< Previous30 Vol. 23/12, December 2022 investment banker in a huge bank where I was toiling away for faceless sharehold- ers. I didn’t start a business in my garage – I went and found a small business with a sound business model that lacked ambition and scale, and joined it and then bought it. The exibility it gave me allowed me to nish my PhD and try out my thoughts on management and lead- ership. The success of the venture allowed me the opportunity to found a charity (the Taylor Bennett Foundation which works to promote diversity in the communications industry), and to become a founding member of the steer- ing committee of the percent Club, that helps to raise the representation of women at senior levels within publicly listed companies. The single greatest investment I made in the success of the business and my personal entrepreneurial journey was in my social capital. Strong networks help you along the way, and academic research shows us that build- ing trust with others lowers transaction costs. Networks are also a source of information and inspiration; there is a lot to learn from others. It is important to have an open mind, listen to other perspectives, and be curious about how other businesses are set up and run. While not everyone is willing to be a mentor, many female entrepreneurs want to build a thriving entrepreneur- ship network and are happy to share their journeys and stories. In conclusion, entrepreneurship is not an easy proposition, but it can be extremely fulfilling when done with passion, sincerity,and dedication. Although there is no formula for over- night success, visualising what the next ve or even ten years can look like, and persevering on the path, can help make the vision into reality. So can the help and support of those around us. As a woman entrepreneur, many challenges exist, but if we reach out to our networks, they can all be overcome. Remember, there is no such sentence as ‘I can’t do it’. The word that completes that sentence is the word ‘alone’. We all need others to help us achieve our goals. 132 The number of years it will take to close the global gender gap, according to the Global Gender Gap Report 2022 Support Being able to help women to advance is a bene t of running one’s own business Luckily, many women are blessed with skills that can help them to over- come these barriers. Patience, for a start, which is a useful attribute when trudging around multiple banks and venture capi- tal rms looking for nance. Consistent risk assessment is another skill women enjoy – academic studies have shown that the male hormone testosterone can lead to irrational decision-making. Multi-tasking – anyone who has juggled family and a career knows that being able to focus laser-like in the moment is crit- ical if you want to get anything done. Finally, perseverance, in having a strong work ethic and not compromising values, is the hallmark of a good leader and improves the chances of success. Being an entrepreneur The number of female entrepreneurs is increasing globally, but there are still a lot of challenges that women face in the modern world. The recent global pandemic showed major aws in the corporate world, and women, speci - cally working mothers, were dispro- portionately affected. According to research by the McKinsey Global Institute, women’s jobs were almost twice as vulnerable to the pandemic as men’s jobs. It is no surprise then that one of the biggest motivations for women to embrace entrepreneurship (and this was certainly true for me) is to control our own agenda and have flexibility. Whether we’re referring to children or ageing parents, the reality remains that women are still the primary caregivers. Autonomy to prioritise family and work without incurring the wrath of your boss comes with running your own business. The ability to set your own schedule makes it easier to make time for family, recreation, and focus on a healthy lifestyle. Above everything else, one of the most important reasons why more women are looking towards entrepre- neurship is that women want to make an impact. Women have the power to address gender equality. A 8 INC and Fast Company report surveyed women entrepreneurs and found that they are more likely to hire women. According to a Kau man Fellows report, startups with a female founder employ .5 times more women while companies with both a female founder and a female executive hire six times more women. Being able to help other women to advance is a bene t of running one’s own business. Women are also known to be espe- cially good at spotting market gaps. Research by the British Chamber of Commerce shows women have a better understanding of market needs resulting in creating innovative products and using technology in business. Another study in the United States showcased that women account for 85 percent of all consumer purchases. Women are usually responsible for deciding which products and services to purchase to best meet their needs and that of the family. As successful businesses rise on the back of market gaps, women’s entrepreneurial spirit in identifying the gaps is a recipe for winning startups. My entrepreneurial journey started as a way to have more control over my time, be closer to my family, and to support women’s representation. I also wanted to invest my time, money and energy into something which would have greater impact than I was able to as an COMMENT | Professor Heather McGregor, Provost and Vice Principal at Heriot-Watt University Dubai Perseverance, in having a strong work ethic and not compromising values, is the hallmark of a good leader and improves the