Securities can easily do so by selecting their preferred type of security on the ila app and submitting the purchase order directly through the app. The minimum investment amount is BD10,000.

The UAE tourism sector continues to demonstrate robust growth in both international tourist arrivals and hotel bookings, in line with the UAE Tourism Strategy 2031. This strategy aims to attract AED100 billion ($27.2 billion) in tourism investments and increase the sector’s contribution to the GDP to AED450 billion ($122.5 billion) by 2031.

In 2023, the tourism sector reported 11.7% of the UAE’s GDP, amounting to AED220 billion ($59.9 billion), and is forecasted to rise to 12% or AED236 billion ($64.3 billion) in 2024, according to the World Travel and Tourism Council (WTTC).

The WTTC also projects the sector’s contribution to the GDP to reach approximately AED275.2 billion ($75 billion) by 2034, supported by the UAE’s world-class infrastructure, including airports, accommodations, and a range of exciting tourist attractions.

Dubai welcomed 10.62 million tourists during the first seven months of 2024, marking an 8% increase year-on-year (YoY), while Abu Dhabi’s hotels hosted more than 2.87 million guests in the first half of 2024, generating AED3.6 billion ($1 billion) in revenue—a 19.5% YoY growth.

These achievements reflect the success of the UAE’s sustainable tourism policies, boosted by its strong infrastructure, diverse range of tourist destinations, and ongoing development efforts under the National Tourism Strategy 2031.

Tawaref, a Saudi-based investment community dedicated to providing startup services across the MENA region, is signing a Memorandum of Understanding (MoU) with SimpliFi, a leading Cards-as-a-Service (CaaS) platform operating in MENA and Pakistan. SimpliFi aims to streamline financial transactions for startups expanding into the Saudi market by offering flexible financial solutions that simplify the management of funds and expenses in multiple currencies.

Tawaref offers a wide range of services to startups, including company formation, legal and accounting support, CEO residency, and government registration through its Saudi Landing Program, which is designed to facilitate the entry of international startups into Saudi Arabia.

Through this strategic partnership, Tawaref will utilize SimpliFi’s wallet and card solutions to help startups benefit from multi-currency wallets, expense tracking and management, and the ability to hold and transfer money instantly between currencies. This collaboration is expected to save both time and costs associated with international bank transfers, all within a single, integrated platform.

Saeed Al Ansari, CEO of Tawaref, said: “This partnership reinforces our commitment to providing startups looking to expand into the Saudi market with everything they need to succeed in Saudi Arabia, ensuring them a comprehensive founding journey and offering innovative financial solutions that help these companies overcome common founding obstacles and better focus on growth and expansion.”

AlMajal AlArabi Group, a leading provider of integrated facility management services in Saudi Arabia, is participating as a main sponsor in the International Facility Management Conference and Exhibition. The event marks the first gathering focused exclusively on the facility management industry in Saudi Arabia, aligning with the Kingdom’s Vision 2030 initiatives which emphasize the development of top-tier infrastructure and services and enhance economic diversification.

AlMajal AlArabi’s sponsorship of this event aligns with its strategy to reinforce its leadership in the market, strengthen partnerships, explore growth opportunities, and maximize its presence within the rapidly growing facility management sector that plays a vital role the Kingdom’s ongoing infrastructure and development projects. Solidifying its footprint in the sector, the Group has reported over 15% YoY growth in H1 2024.

Eng. Fahad Alqifari, Chief Executive Officer at AlMajal AlArabi Group, said “Being the main sponsor of the International Facility Management Conference and Exhibition is a testament to the growing interest and significance of the facility management industry in Saudi Arabia. It reflects our ongoing commitment to innovation and excellence as we continue to deliver integrated facility management solutions that meet the evolving needs of the Kingdom’s major projects and institutions.”

The Saudi Arabia facility management market was valued at $24.48 billion in 2023 and is projected to reach $56.33 billion by 2032, growing at a compound annual growth rate (CAGR) of 10.3% ^*1. This growth highlights the increasing demand for comprehensive facility management services, a demand that AlMajal AlArabi is well-positioned to meet.

