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  • Navigating the Dynamic Landscape of the Global Online Trading Market

    Navigating the Dynamic Landscape of the Global Online Trading Market

    By Boriss Gubaidulin, Africa Director, Admirals

     The global online trading market has witnessed a remarkable upswing, fuelled by technological advancements and the widespread accessibility of the internet. This surge in popularity and increase of the global market size to USD9.32bn in 2022 has been instrumental in democratising investment opportunities, enabling individuals from various corners of the world to partake in online trading.

    Based on a comprehensive analysis conducted by Grand View Research in 2020, the global online trading market showcased a valuation of approximately USD15.47 billion in 2019. Notably, this market has been on an upward trajectory, with a projected compound annual growth rate (CAGR) of 9.7% from 2020 to 2027.

    With the advent of user-friendly platforms and cost-effective trading options offered by numerous online brokerages, retail investors are increasingly recognising the potential of online investing. This realisation has ushered in a new era of financial inclusion, empowering individuals to take charge of their financial futures.

    A closer look at the African Market

     Within the realm of online trading, Africa emerges as a market of untapped potential, poised for remarkable growth, as highlighted by the latest quarterly report from Finance Magnates.

    While developed markets face saturation due to aging populations, Africa’s online CFD trading market is experiencing significant upward momentum, primarily due to a high youth population ratio, high mobile penetration, and technological improvements. Notably, the continent boasts the presence of the world’s five fastest-growing economies, with Nigeria leading the charge, fuelled by its population of over 200 million.

    Even a modest conversion of just 1% of the population into online traders would yield an impressive 200,000 active traders. To put this into perspective, the number of active CFD/forex traders in the United States currently hovers around 200,000, and in Germany, it reaches approximately 100,000.

    Africa’s vast growth potential and evolving regulatory landscape makes it a desirable destination for global expansion, with several reputable players such as Admirals steadily moving into Africa.

    The Impact on Emerging Markets

     Emerging markets are reaping a multitude of benefits from the rise of online trading, which is transforming their financial landscapes in significant ways. One prominent advantage is the enhanced accessibility and financial inclusion it brings. Online trading platforms have opened doors for individuals who were previously excluded from traditional investment opportunities, empowering them to participate in global markets.

    Additionally, online trading enables investors in emerging markets to diversify their investments beyond local markets, reducing dependency on a single economy and thus spreading risk.

    Moreover, lower costs and fees associated with online trading make it more affordable for individuals in these markets to engage in trading activities. Furthermore, the impact of online trading goes beyond personal finance, contributing to economic growth, job creation and the establishment of new businesses.

    This growth, in turn, generates employment opportunities across various sectors such as finance, technology, and customer support services. Overall, the benefits of online trading in emerging markets extend far beyond financial gains, driving inclusive growth, fostering economic stability, and creating avenues for prosperity.

    Embracing Challenges and Opportunities within the African Market

     While the African market showcases immense growth potential, it is not without its fair share of challenges, setting it apart from more developed markets. One significant headwind is the presence of political instability, which can create an uncertain investment environment.

    Additionally, currency fluctuations pose a risk, making it crucial for investors to carefully manage their exposure to mitigate potential losses. Moreover, the higher levels of risk associated with investing in emerging markets can impact investor confidence, requiring a cautious approach and thorough risk assessment.

    Navigating Africa’s often complex and variable regulatory landscape presents another potential hurdle. Whilst regulation across the African regions vary in terms of transparency and sophistication, most countries have been working to refine their regulatory frameworks to promote stability, transparency, and investor confidence.

    Unlocking the Power of AI: From Threat to Empowerment

    Artificial Intelligence (AI) has emerged as a formidable tool that empowers individuals in the realm of online trading, dispelling the notion of it being a threat. With the ability to process and analyse vast volumes of data, including market news, social media sentiment, economic indicators, and historical trading patterns, AI enhances decision-making processes for traders. By quickly extracting valuable insights from complex data sets, AI equips traders with a competitive edge, helping them make more informed and strategic investment decisions.

    Furthermore, AI finds utility in customer support services through the deployment of chatbots, streamlining interactions and providing timely assistance to traders. Additionally, AI plays a crucial role in fraud detection, leveraging its analytical capabilities to identify suspicious patterns and safeguard the integrity of trading platforms.

    However, it’s important to note that while AI provides valuable insights and assistance, its effectiveness is dependent on the quality of human input and requires human assessment for accurate decision-making. AI acts as an enabler rather than a replacement for online trading platforms, working in tandem with human expertise to optimise trading experiences and outcomes.

    By embracing AI as a powerful tool, traders can harness its capabilities to navigate the complexities of the market, fostering growth and innovation within the online trading industry.

    The Rise of Neobrokers: Navigating Innovation and Regulatory Oversight

     A notable trend in the online trading industry is the emergence of neobrokers; app-based platforms that have gained traction among investors. Neobrokers represent a disruptive force, offering user-friendly interfaces and streamlined experiences. However, regulators closely monitor this development to ensure investor protection and mitigate potential risks associated with this innovative approach.

    As neobrokers simplify access to markets and foster a more inclusive environment, they have the potential to encourage risk-taking behaviours among traders. This balance between innovation and regulatory oversight becomes crucial as regulators strive to strike a delicate equilibrium, ensuring market integrity and investor safeguards, while fostering innovation and accessibility.

    The evolution of neobrokers is a fascinating development to watch within the online trading industry, and regulators remain vigilant in adapting to this changing landscape to maintain a fair and secure trading environment.

    Additionally, the rise of AI and neobrokers presents new dimensions to online trading, empowering traders with advanced data processing capabilities and innovative platforms.

    However, regulatory oversight remains crucial to ensure investor protection and maintain market integrity. By leveraging the benefits of technology, embracing regulatory developments, and fostering a balanced approach, the online trading industry is poised for continued growth, fostering financial inclusion, and transforming the way individuals participate in global markets.

    In conclusion, the global online trading industry is undergoing a transformative phase, with remarkable growth and opportunities unfolding. Emerging markets, such as Africa, hold immense potential for expansion, driven by factors such as accessibility, diversification, lower costs, economic growth, and job creation.

    Trading involves Risk.

     

     

  • EDITORIAL COMMENT

    EDITORIAL COMMENT

    To issue international sovereign bonds, financial markets require countries to have a credit rating from at least one or more of the three leading international credit rating agencies (CRAs) namely, Fitch, Moody’s and Standard & Poor’s (S&P).

    This constitutes a minimum requirement for capital market borrowing by market regulators, as adherence to international best practices of information disclosure and to reach out to a wider base of potential investors.

    The Financial and economic cost implications for Africa emanating from subjective credit ratings by international rating agencies(CRAs) has since left some African capital market players grumbling and dissatisfied as alluded to in various independent research study findings.

    The UNDP study report and policy brief on “Lowering cost of borrowing the role of Rating Agencies” has therefore come to make a yet most compelling case and sufficient justification for Africa to take her destiny into her own hands.

    On the back of this UNDP report came the African ministers, development actors and research institutes meeting on 14 April in Washington DC, on the margins of the 2023 World Bank/IMF Spring Meetings, to discuss the impact of credit ratings on the cost of development finance in Africa.

    At this meeting, organized by the United Nations Development Programme (UNDP), the Africa Growth Initiative at the Brookings Institution and AfriCatalyst, they raised the need to review international financing systems and particularly the determination of sovereign credit ratings for African countries, where data is often missing or of poor quality.