chances of success INNOVATE. DISCOVER. CONNECT. WORLD FUTURE ENERGY SUMMIT 16 - 18 JAN 2023 10AM - 5PM / ADNEC - ABU DHABI Hosted byPart of 4 FOCUSED EXPOS 5 LEADERSHIP FORUMS 300+ EXHIBITING COMPANIES 110+ KNOWLEDGE SESSIONS 300+ SPEAKERS RESERVE YOUR ATTENDANCE AT WORLDFUTUREENERGYSUMMIT.COM WATER SMART CITIES SOLAR ECOWASTE ENERGY CLIMATE & ENVIRONMENTIND USTRY | 32 Vol. 23/12, December 2022 an ever-expanding range of products – within the shortest possible time frame. With geographically assigned delivery teams on standby to help collect and distribute items as e - ciently as possible, dark stores perform the same function as conventional brick-and-mortar outlets, but without any cashiers, tills or queues. The Emirates has witnessed a significant spike in dark stores during the past two years, which is hardly surprising given the extent to which the global pandemic reshaped our shopping habits. However, in addition to providing a more efficient retail experience, these facilities tend to offer a more extensive assortment of products thanks to their typical capacities. When one considers that only 58 percent of UAE shoppers report that supermar- kets carry their favourite brands, the ever-growing utilisation of dark stores represents a logical next step. But the rise of dark stores cannot be attributed to the Covid- 9 crisis alone. Their increasing popularity re ects broader industry trends. Do dark stores represent the enlightenment for UAE retail? We explore the growing prevalence of dark stores in the Emirates and asks the question of whether they spell the end of conventional brick- and-mortar outlets Convenience Three out of four UAE customers prefer to shop online, according to a 2022 study conducted by EZDubai BY LINDA SOARES , EDISTRIBUTION DIRECTOR OF LIQUID RETAIL Dark stores have a crucial role to play in the long-term evolution of the UAE’s retail landscape. Put simply, they represent a great way for companies to ensure their customers get what they want when they want it, and with zero hassle. So, what exactly is a dark store? Well, in short, it is a warehouse intended to be used solely as a pickup and drop-off point for online purchases. These facilities are specif- ically designed to ensure that customers can select, order and receive their groceries – or, indeed, 5.88% The compound annual growth rate (CAGR) of the UAE retail market in 2023 – 2027 period, according to a report from TechSci Researcharabianbusiness.com 33 | RETAIL After all, three out of four UAE customers now prefer to shop online according to a 2022 study conducted by EZDubai. It was only ever a matter of time before ecommerce extended its reach to our groceries. That’s not to say that dark stores are limited to the provision of daily essentials. On the contrary, they are making signi cant inroads within the elds of beauty products, clothing and even furniture. This trend is enabling UAE-based retailers to establish local distribution hubs, without the need to shell out for conventional overheads such as interior decoration and customer-facing employees. Even so, it’s not all plain sailing for online marketplaces. The unprec- edented growth of ecommerce during recent years has led to a number of challenges within the segment, including stock scarcity, delayed deliveries and a higher proportion of cancellations. Retailers have had to adapt quickly to address these issues, not only for their own sake but also for that of their patrons. Dark stores represent a modern solution to these problems, with innovations such as bespoke inventory management systems, route-planning software and logistics tools, which have enabled retailers to alleviate teething problems while scaling and optimis- ing their operations. Given the myriad advantages offered by dark stores, both for customers and retailers, is there a future for brick-and-mortar outlets? Well, the short answer is yes. When it comes to our purchasing habits, there has never been – nor will there ever be – a universal panacea. While dark stores may represent a seamless, contactless and convenient experi- ence for some, they will no doubt strike others as a dehumanised, soul- less dystopia. As such, any industry commentator that touts these facilities as the death knell for traditional retail is either prone to hyperbole or naïve. Ultimately, ecommerce and traditional outlets will continue to coexist and supplement one another for generations to come. That said, we expect to see the prevalence of dark stores continue to trend upwards over the coming years, as retailers push ahead with cutting- edge innovations and growth strate- gies. As sales increase in parallel with the options available to consumers, I predict that personalised shopping experiences will be the next frontier in our sector. Concerns The unprecedented growth of ecommerce has led to a number of challenges within the segment Evolution Personalised shopping experiences will be the next frontier in the retail sector, Soares believes Ultimately, ecommerce and traditional outlets will continue to coexist and supplement one another for generations to come $9.2BN The value of the UAE ecommerce market in 2026, according to analysis by the Dubai Chamber of CommerceINVESTING | 34 Vol. 23/12, December 2022 tions for investors around the world, given the dominance of the dollar in international commerce and invest- ments. For instance, almost all media headlines today are plastered with the word “in ation” – which has a direct impact on investment portfolios around the world. If was the year of the pandemic and was the beginning of the global recovery from it, then will