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ISSUE SEVENTEEN - AUGUST/SEPTEMBER 2012

Are we past the worst?

Is the worst of the financial crisis over… or is unprecedented doom impending?

THE BOLD AND THE GOLD

Can the gold price really keep rising?

LONDON’S CALLING

Prime Central London property prices are bucking all the trends

CARS WITH CLASS

New Aston Martin and Bentley

HIGH FLYERS

How to buy your own airplane

WORLD FAMOUS DIAMONDS

Diamond Investments Why more people are investing in diamonds

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Chartis Insurance is a proud sponsor of WEALTH

Dubai Technology and Media Free Zone Authority

Breath-taking, legendary, and pricey


ISSUE SEVENTEEN - AUGUST/SEPTEMBER 2012

EDITOR’S LETTER

S

ales of adult diapers in Japan exceeded those for babies for the first time last year. That’s right, Japan’s elderly are now using more nappies than its babies. It is a reminder of the world’s aging societies. Japan has 29.8 million people over 65 who account for a record 22 per cent of the population. China is on the same track (hello ‘one child policy’) and a similar trend is seen in many western countries. ‘Quelle horreur!’ is generally the reaction of financey experty types I hear. ‘Oh no! Societies are aging, it’s terrible…’ But is it really so terrible? Or will Japan lead the way in showing how an economy can switch from focusing on younger customers to the elderly being the engine of consumption? I personally would love to see less obsession with youth culture and more emphasis on ‘Grey Power’, as this sector is known in my home country. In Japan, some companies see a golden opportunity and are rushing to snatch a bigger bite of the 109 trillion yen ($1.4 trillion) that consumers over 60 spent last year - diaper manufacturers for a start. Of course, the one region where an aging society is not the case is the GCC where about 50 per cent of the population is under age 25. This is seen as a good thing for the region. Is it really? Millions of teenagers ruled by their voracious hormones and seemingly unable to get off the couch while a reality TV show is on? Global demographic trends like these are threads in the rich tapestry of the world’s economic state. But are we through the worst of the financial crisis or is a monster so unimaginably terrible looming around the corner that we won’t know what bit us? See our story ‘Are we past the worst?’ on page 8 and don’t say we didn’t warn you. Follow CPI Financial on Twitter at @cpifinancial

Editor, Tamara Pitelen

06 08 14

Opinion Are bankers to be trusted? (This is not a trick question.)

ABSOLUTE BEGINNERS

20

Are we past the worst? Have we survived the worst of the global financial crisis? Or is unprecedented doom impending? The experts weigh in… Changing tides

of global wealth

The huge, ever-shifting cloud of wealth is no longer mired in the creaky vaults of Europe… where’s it going next?

22

Trading summary What passes for ‘normal’ in the gold, oil and currency markets these days.

INVESTMENT OPPORTUNITY

08

24

Diamond investments Fast-rising prices, rarity, liquidity and portability are just some of the reasons why diamonds are looking ever more alluring as an investment.

CONSUMING PASSIONS

28

Feast your eyes on the most breath-taking, legendary, celebrated and pricey diamonds in the world.

PORTFOLIO

18 20

The bold and the gold Can it really keep rising? Why we just can’t get enough of gold.

PROPERTY

World’s most famous diamonds

28

Prime Central London

- in a class of its own

As the world teeters on the brink of economic apocalypse, Prime Central London property continues to soar. Can it last?

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ISSUE SEVENTEEN-AUGUST/SEPTEMBER 2012


ISSUE SEVENTEEN - AUGUST/SEPTEMBER 2012 Published by

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Out and about with Tim WEALTH columnist, Tim Elliott ponders why we admire sportspeople. Reading matter The newest business and finance titles to hit a bookshop near you. This month, Buy-In: Saving Your Good Idea from Getting Shot Down; Being The Boss, and Discover the Gift.

MOTORING

32 34 36

New kid: Aston Martin Tried and tested: The new V8 Vantage S Coupe. The new Bentley A newcomer to the Bentley stable, the Mulsanne is fitting in very nicely. How to buy a plane Would having a plane enhance your business or pleasure? A starting point to buying an airplane for yourself or your company.

48 50

Events calendar The ‘you need to know’ of what’s on in August and September. That’s a wrap Recent news from the weird and wonderful world of money. This issue, the world’s most expensive cupcake and burger plus who’s paying the most in the war game?

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Chief Operating Officer ADAM BROOM adam@cpifinancial.net Tel: +971 4 391 4681 Managing Editor ROBIN AMLÔT robin@cpifinancial.net Tel: +971 4 391 3723 Editor TAMARA PITELEN tamara@cpifinancial.net Tel: +971 4 391 3728 Contributors ISLA MACFARLANE ANDY SCOTT JAMES THOMAS RUPERT CONNOR ADAM BROOM European Consultant JEAN-PHILIPPE MOULIN jpm@cpifinancial.net Tel: +44 19633 4445 Chief Designer BUENAVENTURA R. JALUAG JR. jun@cpifinancial.net Tel: +971 4 391 3719 Senior Designer NEIL VICENTE C. CASTILLO neil@cpifinancial.net +971 4 391 3724 Subscriptions DEBORAH BELTRAN debbie@cpifinancial.net Tel: +971 4 391 4682

TRAVEL & LEISURE

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Eco-glam holidays High-end, luxury holidays without harming the planet.

Registered at the Dubai Media City Head Office P.O. Box 502491, Dubai Media City, U.A.E. Tel: +971 4 391 4681 Fax: +971 4 390 9576

WEALTH Warning! Remember, if you wish to act on any of the information you read in WEALTH, consider taking independent advice first. WEALTH is written for a general audience and the information contained herein may not be appropriate for your personal circumstances.

Printed by United Printing & Publishing Abu Dhabi, U.A.E. © 2012 CPI Financial. All rights reserved. No part of this publication may be reproduced or used in any form of advertising without the prior permission in writing from the Editor.

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4 ISSUE SEVENTEEN-AUGUST/SEPTEMBER 2012

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OPINION

Put not your trust in... Are bankers good people? Robin Amlôt ponders.

Robin Amlôt

Managing Editor

I

nternational bankers? Hmm... bit of a tricky one that after the past few months isn’t it? Of course, some would have us believe, as Voltaire’s Candide does that ‘all is for the best in this best of all possible worlds’. I’m thinking in particular of the rather wonderfully named Richard Sermon who is Chairman of the Steering Committee of the Lord Mayor of London’s Initiative ‘Restoring Trust in the City’. You would think, would you not, that he has a job and a half on his hands what with HSBC facing allegations of having been a front for Mexican drug lords and Barclays, well what would you call it? Do I exaggerate? It rather depends on how you interpret the evidence that has come to light. The substantial US Senate report U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History outlines the facts about Mexican money laundering and Barclays is now shopping not just for a new Chairman but also a new Chief Executive and a new Chief Operating Officer – almost making one wonder who is steering the boat? And I don’t imagine the ructions will stop there – certainly more names are in the frame over the interest rate ‘fixing’ scandal surrounding LIBOR, the London Interbank Offered Rate. A brief note about Barclays’ now ex-CEO Bob Diamond. It would appear that, to cut a long story short, the bank faced something of a debacle over Russian bonds in 1998, a matter over which Diamond should perhaps then have lost his job. How different would Barclays look I wonder? But to return to Mr. Sermon, who is convinced – and wants to convince us – that the City of London’s bankers are good people. This conclusion he arrives at as a result of survey carried out among, well, said bankers. It seems there is no need to regulate them

further; these bankers (those who could be bothered to respond) ‘are confident of ethics in their workplace’. I don’t want to be harsh but most City bankers I know are firmly of the opinion that ethics is a county to the north and east of London (OK, it’s an old joke and for those who don’t know British geography the county in question is actually called Essex). I think I should also point out that perhaps Mr. Sermon is suffering from premature extrapolation. The survey he quoted on 19 July while addressing the ‘Trust and Integrity in the Global Economy’ conference at Caux, Switzerland, consisted of barely a 10 per cent response to 2,500 questionnaires. That’s not good enough after all that has gone on. Let’s be honest, it was almost certainly asking the wrong people the wrong questions. Among the world’s major financial centres, mainly London and New York, there has been a cultural disconnect between those of us who save and invest and a relatively small, ridiculously over-rewarded coterie of those in whom we had put our trust and to whom we entrusted our money. The time has come to correct this situation. As a journalist I suppose I should take a certain amount of personal pleasure in the fact that bankers in the West are now even lower down the scale of trustworthiness than scribblers like me and even politicians. But I can’t. After all, I, like you, still need to somewhere to put my savings and someone to manage my investments. Perhaps not regionally but certainly in a global context conventional financiers need to engage properly with their clientele and their regulators to rebuild trust and confidence. I am not a Muslim but I find myself increasingly attracted to Shari’ah-compliant finance as a possible way forward.

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ABSOLUTE BEGINNERS

Global crisis: Are we past the worst? Have we survived the worst of the financial crisis or does fiscal pain too horrible to imagine lie ahead? The experts have varied views; here they make their arguments, decide who you believe‌

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ABSOLUTE BEGINNERS

DRACHMA SPARKS GLOBAL DEPRESSION

If Greece goes, it could pull the world with it, says Sarah Hewin, Regional Head of Research for UK and Europe at Standard Chartered. “It is not inevitable that Greece ends up leaving the Euro zone but the risks are great, if we look at the sequence of events that might evolve. If the EU and IMF are unwilling to come up with new money for Greece, then new money has to be found or there’s a chance that Greece will stop servicing its debt and at that point we would be looking at a breakdown in relations between the EU and Greece. “Now, if Greece no longer has financial support, not just for its government but potentially also for it banking sector

then the reintroduction of the drachma might be the only option that is left. “If we get to the stage where Greece does leave, it would mean the need for more bail-out support for countries like Italy and Spain to meet their financial requirements so we are looking at a very risky situation, potentially one that could bring upheaval across the region. “It’s a somewhat anxious period for everyone in Europe and the real concern is that if we do see a Greek exit, the question will be, who’s next? And potentially the survival of the euro as a single currency could come into question. At that point it could go from being a Greece and European issue to a global issue.” Hewin spoke in May at a press conference called The New Normal: Markets Emerging in the Super-Cycle.

We are looking at a very risky situation, potentially one that “ on could bring upheaval across the region ” GOODBYE GREECE, THANKS FOR THE MEMORIES

Greece IS going, it’s just a matter of time, says Arnaud Leclercq, Partner at Lombard Odier Capital Partners and Head of the New Markets.