The conference serves as a platform for AlMajal AlArabi to highlight its commitment to quality and innovation, reinforcing its role in Saudi Arabia’s economic development. As the facility management industry continues to evolve, AlMajal AlArabi is focused on adopting advanced technologies and practices to enhance operational efficiency and client satisfaction.

MAG’s services include providing maintenance and operational services, as well as integrated solutions for all types of facilities, regardless of their size. These services are delivered efficiently and in accordance with all facility requirements.

There are lots of embarrassing ways to lose money, but it is particularly galling to lose when you correctly identify the theme that will dominate the market and manage to buy into it at a good moment.

Pity the investors in the three artificial-intelligence-themed exchange-traded funds that managed to lose money this year. Every other AI-flavored ETF I can find has trailed both the S&P 500 and MSCI World. That is before the AI theme itself was seriously questioned last week, when investor doubts about the price of leading AI stocks Nvidia and Super Micro Computer became obvious.

The AI fund disaster should be a cautionary tale for buyers of thematic ETFs, which now cover virtually anything you can think of, including Californian carbon permits (down 15% this year), Chinese cloud computing (down 21%) and pet care (up 10%). Put simply: You probably won’t get what you want, you’ll likely buy at the wrong time and it will be hard to hold for the long term.

Ironically enough, Nvidia’s success has made it harder for some of the AI funds to beat the wider market. Part of the point of using a fund is to diversify, so many funds weight their holdings equally or cap the maximum size of any one stock. With Nvidia making up more than 6% of the S&P 500, that led some AI funds to have less exposure to the biggest AI stock than you would get in a broad index fund.

This problem hit the three losers of the year. First Trust’s $457 million AI-and-robotics fund has only 0.8% in Nvidia, a bit over half what it holds in cybersecurity firm BlackBerry .

WisdomTree ’s $213 million AI-and-innovation fund holds the same amount of each stock, giving it only 3% in Nvidia.

BlackRock ’s $610 million iShares Future AI & Tech fund was also equal weighted until three weeks ago, when it altered its purpose from being a robotics-and-AI fund, changed ticker and switched to a market-value-based index that gives it a larger exposure to Nvidia.

The result has been a 20-percentage-point gap between the best and worst AI ETFs this year. There is a more than 60-point gap since the launch of ChatGPT in November 2022 lit a rocket under AI stocks—although the ETFs are at least all up since then.

The market has penalized being equal weighted recently, instead rewarding big holdings in the largest stocks.

Jay Jacobs , U.S. head of thematic and active ETFs at BlackRock, says it is best to be market-value weighted when a theme has winner-takes-all characteristics, which he says generative AI has. When the firm’s AI fund included robotics it was spread across a lot more stocks that didn’t compete with each other, so equal weighted made more sense.

For investors, it isn’t so simple. Global X takes the opposite approach with its two $2 billion-plus AI funds, AIQ and BOTZ. BOTZ only buys stocks that focus on AI and robotics, but takes larger positions. AIQ spreads its bets on AI and tech more widely, and its 3% cap on its biggest holdings each time it rebalances means it has far less in Nvidia than BOTZ, with a cap of 8%. AIQ still managed to beat BOTZ this year, though.

So far, so confusing. The basic lesson: Picking among funds within a theme is hard, and depends on luck as well as close reading of the fund’s documents. A more advanced lesson is that it is hard to pick a theme in the first place, or to stick with it. The three problems:

1. Defining the theme is hard . Nvidia features in the anti-woke YALL ETF, which pitches itself as for “God-fearing, flag-waving conservatives.” The chip maker is also held by vegan, gender-diverse and climate-action ETFs. Its shares are clearly driven by the prospects for AI, but it is still big in computer-game and bitcoin ETFs, where its chips were originally used.

2. Timing the theme is even harder. Get in too early, and there aren’t any companies to buy. Get in when the funds are being launched, and the chances are the theme is already widely known and overpriced, as there are typically large numbers of launches during bubbles and late-stage bull markets.