certainly go down in history as the year of global in ation. Through the year, the debate surrounding in ation has in fact moved from “how much” to “how long.” In simple terms, there is now more money in the nan- cial system than the past, along with increased government and consumer spending, and rising prices through consumption. At the same time, supply chain issues have also pushed input costs higher, which are then being passed on to the end consumer. A number of factors thus point to a potential prolonged inflationary cycle ahead. But while certain assets tend to lose value during in ationary peaks, with the right knowledge of inflation trade and an intelligent choice of assets, it is possible for investors to adopt strategies that help them stay ahead and even benefit from in ation. A quick assessment of global stock markets reveals a bleak scenario, with US stocks entering bear market, having lost more than percent from their peak prices this year. The aggressive sello across stock markets this year has provided investors and traders hardly any room to manoeu- vre or margin to bet on. In the US, in ation at 8. percent is at its highest rate in years – and more importantly, this sticky in ation is unlikely to climb down any time soon. The strategy of 6 / portfolio of stocks and bonds on the S&P5 index has also yielded negative results, with the index down by .6 percent so far this year – on track to be the second worst year in history after the Great Depression of 9 . In addition, -year US treasury bonds have lost 8 percent so far this year – the worst How to in ation- proof your portfolio An uncertain global economy requires certainty of investment focus Global nance US stocks entered the bear market, having lost more than 20 percent from their peak prices this year $23.86TR The estimated market capitalisation of the New York Stock Exchange (NYSE) as of December 2, 2022 BY CHADDY KIRBAJ , DIRECTOR/DEPUTY CEO OF SWISSQUOTE BANK DUBAI REP. OFFICE With the US dollar at its high- est level since , it is only 8 percent away from its 985 levels, which triggered the historic Plaza Accord to push down the greenback in conjunction with Japan and Germany. Such a swift and sharp strength- ening of the dollar has major implica-arabianbusiness.com 35 9.5% The global inflation rate in the third quarter of 2022, according to the International Monetary Fund (IMF) | INVESTING year in history for the asset class. It is therefore clear that investors must adjust their tactics and adapt their outlook to prevail over the current global headwinds. They can do that by moving money into assets that typically perform well during periods of high in ation, protecting their wealth from its erosive e ects. They also need to build agility within the portfolio that allows them to move funds away from certain assets towards others, or embrace new assets altogether. While the strength of the US dollar has not yet peaked, there are signals that it’s nearly at the end of its current cycle of appreciation – implying that USD-denominated tangible assets may o er good alternatives to tradi- tional equities. This is further supported by the fact that the interest rate in the US currently stands at 3.25 percent – far higher than all other G10 economies and bene tting USD-cash assets as well as short-term maturity USD-denominated contracts. That is why between 40 percent to 50 percent of an investor’s portfolio should remain in cash for the time being, which will also help them re-enter the equity market quickly once market sentiments begin chang- ing, and bene t from more reasonable equity valuations. At the same time, investors look- ing to ensure a robust protection and growth of their liquid assets should not ignore precious metals, even though the bullion market remains depressed in 2022 with gold having lost 10 percent year-to-date and silver down by 20 percent during the same period. This is especially true for investors living in countries where the domestic currency is weakening compared to the dollar while retail in ation is on the rise – such as Iraq, Lebanon, Turkey, Syria, and Egypt across the region – because precious metals as tangible assets will offer elevated protection for their portfolio and balance the risks that emerge from simultaneously weak currency and high in ation. Although one of the hallmarks of in ation is unpredictability, investors would do well to look for products that offer diversified exposure across multiple markets to grow the value of investments and mitigate the impact of rising prices. By adopting an actively managed approach, research- ing market fundamentals, and invest- ing in products that o er the best of an in ationary cycle, investors can breathe easy when it comes to protect- ing their portfolio against inevitable price rises. Investment portfolio Kirbaj says investors looking to ensure a robust protection and growth of their assets should not ignore precious metals Investors would do well to look for products that o er diversi ed exposure across multiple markets to grow the value of investments and mitigate the impact of rising prices $1,850 The price of gold per ounce in the fourth quarter of 2023, according to projections by Dutch nancial services corporation ING 1.2% The projected global economic growth rate in 2023, according to the Institute of International FinanceIND USTRY | 36 Vol. 23/12, December 2022 both existing business and new ventures, increased due diligence on every transaction and an increase is their cots. I do agree that the UAE, given its lack of dependence from external funding and its political and economic