    The event was centered around a new study by UNDP which shows that African countries could save up to US$ 74.5 billion if credit ratings were based on less subjective assessments. This, in turn, would enable them to repay the principal of their domestic and foreign debt and free up funds for investments in human capital and infrastructure development.

    If we want to bring about change, we need to change the game, H.E. Oulimata Sarr, Minister of Economy, Planning and Cooperation, Republic of Senegal emphasized during the meeting in Washington.

    Subjective credit ratings, the Minister underscored, increase the cost of servicing debt, and put cash-strapped countries in a difficult position, having to choose between repaying debt and feeding their population.

    Furthermore, he noted, non-objective credit ratings also reduce the amount of investment that countries receive, as they are perceived to be riskier than they really are.

    “These negative impacts can occur even if the inaccurate credit ratings are not due to conscious bias, but rather to inadequate data and/or methodologies that are too subjective”.

    To issue international sovereign bonds, financial markets require countries to have a credit rating from at least one or more of the three leading international credit rating agencies (CRAs) – Fitch, Moody’s and Standard & Poor’s (S&P) – as a minimum requirement for capital market borrowing by market regulators, as adherence to international best practices of information disclosure and to reach out to a wider base of potential investors

    What Other Independent Studies say about CRAs

    It is worthy of note that it is not only the UNDP that has issues with subjective ratings by IRAs. In a review article on the study titled, “International credit rating agencies in Africa: Perceptions, trends and challenges” authored by Misheck Mutize, University of Cape Coast, Ghana and McBride Peter Nkhalamba African Peer Review Mechanism,

    Criticisms of CRAs by Researchers 

    In a quest to either improve or maintain favorable SCRs, governments subject themselves to the fiscal and monetary policy recommendations by the three international CRAs (Armstrong, 2016).

    Victims of CRAs downgrading

    South Africa

    Armstrong (2016) argues that a government that crafts an economic policy that contradicts the recommendations of the three international CRAs consequently suffers the loss of being downgraded. For instance, South Africa is facing a high threat of sovereign downgrade partly because of the land expropriation bill (IMF, 2018).

    Kenya

    Kenya facing downgrade by Moody’s following its delay to implement value added tax (VAT) on fuel products and proposal to remove petroleum tax (Irungu and Alushula, 2018). S&P warned South Africa against its R500 million stimulus package aimed at cushioning the economic impact of corona virus, citing that it will result in rising public debt.

    Barta and Johnston (2017) adds that there is an absence of sound economic logic behind CRA’s discouraging certain economic policies in emerging economies, which suggests that SCRs may be prone to being used as punitive measures against states that contradict western interests.

    Restrictive CRAs Policy Recommendations

    Policy recommendations by rating agencies are restrictive and forbid fiscal stimuli through government spending and tax relief, which usually align with emerging economies to increase consumer demand, encourage private investment, create jobs and stimulate economic growth.

    However, in contrast, extreme forms of these expansionary policies highly denounced in emerging economies are permitted and left unquestioned in the European and American setting under the banner of monetary easing and/or bailouts

    Despite the long-term economic potential in African countries, the credit rating methodologies over-emphasize the political risk in the rating criteria (Ahern and Painter, 2016).

    These circumstances have taken away the economic freedom of credit rated Africa governments and their sovereignty to freely craft their preferred long-term economic policies without threats of sovereign downgrades

    It is therefore against this background that, we of the Eco-Enviro News Africa magazine, wish to emphatically state that the decision of the AU to put in place a local African rating agency is appropriate and long than due but better late than never.

    It is our hope that the establishment of the African rating agency would bring sanity into the African capital market landscape and provide a level playing ground.

    Africa’s Ballooning Debt Overhung

    As a percentage of GDP, Africa’s share of external debt has risen from approximately 19% in 2010 to nearly 29% in 2022. Simultaneously, its external debt as a share of exports has risen from 74.5% to 140% over the same period.

    In 2022, public debt in Africa reached USD 1.8 trillion. While this is a fraction of the overall outstanding debt of developing countries, Africa’s debt has increased by 183% since 2010, a rate roughly four times higher than its growth rate of GDP in dollar terms.

    With Africa’s public debt now a cog in the wheel of the development of the continent, the need diversify mode of funding has become more imperative than ever before.

    Serious consideration ought to be given to alternative modes of development funding with relatively lower cost and also ensure investments in projects of strategic economic importance which has good returns on investments and can pay for itself.

    Alternative non interest based modes of funding as bridge financing, sovereign sukuk or zero interest Islamic bonds, public banking, etc. are worth considering.

    Mohammed A.Abu

  • African Union plans to launch its own credit ratings agency

    African Union plans to launch its own credit ratings agency

    FINANCIAL SERVICES

    African Union plans to launch its own credit ratings agency

    Kenya shilling coins and notes are pictured inside a cashier’s booth at a forex exchange bureau in Kenya’s capital Nairobi, April 20, 2016. REUTERS/Thomas Mukoya
    Reuters Images

    The agency, which would craft its own assessment of the risks in lending to African countries

    Libby George, Reuters News

    September 12, 2023

    ECONOMYAFRICAFINANCIAL SERVICES

    The African Union plans to launch a new African credit rating agency next year to address the group’s concerns that ratings given to countries on the continent are unfair, an official told Reuters.

    The agency, which would craft its own assessment of the risks in lending to African countries, would be based on the continent, said Misheck Mutize, lead expert for country support on rating agencies with the African Union.

    It will also add context to the information investors consider when deciding whether to buy African bonds or lend privately to countries.

    “We already have quite a huge interest in the private sector to support the implementation of this,” Mutize said, adding they are targeting a launch in 2024.

    The AU, and leaders of member nations from Ghana to Senegal to Zambia, allege that the “big three” ratings agencies – Moody’s, Fitch and S&P Global Ratings – do not fairly assess the risk of lending to African countries, and say they are quicker to downgrade them during crises such as the COVID-19 pandemic.

    All three ratings agencies have denied bias and say their ratings follow the same formula across continents.

    Moody’s and S&P Global Ratings did not immediately respond to a request for comment. Ravi Bhatia, S&P’s lead analyst for sovereign ratings, told Reuters recently that the agency applies the same criteria consistently all regions.

    A Fitch Ratings spokesperson said all sovereign rating decisions use “globally consistent and publicly available criteria” and that all rating drivers were clearly identified.

    OUTSTANDING BONDS

    Broadly speaking, credit ratings are designed to gauge a borrower’s risk of default, and factor in the terms on which banks and others will lend to them. More than a dozen African countries have outstanding international bonds.

    A United Nations Development Programme study in April showed that African countries could save up to $74.5 billion if credit ratings were based on less subjective assessments, citing “idiosyncrasies” in the frequency of ratings actions for African countries as an example.

    Mutize said the new agency was a push to change the narrative.

    “Our goal has not been to replace the big three…we need them to support access to international capital. Our view has been to widen diversity of opinions,” he said.

    “We know the big three follow the opinion of other smaller ratings agencies. They’ve acknowledged that other smaller ratings agencies have got an edge in understanding domestic dynamics.”

    AU finance ministers passed a resolution over the summer to endorse the plan for the new agency, an effort spearheaded by the African Peer Review Mechanism (APRM), a branch of the AU formed last year to improve governance across the continent. The full AU executive council is expected to adopt the same resolution in February.

