CONTENTS JULY 2022 CEO MIDDLE EAST 3 JULY 2022 # 182 6 EDITOR’S LETTER 8 COMMENT Alejandro Arevalo, head of Emerging Markets Debt at Jupiter Asset Management, presents the opportunities and potential risks in the asset class amid rising inflation, tighter policies and geopolitical tensions 10 COMMENT Unclear expectations are a particularly big challenge for team members new to remote working believes Casey Bailey, Head of People at Deel 12 LEADERSHIP Leaders need to be on the lookout for trouble in their teams, and at the same time it is vital to give space for the voices in the team members to be heard, says Team Space founder Andy Fieldhouse 14 COVER STORY Gokhan Baykam, founder and chairman of Relight, Bay Capital, Arkham Investments and president of the Baykam Earth Foundation, speaks exclusively with CEO Middle East on how innovation is crucial for success in climate change, startups, and technology 14 108 12 COVER STORY CONTENTS 4 CEO MIDDLE EAST JULY 2022 40 LIFESTYLE Good leaders survive change, but great leaders thrive in it, says Tomas Alonso, CEO of BSH Middle East 44 INSIGHT The new era of automotive requires overhaul of ‘conventional thinking’, says Dr Hamid Haqparwar, managing director of BMW Group Middle East 46 LIFESTYLE The UAE’s role as a global culinary destination has grown significantly, Antonio Gonzalez, CEO, Sunset Hospitality Group tells CEO Middle East 18 40 46 44 CEO Middle East celebrates the banking leaders who are ushering in a new era of financial services BANKING INNOVATORS LIST 2022CROWNING ACHIEVEMENTS IN THE MEP SECTOR NOMINATIONS ARE NOW OPEN FOR THE 16 TH ANNUAL MEP MIDDLE EAST AWARDS Wednesday 21 st September 2022 Dubai, UAE For sponsorship enquiries: Vinay Ravindran Commercial Director Tel: +971 4 444 3155 M: ++971 55 810 1197 E: vinay.ravindran@itp.com For nomination enquiries: Almas Tholotr Editor, MEP Middle East T: +971 4 444 3845 E: almas.tholotr@itp.com For event enquiries: Anthony Chandran Marketing & Events Manager T: +971 444 3689 E: anthony.chandran@itp.com Scan to nominate mepmiddleeast.com/awards Gold SponsorsEDITOR’S LETTER 6 CEO MIDDLE EAST JULY 2022 H ello and welcome to the July edition of CEO Middle East. Businesses and the economy at large would struggle to succeed without the support of one crucial industry – the banking and finance sector. As such, I am very happy that this issue we were able to celebrate the leaders and innovators driving the industry forward. Our 30 GCC Banking Innovators include the leaders of some of the biggest banks in the region, and is representative of the transformational steps the industry has taken towards adopting technology, improving financial inclusion, and increasing collaboration while improving financial services. The list begins on page 18 and I encourage you to check out each of our leaders, congratulations to all included. Sticking with the theme of innovation, I am delighted that our front cover this month features Gokhan Baykam, an entrepreneur and investor with a wide variety of ventures across industries. Beginning on page 14, Gokhan shares his thoughts with CEO Middle East on how to invest sustainably, and the technologies that are necessary to help mitigate the chance of catastrophic climate change. Additionally, as an Arabian Business Future Falcon, Gokhan also passed on some advice to startups on how they can secure funding – an ongoing challenge for entrepreneurs in the sector. The question of leadership and management was also addressed during our cover interview, a theme that is also addressed throughout this issue. The pandemic fundamentally altered the way in which managers could motivate their teams, with remote work in particular proving a challenge, a subject that is covered in more detail on page 10. Additional commentary on how leaders can help get their teams out of the “red zone” can also be found on page 12. This commentary also intersects with the ongoing conversation around wellness and sustainability. CEO Middle East’s sister publication Arabian Business held a full event on the subject of mental wellbeing in June, and we have sought to continue the discussion in this issue. Antonio Gonzalez, CEO, Sunset Hospitality Group was kind enough to share some thoughts with us this month on how these trends impact the hospitality sector on page 46. “One can’t be concerned about their wellness without being concerned about planetary health,” Gonzalez said, and added that there is now an “expectation” from travellers of climate-friendly practices and wellness