Elissar Farah Antonios, Cluster Head UAE, Levant and Iraq, Citi: Interview

Interview: Elissar Farah Antonios

What strengths and challenges characterise Dubai in terms of encouraging high-net-worth individuals to bank in the emirate?

ELISSAR FARAH ANTONIOS: First of all you need to understand what clients are looking for when they want to engage in wealth management. One key thing to look for is stability; is the company where my relationship or account is booked within a stable country? Does the country have the right rules and regulations to protect me as a client when I am looking for certain investments? How easy will it be to access my funds? What is the product solution mix available in the given jurisdiction or institution? When you consider all these questions that potential customers may ask themselves, you can safely say Dubai is competitive in comparison to some of the other wealth capitals, such as Singapore and Switzerland.

What is more, a number of developments have taken place in recent years that have allowed for increased competition. The regulator has been extremely active and progressive in terms of enforcing consumer protections, while also ensuring that the right sales practices are in place. It is also focusing on ensuring relationship managers are accredited when it comes to investment management. Taken together, these factors make Dubai an attractive location for banking.

How are appetites towards risk and particular asset classes such as equity, bonds, cash and commodities changing in Dubai and the region?

ANTONIOS: Although I would not say that we have seen substantial changes, the rule of the road is that investors are always looking for high-quality assets. If we look at 2019, the appetite for such products has been quite healthy. For example, Citi has been involved in quite a lot of issuances, including that of Network International, which was over-subscribed multiple times. This is evidence that liquidity is always chasing good opportunities. As such, it is always a risk-reward equation for savvy investors. The Dubai Financial Market remains one of the best performing indices in the GCC, up around 10% at the end of the third quarter of 2019. On the debt side, by the end of the same period we had seen a high volume of issuances, similar to the previous year.

Evidently, there is a lot of demand, and as interest rates continue to fall around the world, investors are looking for new opportunities. Clients are taking advantage of the current environment to lock in long-term funding at attractive levels. Furthermore, looking at debt from a regional perspective, the GCC is now a part of JPM organ’s Emerging Market Bond Index. In equities, we see Saudi Arabia is increasing its percentage of MSCI Emerging Market equities. These types of inclusions allow for further institutional foreign investment in the region.

In what ways do you expect new credit card offerings to shift the preference for cash and debit cards in the upcoming years?

ANTONIOS: In the UAE we have seen a shift towards credit cards on both a public and private level. The government has been at the forefront of efforts to move to a cashless economy, and private consumers are changing their preferences from cash and debit cards to credit cards. Many are attracted to the rewards and perks that are generally reserved for credit cards, such as cash back, airline miles or gift vouchers. Credit cards also provide customers a better method of managing their day-to-day expenses. Today, credit card payments are evolving fast: tapand-pay technology has made transactions more convenient for customers and we have also seen a surge in e-commerce, which has further incentivised the shift towards credit card purchases. We expect the significant growth in our credit cards business seen in 2017-19 to continue into the coming years.