    The agency would be self funded and private-sector driven with AU oversight, Mutize said.

    “Investors have been quite positive. They want to see what will be the output of this,” he added. “Any investor will pay attention to anything that brings them information.”

    (Reporting By Libby George, additional reporting by Marc Jones, editing by Christina Fincher and Ed Osmond)

    SOURCE

    ZAWYA.COM

  • Afreximbank and China Development Bank sign US$400-million loan to support Africa SMEs

    Afreximbank and China Development Bank sign US$400-million loan to support Africa SMEs

    Cairo, 28 Aug. 2023: – The China Development Bank (CDB) today in Cairo signed a development-focused agreement to provide the African Export-Import Bank (Afreximbank) with a US$400-million term loan facility to support the financing of small and medium-sized enterprises (SMEs) across Africa.

    The agreement, signed by Mr. Tan Jiong, President of CDB, and Prof. Benedict Oramah, President and Chairman of the Board of Directors of Afreximbank, at the Afreximbank Headquarters in Cairo, provides for Afreximbank to deploy the facility to support African SMEs involved in extra- and intra-African trade and those engaged in the productive sectors in Afreximbank Member States. According to the agreement, the facility, which has a seven-year tenor, will be deployed either directly to eligible African SMEs that meet Afreximbank’s requirements or indirectly through local financial intermediaries.

    Speaking after the signing, Prof. Oramah pointed out that African SMEs continue to struggle to access adequate and affordable financing for growing their businesses and said that the CDB facility would help increase the level of financing available to them.

    He added that since Afreximbank was receiving the facility as medium to long-term funding at relatively affordable pricing, the Bank would transfer the financial advantage in pricing and tenor to the end beneficiaries.

    “This facility further strengthens the strategic partnership we have developed with the China Development Bank over the last six years, which has seen CDB make three previous interventions in support of our work at Afreximbank,” continued President Oramah. “It will also enable our two institutions achieve our respective mandates and developmental outcomes, which include job creation, increased economic activity and increased extra-African trade with China.”

    – ENDS –

    SOURCE

    Afreximbank Website

    :

  • Online trading: What does psychology have to do with it?

    Online trading: What does psychology have to do with it?

    By Boriss Gubaidulin, Admirals Africa Director

    The term “behavioural finance” which took hold in the 1990s examined what role emotions play in investment decision-making. Why should psychology and trading be linked?

    The simple answer is that we are hard-wired as humans to be emotional, and – let’s face it – when it comes to financial matters, emotional consideration come into play.

    In investing, the two most powerful emotions have been identified as fear and greed. So much so that CNN Business created the Fear & Greed Index to measure exactly how emotions influence how much investors are willing to pay for stocks.

    The index assumes that fear drives stocks lower while greed boosts stock values. In more recent years, similar indices have been developed, such as the Fear & Greed Index for Cryptocurrency trading.

    If emotions are an inevitable part of trading, how can we harness the power of emotions to help and protect us instead of holding us back?

    The first step is to understand your emotions. On a practical level, here we look at various behavioural biases which come into play. Once we understand these biases, we will be more capable of recognising unhealthy psychological patterns and states of mind, and better equipped to react in a way to protect ourselves.

    The overconfidence bias

    Watch out for trading euphoria. It’s not uncommon for traders to complete a winning streak and then believe that they can’t get anything wrong in the future. To believe this would be unwise and will only end in failure. Make sure you always analyse your trading sessions and look at your wins and losses in detail. Reviewing your trades in an honest way is a key aspect of beating your emotions in trading psychology.

    Learn to be comfortable with accepting that mistakes are inevitable, especially in the early stages. It’s all part of the learning curve and the development of your trading psychology.

    The anchoring bias

    Anchoring is a tendency to rely on what is already known to a trader for decision making in the future, instead of considering new situations and the changes that they can bring.

    At times, anchoring tends to cause traders to rely on obsolete and irrelevant information, which of course won’t help you trade successfully. In practical terms, the anchoring bias manifests itself in traders holding losing positions open for too long, simply because they fail to consider the options that are outside of their comfort zone.

    The confirmation bias

    The confirmation bias means looking for information to support a decision you have made, even if it wasn’t the best decision. This is simply a way of justifying your actions and strategies. The problem is that, by doing this, you’re not actually learning and improving your methods, and are likely to continue making the same trading mistakes.

    The loss aversion bias

    The loss aversion bias can be explained as such: when considering options before making a choice, we are likely more willing to give preference to a lower possible loss over a higher possible reward.

    Fear is a much more powerful motivator than greed. In practice, a trader with a loss aversion bias is more akin to cutting profits when they are still low, while allowing bigger drawdowns.
    It is important to note that emotional self-knowledge cannot be done in isolation – make sure you support your trading journey and personal development with continual learning through a reputable partner, with a solid reputation backed by superior knowledge.

    It is also important to know that online trading carries risk – make sure you deal with a reputable broker

    Risk management and education: the role and importance of a licensed, reputable broker

    Risk management and education are vital components when trading in Contracts for Difference (CFDs). Admirals, the global neobroker who recently established its presence in Africa, emphasizes the importance of choosing a reputable broker to help guide you through your trading journey.

    With more than 20 years’ experience, Admirals offers a comprehensive educational package, that can help you learn how to properly mitigate your risk. Here’s how:

    1. Solid risk management

    Develop, implement, and adhere to sound risk management strategies based on setting stop-loss orders, healthy portfolio diversification, and the appropriate position size according to your risk appetite. Admiral’s four-point risk management process involves the following:

    1. Identify the risks
    2. Analyse those risks
    3. Find solutions to minimise those risks and
    4. Consistently manage and apply those solutions to your trading.

    2. Continuous learning

    The financial markets are constantly evolving, and staying updated on market news, economic events, and trading techniques is important. Admirals offers a wealth of educational resources, including webinars, articles, and video tutorials to help traders stay informed and improve their skills.

    3. Practicing with a demo account

    Before diving into live trading, it is essential to practice in a risk-free environment. Admirals provides a demo account that allows you to test your strategies and familiarize yourself with the trading platform without risking real money.

    4. Advanced trading platforms

    Admirals offers MetaTrader 4 and MetaTrader 5, providing you with powerful tools and features to optimize your trading strategies and stay on top of market movements.

    5. Dedicated customer support

    Admirals offers localized support to assist you on your trading journey and to help you navigate the financial markets with ease. A team of customer support representatives is available to assist you.

    6. Wide Market Access

    Admirals offers a range of more than 3700 CFD assets to trade, including CFDs on forex, stocks, commodities, stock indices, bonds and ETFs, allowing for a diversified portfolio and access to global markets.

    Admirals continues to expand globally to provide its clients around the globe with advanced trading tools, access to financial security and various customer care policies. Admirals is licensed in the Seychelles, UK, Cyprus, South Africa, Australia, Jordan, Canada and Kenya.

    In conclusion, risk management, continuous education and choosing a reputable broker like Admirals are important components in CFD trading. By prioritising these elements and leveraging the education and support provided by Admirals, you can embark on your journey in the ever-changing financial markets with more confidence.

    Trading involves risk.

     

  • Global fintech giant invests in sustainable communities in West and Southern Africa 

    Global fintech giant invests in sustainable communities in West and Southern Africa 

    Having pioneered the development of online trading and digital investment solutions 22 years ago, global fintech company Admirals is today considered a market-leading provider of an innovative range of online trading and investment products.  