“A Greek exit from the Euro zone? It is not a matter of if, but rather when and how. The endgame to the debt crisis has not changed; only massive debt restructuring can put a term to the vicious spiral. Policymakers have unfortunately not yet embraced that conclusion and are continuing to buy time. “In this context, the recent European Union summit delivered a number of welcome measures, addressing the main pressures points in the Euro zone periphery: negative spiral between overleveraged public and banking sectors; fiscal instability and ongoing deposit leakage and bank balance sheet deterioration. “While necessary, these measures are not sufficient in our view. Their shortcomings are lack of both detail and firepower. In particular, no details were provided on the future banking supervision system. On the fiscal issue, no additional firepower was provided. While welcome, the

“growth pact” only represents 1.2 per cent of Euro zone GDP. Given the low local fiscal multiplier, it is unlikely to provide more than a one-time 0.8-1 per cent boost to economic growth in the periphery. Finally, no mention was made of a European Union-wide deposit guarantee scheme, which would be the most effective measure to counter deposit leakage. “While positive, the decisions taken during the last European Union summit are not a bazooka. And for Greece, there is really no option left but to default totally on its debt and exit the Euro zone. It is currently having to spend one fifth of its government cash receipts to service debt at rates that are subsidised. A massive currency devaluation would also help restore some competitiveness, without overly damaging inflationary consequences short-term.” Cont. overleaf...

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ABSOLUTE BEGINNERS

...cont. from page 9

GETTING OLD WHEN YIELDS ARE ZERO

Diversify in Emerging Markets says Mark McFarland, Chief Investment Strategist, Private Banking, Emirates NBD. Perhaps the most important development recently wasn’t the failure of markets to move higher or the revelation that up to seven regional governments in Spain are now in need of funding but in fact it was the announcement by the California publicsector pension fund CalPERS that its annual investment returns to 30 June 2012 were far below expectations. Over the next 10 years it’s going to be a challenge for traditional investment plans to earn the returns their sponsors were projecting. From an investment perspective, the results from CalPERs are a wake-up call for all since they are symptomatic of the ill effects of quantitative easing – the depression of inflation-

adjusted long-term yields to (somehow) stimulate long-term growth and keep zombie borrowers in the game. A G7 world with low yields and ageing populations is looking at a prolonged period of financial and social adjustment unless there is clarity on how to escape without a massive burst of inflation. Aside from the usual demographic arguments, it is for this reason that our long-term view is heavily skewed towards Emerging Markets, where debt levels are low, markets are being freed from government intervention and where investment flows can find yields much higher than in developed nations. Simply because potential growth rates are higher. So from a tactical perspective, we continue to see a need for diversification and the avoidance of market-sensitive risk through either low beta equity exposure or short-duration bets in fixed income. We prefer that exposure to Emerging Markets continue to be expressed through USD or low-beta means.

In theory, there are four ways to reduce debt load: grow “ out of debt, save and pay back (“deleveraging”), write off and restructure the debt, or inflate it away ” GLOBAL AUSTERITY MEASURES TAKING A TOLL

Belt-tightening is impeding growth – a bad sign says FOREX. com Research Director Kathleen Brooks. Whichever way you look at it the world is still full of debt. Households, banks and governments are all going through a process of deleveraging at the same time. This is likely to keep demand low and when you get deleveraging of this scale it typically means lower asset prices. The second half of the year is full of unanswered questions. Will European politicians work towards a banking union? Will elections in the Netherlands hurt market sentiment? The US fiscal cliff could potentially shift the focus from the Euro zone across the Atlantic with consequences for global financial markets. Not too long ago, it seemed as though the economic recovery was picking up steam. However progress was halted by a resurgence of tensions in Europe and government-driven austerity programmes impacting growth. With many countries attempting to reduce high

debt ratios, the process of deleveraging has led to reductions in government spending which is also a key component of GDP growth. Rather than seeing money put to work in the economy, the increased uncertainty is prompting a flight to safety as investors flock into havens. We expect uncertainty to remain high and growth to remain subdued as the EU continues to deal with the ongoing debt crisis and as political uncertainty persists. Economic activity is likely to slow further in China and the Euro zone may dip into recessizon as restrictive fiscal policies continue to impede growth. The risk is to the upside if central banks fire up their printing presses and provide more stimulus to support growth.

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ABSOLUTE BEGINNERS

T THE BRIGHT SPO

OIL: THE GCC’S GOLDEN GOOSE

While the rest of the world shivers, the GCC should stay warm and cosy in its comfort blanket of oil, says Philippe Pantanacce, a Senior Economist for MENA at Standard Chartered. “We’re going to see growth in the GCC this year but not as strong as last year; growth will be capped because oil production was already running close to full capacity last year, especially for the UAE. “We have seen oil prices soften recently because Asian nations, in particular China, have seen their GDP softening and the GCC is more and more dependent on Asian growth. Since 2008, the GCC has delivered more oil to Asia than to the West. We’re still think that growth will pick up in the second half of 2012 so there’s nothing to be alarmed about but we are also saying the growth potential

of the GCC countries will be capped or will be slightly lower than last year. “In the UAE, Dubai is playing a huge role in terms of diversifying the economy away from oil. The strength of Dubai is one of the greatest assets for the country; it is the biggest non-oil economy in the region. Hotel occupancy is the highest in the world; the number of trade licenses in the first quarter of 2012 increased 27 per cent in Dubai only, and Jebel Ali the airport figures keep going strong. All indicators show Dubai is doing very well, if you couple that with the wealth of the hydrocarbon sector and the non-oil economy in Abu Dhabi, the country will go through very healthy growth.” Pantanacce spoke at a press conference called "The New Normal: Markets Emerging in the Super-Cycle" in May.

We see a significant risk that lying ahead of us is a new recession “ with deeper implications than the one we just left behind ” GET READY FOR FINANCIAL ARMAGEDDON!

The greatest depression the world has ever seen is imminent, says Gerald Celente, Publisher of Trends Journal. “The economic turmoil is not over. This isn’t just a ‘market correction’. There’s much more to come, and the fallout will affect much more than the economic sphere. There will be far-reaching social and geopolitical repercussions. “Yes, there will likely be an array of economic sleightof-hand tricks and quick monetary fixes from central banks and governments intended to forestall a crash. And yes, Germany may well lift its objections to a common Euro zone bond or other massive bank bail-out plan. But whatever measures are applied, they will do no more than provide temporary symptom relief; they will not cure the deeper economic problems.” “This will be much worse than the Great Depression of the 1930s, much more violent. Street crime and civil unrest. Like nothing we’ve ever seen in our lifetime or anyone’s lifetime. “You can’t spend your way out of problems; you have to

produce your way out of problems. You can’t print money based on nothing and expect it to fix the problem. “What to do? Personally, I buy gold. Secondly, don’t spend a dime you don’t have to. Take proactive measures, understand what the future looks like so you can re-design and re-programme where you need to go. “Back in the 1990s when we had unemployment at 7.2 per cent in 1993, what got us out of the 90’s recession was the internet revolution, it was a productive capacity, products were invented, designed, manufactured, marketed and serviced. So you’re asking about new jobs, anything in alternative energies, anything that’s going to advance us into the 21st Century in an intelligent way, that’s where the job opportunities are going to be.” Cont. overleaf...

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...cont. from page 11

ACT NOW OR THERE WILL BE NO PLACE TO HIDE

In a report called ‘Stop Kicking the Can Down the Road – the price of not addressing the root causes of the crisis’, David Rhodes and Daniel Stelter, Managing Directors at the Boston Consulting Group, warn of dire consequences if governments and central banks don’t pursue debt write-offs and financial regression immediately. “We see a significant risk that lying ahead of us is a new recession with deeper implications than the one we just left behind. Throughout 2008 and 2009, we argued that the recession would be long and deep – and that subsequent economic growth in most developed economies would be ana emic (at best). We did see better growth in the less-leveraged Asian economies – and thus the emergence of a two speed world. We see little reason to change this lukewarm view of many of the world’s economies. What worries us most is the US, the Euro zone and the high sovereign-debt levels. “In the run up to the crisis, the debt load of governments, nonfinancial companies and private households rose to unprecedented levels. Between 2000 and 2007, US debt grew from $18 trillion (183 per cent of GDP) to $32 trillion (225 per cent of GDP). Since the start of the financial crisis, overall debt loads have continued to rise, mainly

RE ALIT Y CHECK

THE DEBT TRAP: JUST HOW BAD IS IT? [Gulp] Here's a dose of reality; the global schedule of rollovers and interest payments due this year: Country

2012 Bond, Bill Interest Redemptions ($) Payments ($)

Japan

3000 billion

117 billion

US

2783 billion

212 billion

Italy

428 billion

72 billion

France

367 billion

54 billion

Germany

285 billion

45 billion

Canada

221 billion

14 billion

Brazil

169 billion

31 billion

UK

165 billion

67 billion

China

121 billion

41 billion

India

57 billion

39 billion

Russia

13 billion

9 billion

driven by governments and central banks trying to postpone the inevitable. In the US, the total debt grew by a further $4 trillion (to 246 per cent of GDP), and in Europe by €5 trillion (to 269 per cent of GDP). Fighting the debt crisis with even more debt is not a viable remedy. “In theory, there are four ways to reduce debt load: grow out of debt, save and pay back (“deleveraging”), write off and restructure the debt, or inflate it away. “The level of uncertainty facing business remains high. Politicians are trying to solve the problem of too much debt by playing for time. This will fail. Given the empty coffers of governments and their recent heavy use of monetary instruments, there is not much left to stimulate the economy once more. “We believe that it would be preferable to stop the vicious circle of too much debt leading to more debt by executing a programme of structured workouts and write-offs. Creditors would need to accept that they have lost a sizable portion of their money. The longer the day of reckoning is postponed, the more money will be lost. Politicians shy away from telling the public the bald truth. This is understandable, since the prospect of reduced pensions, negative returns on savings, and outright default would not be popular. For this reason, we believe that governments and central banks are most likely to resort (eventually) to a policy of aggressive financial repression: that is, high inflation. “It is obvious that time and doing nothing cannot solve the problem – it just grows bigger. With every softening of the economy, the pressure on central banks to intervene one more time will increase. The longer we postpone the necessary write-off of debt, the more volatility we will see and the more intervention by governments. The final outcome, the devaluation of debt, can be postponed but is unlikely to be avoided. Politicians will be loath to acknowledge that default and restructuring are inevitable. So they will continue kicking the can. Businesses need to be prepared for an environment characterised by the following: ■ Overall low growth of the economy for most of the largest developed economies. ■ Much higher volatility, leading to an increased risk of more recessions. ■ Constant intervention by governments in an effort to ‘fix’ things. ■ Increased tensions between countries, including protectionism. ■ Broader social unrest. ■ Significant inflation. Either the politicians need to organise a systematic debt restructuring for the Western world and/or generate inflation fast, or we run the risk of the situation spinning out of control. In which case, there will be no place to hide.” Go to www.bcg.com.

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ABSOLUTE BEGINNERS

The changing tides of global T wealth

he global wealth cloud is on the move; shifting and expanding into different corners of the world according to the recently released 2012 Global Wealth Report by Boston Consulting Group (BCG) called The Battle to Regain Strength. BCG is a global management consulting firm and advisor on business strategy.

The huge, ever-shifting cloud of global wealth is on the move. No longer mired in the creaky vaults of Europe, it’s now exploring new parts of the planet… but where’s it going next?

The main points of the report are: 1. Overall wealth: Global private wealth increased by 1.9 per cent in 2011 reaching $122.8 trillion – slower than expected. 2. A two speed world: The old world ( Japan, North America, Western Europe) shrank by one per cent while in the new world (Asia Pacific excl. Japan, Eastern Europe, Latin America, Middle East and Africa) private wealth grew by 10 per cent. 3. Growth drivers: Growth drivers affected the old and new worlds differently; in light of widespread poor market performance, GDP was the main driver for positive growth. 4. Hands of the few: Nearly 40 per cent of total global wealth was held by only 0.9 per cent of households in 2011 and average wealth per household stagnated at around $83,000 globally.