“They are trendy by design,” says Kenneth Lamont, a senior researcher at Morningstar. “They play to our worst instincts, because we’re narrative-driven creatures.”

A recent example was the race to launch clean-energy and early-stage-tech ETFs during the bubble of late 2020 and early 2021. Performance since then has been miserable as prices corrected, with many of the ETFs halving or worse.

Dire timing is common across themes: According to a paper last year by Prof. Itzhak Ben-David of Ohio State University and three fellow academics, what they call “specialized” ETFs lose 6% a year on average over their first five years due to poor launch timing.

3. Long-term investing is pitched by fund managers as the goal for thematic investing, to hang on until the theme bears fruit. But even investors who really want to commit to a theme for the long run often find it hard, as so many funds are wound up, merged or change strategy when they go out of fashion.

The boom in internet funds of the late 1990s vanished after the dot-com bubble burst, with few surviving to see the internet theme blossom a decade later, while six of the 50 “metaverse” funds launched after Facebook switched to Meta Platforms in 2021 have already shut, according to Lamont.

The oldest thematic fund, the DWS Science and Technology mutual fund, started as the Television Fund in 1948 before adding electronics, and has gone through at least four other names. I only have data back to 1973, but it has lagged far behind the wider market since then, despite golden ages for television, electronics, science and now tech. (Yes, it has a lot of Nvidia.)

So what to do? At a very minimum, don’t buy based on the name of a fund. Look at the holdings, look at the index it follows and how it is structured, and consider whether it does what it says. Then think about just how expensive the idea has already become. Watch for the theme coming into fashion and getting overpriced, as that is a good time to sell (or to launch a fund).

But mostly, look at the fees: They will be many times higher than a broad market index fund, and the dismal history of poor timing suggests that for most people they aren’t worth paying.

Boeing stock has fallen to its lowest level since 2022 after a downgrade from a Wall Street analyst put a number on one of investors’ worst fears: stock dilution.

Wells Fargo analyst Matthew Akers on Tuesday downgraded Boeing stock to the equivalent of Sell from Hold. His price target was reduced to $119 a share from $185.

That is the lowest target price on Wall Street by almost $70 a share, according to FactSet. At $119 a share, down about 30% from recent levels, Boeing would have a market value of roughly $73 billion, levels not seen since early 2020 during the Covid-19 pandemic.

Boeing stock closed down 7.3% at $161.02, while the S&P 500 and Dow Jones Industrial Average were off 2.1% and 1.5%, respectively. It was the lowest close since Nov. 4, 2022, when it finished at $160.01, according to Dow Jones Market Data.

“We think Boeing had a generational free cash flow opportunity this decade, driven by ramping production on mature aircraft and low investment need,” wrote Akers. “But after extensive delays and added cost, we now see growing production cash flow running into a undefined new aircraft investment cycle, capping free cash flow a few years out.”

At this point in its product cycle, Boeing simply should be generating north of $10 billion in free cash flow a year. However, production and quality problems have pushed output lower and added costs. Wall Street sees Boeing using almost $8 billion in cash to fund operations in 2024.

What is more, Boeing likely will need to design a new single-aisle jet in the coming years to better compete with the Airbus A321 family of aircraft. That will take tens of billions of dollars spread out over several years.

Akers sees $30 billion in equity being raised by 2026 to help cover the cost of new investment. Some of that hefty total will go toward repairing Boeing’s balance sheet. The company ended the second quarter with more than $53 billion in long-term debt, up from less than $11 billion at the end of 2018, before the pandemic and significant problems with Boeing’s 737 MAX jet.

Raising $30 billion of equity at recent prices would require issuing roughly 190 million new shares, increasing the share count by about 31%. All things being equal, a higher share count reduces earnings per share.

“If Boeing were to postpone new plane development for several more years (launch early next decade) and instead just pay down debt, we estimate free cash flow per share could grow to about ~$20 late this decade,” added Akers. That might justify a $150 share price in coming years, but postponing a new plane would mean “ ceding significant narrowbody share” to Airbus.