    The Admirals suite of products includes leveraged Contracts for Difference (CFD) products in the over-the-counter market, including Forex, indices, commodities, digital currencies, stocks, and ETFs, as well as listed instruments to retail, professional, and institutional clients. 

    The company is steadily increasing its footprint in Africa, having opened its first African office in Cape Town, South Africa in July 2022, followed by the launch of its Lagos office in Nigeria in February this year.

    Admirals currently serves clients across 176 countries world-wide.  

    With a physical presence in 18 countries across developed and emerging economies, Admirals is deeply committed to bridging the financial inclusion gap that spans across continents, economies, and societies. 

    “Financial freedom is a universal objective,” says Boriss Gubaidulin, Admirals Africa Director. “By offering simplified retail trading and investing processes and solutions, supported by accessible financial literacy and education material, we aim to encourage greater access to global financial markets in a transparent, secure, and sustainable manner,” he says.  

    “As we continue to expand our footprint, we are constantly witnessing the many social, economic, and environmental challenges affecting societies the world over,” he continues. “As a reputable neobroker with a growing base of savvy and socially conscious clients, Admirals is actively living its commitment as an ethical, and socially and environmentally responsible global citizen to drive the betterment of communities in which we operate,” Gubaidulin says. 

    In 2020, Admirals developed and rolled out its global environmental, social and governance (ESG) program which directs its strategic corporate social investment initiatives. These projects range from tree planting and reforestation, clean ocean initiatives, investing in renewable energy and scarce resource management projects, recycling, and the development of better living conditions for local communities. 

    Admirals’ ESG philosophy 

    Admirals has been at the industry forefront by engraining the principles of ESG as part of its strategic business imperatives. Incidentally, Admirals has taken on a carbon-neutral status in 2020, which is firmly integrated into the Admirals overall business model.  

    The company engaged a global third-party rating agency, ClimatePartner, to verify its carbon footprint, as well as certify the CSI projects in which Admirals is involved. 

    Here on the African continent, Admirals has been involved with two sustainable water management and renewable energy initiatives in Sierra Leone and South Africa respectively.  

    Project 1: Clean drinking water in Kono, Sierra Leone  

    Sierra Leone is a largely rural country where households typically use wood fuel on inefficient three-stone fires to purify their drinking, cleaning, and washing water. This process results in the release of greenhouse gas emissions from the combustion of wood. 

    However, these emissions can be avoided by using efficient borehole technology that does not require fuel to supply clean water. 

    Admirals’ support is helping communities in the Kono region to restore 57 wells. In cooperation with the local population, damaged wells are repaired and regularly maintained, which secures the regional water supply. The availability of clean drinking water eliminates the need to boil water, saving an average of 10,000 tonnes of CO2 emissions per year. 

    Not only does this initiative contribute to climate action but it also has a major social impact. In these rural areas, water sources are often located far from residential areas. Women and children, who are primarily responsible for fetching water, may have to travel long distances, sometimes several kilometres, to access water. This not only consumes their time and energy but also poses safety risks, especially for women and girls. 

    Project 2: Investing in the future of South Africa’s sustainable clean energy generation 

    South Africa has been in the grip of a severe energy supply shortage in recent years, and every effort possible is being made to generate additional electricity capacity. Admirals has heeded the call for investors to help drive clean energy projects by pledging its support to one of the country’s largest wind projects.  

    Close to the rural town of De Aar in South Africa, 96 wind turbines have been producing an average of 439,600 MWh of electricity per year since 2017, which is being fed into the South African grid. The aim of the project is to harness the region’s wind energy potential to balance its energy needs in a sustainable way. This diversifies the power supply and improves energy security in regions that are frequently affected by power shortages and outages. 

    The share of electricity now supplied by the wind farm would have otherwise been generated by fossil fuels. The wind power project avoids about 433,920 tonnes of CO2 emissions per year, which makes an important contribution to a clean energy supply and sustainable development with respect to the UN Sustainable Development Goals (SDGs). 

    In addition to the environmental benefits, the project assists the local community by creating jobs and improving the access to healthcare through its Mobile Health Clinic. Offering primary healthcare, dental, eye care services, more than 36 000 residents and members from nearby communities have been screened and serviced by this clinic. 

    The project supports local football clubs by funding equipment, events, travel and much more. It also provides financial funds to the Richmond Untied Ladies Football Club, the only female club in De Aar playing in the premier league. 

    The project supports a math enrichment programme for pupils in 10 primary and 4 high schools to encourage interest in this subject. Three Early Childhood Development Centres were renovated to support about 155 children between 2 and 6. About 108 students are currently on the project’s bursary scheme that covers tuition, accommodation, books, food, and laptops. 

    “Contributing meaningfully to society is one of the cornerstones of our business,” Gubaidulin says. “Admirals considers the environment, our actions, and the influence we can create as global leaders. We are deeply committed to leaving a legacy through shared success and by creating flourishing communities across the globe,” he concludes. 

    —————————————————————————————————————————————— 

    Admirals Group AS 

    Admirals Group AS is a global growing FinTech company, offering a wide range of products and services worldwide, meeting people’s needs and making personal financial management easy-to-use, affordable and secure through its regulated investment firms. 

    The online investment service providers that are owned by Admirals Group AS, are authorized to offer their clients with the ability to trade Forex, and CFDs on, inter alia, indices, metals, energies, stocks, bonds and digital currencies, but also to invest in Stocks and ETFs (product offering may vary depending on each investment service provider’s license obligations and the client’s country of residence). 

    Over the years, Admirals has received internationally recognized and respected awards and recognitions, including the ‘Best Broker of 2022’ awards from both Area de Inversion and Traders.com, as well as the Traders.com award for ‘Best Financial analyst of 2022’.  

    Since founded in 2001, Admirals continues to experience worldwide growth and evolution and is committed to providing its clients around the globe with advanced trading tools, access to financial security and various customer care policies.  Admirals is licensed in the Seychelles, UK, Cyprus, South Africa, Australia, Jordan, Canada and Kenya. 

    For more information about Admirals visit admirals.com. 

    Trading involves risks.  

  • Top circular economy event calls for future-proofing of investment portfolios

    The seventh World Circular Economy Forum (WCEF) shows how to create a new economy, businesses and jobs, by leveraging circular solutions to solve the planetary crises. Held in Helsinki, Finland from 30 May to 2 June, the leading circular economy event gathers forward-looking doers and thinkers and presents the game-changers helping governments, industries, businesses and households become circular.

    Picture: Topias Dean / Sitra

    This year’s World Circular Economy Forum WCEF2023 shows how the pressing challenge of rapidly scaling up circular solutions can be answered worldwide. For instance, the forum demonstrates how investing in the circular economy is a way to increase profitability and resilience for companies across value chains. Reducing dependencies on scarce virgin materials create sustainable growth and new jobs. Collaboration is key so that entire value chains can become more circular.

    The Forum also explores the role and possibilities of the financial sector to tackle challenges and drive coherent action towards de-risking investment in circular initiatives globally. We aim to demonstrate that well-being within the boundaries of nature is possible with policies which create incentives to adequately price natural resources and unlock investments to support uptake.

    “I hope businesses and investors as well as countries are looking for truly future proof strategies. Are they ready to respond to the growing call to put nature at the heart of all decision making, business and our lifestyles? Through the WCEF2023, we want to help all kinds of organisations look further into the sustainable and profitable future,” says Jyrki Katainen, President of the Finnish Innovation Fund Sitra, WCEF2023’s co-host.