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ABSOLUTE BEGINNERS

5. Outlook: Private wealth is expected to rise by four to five per cent annually to reach over $150 trillion by 2016. New world growth will continue and old world will see a slight decrease (an optimistic view that assumes no black swans, eg, a Euro zone member exit). 6. Regional deep dives: Continued much stronger growth in the new world is expected to further the regional shift in global wealth with Asia Pacific (excl. Japan) growing to over $40 trillion, over taking Europe (Western and Eastern combined). 7. New millionaires: The number of global millionaire households grew by 175,000 to 12.6 million. Similarly, the number of ultra high net worth households (in excess of $100 million in private wealth) grew globally by 260 to 12,200. The majority are US based.

NEW MILLIONAIRES

Although the number of millionaire households decreased by a combined 182,000 in the US and Japan in 2011, globally the number grew by 175,000 as many households crossed the millionaire threshold in developing economies, particularly China and India. The total number of millionaire households reached 12.6 million by the end of 2011. The US still had the largest number of millionaire households (5.1 million), followed by Japan (1.6 million) and China (1.4 million). [See chart below]

China’s number of millionaires should continue to grow strongly, driven by the large number of initial public offerings (IPOs) expected in the country as well as by new wealth generated mainly by entrepreneurs. The highest density of millionaire households in 2011 was in Singapore – where more than 17 per cent of all households have private wealth of $1 million or higher – followed by Qatar (14.3 per cent), Kuwait (11.8 per cent) and Switzerland (9.5 per cent). The US had the largest number of both UHNWI and billionaire households in 2011 at 2,928 and 363, respectively. Relative to population size, however, Switzerland had the highest number of UHNWI households and Hong Kong was the leader in the number of billionaires – driven partly in both countries by the immigration of billionaire families. UNHW households held $7.1 trillion, or 5.8 per cent of global private wealth, in 2011, a 3.6 per cent increase over 2010. At a projected Compound Annual Growth Rate (CAGR) of about eight per cent over the next five years, UHNW households should hold about $10.3 trillion, or 6.8 per cent of global wealth, by the end of 2016. [N.B. this projection is very dependent on a lack of black swans or other crises hitting the global financial markets.] Cont. overleaf...

The United States, Japan and China have the most millionaires Ultra-high-net-worth (UHNW) households (more than $100 million in private financial wealth)

Millionaire households Number of millionaire households (thousands)

Proportion of millionaire households (%)

Number of UHNW households

2011

Number of UHNW households per 100,000 households

2010

2011

2010

2011

1.

US

5,263

5,134

Singapore

17.1

US

2,989

2,928

Switzerland

2011 11

2.

Japan

1,640

1,587

Qatar

14.3

UK

1,125

1,125

Singapore

10

3.

China

1,239

1,432

Kuwait

11.8

Germany

807

807

Austria

8

9.5

Russia

607

686

Norway

7

4.

UK

422

411

Switzerland

5.

Germany

320

345

Hong Kong

8.8

China

538

648

Hong Kong

7

6.

Switzerland

317

322

UAE

5.0

France

480

470

Kuwait

6

7.

Italy

274

270

US

4.3

Taiwan

369

375

Qatar

6

8.

Taiwan

247

246

Israel

3.6

Switzerland

366

366

Taiwan

5

9.

Hong Kong

209

212

Taiwan

3.2

Turkey

318

344

UK

4

10. France

199

200

Bahrain

3.2

Italy

319

333

Netherlands

4

11. Singapore

165

188

Japan

2.9

Austria

301

301

UAE

4

2.9

Netherlands

291

279

Belgium

4

12. Canada

174

185

Belgium

13. India

134

162

Oman

2.5

India

241

278

Israel

4

14. Netherlands

157

152

Ireland

2.2

Canda

252

257

Sweden

3

15. Spain

147

139

Netherlands

2.1

Australia

228

228

Denmark

3

Source: BCG Global Wealth Market-sizing database, 2012 Note: UAE is United Arab Emirates. the 2010 rankings are determined on the basis of year-end 2011 exchange rates.

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...cont. from page 15

MIDDLE EAST WEALTH

will account for 35 per cent (about $10.1 trillion) of the overall increase in global wealth over this period, while India will account for 10 per cent (about $2.7 trillion). Another trend is the constraint of growth in wealth management through tighter regulations, stricter compliance requirements and greater interest in non-financial investments. In addition, HNWIs are expected to increasingly use alternative channels – especially online and mobile channels – to access market information and execute simple transactions. They will continue to prefer personal interactions with experienced advisors when it comes to portfolio reviews, product selection and holistic advice. For HNWI investors in the Middle East, preferred investments are clear and include: ■ Industry: oil and gas, industrial manufacturing, healthcare and education ■ Asset class: Real estate, capital-protected products/cash ■ Geographic: GCC, SEA/China, India Investors from the GCC differ from the rest of the world in that they tend to prefer direct investments, private equity and real estate. There is also a heavy emphasis on cash. Interestingly, Shari’ah-compliant investments are most important in Saudi Arabia and Kuwait but of lessr importance in the UAE.

Middle East and African wealth grew by 4.7 per cent in 2011 to $4.5 trillion, about a third of which – about $1.5 trillion – was booked offshore, which would suggest a big opportunity is being passed up by locally-based private banking firms. Qatar, Kuwait, UAE, Bahrain and Oman are in the top 15 countries of the world that have the highest percentage of millionaire households. [See chart below]. In the Middle East, the status remains that bulk of the wealth is in the hands of the few. About 52 per cent of MENA wealth is held by 0.5 per cent of the population, with the other 48 per cent held by 99.5 per cent of population. This makes the Middle East and Africa the region with the highest level of wealth inequality, alongside Eastern Europe.

TRENDS SHAPING WEALTH MANAGEMENT

Over the next 10 years, the face of global wealth – where it is, how it’s managed and who’s got it – is going to change. This will be the result of evolving technology, HNWI behaviour, competitive dynamics and regulation. These trends are already in motion. For a start, emerging markets will fuel the growth of global wealth. In India and China, private wealth is projected to increase at CAGRs of 19 per cent and 15 per cent, respectively, from year-end 2011 through 2016 – significantly faster than the global forecast of about four to five per cent annually. China alone

highest “ Thedensity of

Percentage of millionaire households: 2011 18

Non-GCC countries

17.1

16

14.3

GCC countries

14 11.8

12

9.5

10

8.8

3.2

2.9

2.9

2.5

Israel

USA

UAE

Hongkong

Switzerland

0

Kuwait

2

2.2

2.1

Netherlands

3.2

Ireland

3.6

Oman

4.3

Belgium

4

Japan

5.0

Bahrain

6

Taiwan

8

Qatar

Qatar, Kuwait, UAE, Bahrain and Oman in top 15 countries with highest % of millionaire household

Singapore

millionaire households in 2011 was in Singapore – where more than 17 per cent of all households have private wealth of $1 million or higher

A copy of the BCG Global Wealth 2012 report can be downloaded at www.bcgperspectives.com.

Source: BCG

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P O RT F O L I O

The bold and the gold Can it really keep rising? From rows of shining bangles in the gold souqs to ATMs that dispense gold bars, James Thomas and Rupert Connor of Acuma Wealth Management explain why people just can’t get enough of gold.

O

ne of the reasons gold has been making headlines recently is because the price of gold has been nudging $1,600 an ounce despite the global economic slowdown, although prices have been falling periodically as well – this is a rocky ride upwards. The price of gold is actually up five-fold in the past decade! If you invested in gold in this period you will have enjoyed the investment ride. Due to this, gold has become very topical but it is hardly breaking news. Gold has long been a balanced portfolio staple where risk is spread over different asset classes. However, now the average man and woman in the street are buying physical gold in any form they can, including gold jewellery. Generally speaking, most investment managers will always recommend some exposure to gold or other precious metals in an asset spread. This has become the norm due to the extreme volatility of the financial markets in recent years. The value of gold and precious metals is generally not connected to other asset classes

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P O RT F O L I O

The rise in gold prices may continue but it is certainly not a 100 per cent safe haven and it is unlikely to last for another decade as it has done.

so it can be used to reduce risk in a portfolio. Paired with a rising gold market, this makes for a happy portfolio! The view commonly accepted in the West is that commodities are one of the best hedges against inflation and the loss of purchasing power. It is also the view of many commentators that we are currently in a commodity supercycle, when commodity prices trend up, strongly driven by short supply and increasing demand. The continued concern about the fragility of the European Monetary System is presenting excellent commodity trading opportunities. Market conditions are still creating distressed physical commodity sellers and frequent movements in commodity futures.  

WHY GOLD IS GOING UP

It is a different story, however, in the East where the Indian and Chinese middle classes believe that, as well as being an adornment; gold jewellery is a sound investment. India is already the world’s biggest gold market for cultural reasons, with prices around the world affected by seasonal demand around the Diwali festival and the wedding season. The growing middle class in China is also catching up fast. Mainland China’s Communist-led government deregulated gold ownership over a decade ago, and demand for jewellery has doubled in the past seven years, according to the World Gold Council. There is a healthy appetite for gold in the Middle East as well. The head of the Istanbul Gold Exchange told Bloomberg recently that Turks have nearly 5,000 tonnes of gold ‘stashed under their pillows’, or $270 billion worth of

gold that the Turkish banks are desperate to get their hands on! As an incentive to citizens hiding gold under their mattresses, Turkish banks have started offering gold deposit accounts to spur savings. Gold in jewellery form may be quicker to sell but as a pure investment it is still quite high-risk. For example, prices of necklaces and rings reflect the cost of making them and this can add up to 30 per cent on the price of the actual gold in these items. To benefit from the price of gold, there are various investment products and funds that are linked to gold, which can be easily accessed to everyday people. Several index funds and exchangetraded funds based on gold are now available to consumers (although these funds are not without their critics either). There is also bullionvault.com, which is easily navigated from the comfort of one’s armchair. Essentially, these funds are managed by companies that invest in gold bullion, or firms involved with the production of gold. This allows customers to benefit from rising gold prices because the value of the funds goes up. However, in reality the price of gold is actually going up because Asian governments are hoarding it, it is not the investments of ordinary people. This could mean that the rise in gold prices may continue but it is certainly not a 100 per cent safe haven and it is unlikely to last for another decade as it has done.  

GOLD VERSUS SILVER

Even if you buy gold or invest in gold-linked funds, it shouldn’t be the only place you save your money. As always, never keep all your money only in one asset class. Silver complements gold. Indeed, one of the region’s prominent experts on the subject, Geoff Rhodes of INTL Commodities, often

says that if you like gold buy silver. This is because if the market conditions are pushing up the price of gold, it is likely that these factors will also drive up the price of silver. With the price of silver being a lot lower than

gold – at the time of writing ( July 2012) gold is at $1,605 an ounce while silver is at $27.35 an ounce. Therefore if you were to buy an ounce of gold, for the same investment you could buy 51 ounces of silver. This would allow you to manage and control your investment in a more strategic manner. With one ounce of gold, you can really only be in or out of the market, but with 51 ounces you have many more options available to you. Silver has a number of commercial uses, rather than purely as a precious metal, and these help to give the metal a different profile to gold, as there are other factors driving its price. With the price being so much lower, silver tends to be more volatile than gold. Over the past year, gold swung 40 per cent from its lowest price to its highest; while silver moved 70 per cent. This can be viewed as a positive or negative, dependent on when you invest and when you want to get out but if you can time your investment well, silver can be more profitable than gold.