Narrowbody is industry jargon for single-aisle aircraft such as the 737 MAX or A320.

Raising equity and offering customers a new plane, or not offering a new jet and holding off on raising equity: Boeing doesn’t have easy choices to make in coming years.

Overall, 60% of analysts covering Boeing stock rate shares at Buy, according to FactSet. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. Even though Boeing’s Buy-rating ratio is above average, it has been sliding. Coming into the year, before an emergency- door plug blew out in midair on an Alaska Air flight on Jan. 5, the ratio was north of 75%.

The average analyst price target for Boeing shares is about $214.

For years, global companies showcased their Chinese operations as a source of robust growth. A burgeoning middle class, a stream of people moving to cities, and the creation of new services to cater to them—along with the promise of the further opening of the world’s second-largest economy—drew companies eager to tap into the action.

Then Covid hit, isolating China from much of the world. Chinese leader Xi Jinping tightened control of the economy, and U.S.-China relations hit a nadir. After decades of rapid growth, China’s economy is stuck in a rut, with increasing concerns about what will drive the next phase of its growth.

Though Chinese officials have acknowledged the sputtering economy, they have been reluctant to take more than incremental steps to reverse the trend. Making matters worse, government crackdowns on internet companies and measures to burst the country’s property bubble left households and businesses scarred.

Lowered Expectations

Now, multinational companies are taking a hard look at their Chinese operations and tempering their outlooks. Marriott International narrowed its global revenue per available room growth rate to 3% to 4%, citing continued weakness in China and expectations that demand could weaken further in the third quarter. Paris-based Kering , home to brands Gucci and Saint Laurent, posted a 22% decline in sales in the Asia-Pacific region, excluding Japan, in the first half amid weaker demand in Greater China, which includes Hong Kong and Macau.

Pricing pressure and deflation were common themes in quarterly results. Starbucks , which helped build a coffee culture in China over the past 25 years, described it as one of its most notable international challenges as it posted a 14% decline in sales from that business. As Chinese consumers reconsidered whether to spend money on Starbucks lattes, competitors such as Luckin Coffee increased pressure on the Seattle company. Starbucks executives said in their quarterly earnings call that “unprecedented store expansion” by rivals and a price war hurt profits and caused “significant disruptions” to the operating environment.

Executive anxiety extends beyond consumer companies. Elevator maker Otis Worldwide saw new-equipment orders in China fall by double digits in the second quarter, forcing it to cut its outlook for growth out of Asia. CEO Judy Marks told analysts on a quarterly earnings call that prices in China were down roughly 10% year over year, and she doesn’t see the pricing pressure abating. The company is turning to productivity improvements and cost cutting to blunt the hit.

Add in the uncertainty created by deteriorating U.S.-China relations, and many investors are steering clear. The iShares MSCI China exchange-traded fund has lost half its value since March 2021. Recovery attempts have been short-lived. undefined undefined And now some of those concerns are creeping into the U.S. market. “A decade ago China exposure [for a global company] was a way to add revenue growth to our portfolio,” says Margaret Vitrano, co-manager of large-cap growth strategies at ClearBridge Investments in New York. Today, she notes, “we now want to manage the risk of the China exposure.”

Vitrano expects improvement in 2025, but cautions it will be slow. Uncertainty over who will win the U.S. presidential election and the prospect of higher tariffs pose additional risks for global companies.

Behind the Malaise

For now, China is inching along at roughly 5% economic growth—down from a peak of 14% in 2007 and an average of about 8% in the 10 years before the pandemic. Chinese consumers hit by job losses and continued declines in property values are rethinking spending habits. Businesses worried about policy uncertainty are reluctant to invest and hire.

The trouble goes beyond frugal consumers. Xi is changing the economy’s growth model, relying less on the infrastructure and real estate market that fueled earlier growth. That means investing aggressively in manufacturing and exports as China looks to become more self-reliant and guard against geopolitical tensions.