    Another important topic of the forum are circular solutions to halt the loss of biodiversity, where the food and agriculture sector can make the greatest contribution. Additionally, decarbonising the world is critical: as the demand for metals and materials grows exponentially, circular solutions are needed more than ever.

    “Setting up new conservation areas is of course necessary, but not enough. If we ever reached the global target to protect 30% of our land and water areas, more significant is what happens in the other 70%. From this point of view it is necessary to integrate economy and market mechanisms to bring solutions,” Katainen continues.

    The WCEF2023 brings together more than 2,000 new economy pioneers in Helsinki and thousands more online. You can hear the ideas of more than 120 speakers, participate in 42 results-oriented accelerator sessions, and explore more than 50 circular economy champions in the Expo area. The WCEF2023 is the place to find the best business models, financial instruments, innovations, partners, policies and strategies.

    Visions for a circular future by young leaders

    The WCEF2023 amplifies strong voices of young generations about the need of transformation from the current linear “take-make-waste” economic system towards a sustainable and regenerative circular economy. At the same time, young voices at the Forum are challenging the way we currently understand the circular economy and demanding for not only their voice but also that of nature to be heard.

    “We need to include younger generations to the circular economy discussions as this transition will define their future. That is why we have engaged youth organisations and asked them to actively join the circular economy community at the WCEF2023”, says Svein Berg, Managing Director of the Nordic Innovation, also co-host of WCEF2023.

    Meet top doers and thinkers from all over the world!

    How the game-changing solutions will be scaled up everywhere will be discussed at WCEF2023 in Helsinki by Managing Director of BlackRock Christopher Kaminker, Chief Impact Officer of Circulate Capital Ellen Martin, Vice-President of European Investment Bank Ambroise Fayolle, Director of African Development Bank Anthony Nyong, Managing Director of the Nordic Development Fund Karin Isaksson, UN Assistant Secretary-General Elizabeth Mrema, Executive Vice-President of the European Commission Frans Timmermans, EU youth delegate to the UN Nadia Gullestrup Christensen, Founder of Swivel Skills & UnSchool Leyla Acaroglu, President and CEO of Metsä Group Ilkka Hämälä and Co-Founder of Climate Farmers Philippe Birker, among others.

    Online press briefing on 23 May and accreditation

    Want to learn more? Representatives of the co-hosts will share their thoughts and answer questions in an online press briefing on 23 May 15:00 (EEST; UTC+3) / 12:00 (UTC). The briefing is limited to representatives of the media and will take place on Microsoft Teams.

    The speakers of the press briefing include:

    • Kari Herlevi, Head of Global Collaboration Unit for Sustainability Solutions, The Finnish Innovation Fund Sitra
    • Svein Berg, Managing Director, Nordic Innovation

    Media representatives are required to register for the briefing by 22 May 16:00 (EEST; UTC+3) / 13:00 (UTC) at https://www.lyyti.fi/reg/WCEF2023__Online_press_briefing_0547. Registered journalists will be provided with the link to join the Microsoft Teams meeting.

    To join WCEF2023 from 30 May to 2 June online or on-site in Helsinki, media accreditation is needed and is available on the event website at www.wcef2023.com/media.

    Mediakit and logos

    Download our media kit from WCEF2023’s website for more background information on the circular economy and the World Circular Economy Forum. You’ll find story ideas, contact information of experts for your interviews as well as recommended background material.

    The WCEF2023 logo is available at Sitra’s material bank.

    Media contacts

    Media inquiries and interview requests should be addressed to WCEF2023’s media liaisons:

    Source:(SITRA/Nordic Innovation)

     

  • Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Signs Landmark Bank Guarantee Cooperation MoU with Fonds Africain de Garantie et de Coopération Economique (FAGACE)

    Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), Signs Landmark Bank Guarantee Cooperation MoU with Fonds Africain de Garantie et de Coopération Economique (FAGACE)

    This MoU aims to facilitate the cooperation between ICIEC and FAGACE, with a view to increasing the foreign and domestic direct investments towards member countries common to both institutions
    JEDDAH, Kingdom of Saudi Arabia, May 13, 2023/ — The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) (www.ICIEC.IsDB.org), the Shariah-compliant multilateral insurer and member of the Islamic Development Bank (IsDB) Group, signed a landmark MoU with Fonds Africain de Garantie et de Coopération Economique (FAGACE) – the African Guarantee and Economic Cooperation Fund.

    The MoU was signed by Mr. Oussama Kaissi, CEO of ICIEC, and Mr. Mouhamadou Al Amine DIA, Director of Risk Management, FAGACE on the sidelines of the 2023 IsDB Annual Meetings on 10-13 May 2023 at the Ritz-Carlton Hotel in Jeddah, Saudi Arabia.

    This MoU aims to facilitate the cooperation between ICIEC and FAGACE, with a view to increasing the foreign and domestic direct investments towards member countries common to both institutions. This will be attained through the establishment of mechanisms guaranteeing risks related to investment, financing of banking institutions and regional and sub-regional SMEs. It is also expected to facilitate  international trade transactions involving banks of member countries.

    FAGACE is a pioneer in the field of bank guarantees. It is a pan-African institution established on 10 February 1977 and based in Benin. It has 14 member states, almost all of which are also member countries of the IsDB and ICIEC. Since inception, according to Director General Ngueto Yambaye, FAGACE has issued bank guarantees totalling CFA3,000 billion (US$4.9 billion) in support of trade and investment flows for transactions and projects in member states.

    Distributed by APO Group on behalf of Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).

     

  • Green Entrepreneurship: A Key Driver for Competitiveness and Sustainability Highlighted at the Annual Investment Meeting’s Entrepreneurs Investment Summit

    Green Entrepreneurship: A Key Driver for Competitiveness and Sustainability Highlighted at the Annual Investment Meeting’s Entrepreneurs Investment Summit

    The Summit discussed new strategies and opportunities in green investment for entrepreneurs

     Abu Dhabi, UAE, 9 May 2023 The Entrepreneurs Investment Summit opened its doors to industry leaders and experts from around the world to discuss new strategies and opportunities for investment. Held at the 12th edition of the The Annual Investment Meeting (AIM), which took place at the Entrepreneurs Room located at the Abu Dhabi National Exhibition Centre, The Summit witnessed a range of distinguished speakers who shared their thoughts and insights on the subject.

    The forum commenced with opening remarks from Dr. Hashim Hussien – Executive Director World Entrepreneurs Investment Forum. He said, “This summit marks a new beginning for the Interpreters Forum Secretariat, with more focused events that aim to create an optimal platform for entrepreneurs to connect with major investors, experts, and unicorns. We are focusing on Arab and African entrepreneurs, but we have also invited entrepreneurs from all over the world to share their experiences and build more resilient enterprises.

    Over the next three days, we will hear from 55 speakers from 23 countries, representing Europe, Asia, Africa, Latin America, and of course, the Arab region. We will be discussing issues that challenge entrepreneurs and economic development worldwide, as well as the ecosystems regionally and internationally. Thank you for coming together to invest, network, and share experiences, and I hope you have a successful and enjoyable summit.