Authors are James Thomas and Rupert Connor of Acuma Wealth Management. Thomas is Regional Director while Connor is a Senior Financial Consultant. www.acuma.ae

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P RO P E RT Y

T

he Prime Central London residential market has been defying the laws of gravity for some time now. Whilst the UK and Europe limp along, the Prime Central London property market is booming with prices now far above the level they reached at the height of the bull cycle in 2007, prior to the crash. This is in stark contrast to residential markets in the rest of the UK. The stock of prime housing in London’s most desirable postcodes is now valued at around £130 billion (AED 750 billion/$204 billion). Over the past three years, prices for residential property in Prime

Prime As the rest of the world teeters on the cusp of economic apocalypse, Prime Central London property prices continues to soar skywards with blithe disregard. Can it last?

Central London in a class of its own

Central London (PCL) have outperformed Greater London by 30 per cent and the UK as a whole by 34 per cent. This has led to a growing belief that PCL is special and entirely separate from the rest of the UK property market. Is Prime Central London operating under different rules to the rest of the property market? A new study commissioned by Development Securities PLC from Fathom Consulting has investigated the drivers behind Prime Central London residential values and looks at the risks to its continued boom. “PCL is part of London and London is part of the UK housing market,” states the Development Securities PLC report. “Over a long period of time, that truth is clear in the data. But for shorter periods, PCL property prices can deviate significantly from prices elsewhere in the country. This is because PCL responds to three key drivers that do not materially affect the rest of the UK property market, namely: 1. Global equity prices; 2. The sterling exchange rate;

WHAT IS ‘PRIME CENTRAL LONDON’?

Prime Central London (PCL), is a familiar phrase in the market for high-end residential property. To a degree, the definition is subjective but few would argue that it includes the London boroughs of Westminster, Kensington, Chelsea, Belgravia, Marylebone, Mayfair and St John’s Wood. Others would expand the definition to include parts of the South Bank, the City of London as well as Canary Wharf and Docklands.

3. Safe-haven flows into sterling assets. “The most important of these drivers since the mid-1990s has been safe-haven flows, which reflect an increased desire, on the part of foreign investors, to hold sterling assets, largely as a hedge against the euro.” “In early 2012, the average property in PCL fetched around six times as much as the average property across the UK as a whole . This multiple is at record levels, and yet

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P RO P E RT Y

WHO OWNS PRIME CENTRAL LONDON?

PCL property is expensive and attracts some of the world’s wealthiest individuals. According to estimates from the Office for National Statistics, more than 50 per cent of the resident population of Westminster and Kensington and Chelsea, the two boroughs that contain the bulk of PCL, were born overseas. By contrast, a comparable figure for Greater London is 35 per cent and for the UK as a whole, just over 10 per cent. According to Savills Research, the UK’s nearest neighbours in Western Europe and the Nordic countries have been the single biggest group of overseas buyers of PCL property over the past five years. The Middle East and North Africa are close behind, as are Eastern Europe and the former Soviet Republics. Buyers from the former Soviet bloc are operating at the very top end of the market: they accounted for seven per cent of purchases by volume, but as much as 15 per cent by value between 2007 and 2011. Similarly, over the past five years, the typical property purchased by a national of Eastern Europe or the former Soviet Republics has cost an average of £6.2 million (AED 35.8 million/$9.7 million), more than four times the amount paid by those coming from Western Europe or the Nordics.

it can be justified, for now, by the three key drivers identified above. However, its high valuation relative to the rest of the UK is unlikely to last forever,” the report states.

area with all 17 members re-introducing their own national currencies or a full recapitalisation of the European banking system with large fiscal transfers from the core – principally Germany and to a degree France – to the periphery. In addition, renewed tensions in the Middle East could raise the oil price. This would benefit a small number of investors whose fortunes are tied to the crude oil price but it would be detrimental to the majority. How likely these risks are to transpire and whether they would suppress prices long term is up to the individual investor to decide for themselves.

WHAT GOES UP… KEY RISKS TO PRIME LONDON PRICES

The three potential risks to PCL property prices are: 1. Euro break up 2. Decisive recapitalisation of the European banking system 3. Oil spike Two of these risks are related to the ongoing Euro debt crisis. Ultimately, there will be a resolution to the crisis. The two extreme scenarios are a complete break-up of the Euro

To download a copy of the Prime Central London: In a class of its own? report, visit www.developmentsecurities.co.uk

Average Prime London Spend by Global Region

£6.2m £1.5m

£2.5m

£2m

£2.2m

£4m

USEFUL WEBSITES Christie’s Private Property Fine art auctioneers Christie’s have launched a discrete and expert advisory service for international buyers wishing to purchase a residence in London’s prime residential neighbourhoods, including Chelsea, Knightsbridge, Belgravia, Mayfair, Holland Park, Notting Hill and Hampstead. Visit www.christiesrealestate.com. Wigmore Jones Another London estate agent specialising in the letting, management and sale of new build and refurbished properties in central and south west London is Wigmore Jones. Already letting and managing properties on behalf of residential investment funds, the company is now offering its knowledge and experience to all landlords. Visit www.wigmorejones.com

£3.4m £1.5m

£2.8m

£1.3m

Source: Savills Research

Who Buys and Rents Property in PCL? UK

Buyers (by number) Buyers (by value) Lettings (by number)

Other W. E M. East SubS. Asia China Saharan Europe & Europe & Nordics & N. Africa Africa CIS

Pacific N. America Asia

51%

16%

7%

10%

2%

4%

3%

2%

5%

39%

15%

15%

13%

2%

6%

3%

2%

5%

30%

24%

5%

3%

2%

2%

2%

5%

27%

Source: Savills Research Data covers the period from 2007 to 2011

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INVESTMENT OPPORTUNITY

Trading summary Gold ($/oz) 1,680 1,640 1,600 1,560 1,520 2012 May

Jun

Jul

Source: Zawya/Dow Jones

Oil Opec Basket ($/bbl)

110 112 108 104 100 96 92

May 1/05/2012

Jun 1/06/2012

Jul 1/07/2012

88

Source: OPEC

Currencies - INR/$ 57 56 55 54 53 May

Jun

Jul

Source: Thompson Reuters

Currencies - $/EUR 1.32 1.30 1.28 1.26 1.24 1.22 May

Jun

Source: Thompson Reuters

Jul

What passes for ‘normal’ in the markets? Robin Amlôt finds out... GOLD

We always look at the gold price in terms of dollars. That can be a little misleading for those whose major currency exposure is not to the greenback. Of course, here in Dubai that’s inescapable given the AED’s peg to the dollar but consider gold against the EUR. Uncertainties over the Euro zone are not going away and the EUR gold price continues to rise. In dollar terms there is less excitement with the US currency itself looking stronger than others. Summer is here (I expect you noticed) and that means a seasonal slowdown in physical demand. There’s some suggestion that it is more marked this year. That could be taken by those made of stern enough stuff as a buying opportunity towards the end of Q3.

OIL

The oil price now appears more than ever to be at the mercy of global economic events. The balance appears to be tilting towards those who believe the problems of the Euro zone and a slowing Chinese economy will trump geopolitical concerns that might otherwise push the price higher. The Chinese economy grew by 7.6 per cent YoY in Q2 – its slowest rate for three years (although most countries would be very happy with that kind of growth). Given that China is now the world’s number two consumer of crude it does have a direct impact on price prospects.

CURRENCIES

A rate around INR 53-55 was being described in India as ‘the new normal’. A survey carried out of 35 economists by the Confederation of Indian Industry in July found a majority suggesting that this level represented the medium term trend. I am not convinced. It is not just a matter of any weakness on the part of the INR but also of dollar strength and, as anaemic as the US economy appears, the dollar itself is looking a lot fitter than other currencies. For the record, that survey found significantly divergent views on the outlook for the INR’s year-end position. A majority suggested INR 50-52 to the dollar but on the other side of the argument the prediction was INR 55-58. Once again I’m choosing to focus this time on the EUR rather than the GBP. As I write this, the EUR has just hit a two-year low against the dollar. In passing, it is also flirting with near 12-year lows against the JPY (Japanese Yen). So, do you need me to rehearse/rehash the Euro zone’s troubles? Among recent developments, the European Central Bank (ECB) has announced that it will no longer accept Greek Sovereign Bonds as collateral, Spanish bond yields are at Euro-era highs and there’s talk Italy will have to ask for EU assistance in the autumn. Like Agatha Christie’s Mousetrap this one looks set to run and run...

22 ISSUE SEVENTEEN-AUGUST/SEPTEMBER 2012

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INVESTMENT OPPORTUNITY

Diamond investments Fast-rising prices, rarity, liquidity and portability are just some of the reasons why diamonds are looking ever more alluring as an investment.

W

hy invest in diamonds? For a start, they’re fetching record prices. Largely driven by Asian buyers and new wealth in emerging markets where people are falling prey in droves to the sparkle of diamonds. This, coupled with an increased interest in alternative investments as the global economy slips and slides, has the industry forecasting record highs for the precious gems for a long time to come.

And that’s not all says Deborah Jossa, jewellery specialist for Bonhams. According to Jossa, diamonds are a true rarity that offer a high return on investment – they’re getting rarer by the day and it’s a total misconception that there are piles of diamonds throughout the world and that they have no intrinsic value. “It’s interesting to see that in times of uncertainty we all turn to alternative investments, it could be art, it could be commodities like water and it’s certainly going to be diamonds,” said Jossa, who was speaking on diamond investment at an Alternative Investments seminar hosted by IP Global Property Investment in partnership with Bonhams.

SPARKLING STONES Diamonds are the strongest naturally occurring substance on the earth’s surface. First discovered in India over 2,000 years ago, these stones have captivated and fascinated throughout human history. Coloured diamonds are extremely rare. For every 10,000 colourless diamonds only one natural coloured diamond will be found. ■ High ROI – fueled by a volatile global economy and emerging market demand, diamond prices have doubled in the last decade. ■ True rarity – All the cut diamonds in the world to date would fit into one double decker bus… and the new mines aren’t producing the big diamonds the older, closing mines did. ■ Portability – Put it in your pocket and take it across borders – diamonds won’t ‘ping’ at customs. ■ Liquid globally – A stone of over three carats can be sold on any market in the world. ■ Low volatility – The price is resilient to economic turmoil. ■ No maintenance – Diamonds are the hardest substance on the planet. ■ Enjoyment – Diamonds are forever, a girl’s best friend etc.