The shift is hurting western multinationals, with deflationary forces amid burgeoning production capacity. “We have seen the investment community mark down expectations for these companies because they will have to change tack with lower-cost products and services,” says Joseph Quinlan, head of market strategy for the chief investment office at Merrill and Bank of America Private Bank.

Another challenge for multinationals outside of China is stiffened competition as Chinese companies innovate and expand—often with the backing of the government. Local rivals are upping the ante across sectors by building on their knowledge of local consumer preferences and the ability to produce higher-quality products.

Some global multinationals are having a hard time keeping up with homegrown innovation. Auto makers including General Motors have seen sales tumble and struggled to turn profitable as Chinese car shoppers increasingly opt for electric vehicles from BYD or NIO that are similar in price to internal-combustion-engine cars from foreign auto makers.

“China’s electric-vehicle makers have by leaps and bounds surpassed the capabilities of foreign brands who have a tie to the profit pool of internal combustible engines that they don’t want to disrupt,” says Christine Phillpotts, a fund manager for Ariel Investments’ emerging markets strategies.

Chinese companies are often faster than global rivals to market with new products or tweaks. “The cycle can be half of what it is for a global multinational with subsidiaries that need to check with headquarters, do an analysis, and then refresh,” Phillpotts says.

For many companies and investors, next year remains a question mark. Ashland CEO Guillermo Novo said in an August call with analysts that the chemical company was seeing a “big change” in China, with activity slowing and competition on pricing becoming more aggressive. The company, he said, was still trying to grasp the repercussions as it has created uncertainty in its 2025 outlook.

Sticking Around

Few companies are giving up. Executives at big global consumer and retail companies show no signs of reducing investment, with most still describing China as a long-term growth market, says Dana Telsey, CEO of Telsey Advisory Group.

Starbucks executives described the long-term opportunity as “significant,” with higher growth and margin opportunities in the future as China’s population continues to move from rural to suburban areas. But they also noted that their approach is evolving and they are in the early stages of exploring strategic partnerships.

Walmart sold its stake in August in Chinese e-commerce giant JD.com for $3.6 billion after an eight-year noncompete agreement expired. Analysts expect it to pump the money into its own Sam’s Club and Walmart China operation, which have benefited from the trend toward trading down in China.

“The story isn’t over for the global companies,” Phillpotts says. “It just means the effort and investment will be greater to compete.”

Corrections & Amplifications

Joseph Quinlan is head of market strategy for the chief investment office at Merrill and Bank of America Private Bank. An earlier version of this article incorrectly used his old title.

Bahrain has taken a major step in advancing data transparency with the recent launch of its National Summary Data Page (NSDP). This initiative, which went live on Thursday, fulfills a key recommendation from the IMF’s Enhanced General Data Dissemination System (e-GDDS) by publishing critical macroeconomic and financial data.

The e-GDDS is the foundational tier of the IMF’s Data Standards Initiatives, designed to promote transparency and encourage countries to voluntarily share timely data that is vital for monitoring and analyzing economic performance, the IMF noted in a statement. Bahrain’s adoption of these recommendations and the creation of the NSDP underscore the nation’s commitment to improving data accessibility and transparency.

The NSDP will serve as a centralized hub for national and international stakeholders, investors, rating agencies, and decision-makers, offering easy access to vital economic and financial data. According to the IMF’s Executive Board, this transparency is essential for tracking a country’s economic and financial developments. Additionally, the standardized data format supports cross-country economic analysis and early detection of risks, helping to prevent economic crises and promoting sustainable growth.

Bert Kroese, Chief Statistician and Data Officer at the IMF, praised this achievement, expressing confidence that Bahrain will benefit from utilizing the e-GDDS framework to further develop its statistical system. The IMF Executive Board has recently reviewed the advantages of participating in the e-GDDS, including improved sovereign financing conditions.