    In addition, H.E. Dr. Khaled Hanafy – Secretary General – Union of Arab Chambers said, “This event, the Entrepreneur Investment Summit, is a crucial platform for addressing the challenges and opportunities that exist in the Arab world. However, before we delve into these issues, let me shed light on some of the Givens or facts that characterize the Arab world.

    To begin with, the 22 Arab countries are not homogeneous. Each country has its unique mix of factors of production, including labor force, which makes it challenging to generalize about the region. Secondly, around 88% of the Arab world’s population has access to the Internet, and 94% own mobile devices. Thirdly, poverty is a prevalent issue in the region, with around 40% of the population living below the poverty line. Of this percentage, 50% are youth aged between 18 and 30. When it comes to entrepreneurship, while there is a significant number of small and medium enterprises (SMEs) in the Arab world, only 1.3% of them are startups, which is a considerably low rate. Given these Givens, it is imperative that we consider how to address these challenges.

    As the Union of Arab Chambers, we are organizing this summit to represent the private sector in the Arab countries. The private sector accounts for almost 70-75% of the GDP and employment in the region and is a leader in growth and development. Thus, we aim to emphasize that the private sector cares deeply about entrepreneurship and investment in SMEs. We understand that there are bugs and problems in some Arab economies, but we also believe that there is potential in every Arab country.”

    H.E. Dr Ali Saeed Bin Harmal Al Dhaheri – First Vice Chairman- Abu Dhabi Chamber of Commerce & Industry said, “As part of the annual investment meeting 2023, we are excited to welcome you to the Arab African Entrepreneurs Summit. Over two days, this summit will showcase bankable investment opportunities led by intrapreneurs, SMEs, and micro-investments from African and Arab regions. It will provide a platform for sharing best practices to stimulate joint investment opportunities between Africa and the region, contributing to African economic integration.

    “The Abu Dhabi Chamber’s new strategy spanning 2023-2025 aims to drive economic cooperation and create business opportunities for the private sector, locally, regionally, and internationally. Our participation in this event aligns with our commitment to support policies, adaptive innovation, and digital transformation to build a knowledge-based economy”

    Continental African trade is estimated to be $80 billion US dollars in 2041, according to the African African bank. Plans are underway to strengthen trade exchange between Africa and the Arab region, with initiatives such as the Arab Africa guarantee fund and Cairo’s plan to increase exports to Africa to $10 billion US dollars by 2025. The UAE has emerged as one of the largest investors in Africa among the GCC states, with the Abu Dhabi Fund for Development financing more than 66 projects and 28 African countries valued at $16.6 billion US dollars between January 2016 and July 2021. The African entrepreneurs summit will build on these initiatives by creating solid partnerships between SMEs and entrepreneurs in Africa and our region.”

    Following the opening remarks, ‘The Entrepreneurs Investment Summit’ commenced. This was marked by the presence of several distinguished guests, including HE Dr. Ahmed Abu El Gheit, Secretary General of the League of Arab States, HE Dr. Haidara Fatou, Deputy Director General and Managing Director of the Directorate of Global Partnerships and External Relations, and Director General’s Special Representative for Africa, H.E. Sameer Abdulla Nass, President of the Union of Arab Chambers.

    H.E. Dr. Ahmed Abu El Gheit – Secretary General League of Arab States said, “We are working collaboratively towards a historic milestone for entrepreneurs, with a strong focus on community development and creating opportunities to support SMEs that can drive economic growth and increase investment opportunities. The introduction of digital techniques has made it easier for investors to take an interest in these opportunities. The Arab world recognizes the importance of transitioning towards shared opportunities between the private and public sectors, and empowering local industries to prepare for economic growth, employment, and the best interests of the region.”

    H.E. Dr. Haidara Fatou – Deputy General and Managing Director, Directorate of Global Partnerships and external relations, and Director General’s Special Representative for Africa, said “The need to achieve Sustainable Development Goals (SDGs) has become more urgent, and investment opportunities have arisen at a critical time for the community.

    “It is essential to address global challenges, create jobs, and drive economic growth. Several nations are experiencing a decline in the number of start-up businesses, and many young people are unable to find employment after leaving school. This makes it crucial to invest in youth to ensure future generations can thrive.”

    H.E. Sameer Abdulla Nass – President at – Union of Arab Chambers said, “I would like to highlight the Arab Chamber’s efforts to increase trade and investment among Arab countries. Unfortunately, the current level of trade, which is only 50% among 22 countries, falls short of our expectations. Therefore, we need to focus on creating recommendations and bylaws to enhance trade relations among union countries. Entrepreneurship has always been a crucial concept in our region, and we need to emphasize its importance.

    “We must support the digital economy and entrepreneurship to secure a better future for upcoming generations and build a strong trading network between Africa and the Arab region. It is imperative to establish better links between SMEs in Africa and Arab regions to overcome any challenges and create new opportunities. Through this summit, we hope to provide a platform that facilitates trade and generates recommendations to strengthen these links.”

    The summit also hosted several panels, with experts sharing their insights on topics such as ‘Supporting Green Entrepreneurship: Greening SMEs for more Competitiveness and Sustainability – Opportunities for SMEs in a greener value chain’. Speakers for this panel included Rasmus Wiinstedt Tscherning, Managing director, Creative Business Network, Denmark:, Douja Ben Mahmoud Gharbi, CEO RedStart Tunisia Accelerator and President DAMYA Angels, Dr. Ahmed Nasser, Green Hub, Osama Rais, Head of the Entrepreneurship Unit and Digital Transformation Expert, Arab Organization for Agricultural Development and Hatem Mohammad AbouOllo, Founder of Saber Incubators & Accelerators.

    Rasmus Wiinstedt Tscherning – welcomed the participants and the panellists for this session. The pane started with key remarks by Douja Ben Mahmoud Gharbi who said, “It is important to provide support to women entrepreneurs because they have a significant role to play in identifying successful business opportunities. Climate change, pollution, and waste management are real-world problems that require innovative solutions. As we face these challenges, we need entrepreneurs who can introduce new business models, technology, and innovations that can be connected with large corporations that are responsible for impacting our environment and social well-being. Therefore, it is crucial to work on promoting the green economy as it will have a transversal impact on all the other sectors of the business ecosystem.”

    Dr. Ahmed Nasser said, “Our expertise lies in digital and western transformation, which emphasizes scalability and autonomy. To achieve digital transformation, it’s crucial to understand that it can apply to communities, villages, and different business sectors. The key is to use suitable technologies to transform businesses, and proper training and education are essential for a successful transformation. We have developed solutions such as virtual reality and augmented reality for training and self-learning.

    Digital transformation can have a significant impact on businesses, including cost savings and more efficient supply chains. Our company is also working on a new platform to support startups with an easy-to-use and cost-effective solution. We believe that digital transformation will play a crucial role in promoting a green economy, but we also need professional criteria for growth and secure platforms to manage businesses. We aim to support more startups in the future.”

     Osama Rais said, “Our focus is on bringing innovative solutions to drive the shift towards agricultural waste reduction and clean energy in greenhouses. We aim to do this while maintaining our commitment to the planet’s decarbonization and overall health. To achieve this goal, we believe in the importance of changing the mindset of the youth to direct their organizational efforts towards personal development and purposeful work.

    Digital transformation is key to all our efforts, from planning and analyzing data to achieving a global picture of food security and developing effective logistics policies. We believe that by bringing together innovative solutions and cutting-edge technology, we can drive progress towards a greener, more sustainable future.”