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INVESTMENT OPPORTUNITY

LUST FOR LUSTRE

What do diamonds offer? A high return on investment for several reasons, which include rarity and portability. “If you took all the cut and polished diamonds in the world, they would all fit in a double decker bus, so we have true rarity with diamonds. “I would recommend you invest in rarity and the next rarity in diamonds is size. There are no more stockpiles of diamonds and sadly, most of the old mines are closing or preparing to close, such as the Kimberley Mines. When you’ve taken all the diamonds from within a mine and it’s finished, you shut it down. Unfortunately the new mines that are surfacing - in Canada for example - are yielding far smaller diamonds.

If you took all the cut “ and polished diamonds in the world, they would all fit in a double decker bus, so we have true rarity with diamonds

A SHINING EXAMPLE: A FEW SIMPLE RULES FOR INVESTING IN DIAMONDS 1. Always get the best you can: The increase in value will be exponential as you get into the bigger, better and rarer stones. 2. Above board: Buy from a trusted source and ensure you do not buy a conflict diamond (aka blood diamond). 3. Getting certified: Prefer diamonds with certificates. Having a certificate from a reputable gem rating agency can add value to your asset. 4. The four Cs: Take account of the four main factors which define the quality and value of a diamond: Colour, clarity, cut and carat. 5. Selling at auction: When the time comes to cash in your investment, an auction sale has the advantage of being able to trust the seller and getting a reputable report. Auction houses are not limited by brands, periods, stones, or styles. A specialist will sit down with you and give a lower and higher estimate - not a retail price, but the equivalent of a trade price and real market value.

“When I say large diamonds I’m talking three carats and above. We definitely have a problem with the supply going down and at the same time there’s a huge increase in demand, there’s a lot of money around and the demand from China market is opening up at a time when only 200 flawless diamonds come on the market every year, of about five carats. The second rarity is colour. “Diamonds come in all the colours of the rainbow, the rarest being the red diamond. Because coloured diamonds are so rare and because the mines yielding them are shutting down, we’ve seen huge increases in price - 20 per cent a year from 2002 to 2008. We had a rush pink diamonds in the early 2000s and that trend is continuing, so coloured diamonds are a great investment.” Cont. overleaf...

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INVESTMENT OPPORTUNITY

...cont. from page 25

CASH AND CARRY

Another plus for diamonds is their portability, Jossa says. “I’ve held $60 million in my right hand; the De Beers Millennium Star. It fits in my hand and I could’ve popped it into my pocket and gone anywhere with it; diamonds go undetected through customs, through airports, it’s quite a fantastic asset.” Being easy to hide and transport is a big advantage for investors who live in volatile parts of the world where political unrest or economic collapse are risks. If you have $1 million in your local bank when hyper inflation takes hold, its value is lost – not so with diamonds. “Plus there’s global liquidity on diamonds, you could literally take it anywhere in the world and sell it. If you have a stone above three carats you’ll be able to sell it at any auction in the world. In addition to low volatility diamonds are virtually no maintenance. “It’s a very hard substance and it generally does well anywhere without being cared for too much,” Jossa said. The same cannot be said for art or classic cars. “Finally of course, there’s the enjoyment. For the gentlemen, it’s the pleasure of giving the kind of gift that can be passed on.”

Diamond Pricing Trends Index The Diamond Prices Index (DPI) is a representation of the current market pricing trend for diamonds. It takes into account the average retail price per carat of loose diamonds from jewellers around the web. Prices are calculated for groups of weight ranges as well as by colour and clarity. From January 2006 to January 2012, the average price for diamonds almost doubled from 134 to 224.

Diamond Price IndexTM Chart by amCharts.com 260 240 220 200 180 160 140

Jan 2006

Sep 2006

May 2007

Jan 2008

Sep 2008

May 2009

Jan 2010

Sep 2010

May 2011

Jan 2012

Because coloured diamonds are so rare and “ because the mines yielding them are shutting down, we’ve seen huge increases in price - 20 per cent a year from 2002 to 2008

PROVENANCE

Another factor that can increase a diamond’s value is provenance, or the history of the diamond. For example, if it belonged to a royal family or to a movie star – the latter illustrated by the staggering success of the sale of Elizabeth Taylor’s collection earlier this year. One diamond necklace currently on the books at Bonhams is a 17th Century Royal Mughal necklace listed for private sale at $20 million. Why such a high price? Because the five diamonds in the necklace were from the Golconda mines in India, the world’s first diamond mines, which produced what many experts consider the purest diamonds in the world. “To have five such quality diamonds with a Royal

Mughal provenance is amazing,” Jossa said. Similarly, if a diamond is signed by one of the prestigious jewelers such as Cartier or Boucheron, again, it’s intrinsic value increases. Fashion trends may also play a role in value, for example, an art deco piece of diamond jewellery is very desirable. So is the kind of jewel it is, for example, rings and pendants are more popular than brooches. Gemologist Deborah Jossa is the Middle East jewellery specialist for Bonhams, the fine art auction house. A graduate of the London School of Economics, Jossa has a background in banking and previously headed up the Middle East Watch and Jewellery Division for De Beers Diamond Jewellers.

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CONSUMING PASSIONS

World’s most famous diamonds Some of the most breath-taking, legendary, celebrated and pricey diamonds in the world.

THE BEAU SANCY

Size: 35 carats cut Worth: $9.7 million

One of the most important royal diamonds ever to come to auction sold for $9,699,618 in May this year, the Beau Sancy. Marie de Medici wore this stone at her coronation in 1610 as Queen Consort of Henri IV and since then the Beau Sancy has been the privileged witness of 400 years of European history. Passed down through the royal families of France, England, Prussia, and the House of Orange, the 34.98 carat modified pear double rose cut diamond would have come from Golconda in India, the sole source of diamonds until the discoveries in Brazil in the 1720s. After the May sale, David Bennett, Chairman of Sotheby’s Jewellery Department in Europe and the Middle East said: “The legendary Beau Sancy is a truly magical stone that has entranced generations of royal owners and continues to exert a powerful influence over all who see it.” After a battle of nearly eight minutes, the jewel was bought by an anonymous telephone buyer.

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CONSUMING PASSIONS

CENTENARY DIAMOND

Size: 273.85 carats cut (was 599 carats raw) Worth: Estimated value $150 million The largest cut white (D) diamond by weight is the 1991 modified heart-shaped 273.85 carats (54.77g) Centenary Diamond. Internally and externally flawless, the De Beers Centenary Diamond was presented in the rough for the Centennial Celebration of De Beers Consolidated Mines in May 1988. It was unveiled in its final form in May 1991.

GRAFF PINK

MARTIAN PINK

Size: 12 carats cut Worth: $17.4 million

After coming onto the market for the first time in 36 years, this exceptional stone was sold for $17.4 million at Christie’s auction in Hong Kong in May 2012 after a frenetic 10-minute bidding war.  The 12-carat gem got its name in 1976 when it was sold by US jeweller Harry Winston. It was the same year the US sent a satellite to Mars, and the gem was named for the colour of the planet.

Size: 23.88 carats cut Worth: $46 million Unseen by the public for 60 years, this thenunnamed diamond, mounted in a ring, was sold by Sotheby’s auctioneers in Geneva, Switzerland on 16 November 2010 to Laurence Graff. On selling for $46 million, it became the most expensive single jewel ever sold at auction. Graff named it the Graff Pink. After studying the diamond, 25 inclusions were found close to the surface which could be removed by Graff ’s master cutters. The polishing increased the colour intensity to ‘vivid’ and clarity to ‘internally flawless’. Cont. overleaf...

MILLENIUM STAR

Size: 203 carats cut (was 777 carats raw) Worth: Insured for $100 million The Millennium Star is owned by De Beers. At 203.04 carats (40.608 g), it is the world’s second largest known top-colour (D), internally and externally flawless, pear-shaped diamond. The diamond was discovered in the Mbuji-Mayi district of Zaire (Democratic Republic of the Congo) in 1990 and was 777 carats uncut. It was purchased by De Beers during the height of the country’s civil war that took place in the early to mid-nineties. It took over three years for workers of the Steinmetz Diamond Group to produce the classic pear form. The actual cutting was done using lasers.

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...cont. from page 31

DELAIRE SUNRISE

Size: 118.08 carats Worth: $26 million

The Delaire Sunrise, discovered in its rough form in an alluvial mine in South Africa, displayed a very rare natural shape; a perfect octahedral. It took almost twelve months to cut the stone, transforming it into the largest Fancy Vivid square emerald cut diamond in the world. On completion in 2010, Laurence Graff named the diamond the Delaire Sunrise after his Delaire Graff Estate in Stellenbosch, in celebration of his love for Africa.

HOPE DIAMOND

Size: 45.5 carats cut Worth: Insured for $250 million The Hope Diamond, also known as Le bleu de France or Le Bijou du Roi is a large, 45.52 carat deep-blue diamond, now housed in the Smithsonian Natural History Museum in Washington DC. Apparently cursed after being stolen from an idol in India – it’s said that anyone who owns or even touches the rare stone will have bad luck and death befall them. Blue to the naked eye because of trace amounts of boron within its crystal structure, the stone also exhibits red phosphorescence after exposure to ultraviolet light. It has a long recorded history and has changed hands numerous times on its way from India to France to Britain and to the United States. It has been described as the “most famous diamond in the world” and is said to be the second most-visited artwork in the world, after the Mona Lisa. In 2010, the famous stone was revealed in a new necklace setting called Embracing Hope.

LESOTHO PROMISE

Size: 603 carats raw Worth: $20 million for the necklace In 2006, the world’s fifteenth largest rough diamond ever found emerged from a diamond mine in Northern Lesotho, a Kingdom landlocked by South Africa. Named the Lesotho Promise, the rough diamond was 603 carats. The raw stone was sold to Graff Diamonds for $12.36 million. Graff spent the next 18 months cutting the raw stone into a perfect set of 26 Flawless D colour diamonds. All 26 diamonds were then set to form one piece of jewellery, the Lesotho Promise necklace – the rarest necklace in the world.

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WITTELSBACH-GRAFF

Size: 31.06 carats Worth: $25.5 million

The Wittelsbach-Graff diamond is the largest natural fancy deep blue, internally flawless diamond in the world. Discovered in the Golconda mines in India, it’s said the diamond dates back to 1664 and was acquired by Philip IV of Spain and passed through the Austrian Royal Family for hundreds of years. In 2008, the Wittelsbach diamond came onto the international market for the first time in 75 years and Laurence Graff bought it for £16.4 million ($25.5 million), which was at the time the highest price ever paid at auction for a diamond.

CULLINAN I

Size: 530.20 carats cut Worth: Estimated at $200 million to $400 million Also called The Star of Africa, the Cullinan I is a pear-shaped diamond weighing 530.20 carats. It is called the Cullinan I because it’s the largest of the nine large stones cut from the Cullinan Diamond that came from the Cullinan Rough, a huge diamond of 3,106 carats found in 1905 at the Premier Mine in South Africa. The Cullinan Rough was sold to the Transvaal government, which presented it to King Edward VII on his 66th birthday on 9 November, 1907. It was cut into nine pieces, the first of which became the Cullinan I, or Star of Africa, at 530.20 carats. King Edward placed it in the Sovereign’s Royal Sceptre as part of the Crown Jewels, and it is now on display in the Tower of London.