Bahrain’s NSDP consolidates data on national accounts, government operations, the monetary and financial sector, and the external sector in one accessible platform. With machine-readable formats and a scheduled release of data, it ensures timely and simultaneous access for all users. Data for the NSDP is provided by the Ministry of Finance and National Economy, the Central Bank of Bahrain, and the Information and eGovernment Authority.

This launch also signals Bahrain’s future intention to subscribe to the IMF’s Special Data Dissemination Standard (SDDS), further reinforcing its dedication to data transparency. The NSDP is now accessible via the IMF’s Dissemination Standards Bulletin Board.

Eton Solutions has launched EtonGPT™, the world’s first generative AI module tailored specifically for family offices worldwide. EtonGPT™ seamlessly combines the robust transactional capabilities of Eton Solutions’ ERP platform with advanced conversational AI features.

This technology will be available exclusively to users of AtlasFive®, enabling the majority of the 750 families on the platform to leverage EtonGPT™ to enhance the productivity and efficiency of their family offices. By integrating document data with transactional data stored in AtlasFive®, EtonGPT™ streamlines operations and drives productivity improvements.

Several clients of Eton Solutions, including Shade Tree Advisors (US), Todd Family Office (New Zealand), and Aglaia Family Office (Singapore), are already utilizing this AI-powered platform to access information and conduct detailed analyses of their investment and asset portfolios. EtonGPT™ serves as both an internal search engine and a data extraction tool within the secure, cloud-based AtlasFive® ERP platform.

With pending patents, this hybrid AI platform integrates various cutting-edge AI technologies, including machine learning, expert system-based business rule engines, and large language models. It delivers superior accuracy and insights through AI-driven data extraction, summarization, inference, and transformation, empowering family offices to operate more efficiently and securely.

Satyen Patel, Eton Solutions’ executive chairman said, “Our AtlasFive® solution was the first to offer a centralized data platform that had integrated structured data processing across accounting, investment and tax functions.  With the launch of EtonGPT™, the world’s first family office LLM, we are embracing cutting-edge technology and reshaping the future of family office management across the globe. AI is increasingly being deployed across businesses. While family offices have largely remained rooted in manual processes, with the integration of AI, they will undergo an unparalleled change, making them resilient and future-ready”.

“With EtonGPT™, AtlasFive® can now parse and integrate data buried in more than 250 document types such as trust plans, estate plans and partnership agreements. This combination of structured and unstructured data processing offers wealth managers the ability to gain a 2 to 4X increase in operational efficiency.”

“EtonGPT™ will offer a foundational shift platform enabling family offices to elevate their legacy, strengthen corporate governance, and provide high value to the HNWIs and UHNWIs they serve.”

Timothy C. Macherone, Chief Operating Officer of Shade Tree Advisors LLC, said, “I do not doubt that EtonGPT™ can be a potential game-changer.  In deploying the AI-based technology, which involved leveraging EtonGPT™ to automate our document organization and retention processes, we reduced human involvement by 50% and met our accuracy goals. Similarly, we see countless opportunities to unlock efficiencies in our legacy processes through the use of EtonGPT™ in many verticals, including calculating and posting mark-to-markets on private investments, logging invoice information, and summarizing estate planning documents.”

Andrew Hull, Chief Executive of Todd Family Office, said, “AI is reshaping how we do everything at the Todd Family Office, and our partnership with Eton Solutions has been beneficial. We have faced challenges in fixing AI hallucinations and are worried about the potential misuse of these tech marvels. We’re working with Eton Solutions to pioneer a Responsible AI framework that harnesses the full power of AI with transparency, ethics, and trust at its core.  Together, we’re setting the standard for the future of AI for family offices.”

Stephen Hunt, Chief Executive Officer of Aglaia Family Office Pte. Ltd., said, “Aglaia Family Office is proud to be pioneering the setup of automated and AI-powered consolidated portfolio reporting and analytics solutions in Asia. Our commitment goes beyond just automation—we’re focused on the responsible use of AI, ensuring that its integration into our operations enhances not only efficiency but also strengthens timeliness and accuracy. EtonGPT’s early success reassures us that, with Eton Solutions, we’re on the right path.”