    Hatem Mohammad AbouOllo said, “We specialize in city branding and revitalization and have a website, but there are also startups that invest in businesses oriented towards quality of life. Our focus is on high-tech, fast-growing businesses, and we’ve studied the 15 best practices worldwide to create our framework for city branding and revitalization. As part of this framework, we emphasize smart city solutions, not just in terms of infrastructure and facilities, but also in terms of activation and programming.

    To encourage visitors, residents, and local economy players to contribute to the environment, we launched a crowdsourcing platform where people can plant trees. Companies that we work with also use this platform to offset their carbon footprint. When it comes to consumers, our objective is different.

    Instead of traditional gifts like flowers or chocolates, we promote the idea of sharing gifts that are healthy and sustainable, like a tree planted on a special occasion or milestone in someone’s life. For example, a new parent might receive a tree to plant when they have a baby, or a company might give a biogas plant to an employee as a gift. We aim to align consumer psychology with smart technology through our crowdsourcing platform.”

    In addition, a special session on ‘Fostering International Partnerships Energy and Environment – Call for High Impact Cleantech’, by UNIDO ITPO Italy was conducted. Key panellists as Phillip Sellwe, Managing Director Bayon Holdings, Botswana, Samuel Okioro, Co-founder Drop Access, Kenya and Roger Mori Pizzino, CEO Ciclo, Peru discussed their expert insights. The session aimed to promote international collaboration and partnerships for the development and implementation of clean and smart energy technologies.

    Phillip Sellwe, pointed out that international partnerships face common obstacles such as cultural differences, intellectual property protection issues, time zones, legal and regulatory framework. He emphasized the need for clear and mutual goals transparency as well as respect for cultural differences to overcome or manage these obstacles. He cited successful collaborations in clean tech products between Tesla and Panasonic, and General Electric and Perceiver as examples, and encourages working together to achieve clean tech goals.

    Samuel Okioro – said that his company aimed to provide real-time access to cell-based and other grains, reduce post-harvest loss of fresh food both on the farm and the household by manufacturing coal preaches that utilize solar energy solar power. Roger Mori Pizzino highlighted the importance of the structure of buildings as they are responsible for 39% of the planet’s greenhouse gases.

    He explained that his startup aims to increase the sustainability indicators for construction companies by making eco-materials from recycling construction and demolition waste. Their solution is based on two value propositions: construction companies pay them for their waste, and they turn it into equal materials that they finally sell back to the same construction market.

    Next in line wsa a Special Initiative by UNIDO Global on ‘Clean and Smart Energy for Inclusive and Sustainable Industrial Development, spearheaded by Mr. Wu Yabin, Head UNIDO ITPO Beijing was conducted. He said, “Global Call Containment, is an event that identifies and promotes innovative energy solutions for sustainable development. This year’s theme is clean, smart energy, with three main tracks: green hydrogen, energy efficiency, and clean energy innovation. The event is open to all, including multinationals, SMEs, and startups, and participants receive benefits like matchmaking with financial institutions, coaching, and technical support. The Global Call is a successful institutional partnership among ITPO offices and external partners, and follow-up actions will help award winners penetrate industry sectors.”

    Another highlight was a panel discussion on ‘Improving SMEs Access to Finance: Finding Innovative Solutions to Unlock Sources of Capital in MENA Region and the African Continent’. This panel discussed the barriers to finance in 2022/2023, and the tools for improving access to finance and unlocking sources of capital for SMEs.

    It featured speakers as Reem Badran, Founder MENA Business Women Network Panelists, Dr. Wissam Fattouh, Secretary General Union of Arab Banks (TBC), Pauline Koelbl, Founder/Managing Partner – ShEquity’s, Baybars Altuntas, Chairman, World Business Angels Investment Forum, Michel Fossaert, Board Member – World Union of SMEs, Mohamed Hreimou, Executive Manager – Emirati Entrepreneurs Association, and Ali Muqaibal, Chief Executive Officer, Sharakah – Oman.

    Reem Badran said, “SMEs in our region represent a significant potential for economic growth and job creation, but two major obstacles are preventing them from reaching their potential: operating in the informal sector and lack of access to finance. The finance gap for MSMEs in our region is significant, with many SMEs not obtaining sufficient bank lending.

    The traditional lending method is proving insufficient, so FinTech platforms can be leveraged to reduce barriers to SMEs’ access to finance. Banks must change their way of thinking regarding SMEs, or FinTech start-ups will take a significant share of the market. In the West, big banks are already acquiring and absorbing FinTech start-ups to facilitate lending for segments that cannot be served using traditional lending mechanisms.”

    Pauline Koelbl said, “Investing in African women is not just charity, but a proven way to achieve sustainable development goals. McKinsey reports show it can add to African GDP by 2025. Rather than just microfinance, an ecosystem approach combining cash investment and VC investment can stimulate growth and impact sectors. Women’s innovative solutions can address challenges faced by people on the continent. To build a sustainable world, we must invest in women and put money on the table.

    Baybars Altunas explained that access to finance is a common concern for capital and equity markets, but it’s important to differentiate between startups and SMEs. SME owners typically focus on growing their business with no exit strategy, while startups have an exit strategy in mind and aim to turn their business into a success story within five to seven years. Access to finance sources for entrepreneurs today include ICO, IPO, crowdfunding, angel investors, and more.

    However, small businesses need more than finance to compete globally, and angel investors can offer mentorship and networking opportunities. The COVID pandemic accelerated the growth of the startup economy, with traditional business owners now investing in startups to stay competitive in the digital age.

    On the other hand, Michel Fossaert highlighted that 50% of SMEs lack access to finance, and with economic challenges in some countries, it will become more difficult for them to obtain loans from banks. He suggests innovation is needed in cooperation with banks, and proposes a mix of donor guarantees and private investment as a solution for SMEs to access loans and equity. He focuses on the agricultural sector in Africa as an opportunity for growth and job creation.

    Mohamed Hreimou leads the Emirati Emerging Entrepreneurs Association, which connects MSMEs with government bodies to improve local content and increase in-country value. They focus on building capabilities through training and expanding opportunities for entrepreneurs to access finance. One issue they’ve identified is the lack of a unified database for categorizing companies, which they are working on to help financing institutions better understand which companies are eligible for funding.

    Ali Muqaibal explained that their organization supports various pillars of the ecosystem, with access to finance being a key focus for entrepreneurs and SMEs due to collateral requirements and poor credit reporting. They offer different types of financing, including venture capital, and work with regulators to increase additionality in the ecosystem.

    One initiative they have undertaken is creating credit goals with a central bank to provide ratings for SMEs and establish a credit guarantee agency to incentivize more companies to access funds. They are also investing in crowdfunding and advising local platforms on the business model and regulatory procedures. Overall, their goal is to help more companies gain access to finance and elevate the ecosystem.

    Reem concluded the session by asking the panel’s thoughts on how to bridge the gap and who would be best for funding i.e Government, donors, NGO, etc. Dr. Wissam shared his thoughts initially by stating that the government should present and finance SMEs to bridge the gap at least partially.

    According to experts, SMEs represent 90% of the businesses and more than 50% of employment worldwide and contribute to up to 40% of national income GDP in emerging economies, making it very important to think about new sources of capital for SMEs. However, many SMEs in the MENA region and African continent face significant barriers in accessing formal credit and financing. This panel explored innovative solutions and tools that can be used to improve SMEs’ access to finance and unlocked sources of capital, enabling them to grow, create jobs, and drive economic development.

