RSM In­ter­na­tional holds ‘Econ­omy Watch Fo­rum’

Kuwait Times - - BUSINESS -

KUWAIT: RSM Al­bazie & Co, a mem­ber of the sixth largest net­work of in­de­pen­dent au­dit, tax and con­sult­ing firms ‘RSM In­ter­na­tional’, re­cently held an Econ­omy Watch work­shop in col­lab­o­ra­tion with Bordier & Cie Pri­vate Bankers; a Swiss in­de­pen­dent pri­vate bank founded by the Bordier fam­ily as an un­lim­ited li­a­bil­ity part­ner­ship in 1844 in Geneva, at JW Mar­riott in Kuwait. The work­shop ad­dressed re­cent world econ­omy de­vel­op­ments and in­vest­ment op­por­tu­ni­ties fea­tur­ing Mr. Gré­goire Bordier - Se­nior Part­ner of Bordier & Cie, Gian­luca Tarolli -Mar­ket Econ­o­mist at Bordier & Cie and Yama KabirMa­roofi - Head of Mid­dle-East at Bordier & Cie.

The work­shop was at­tended by se­nior level ex­ec­u­tives of var­i­ous cor­po­ra­tions, in­vest­ment de­ci­sion mak­ers and High Net Worth In­di­vid­u­als (HNWIs). Com­menc­ing the Econ­omy Watch work­shop, Dr Shuaib A Shuaib - Chair­man at RSM Al­bazie & Co fo­cused on pro­vid­ing an over­view of macroe­co­nomic in­di­ca­tors in Kuwait as well as an un­der­stand­ing to the size and im­por­tance of the projects mar­ket in Kuwait. Dr Shuaib said: “His­tor­i­cally, GCC projects did not wit­ness fund­ing is­sues; how­ever,with the de­cline in oil prices,GCC gov­ern­ments are forced to re­align cap­i­tal spend­ing plans.”

Gré­goire Bordier and Yama Ma­roofi gave an in­tro­duc­tion on the tradition of Swiss pri­vate bank­ing through the his­tory of the Bordier fam­ily start­ing with Ami Bordier who founded the fam­ily bank in 1844 as an un­lim­ited part­ner­ship. The part­ners then bore un­lim­ited per­sonal li­a­bil­ity on their per­sonal for­tune for all the com­mit­ments en­tered into by the bank and this re­mains un­changed to this day. This dis­tinc­tive as­pect has al­ways en­sured a com­plete align­ment of in­ter­est be­tween the bank and its clients and to con­cen­trate on the clients’ longterm goals rather than on the short-term tar­gets of ex­ter­nal share­hold­ers.

Gian­luca Tarolli fo­cused on where to find value in the global fi­nan­cial mar­kets. “Due to the geopo­lit­i­cal risk in the re­gion, lo­cal in­vestors are look­ing at USA and Europe and other safe havens which are in it­self wit­ness­ing ex­treme changes in mon­e­tary poli­cies. Po­lit­i­cal risk is no longer con­sid­ered a tail-event. Trump’s tri­umph and Brexit could po­ten­tially em­power sim­i­lar right-wing par­ties across the Globe. The risk of large economies cut­ting down on global trade tie-ups has seen a sig­nif­i­cant in­crease - a step in the re­verse direc­tion. De­cel­er­at­ing China, stag­nant Ja­pan, US’ atyp­i­cal eco­nomic cy­cle and EU’s po­lit­i­cal woes all add up to a very unique sit­u­a­tion for in­vestors and port­fo­lio man­agers; an eco­nomic sit­u­a­tion which has al­most no prece­dent in his­tory”, said Tarolli.

He went on to­ex­plain that in Europe, with­flat cor­po­rate prof­its, tepid eco­nomic growth, and a frag­ile bank­ing sys­tem, the mar­ket is vul­ner­a­ble to a range of po­lit­i­cal risks in the com­ing months that could de­rail the re­gion’s weak re­cov­ery. The global trend to­wards more fis­cal eas­ing, tak­ing over the ba­ton from mon­e­tary eas­ing which has reached its lim­its, will not take place in Europe next year due to the busy elec­toral cal­en­dar, which will pre­vent any co­or­di­nated eco­nomic pol­icy.

Ad­dress­ing fam­ily busi­nesses’ in­vest­ments, Tarolli said, “fam­ily busi­ness will re­act in func­tion of in­vest­ment op­por­tu­ni­ties that will vary from a sec­tor of ac­tiv­ity to an­other. The pre­cise­ness of the tax rate cut tim­ing, both on cor­po­rate prof­its and per­sonal rev­enues will be cru­cial to de­ter­mine their in­vest­ments. In fact, they will give back some mar­gins and hence prof­itabil­ity to sus­tain the cur­rent fad­ing in­vest­ment cy­cle: to in­vest, cor­po­rates need prof­its.”

“For GCC in­vestors, in­vest­ments in the US and USD will con­tinue to make sense. As mar­kets are cur­rently an­tic­i­pat­ing ad­di­tional growth and in­fla­tion, they are push­ing in­ter­est rate up­wards, lift­ing up the cur­rency. We ex­pect this trend to con­tinue for some months, and that’s why float­ing rates bonds are to be favoured. Keep­ing some cash may al­low to clip in higher yield in the fixed in­come area early next year. On the eq­uity front, the dis­ad­van­tages of higher fi­nanc­ing costs and stronger cur­rency, on top of the global po­lit­i­cal un­cer­tainty, are not priced in. We think there will be some dis­ap­point­ment in the next cou­ple of quar­ters that could al­low us to come back into the mar­ket at a bet­ter level. Glob­ally speak­ing, we find US as­sets quite ex­pen­sive and are wait­ing on the side lines for bet­ter en­try points”.

Since its foun­da­tion in 1844 in Geneva, Bordier & Ciebe­came an in­ter­na­tional group with of­fices in three ma­jor con­ti­nents, still owned and man­aged by the fifth gen­er­a­tion of its founders. The bank fo­cuses solely on man­ag­ing and safe­guard­ing the wealth of its pri­vate clients by forg­ing long-term re­la­tion­ships built on trust while de­liv­er­ing per­son­al­ized ser­vices that meet the high­est stan­dards.

RSM Al­bazie& Co. strives to mon­i­tor de­vel­op­ments in the fi­nan­cial and eco­nomic world to pro­vide its clients with the best in-class ad­vi­sory ser­vices. The firm will con­tinue host­ing sim­i­lar events that in turn would help guide the busi­ness com­mu­nity in Kuwait. Es­tab­lished in 1963, RSM Al­bazie & Co. is con­sid­ered to be among the old­est ac­count­ing and ad­vi­sory firms in Kuwait, with more than 50 years of ex­pe­ri­ence.

Econ­omy Watch Fo­rum at­ten­dees.

(Left to right) Fouad Al-Hourani, Dr Shuaib Shuaib and Gre­goire.

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