stability, has confirmed the early opinions that it would have been impacted by the grey listing much less than what we have observed in the vast majority of the other countries once they were listed. In my opinion, as also in other cases, the FATF listing of the UAE, more than a sanction for gross non-compli- ance with its recommendations on anti-money laundering and counter of financial terrorism, appeared to be more a push to nalise a process which was already in an advanced stage, with the whole financial system having implemented a much deeper scrutiny of any internal and external player engaging with the jurisdiction and on all related transactions. Practitioners on the nancial and real estate sphere know this rst hand, when they face the due diligence and KYC (know-your-client) procedures with banks and other counterparties. UAE on the global nancial grey-list is a challenge for businesses to overcome Concerns around the UAE’s grey listing are overblown Institution The Central Bank of the UAE established a dedicated Department in August 2020 to handle all Anti-Money Laundering and Combatting the Financing of Terrorism matters (AML/CFT) ECONOMY | Robust The UAE’s overall GDP growth is projected to reach above 6 percent in 2022 BY ROBERTO D’AMBROSIO , CEO OF AXIORY GLOBAL As the UAE was grey listed by FATF in March , concerns sparkled about the impact that such a move from the interna- tional watchdog might have on the economy of the UAE, its attractive- ness to FDIs and individuals and to its banking sector. While grey listing does not get even close to the consequences of blacklisting, it increases the risk score of a country signi cantly, leading to a relevantly higher level of scrutiny for arabianbusiness.com 37 4% The UAE’s non-hydrocarbon sector growth in 2023, according to IMF projections | ECONOMY Still as the UAE leadership strat- egy is rightfully focusing on the attractiveness to FDIs, the impact of the listing should not be underesti- mated. As a matter of fact, the Central Bank as well as other institutions have tighten even more their require- ments, especially towards corporate entities and individuals which lack signi cant ties with the jurisdiction itself and are proceeding to review all existing relationships to detect any sign of anomalies or irregularities, so to address them rmly. All of this come at the cost of increased operational and financial burden for both the impacted entities and the financial institutions and government bodies, also leading to stretched timelines to finalise onboarding and approval processes. Investors are also concerned about the increased di culties they have in setting new relationship and sell their products and services outside the UAE, where they will have to face enhanced due diligence processes and in some cases even not being able to proceed as being based, or operating from, a FATF listed country might fall outside the risk appetite of the selected partner, or require an expensive, lengthy ad hoc procedure, involving senior manage- ment approval. All this might lead FDIs and indi- viduals to delay the decision to initiate the process of engaging in with the UAE as a jurisdiction and poses threats to those already operating from within the UAE, with the smaller players facing a relatively higher di culties in facing the described situation. Such outcomes are rare though, but might become and issue if the permanence of the UAE in the grey list stretches beyond the expectations. Besides the above, we need to consider that the UAE has attracted a very high number of expats, vital to the development of the country for its future projects, which are fully embed- ded in the economy and having the centre of their working, professional and personal life in the UAE, but still strongly connected to their country of origin, with which they operate tiny at correspondent bank level, espe- cially if the amount involved is relevant. Such an issue can occur both in send- ing assets from the UAE abroad and the other way around. When it comes to expectations, analysing the latest trends in the FATF action, it is my option that, considering the actions taken and the upcoming implementation of the corporate tax regime, the UAE is set to be delisted by spring 2023 or closely thereafter, thus a normalisation of the situation can be expected soon enough to avoid any escalation of the issue. To achieve such outcome, care must be taken in continuing in the path of creating a safe, compliant environment in the UAE from an AML and CFT point of view, still striking a balance between compliance with laws, rules and international bodies recommendations and the needed agility and timeliness business and individual requires, making sure that the increased geopolitical tensions and related sanctioning regimes are taken into due consideration to avoid delays in being delisted from the FATF grey list. Analyst The UAE leadership strategy is rightfully focusing on the attractiveness to FDIs, d’Ambrosio believes We need to consider that the UAE has attracted a very high number of expats, vital to the development of the country for its future projects frequent nancial transactions. Such transactions, as well as those initiated by corporate entities, are now being more expensive and are exposed to the risk of relevant delays in their execution. As an example, an interna- tional remittance can be delayed as the receiving bank might request more information than those required as a standard to complete the transaction or, and that would lead to even longer delays, it gets stopped for further scru-IND USTRY | 38 Vol. 23/12, December 2022 