STEINMETZ YIN YANG

Size: A matching pair of diamonds weighing 35.85 carats and 35.76 carats Price: $16.4 million, the most expensive pair of round colourless diamonds sold in Asia. At about the size of cherry tomatoes, The Steinmetz Yin and Yang are the world’s largest pair of identically cut diamonds meaning they dwarf your standard two carat diamond in both size and quality. Yin and Yang are Flawless D colour as well as type IIa, a classification reserved for less than two per cent of the world’s diamonds. Yin and Yang were cut from two individual rough diamonds found in South Africa, each initially weighing more than 100 carats. More than a year was spent by a team of Steinmetz craftsmen to finish the perfectly matched pair of Round Brilliant cut stones. The diamonds were sold in November 2011 by Christie’s Hong Kong.

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Aston Martin is the new kid in town A weekend spent up close and personal with the Aston Martin V8 Vantage S Coupe left Adam Broom shaken and stirred

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t is not often that I ask to pick up the keys to a car that WEALTH is profiling. However there is one that in particular for which I have a special affection. Aston Martin. I watched far too much 007 in my early years. A few years ago, I was lucky enough to drive through the Alps in the V8 Vantage S Roadster and this only cemented my love for the car. If you have never driven through the Alps in the summer please make sure it’s your next vacation! If you enjoy driving great cars on winding roads amongst perfect landscapes this has to be an experience felt.

Anyway, so when I heard that Aston Martin was establishing a dealership in Dubai I quickly claimed (demanded) the test drive rights. This time I was taking to the roads in the V8 Vantage S Coupe, a two-seat, two-door coupe body style. Given it was July in Dubai, this was probably the better option. I’m not a car fanatic and have no particular inclination to know about top speeds, BHPs etc. but I do know when a car is quick and drives well. I also know that many sports cars are not refined and this is where Aston Martin distinguishes itself.

TOP OF ITS GAME

With more power, sharper handling, stronger brakes and a seven-speed gearbox the V8 Vantage S is a sporting driver’s dream. The most generously equipped, highest performing and most driver-focused V8-engined model in the range, the Vantage S’s engine tune complements the Sportshift II close-ratio seven speed automated manual transmission, which is fitted as standard. A sports exhaust system unique to the ‘S’ further emphasises its sporting credentials.

PERFORMANCE

Scream if you wanna go faster…   

Maximum Power 321 kW (436 PS/430 bhp) at 7300 rpm Maximum Torque 490 Nm (361 lb.ft) at 5000 rpm Maximum Speed 305 km/h (190 mph)

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Unlike many alternatives, the Aston Martin is as suited to driving to and from work every day as it is to being pushed to the limit at the local track. It’s a refined gentleman’s car that exudes charisma and style. It is a quintessentially British brand for the sophisticated car enthusiast. I’m sure that with the new dealership and the soon-to-be opened Aston Martin service centre, the classic Aston lines will be seen more frequently on the roads of the UAE – something that will considerably improve the local scenery.

News Flash!

Aston Martin is opening its first dealership and service centre in Dubai in August 2012. Go and see the latest from this iconic brand at: Aston Martin UAE, Boulevard Plaza Tower One, Emaar Boulevard, Downtown Dubai. For sales enquiries, contact Larbi Bensouda on +971 4 455 8793 or +971 50 882 6675 Email: larbi@astonmartindubai.ae www.astonmartin.com

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T

here is an almost ineffable sense of ownership, not just of the automobile but of the entire road. In fact, the four days I test drove the Bentley Mulsanne I felt it was very gracious of me to allow everybody else to use my roads! That’s the feeling you get when you sit behind the wheel of the Mulsanne, not least because it is indeed a very big car that takes up rather a lot of road all by itself. But it is not a feeling of arrogance nor is it one of smugness, simply that of utterly assured superiority of quality.

Let’s get the basics out of the way; the Mulsanne is more than five and a half metres long and weighs about three tonnes. That doesn’t mean it can’t accelerate, though, and travel very smoothly at speed, indeed, disconcertingly smoothly. At any legal speed on the roads (ahem), you’ll find that the car is virtually silent as the world glides by. The Mulsanne is still a relative newcomer to the Bentley stable. The name comes from the Mulsanne Straight at the Le Mans racing circuit (anoraks of a certain age will be aware that Bentley has five victories to its credit in the 24 Hours of Le Mans).

Launched in 2009, it is the first car to be independently designed by Bentley for nearly 80 years. The 2012 Bentley Mulsanne presents a bold front dominated by the traditional Bentley matrix grille with a long bonnet, short front overhang and long rear overhang. The ‘Flying B’ retractable radiator mascot is available as an option. The radically re-engineered six and three quarter litre twin turbocharged V8 beast under the bonnet is tamed by speedsensitive, power-steering and drive dynamics control with four driverselectable settings.

King of the Road Robin Amlôt gets a ‘Flying B’ in his bonnet

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There are three standard modes: Bentley, Sport and Comfort. A fourth Custom mode allows you to ‘tune’ performance to your driving style. For a heavyweight, the Mulsanne is impressively light on its feet. You can motor imperiously if you wish or you can leave the rest of the traffic standing when you put your foot down. Inside there’s a multimedia system with a 60GB hard disc to manage satellite navigation, audio, video, personal data, telephone and Bluetooth connectivity through an 8-inch multimedia screen behind an electrically operated veneered door. Personalised keyless entry means you can pre-programme radio stations, phonebooks, seat, seatbelt, steering column positions and

The name comes from the Mulsanne Straight at the Le Mans racing circuit (anoraks of a certain age will be aware that Bentley has five victories to its credit in the 24 Hours of Le Mans)

BENTLEY MULSANNE Price: Engine: 0-100 km/h: Top speed: Torque:

With thanks to Al Habtoor Motors, agents for Bentley throughout the UAE Bentley Emirates Showrooms Abu Dhabi: Tel. +971 2 642 3114 Dubai: Deira Tel. +971 4 294 4492. Marina: Tel. 04 4475365 www.alhabtoor-motors.com

AED 1.3 m (approx.) 6 ¾ litre twin-turbo V8 5.3 seconds 296 kmh 1020 Nm at 1750 rpm

Robin Amlôt put the Bentley Mulsanne through its paces. w ww. c p ifin a n c ia l. n et

rear seat side and rear window blinds. A 14-speaker audio system comes as standard with the Naim for Bentley system an option. Almost half of the car’s build time on Bentley’s production line is devoted to the interior. It shows. How the car looks is up to you with a choice of 114 paint colours, 21 carpet colours, nine wood veneers and 24 interior leather hides. To sum up, comfort, style, superiority and a surprising turn of speed... but you’ll need a large parking space. Sadly, I was eventually persuaded, after my test drive, to give the car back to the showroom. I suppose you can have your roads back now as well!

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How to buy a plane Would having a plane be good for your business or pleasure? Here’s a starting point to buying an airplane for yourself or your company.

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hierry Boutsen is a former Formula One Grand Prix racing car champion. Between 1983 and 1993 he won three Grand Prix titles. Today, he buys and sells corporate aircraft and some of his former Formula One contemporaries were his first customers. “Flying is a hobby and I bought my first plane at about 30 years old. A couple of years later, I sold it and bought another one, sold that and bought another one, sold that, etc… I did that about every two years for myself and that’s how I got into this fun and game of buying and selling airplanes.”

Then, in 1997, the German F1 driver Heinz-Harald Frentzen asked Boutson to help him with buying a plane. “He said, ‘You have a nice airplane, I would like to get the same airplane as yours but I don’t know how to do that.’ So I told him, ‘I’m going to take care of the whole transaction for you, don’t worry, give me the green light and I will go and get it for you.’ And I did my first official customer transaction. I took a percentage of the purchase price. “After him, I sold one to Keke Rosberg, to Michael Schumacher, and more… I started

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COSTS OF OWNING A PLANE Purchase price: The smallest, used airplane suitable for business travel is the five-seat Cessna Citation at about $2 million. For a big plane, a new Airbus 319 costs about $80 million. A new Airbus 340 is about $300 million.

You may be able to buy an airplane for $1 “ million but it may cost three times as much to operate because of maintenance and the fuel inefficiencies

with these F1 drivers and after four or five transactions, my wife and I decided to start our company, Boutsen Aviation. “Since 2000, we have sold 228 airplanes ranging from the Cessna Citation to Airbus corporate jets.” “Ninety per cent of aircraft we sell is for business travellers. Currently, the skies contain about 18,000 private business jets. Of these, about 2,500 are for sale at any time. Business aviation is everything that does not include airliners, says Boutsen. “We sell private business jets like Airbus corporate jets, Boeing, Falcons, Gulf Streams...”

PREPARING FOR TAKE OFF

The very first step in buying a plane is to find an aviation broker and sit down for an indepth chat. “First we discuss the very deep details to find the exact criteria for the client. What do they need from an airplane? Will they only fly regionally or will they need to regularly fly to the US or Asia? Once we have all the criteria, we explain their choices. For example, new versus second-hand. We scan the world market and figure out which three or four planes that best fit the customer’s criteria, then we research every single detail

Extravagant interiors: We’ve all heard of the extravagant private jets with inbuilt cinemas and gold taps but in reality opulence is limited by regulation. Material and floor plan have safety limitations. Also, when you invest $100 million in an airplane you want to be able to sell it in a few years and the more extravagant the interior, the smaller your pool of buyers. A plane is a business tool; it is not a yacht, which is a pleasure craft. Operating costs: Keeping an airplane in the air costs from €1500 to €10,000 (AED 6,800 to AED 45,000) per flight hour, says Thierry Boutsen. This includes pilot salaries, aviation insurance, fees such as landing and parking, fuel, maintenance, hangar rental costs (about AED 45,000 per month in Dubai), on board catering, and so on. This does not include the cost of buying the aircraft. Flight hours per annum: Most owners use their aircraft about 300 hours per year, meaning the annual cost of operating the plane ranges from AED 2 million to AED 13.5 million. Free flights: Some owners only require 100 to 150 hours of airtime per year, the rest of the time they charter it for hire. Chartering for, say, 700 hours per year will cover the costs of the owner’s 150 hours.

Cont. overleaf...

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...cont. from page 39

HOW DO YOU KNOW IT’S TIME TO BUY A PLANE? That’s a sliding scale that changes for each individual, says Jay Hueblein Vice President of Nextant Aerospace. “It’s a risk and rewards balance. If you can’t accomplish what you want to do in a certain time frame and this is costing you money from a business standpoint, buying an aircraft makes sense and opens up new opportunities that didn’t exist before. “A great example is our CEO,” Heublein says. “We were at a trade show in Europe for private aviation about two weeks ago where he had a press conference and several meetings, then he had meetings in Italy, the Czech Republic… he had meetings in five different countries in three to four days and then went home to the US. This schedule would be physically impossible to do commercially.” This tipping point is not the same for everybody, Hueblein says.

of the airplane and see how low the owner can go with the price. We negotiate strongly to get the very best deal for our customer, that’s first and that’s the easy bit.