services. It will be exciting to see how these trends continue to impact different industries and the ways in which leaders adapt to this change – a story we will continue to cover in this publication. Until next time. Share your views on thought leadership and innovation by getting in touch: matthew.amlot@itp.com QUESTIONS? COMMENTS? MATTHEW AMLÔT Editor @MatthewAmlot IN CELEBRATION OF AN INDUSTRY Innovation, sustainability, and wellness come to the foreJULY 2022CEO MIDDLE EAST 7 To receive your copy delivered directly to your door, subscribe online at www.itp.com/subscriptions The most important business people and CEOs talk to the most important magazine The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication which is provided for general use and may not be appropriate for the reader’s particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. ITP MEDIA GROUP CEO ALI AKAWI MANAGING DIRECTOR ALEX REEVE EDITORIAL EDITOR AT LARGE MATTHEW AMLÔT matthew.amlot@itp.com SUB EDITOR EDWARD LIAMZON SENIOR DESIGN MANAGER GERI SONNY DESIGNER MOHAMMED IRQSOSY EVENTS & MARKETING DIRECTOR OF AWARDS & MARKETING DANIEL FEWTRELL +971 4 444 3684 Daniel Fewtrell@itp.com ADVERTISING GROUPCOMMERICAL DIRECTOR SARASWATI AGARWAL +971 4 444 3352 saraswati.agarwal@itp.com SENIOR COMMERCIAL MANAGER MANSI KHATWANII +9714 44432442 mansi.khatwani@ni@i@ittp.c.comm PO BOX 500024, DUBAI, UAE +971 4 4 44 3000 OFFICES IN ABU DHABI, DUBAI & LONDON PHOTOGRAPHY SENIOR PHOTOGRAPHERS EFRAIM EVIDOR ADEL RASHID VIDEOPHOTOGRAPHER AJITH NARENDRA PRODUCTION & DISTRIBUTION GROUP PRODUCTION AND DISTRIBUTION DIRECTOR KYLE SMITH PRODUCTION MANAGER DENNY KOLLANNOOR PRODUCTION COORDINATOR MANOJ MAHADEVAN SENIOR IMAGE EDITOR EMMALYN ROBLES CIRCULATION CIRCULATION EXECUTIVE RAJESH PILLAI DISTRIBUTION COORDINATOR AVINASH PEREIRA ITP LIVE GENERAL MANAGER AHMAD BASHOUR ITP GROUP CEO ALI AKAWI CFO TOBY JAY SPENCER-DAVIES PUBLISHED BY AND © 2022 ITP MEDIA GROUP FZ-LLC. MEDIA MAY 2022 # 180 UAE AED 20 KSA SAR 20 BAHRAIN BHD 2 KUWAIT KWD 2 OMAN OMR 2 PREPARING FOR THE NEXT PARADIGM SHIFT Dr. Ray O. Johnson, CEO, TII on how the UAE is ready for the technology revolution8CEO MIDDLE EAST JULY 2022 Opportunities and potential risks in the asset class amid rising infl ation, tighter policies and geopolitical tensions EMERGING MARKET DEBT: WINNERS AND LOSERS BY ALEJANDRO AREVALO, HEAD OF EMERGING MARKETS DEBT AT JUPITER ASSET MANAGEMENT ields across hard currency emerging markets debt have blown out by 2 percent or more this year, with sovereign hard currency debt recording a year-to-date loss of almost -17 percent, driven mainly by higher interest rates across the globe. Emerging markets now look extremely attractive relative to both their history and many other parts of fixed income. If past is any guide, from these valuation levels, EMD tends to deliver strong risk-adjusted returns. For many investors, the difficult ques- Y tion is not just when to buy but what to buy. Inflation is putting pressure on central banks. Global growth is threatened by higher prices and tighter policy. The Russian invasion of Ukraine continues. China is struggling with lower growth and zero-Covid policies. However, EM central banks are ahead of the curve in tackling infla- tion. Higher commodity prices are a tailwind for many. The presence of an emerging market middle class has made EM consumption less dependent on DM. Energy-related inflation, as well as spikes in prices of basic materi- als, are usually perceived as positive factors for EM, but some countries are net energy importers. Wheat and other agricultural commodities can have significant effects on food importers. In our team, we dig even deeper and ask ourselves questions such as: What might be the effect of higher prices at sector and company level? Can persistent inflationary pressures generate second-order effects on po- litical stability? Macroeconomic shocks rarely have the same impact on different countries and businesses: winners, as well as losers, emerge. This makes a selective approach essential for EM investors, creating a great environment for truly active managers. Our team of EM credit analysts identify potential win- ners and losers: Latin America – Alejandro di Bernardo WINNERS Mexico – Mexico is a highly special case as its terms of trade are tied to the United States. While the country is a net importer, higher oil prices aid public finances via higher tax collec- tions from state-owned PEMEX. Fiscal prudence should continue throughout the year and the opposi- tion in Congress