slightly better than expected, espe- cially in the US and in China, the picture from monthly data was unam- biguous: the global economy is mate- rially slowing. The US remains resilient but decelerates, China is lacklustre, and Europe is heading to a probably mild but imminent recession. The goods sector is particularly a ected. Meanwhile, in ation is only marginally moderating. The latest year-on-year increase of consumer prices is + percent in Europe and + percent in the US. The US core PCE de ator, which is the reference for the Fed’s percent target, is at 5. percent, only marginally o its year high and comparable to 9 , when short-term interest rates were around percent. Monetary tightening continues, but regional nuances appear Against such a backdrop, Western central banks unsurprisingly kept on raising interest rates. The US, the UK and the Eurozone had two things in common: rst, they hiked their policy rates by a massive +75 basis points. Second, they opened the door to a slower pace looking ahead, probably 5 basis points. Beyond this appar- ently perfect synchronisation, Our notebook on a hectic quarter Crucial central bank meetings, an avalanche of economic data and corporate earnings, major political events in China and the US, and even another crypto shock: The rst half of 2022’s last quarter is epic, but markets are so far resilient Economic outlook Europe is heading to a probably mild but imminent recession ECONOMY | Expert view Gravier believes the global economy is materially slowing BY MAURICE GRAVIER , CHIEF INVESTMENT OFFICER, WEALTH MANAGEMENT AT EMIRATES NBD There are decades where nothing happens; and there are weeks where decades happen.” Starting a nancial column with a quote from Lenin is admittedly a bit ironic. This is not 9 7, but the winds of change blowing on markets’ regime only got stronger in the recent eventful weeks. While the horizon remains clouded, some fog has started to dissipate to reveal a clearer picture for the outlook. Global growth slows down, but inflation resists While Q GDP numbers were overall arabianbusiness.com 39 2.9% The growth in the US GDP in the third quarter of 2022, according to the Bureau of Economic Affairs | ECONOMY nuances started to appear. The Fed made it clear: Slower yes, but to reach a higher terminal rate, closer to 5 percent, and for longer, until in ation is back on track. The economy will slow further. European central banks were less radical as the region has basically less growth and more debt. It’s also inter- esting to note that the Bank of Japan didn’t change anything since 2016, combining negative interest rates with quantitative easing, and that the last move from China’s PBOC was a 10 basis points cut in August. Shifts in political leadership As we write, it’s too early to draw a conclusion to the US mid-term elec- tions, but the probability is high that the Republicans gain a narrow major- ity in the House, but not in the Senate. A “split congress” is historically not bad for markets as it prevents extreme policy moves. Having less scal spending could ultimately help on the in ation front. By contrast, in China, President Xi has secured a third term and a rm grip on power together with his allies. This hasn’t been perceived positively by markets, but it also means that China’s leadership has the full ability to radi- cally stimulate the economy if and when they decide. A decent Q3 earnings season Around 75 percent of US companies that have reported beat the median earnings forecast, on average 4 percent higher. This is not as great as it sounds: the proportion is just in line with history, and the bulk of profit growth comes from the energy sector. Meanwhile, European and Japa- nese multinationals benefit from a stronger US dollar, which leads to good looking numbers but not for intrinsic reasons. While misses were heavily punished, especially in the sectors used to high growth, our take- away is that margins have been so far resilient despite in ation: a focus on high quality companies with robust competitive advantages should continue to bear fruits. Market participants are trying to look through the current backdrop, as there are reasons to believe that the toughest part of monetary tightening is done, and as the US may be able to avoid a deep recession. Downbeat sentiment and positioning are clearly supportive: markets don’t need great news to grind higher. However, sentiment is vulnerable, and uncertainty remains elevated, with the trajectory of in ation being the main unknown. The only true catalyst for a sustainable rally is to see it materially abating, which we believe it will, but the nightmare scenario is to see in ation staying out of control while the economy goes into a recession. In the meantime, volatility should remain extreme, even if we have a reasonably constructive medi- um-term scenario. Risk aversion can spike for many reasons, from the war in Ukraine to a financial shock, including the current one from the crypto sphere around exchange FTX. Patience and careful risk control remain paramount. Resilient The S&P 500 recorded its second consecutive month of gains in November Risk aversion can spike for many reasons, from the war in Ukraine to a nancial shock, including the current one from FTX Volatility remains the name of the game As we write, it’s interesting to note that since the beginning of the fourth quarter, most asset classes are in the green. It’s not a huge rally, between +0.2 percent for DM stocks and +5 percent for gold, but it happened despite a slowing economy, hawkish central banks, political uncertainty and unspectacular earnings.Next >