TECHNICAL NITTY GRITTY

Once the broker has identified a handful of aircraft that will meet the needs of the client, the serious work begins on a prepurchase inspection. “This is very thorough. We retrace the whole history of the airplane day by day, where it has been flown, where did it go, who flew it, who maintained it… that takes a while. We have engineers who closely inspect it to assess its condition; is there any corrosion or damage? Any systems not working properly? Any malfunctions? Is the vendor’s

description accurate? Plus we check the plane is up to date with regulations because these change regularly. If we find any discrepancies, they must be fixed by the seller at their cost.”

Currently, the “ skies contain about 18,000 private business jets. Of these, about 2,500 are for sale at any time

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I NEED AN AIRPLANE, WHERE DO I START? Jay Heublein, Vice President of Nextant Aerospace, the producer of the light business jet, Nextant 400XT, sums up the main points… 1. Help! Find an unbiased broker who’s going to look at your personal situation and give objective recommendations. 2. Work out you need from your plane: Are there any special requirements for the destinations that you’re going to? For example, are you flying into mountain airports that require special equipment or considerations? Are the majority of your trips 400 miles or 3000 miles? Passenger load, are you flying with one or two people or are you regularly flying with a full office team. A good needs analysis will quickly clarify the direction you need to go from an equipment standpoint very quickly. 3. Get a short list: One airplane almost never meets 100 per cent of your needs so find one that meets meets your primary core mission (the must-have) and can expand to some outlying trips (the nice-to-have). For example, if your regular mission is a two to three hour, 800 mile trip every other week but occasionally you want to go on 3,000 miles, you’ll look at a light or a mid-size airplane. 4. Consider the costs: This conversation is about acquisition cost and operating costs. It’s a buyer’s market today but be wary of a bargain. Planes with older technology can be incredibly expensive to operate. You may be able to buy an airplane for $1 million but it may cost three times as much to operate because of maintenance and the fuel inefficiencies. So if you’re flying 400 hours a year, the million dollars you saved from buying cheap will be quickly negated. 5. More information: Unbiased sources include the US-based National Business Aviation Association (NBAA) at www.nbaa.org; the European Business Aviation Association (EBAA) at www.ebaa.org, the annual publication called Business and Commercial Aviation, which lists all available aircraft.

The Nextant 400XT is a newly certified, light jet produced by Nextant Aerospace. A modified and modernised Beechjet 400A/XP. you can take one home for about $4.5 million. The world’s first and only FAAcertified re-manufactured light jet for up to eight passengers, the 400XT has all the luxuries and capabilities of any jet in its category yet costs less than 50 per cent of a brand new, comparable aircraft. In addition, its cost per mile is competes well with other planes in its class. www.nextantaerospace.com Fly in comfort on a Nextant 400XT light business jet.

The Nextant 400XT... yours for just $ 4.5 million

Most owners use their “ aircraft about 300 hours per year, meaning the annual cost of operating the plane ranges from AED 2 million to AED 13.5 million

Once the broker is satisfied with the plane’s condition and a check flight has been carried out, the administrative and legal side begins, Boutsen says. “We prepare the sales contract with experienced lawyers to make sure no door is left open for mistakes. Closure involves transfer of title, money and ownership, registration with the new owner… we take care of all that. Then, when everything is done, the plane is finally delivered to its new owner.” Thierry Boutsen is President of Boutsen Aviation, based in Monaco. Tel. +377 93 30 80 02, email: aviation.sales@boutsen.com, go to www.boutsen.com

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TRAVEL & LEISURE

Eco-glam holiday So you love highend holidays but you’re feeling bad about the carbon footprint indulgence leaves on the local environment? These days luxury and ecofriendly can go hand in hand. (Top) Dining at the Golden Palm Tree. (Middle) A buggy for getting around the restort. (Below) Inside a Golden Palm Tree villa.

WORLD FIRST! AN ECO-FRIENDLY SEA HOTEL Isla Macfarlane jetted off for a deluxe eco escapade in Malaysia at the Golden Palm Tree Iconic Resort & Spa Happily snuggled into the surrounding mango groves, the Golden Palm Tree Iconic Resort & Spa stretches serenely out from the Sepang coastline, almost a kilometre into the sheltered waters of the Straits of Malacca, offering luxury that rivals Dubai at no detriment to the pristine local environment. Three hundred and ninety two villas stand on stilts above the sea, treating eco adventurers to views of both the ocean and the tropical sceneries that dot Malaysia’s Golden Coast. With exposed alang-alang roofing and tall wooden paneled glass doors opening out to a private deck, the luxuriously appointed sea villas house both state-of-the-art comfort and Malaysian tradition. So as not to waste paper and preserve Malaysia’s precious rainforests, the hotel’s amenities and room service menu are available only through your digital TV, where all services can be ordered as easily as changing the channel.

INDULGENT COCOONS

Difficult though it is to emerge from these indulgent cocoons, there is plenty on offer to tempt you out of your villa. Not least the fact that you don’t actually have to walk anywhere – simply ring for a buggy which will collect you from your front door and take you to wherever you want to go – be it the infinity pool, the hotel’s renowned spa or one of the many restaurants or bars.

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The mangrove forest which “ fortifies the resort is pulsing with life, and guides are on hand to introduce you to the variety of wildlife that call it home, including monkeys, fruit bats and blue crabs

The mangrove forest which fortifies the resort is pulsing with life, and guides are on hand to introduce you to the variety of wildlife that call it home, including monkeys, fruit bats and blue crabs. You can canoe down the extensive stretch, or go at a more leisurely pace on one of the hotel’s cruises. In addition to water sports, hikes and horse riding, there are also a variety of daytrips, from exploring Kuala Lumpur’s space age skyscrapers to wandering ancient ruins. You can spend a day in a traditional Malaysian village or visit an elephant orphanage; the Golden Palm Tree Iconic Resort & Spa offers activities as varied as the country it represents. For the less energetic, the resort shelters a largely undiscovered coastline for uninterrupted beach pleasure; you can swim, sunbath or paddle along its secluded golden coast with only the sounds of the sea for company.

FUSION CUISINE

Malaysia offers one of the most varied

buffets of cuisine in the world, its pockets of ethnicity all contributing to the wide variety of food on offer, and the Golden Palm Tree Iconic Resort & Spa does its country proud. Chinese, Indian, Western cuisines and tantalising fusions of all three are on the menu; however the local cuisines deserve priority. In the hotel’s iconic beachfront restaurant, you can sample Malaysia’s favourite marinades with freshly caught seafood, with the ocean they came from lapping not 10 feet away from you table. Much like Malaysia, the Golden Palm Tree Iconic Resort & Spa offers the best of both worlds: high end luxury and spectacular natural beauty. The resort proves that the two can happily coexist.

A bird's eye view of the Golden Palm Tree Iconic Resort & Spa. (Insets right and below) Inside a villa and the infinity pool.

Golden Palm Tree Resort & Spa Selangor Darul Ehsan, Malaysia Contact: Tel. +603 3182 3600 or email: info@ goldenpalmtree.com www.goldenpalmtree.com Cont. overleaf...

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(Left) The terrace at 51˚ Spa Residences in the historic Swiss Alpine town of Leukerbad. (Middle) The jacuzzi. (Right) Dining at 51˚ .

...cont. from page 41

SUSTAINABLE SWISS OPLULENCE Just launched in Switzerland is the world’s first luxury resort featuring indoor and outdoor thermal spas, with water from deep mountain springs. Words by Andy Scott Opulence is not normally associated with sustainability however the ultra-exclusive 51˚ Spa Residences in the historic Swiss Alpine town of Leukerbad is an exception. The five-star 51˚ Spa Residences gets its name from the

temperature of the thermal waters pumped into each domicile. The very latest and cleanest technologies are used to collect rainwater and divert it to nearby trees. The mix of crisp Alpine air, volcano heated waters, snow capped mountains and verdant glacial valleys is simply breathtaking... it has remained Switzerland’s secret since Roman times with over 65 natural thermal springs enticing the likes of Mark Twain, Charlie Chaplin and Jules Verne to journey to the centre of the Swiss turf. The mountain experience combined with moon baths, indoor and outdoor fireplaces,

and one’s own thermal spa pumped from the earth into the residences brings the holistic spa experience to a new level of becoming attuned to nature and the surroundings. 51˚ Spa Residences Leukerbad – 2.5 hours by train or car from Geneva Contact: Via the website www.51degrees.ch

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TRAVEL & LEISURE

The cult of the sports personality What is it about sport stars that interests us? Why do we care so much, why do we root for people we’ve never met and don’t know? Why do we want them, so passionately, to win? And why does it matter? Tim Elliott looks for answers.

O

ne of my most vivid memories growing up is of cricketer Ian Botham, playing for England against Australia, in 1981. That’s when the cricket bug first bit. It was the test series that became known as Botham’s Ashes. A sporting memory held dear to this day by cricket fans all over the world. There was even a video released under the same name. I know - I’ve still got an old Betamax copy somewhere. It was the first time I really seriously considered a sporting figure in heroic terms. Sir Ian, as he’s now known, had come of age and, looking back it still seems like he’d come to a very simple decision. It was as though he just decided to refuse to lose. Simple, really. He set about his task like a man possessed. He bowled, he batted, he fielded and (it’s rumoured) he sledged out of his skin. And inspired the team to test victories that seemed impossible. It was a performance full of heart, full of pride, an almost superhuman effort. What struck me at the time, and still strikes me over thirty years later, was the example it set. This was an icon in the making, at his

best, leading from the front, going out on a limb, inspiring achievement against all the odds. A true role model. I suppose that it’s what all kids need, maybe that’s one of the reasons it was such a Eureka moment. It’s said that nobody becomes a role model simply because they’re a famous sportsperson... no matter how many column inches their athletic prowess generates. It’s down to us. We make them our role models. It’s all about choice. And that’s fine but it’s easy to argue that we do have an almost unnatural obsession with sports stars. The point that ‘the media’ blows things out of proportion and creates the pedestal is valid. As is ‘the media’ answer that there is a thirst for the minutiae of a sports stars life. So what is it that fascinates us so much? Is it the escapism of sport that we love? Do sporting icons and their exploits offer a place of refuge where the stresses of everyday life disappear for a few moments? Perhaps it’s a longing to be someone else? The idea of being sporting hero is an attractive option... who wouldn’t want to score in the dying seconds of the World Cup final with a last ditch free kick? Or is it simply that to successful sportspeople their chosen discipline or sport is important to them and they’re committed to being the best that they can be within the scope of their limitations – other life commitments, finances, time, natural ability? Successful sportspeople set high, realistic goals and train and play hard. They’re successful because they’re pursuing their goals and enjoying their sport. Their sport participation enriches their lives and they believe that what they get back is worth what they put into their sport. Could it be that all we really want is for that sporting formula (of working towards realistic goals, enjoying what we do and making an effort) to apply to our own lives, our work, our families? Is it that simple? And does that mean that having a sporting icon that we hold dear, a sporting role model that we aspire to emulate is a healthy and positive thing? Which brings me back to Sir Ian. Anybody still got a Betamax video player? Cricketing legend Sir Ian Botham at the top of his game.

Keep up to date with the latest national and international sporting news and more, weeknights on Dubai Eye 103.8FM’s Tonight Show with Richard Dean and Tim Elliott.