will likely limit radical changes. We thus stay overweight on selected utilities and names that can benefit from a reopening economy. Corporates are preferred to sovereign debt as relative spreads have meaning- fully cheapened. Brazil – We are positive on Brazil. The country is a major exporter of iron ore and soft commodities (like soybean). On the political front, former presi- dent Lula has emerged as the favourite to win this year’s elections, and his alliances with centrist parties signal a more moderate approach. We stay tactically overweight on blue- chip exporters, able to pass-through cost increases in the chemicals and metals COMMENTJULY 2022 CEO MIDDLE EAST 9 COMMENT and mining sectors. We also see value in some producers of fertilisers. Corporates are preferred to sovereign debt. Guatemala – We maintain a positive view on Guatemala as the largest country in Central America with the lowest debt to GDP ratio in the region. The country maintains a prudent fiscal policy and thanks to record levels of remittances we expect higher growth for this year, despite inflationary pressures. We stay overweight on selective corporates with revenues in US dollars or with currency hedges, corporates preferred to sovereign on relative valuation. LOSERS Chile – Chile is a significant importer of oil and the increase in energy prices has been much larger than that experienced by copper, its key export commodity. Ad- ditionally, unlike in 2021, we see limited room for the government to stimulate the economy, and ongoing constitutional reform adds political uncertainty. We are underweight across portfolios and prefer exposure to HY names in the Telecom sector given attractive valuations. Peru – Peru is a net exporter of base metals, but we remain cautious. Ongoing political noise and risks of presidential impeachment make future prospects uncertain, and high copper prices might not produce expected improvements in the fiscal position of the country given inconsistent spending targets. We stay neutral to underweight and prefer expo- sure to selected miners and agricultural commodities exporters. Asia – Xuchen Zhang WINNERS Indonesia – Indonesia is one of the few net commodity exporters in Asia, and will continue to see improving fiscal and external metrics, and robust GDP growth. The central bank has been consistent in keeping monetary policy pro-growth and inflation is under control. We like E&P companies that generate strong cash flows, as well as property developers that are set to ben- efit from improved household balance sheets. Nevertheless, allocations re- main modest, as many corporates still carry significant exposure to thermal coal production, which does not help promote the transition to net-zero. LOSERS South-East Asia – Philippines, Thai- land, Vietnam – All three countries are net commodity importers and govern- ment balance sheets will deteriorate. The new Philippine government’s policy remains uncertain with regard to the local conglomerates that have issued the lion’s share of dollar bonds. India – India sources 85 percent of its oil and gas from imports: every $10 oil price increase leads to a 0.4 percent wider current account deficit and 0.5 percent higher inflation. Oil, metals and fertiliser together account for half of India’s imports, which is a heavy blow to both government and household finances. However, this also means renewable energy is more stra- tegically important to the government as a sustainable solution. We continue to like this sector. EMEA – Reza Karim WINNERS African oil exporters Nigeria/ Angola – Angola’s debt to GDP is expected to decline sharply because of the high oil price and the country is also almost self-sufficient when it comes to food imports. To a lesser extent, Nigeria also benefits from high prices, but pro- duction has been running lower than expected and food inflation is high. GCC – The IMF expects Kuwait, Oman, Qatar, Saudi Arabia, and the UAE to run large current account fiscal surpluses this year, thanks to oil. Strong fiscal sur- pluses allow much greater room to man- age the increase in food prices through subsidies. The region is looking much stronger than during the Arab spring period and the probability of political unrest is reduced. Promising market. Brazil needs to continue the ambitious reforms it has started to simultaneously boost productivity and employment, the Organisation for Economic Co-operation and Development (OECD) said 2.9% The global economic growth this year, according to World Bank projectionsNext >