     

     

     

  • Annual Investment Meeting brings to focus the opportunities and challenges of investing in distressed assets and non-performing loans (NPLs)

    Annual Investment Meeting brings to focus the opportunities and challenges of investing in distressed assets and non-performing loans (NPLs)

     The session highlighted how real estate, like any other sector carries risks and uncertainties, which can lead to distressed assets

     Abu Dhabi, UAE, May 2023:  Investment experts from around the world discussed the opportunities and challenges of investing in distressed assets and non-performing loans (NPLs) at the 12th edition of the The Annual Investment Meeting (AIM), which took place at the Future Room located at the Abu Dhabi National Exhibition Centre.

    The conference was held in two panels. The first panel ‘The Role of Distressed Real Estate in a Diversified Portfolio’ examined the current economic environment and how rising interest rates are creating opportunities for distressed debt investors. The speakers discussed the challenges that could limit the growth of this market, including the absence of covenants in credit documents, the amount of dry powder in the market, and the maturity wall not ramping up until 2025.

    This session was led by Viktoria Soltesz, CEO, PSP Angels. Featuring experts as Mihai Pop, Investment Director APS Investments, Hans-Jörg Baumann, Chairman of StepStone Private Debt, CH, Federico Gaito, Managing Director, Taurus Asset Management, ES, Christophe Beauvilain, Managing Partner, Pygmalion Capital Advisers, UK, the session highlighted how real estate investments can be an attractive option for investors seeking diversification and long-term returns. They also highlighted how, like any investment, real estate carries risks and uncertainties, which can lead to distressed assets. A distressed asset is a property that is under financial or operational distress, often due to foreclosure or bankruptcy.

    Christophe Beauvilain said, “The majority of the reason in financial difficulty is because it’s easy to fall in love with the project. It’s a warning, don’t do that. In hotel assets, the bank will seize your assets if things get bad, but even then, that’s not very likely to happen. When things get bad, we sell. Our role is to go and negotiate with sellers and help the buyers buy assets. Before Covid, we were at peak, and then we saw a sudden crash. The loan and salary inflation are bad, so there aren’t many investors. The next massive issue is the financing rate. We are focusing on Italian hotels and are looking forward to it as they provide quality. The Italian market is keener with their buyers.”

    Mihai Pop said, “No simple way of escaping inflation because it has caused harm to high earners as well as low earners in the market. In Europe, there is no rounding price market. There is a difference when it comes to foreign businesses, it’s better if you are local and invest locally. We will see better fair in the local market. Keep in mind the location and regional funds.”

    Federico Gaito said, “”Working with local experts from a data and theoretical point of view can avoid and price it very differently. Lack of transparency brings an opportunity to people with a lack of experience in data. In hotel with distress angels, we can get 18-20%. Distressed is never advertised. In Europe, bankruptcy is very efficient and gets dragged to 5-8 years. The value is high. We always focus on consensual deals. With a discount of 50% on average, it gives us confidence to achieve three-quarters of our goals. We very often negotiate with existing loans or lenders. We don’t buy your loan and become a creditor, it’s risky.”

    Hans-Jörg Baumann said, “Performance is the sum out of potential. When it comes to assets, we need to deny the disturbances that are many. It’s tangible. If financing doesn’t work, then it’s a tremendous problem for real estate. Do you need to generate income? How much flow is real estate going to generate? It could be refinancing costs, there is market stress. Do you have the legislative power to stay in this business? Acquiring a legal system is a must when it comes to endorsing your rights. The Anglo-Saxon world has an advantage over the foreign market. The only choice is obtaining luxury information about the legal system and assets. Entering a transaction is easy, exiting is hard. If low on income, offense with capital. Don’t go for bulk risk.

    The second panel, ‘Global NPL Investing: Strategies & Opportunities’ explored the world of global distressed and NPL investing, with insights into the strategies and opportunities available in this space. The speakers discussed the different asset classes in this sector of the market, including real estate, corporate, and consumer debt, the secondary market, and the directions the market is heading in due to macroeconomic forces.

    The session was led by Edwin Harrap, Director, Alantra, UK, and included panellists as José Nestola, Founder & CEO, Copernicus Group, ES, Konstantin Kraiss, Managing Director, LynxCap Investments, CH, Martin Machon, CEO, APS Group, CZ and Inam ur Rahman CEO & Co-Founder, Oasis Global Consulting, USA.

    According to experts in this session, non-performing loan (NPL) investing has become an increasingly popular strategy for investors seeking high returns. Panellists shared their experiences and analysis of investing in distressed and NPL assets across different geographies, including emerging markets and developed economies. They also discussed the challenges and opportunities of investing in these markets, taking into account macroeconomic conditions, industry-specific trends and the unique regulatory and legal frameworks that govern these transactions.

    José Nestola said, “We are spread over six countries, and the real challenge is the quality of data. Not everything is clear when it is given to us by people. In two to three years, we shall be talking about millions moving into the bank. But how? Such information is difficult to get your hands into. Especially in the corporate world. We focus on second opportunities. Lack of information will stop you from pricing better. Real estate, legal, and financial knowledge is a must. When done right, equity returns (13-15%). Here your return will be achieved. When we price everything at the end of the day, we try to see what the potential buyers want and who they are. The banks are for selling to the right investors and managing the reputation of themselves. Who is going to check the services in the market, and what treatment will they have? It’s a tough scheme. Buying a portfolio of loans is difficult for banks and debtors.”

    Konstantin Kraiss said, “Entering new markets is all about learning and gaining experience. It took us 6 years before making the first investment because it’s not easy. Financial distress is the most occurred. If there is opportunity, then there is a debt sitting around, but there are legal services to get ourselves out of it. Having partners is a must because if someone goes on strike in the middle of your forecast, then it’s troublesome. Key role is to follow the market and the supply and stay open to find the best opportunity. There are plenty of opportunities out there and we must be wise to choose, and it’s a bit exciting.”

    Martin Machon said, “Entering the industry is not easy, it takes time and effort, especially in new markets and first transactions. With the current inflation and work crisis, the risks are higher. We must be careful and aware of the legal framework and have a good partner. When starting out, it’s better to go for smaller assets. The banking system has evolved, but we still face challenges in dealing with limited tools from them. We need to investigate the services beforehand and strengthen them through knowledge sharing.”

    Inam ur Rahman said “I believe that NPL markets were thriving before Covid, but it is difficult to predict how it will be impacted in the future. The legal framework for NPL varies across countries, and some countries have developed strict NPL laws, which could be beneficial for investors. Technology has also had a positive impact on the industry, and I am optimistic about the future.

    However, investing in NPL is challenging, and it requires a proper team to navigate the legal landscape. Lack of clarity and understanding could lead to losses. Technology, such as blockchain, can help minimize the risk of fraud. To succeed in this industry, it is crucial to have a team of experts who can evaluate and assess the situation.”

    Experts emphasised that investors need to have a solid understanding of the different NPL investment strategies available in order to make informed investment decisions. For example, some investors may prefer to focus on purchasing individual NPLs, while others may prefer to invest in portfolios of NPLs. Additionally, investors need to be aware of the unique risks associated with investing in distressed assets, such as potential legal and regulatory hurdles, liquidity risks, and market volatility.

    Overall, global NPL investing presents a promising opportunity for investors looking to diversify their portfolios and capitalize on distressed assets in the market.