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ART & CULTURE

Reading matter A look at some of the newest business and finance titles to hit a book shelf near you. Buy-In: Saving Your Good Idea from Getting Shot Down

John Kotter and Lorne Whitehead / AED 85 Got a brilliant idea but need to convince others it’s brilliant? It would be wonderful if the good ideas you have, on or off the job, stood on their own but often this is not the case. Whether it’s a big bill before Parliament, an innovative corporate strategy, or tonight’s plan for dinner and the movies, sensible ideas can be ignored or shot down. When buy-in is thin, the smallest of obstacles can eventually derail a supposedly agreed-upon proposal. Kotter and Whitehead reveal how to win the support for ideas by understanding the generic attack strategies that naysayers and obfuscators deploy, and engaging these adversaries with tactics tailored to each strategy. There are a few dozen arguments used against good ideas that are very generic in their form, can be used in virtually any setting, and can be very powerful. There are also a set of generic responses, all based on a single, somewhat counterintuitive method, that can build strong support for good ideas. Buy In reveals the 24 very specific responses to 24 common generic attacks.

Being The Boss

By Linda A. Hill & Kent Lineback / AED 101 You never dreamed being the boss would be so hard. You’re caught in a web of conflicting expectations from subordinates, your supervisor, peers, and customers. You’re constantly fighting fires. You’re mired in office politics. You end each day exhausted and discouraged, wondering what, if anything, you’ve accomplished. You’re not alone. As Linda Hill and Kent Lineback reveal in Being the Boss, becoming an effective manager is a painful, difficult journey that many managers never complete. The authors explain how to avoid that fate by mastering three imperatives: manage yourself: learn that management isn’t about getting things done yourself, it’s about accomplishing things through others; manage a network: understand how power and influence work in your organisation and build a network of mutually beneficial relationships to navigate your company’s complex political environment; and manage a team: forge a highperforming ‘we’ out of all the ‘I’s’ who report to you. Packed with stories and practical guidance, “Being the Boss” is a guide for all managers seeking to master the daunting challenges of leadership.

Discover the Gift

By Shajen Joy Aziz and Demian Lichtenstein / AED 84 Discover the Gift is the companion book to an upcoming film of the same name. It explores the idea that we are each given a unique gift, a purpose in our lives that is always seeking to express itself. Find that gift and you can experience joy, power, fulfillment, freedom and unconditional love in ways beyond your imagination. In Discover the Gift, siblings Aziz and Lichtenstein present a simple road map to a journey of selfdiscovery that they say will change your life forever. Certain to appeal to the millions who loved the book The Secret, this programme provides people with the means to find happiness and peace by living the life they were meant to live, resulting in a variety of possible benefits, including a closer family, career fulfilment, material abundance, greater creativity and unconditional love. It is explained by wellknown transformational teachers, such as His Holiness the Dalai Lama, Jack Canfield, Mark Victor Hansen and Barbara de Angelis, who lay out the steps one needs to take to uncover this life-changing source of strength and wisdom.

All these books can be purchased at Jashanmal Books, go to www.jashanmalbooks.com for more information.

46 ISSUE SEVENTEEN-AUGUST/SEPTEMBER 2012

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AUGUST 2012

Put it in your diary...

SPECIAL DATES

19-23 August

EID BUFFET AND BRUNCH AT AOC FRENCH BRASSERIE

Mark Eid at AOC French Brasserie in the Sofitel on Jumeirah Beach Walk with a traditional Arabic brunch. Live stations featuring a variety of recipes from different regions and, for the children, a dedicated kiddy-sized buffet with a play area and face painting. AED 170 per person.

18 August,

EID AL-FITR

For Muslims, Eid al-Fitr is the joyous end to the month-long fast of Ramadan. It is a holiday that’s name translates to the ‘feast of breaking the fast’ and is marked by community prayer and one to three days of feasting, celebration, new clothes, and the giving of alms to the poor. Venue: Sofitel Dubai Jumeirah Beach, 19-23 August, from 1pm to 4pm For reservations, call: 04 448 4870 Now to 31 August

DUBAI SPORTS WORLD

10-19 August

RAMADAN NIGHT MARKET

Held for the first time, the Ramadan Night Market in Dubai will host retailers from across the world, offering a diverse variety of products. AED 10 entry fee. Show dates: 8am to 3pm during Ramadan and 5pm to midnight during Eid Venue: Dubai World Trade Centre, Sheikh Zayed Road, Dubai www.ramadannightmarket.com

There’s still time to get active this summer and register in one or several of the sports activities at Dubai Sports World. The Middle East’s largest indoor sports event, a variety of sports are on offer in one pro-standard, air conditioned arena, namely football, rugby, basketball, beach volleyball, fitness boot camps as well as a cricket academy and indoor running track. Personal training, fitness and wellness classes hosted throughout the day and into the evening as well as 12 Table Tennis tables, six pool/billiard tables, six football tables and live sports screen facilities. Venue: Dubai International Convention and Exhibition Centre, Sheikh Saeed Hall 1, Sheikh Saeed Hall 2, Trade Centre Arena www.dubaisportsworld.ae

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SEPTEMBER 2012 26-28 September

3-15 September

SMART AIRPORT WORLD MENA 2011

BACK TO SCHOOL 2012

This is where your child can engage in a variety of activities tailormade just for them from providing inspiration for a new hobby choice to dressing up like a favorite ‘super hero’. Parents get advice on topics from planning your child’s next birthday party to their autumn wardrobe. Admission: Individual ticket AED 15. Family ticket (two adults with up to three kids) AED 50. Groups of ten people AED 100. 10am to 8pm daily. Venue: Meydan Grand Stand Telephone: +971 4 303 4773 www.backtoschool.ae

Gathers airport operators, regulators, infrastructure developers, technology and service providers across MENA to to explore and showcase innovative industry solutions that support the exponential growth of air travel. Venue: Park Hyatt Dubai www.terrapinn.com

29 September – 6 October

GITEX SHOPPER

The region’s biggest consumer electronics retail platform. Includes IT professionals, technology enthusiasts, students and consumers as well as regional traders searching for the latest tech-innovations and shopping deals. Venue: Dubai World Trade Centre, Sheikh Zayed Road, Dubai www.gitexshopperdubai.com

LOOKING AHEAD 1 November 11 to 12 September

AL MURRAY, THE PUB LANDLORD

A new live stand-up show from the multi-award-winning comedian. Al Murray, Britain’s most irrepressible innkeeper will be serving up his own special brand of comedy as part of his 2012 The Only Way Is Epic Tour. AED 250. Venue: The First Group Theatre, Madinat Jumeirah Tel: +971 4 439 0900 www.doneevents.com 21 September

KERALEEYAM AWARDS

The Keralites in Dubai have played a large role in making Dubai the city it is today. The Keraleeyam Awards were created to thank and recognise all those Keralites that have made contributions to the economy of Dubai. The invitees for this function include the crème de la crème of the Keralites within the region – achievers, corporate leaders and socialites. Limited tickets available for sale - AED 10,000 for a table of 10. Tel: +971 55 252 0730 Venue: Armani Hotel, Downtown Dubai www.keraleeyamawards.com

GREGORIAN MONKS LIVE IN DUBAI

The 10-men choir will perform Gregorian chant-inspired interpretations of modern pop and rock songs. Seats are limited! Register for pre-sale of tickets by calling +971 50 768 6418. Venue: Madinat Arena, Madinat Jumeirah www.mpremiere.com 5-8 November

THE BIG 5 - INTERNATIONAL BUILDING & CONSTRUCTION SHOW 2012

A business and networking platform for the MENA construction industry providing business networking opportunities for exhibitors and visitors. Venue: Dubai International Convention & Exhibition Centre, Sheikh Zayed Road, Dubai Admission: Online registration www.thebig5.ae

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ISSUE SEVENTEEN-AUGUST/SEPTEMBER 2012


LAST WORD

That’s a Wrap A look back at some of the recent news related to money that made you laugh, gasp, sigh, or shake your head in disbelief…

WORLD’S MOST EXPENSIVE CUPCAKE

Posh nosh: AED 3,700 for a cupcake.

WORLD’S MOST EXPENSIVE BURGER AT $295

ART GASP!

The star of this season’s Impressionist and Modern Art sales was Joan Miró’s Peinture (Étoile Bleue) which sold for a staggering $36.9 million in London in June. Joan Miro’s Peinture (Etoile Blue) sold for $36.9 million.

THE PRICE OF WAR

2010 Military Expenses, US vs rest of World 800 700 600 Billion of Dollars

Burgerlicious! I don’t think you’re ready for this jelly.

Continuing in the ‘most expensive food’ vein, The Guinness Book of World Records has announced that Le Burger Extravagant from New York restaurant Serendipity 3 is the world’s most expensive burger at $295 (AED 1,080). The patty is made from Japanese Waygu beef infused with 10-herb white truffle butter and topped with hand-made cheddar cheese, cave-aged for 18 months by cheese maker James Montgomery of Somerset, England. It also has shaved black truffles, a fried quail egg, and Kaluga caviar, all held together with a solid gold toothpick encrusted with diamonds.

In what the more cynical may call a cheap PR gimmick, Bloomsbury’s boutique cafe, which opened at Dubai Mall in June, has unveiled the world’s most expensive cupcake. Called the Golden Phoenix, the pricey patisserie contains edible 23 carat gold sheet. How much will it put you back? ‘Just’ AED 3,700. Now that really – you know what’s coming next - takes the cake! Ba-boom cha! http://ilovebloomsburys.com

500 400 300 200 100 0

$691 billion

$698 billion

China UK France Russia Japan Saudi Arabia Germany India Italy Brazil

USA USA

South Korea, Australia, Canada, Turkey, UAE, Spain and Israel

The US spends $700 billion on the military each year (this doesn’t include bombs and missiles, which are off-budget items). Not only is the US number one in military spending each year but it spends more than the countries listed two through 18 - combined. Someone should remind Obama that the Roman Empire fell, in part, due to ballooning military costs.

“Religion is what keeps the poor from murdering the rich.” - Napoleon Bonaparte

50 ISSUE SEVENTEEN-AUGUST/SEPTEMBER 2012

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UP TO

2.9% p.a ON OFFSHORE GBP FIXED DEPOSITS*

WHERE YOUR SUCCESS WORKS FOR YOUR SUCCESSORS. OFFSHORE BANKING Security for the future. It’s what all ambitious people aspire to. With ADCB, you’re now able to ensure that your hard-earned wealth is protected in a way that gives you greater control of your financial resources. Our Offshore Banking Jersey branch offers attractive interest rates of up to 2.9% p.a on Offshore GBP fixed deposits* and is accessible via our award winning online banking facility or in branches and ATMs throughout the UAE. To find out more about the peace of mind it offers, visit adcb.com, call 800 2030 or SMS OFFSHORE to 2626.

Abu Dhabi Commercial Bank PJSC, Jersey Branch (“ADCB Jersey”), is regulated by the Jersey Financial Services Commission. Its principal place of business in Jersey is at: 25 Esplanade, St Helier, JE1 2AB. Abu Dhabi Commercial Bank’s latest financial statements may be viewed at www.adcb.com. ADCB Jersey is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website: www.gov.je/dcs or on request. * Terms and Conditions apply.


WEALTH Aug-Sept 2012