As AI’s power is increasingly integrated into modern organizations, Eton Solutions recognizes cybersecurity challenges from traditional threats such as phishing, malware, and data breaches are expanding to include AI-based risks such as deepfakes, misuse, and algorithmic bias. To lessen or mitigate these risks, Eton Solutions is working with its Customer Advisory Board to introduce frameworks that encompass ethics, safety, transparency, trust, and security.

EtonGPT™ is designed to ensure a robust, secure, and ethical environment for family office operations.

The Central Bank of the UAE (CBUAE) has reported a rise in demand for bank credit across the country, driven by economic stability and robust investments, even in the face of increasing interest rates.

In its Credit Sentiment Survey for Q2 2024, the CBUAE highlighted that the positive economic outlook and improving asset quality continue to support the willingness of financial institutions to lend.

The survey findings suggest that this strong credit demand is expected to persist into the third quarter of this year. The CBUAE also noted that the construction sector saw the highest growth in credit demand during Q2, followed by manufacturing, real estate development, and retail and wholesale trade.

Trade credit demand remained strong throughout the second quarter, with an increased appetite for lending across all loan categories and industry sectors, particularly from large government entities and major corporations.

The survey further indicated that all emirates experienced a significant rise in credit demand during Q2, with expectations that this trend will continue over the next three months, particularly in the construction, real estate, manufacturing, retail, and wholesale sectors.

InterNations has recently published its Expat Insider 2024 rankings, highlighting the top destinations for expatriates across several key sectors. The online survey gathered insights from expats residing in over 170 countries, offering a broad perspective on the global expat experience.

Qatar stands out in the rankings, securing the fourth place in the Quality-of-Life category. It also earned top-five positions in crucial areas such as Healthcare, Safety & Security, Travel & Transit, and Career Prospects, showcasing the country’s appeal as a prime destination for expatriates.

With over 12,500 expats from 175 nationalities, spanning 174 countries, participating in the survey, the data provides a detailed look at what makes Qatar a leading choice for expats.

Quality of Life

In the global Quality of Life rankings, Qatar placed fourth, following the UAE, Austria, and Spain. This ranking takes into account five subcategories: Healthcare, Travel & Transit, Safety & Security, Environment & Climate, and Leisure Options.

Healthcare

Qatar’s healthcare system received high praise from expats, placing the country second globally in this category, just behind South Korea. Expats highlighted the quality, accessibility, and affordability of medical care as key factors in their positive assessment.

Travel & Transit

Qatar’s efficient transportation network also drew attention, securing the third spot globally, following Austria and Singapore. Expats were particularly impressed with the affordability and availability of public transport, as well as the ease of navigating the country on foot or by bicycle.

Safety & Security

Safety and political stability are often key considerations for expats when choosing a destination, and Qatar ranked fifth in the Safety & Security category. With expats reporting a strong sense of personal safety, Qatar sits among the world’s safest countries, following the UAE, Switzerland, Luxembourg, and Denmark.

Environment & Climate

In the Environment & Climate category, Qatar ranked 27th globally. While the country topped in other areas, the expats surveyed shared mixed views on air quality, climate, and the balance between natural and urban environments. Costa Rica topped this particular category.

Leisure Options

For those seeking leisure and recreational activities, Qatar offers plenty, securing 13th place globally in this category. Expats appreciated the country’s culinary diversity, cultural offerings, and local nightlife. However, Spain took the lead in this segment.

Additional Rankings

Qatar also featured prominently in other surveys. In the “Best Destinations for Expats in 2024” list, Qatar ranked 17th overall. Additionally, in the “Working Abroad” survey, the country placed 19th, with notable highlights including a 5th place ranking for Career Prospects and 11th for Salary and Job Security.

These rankings reinforce Qatar’s growing reputation as a top destination for expatriates, offering a high standard of living, excellent career opportunities, and a safe, vibrant environment. The country’s continued development across sectors ensures that it remains a key player in the global expat landscape.