OCTOBER 2022 # 185 UAE AED 20 KSA SAR 20 BAHRAIN BHD 2 KUWAIT KWD 2 OMAN OMR 2 FOSTERING INTELLECTUAL CAPITAL Sahar Al Marzouki, owner and director of Al Faris International School, focuses on the value of building the next generationCONTENTS OCTOBER 2022 CEO MIDDLE EAST 3 OCTOBER 2022 # 185 OCTOBER 2022 # 185 UAE AED 20 KSA SAR 20 BAHRAIN BHD 2 KUWAIT KWD 2 OMAN OMR 2 FOSTERING INTELLECTUAL CAPITAL Sahar Al Marzouki, owner and director of Al Faris International School, focuses on the value of building the next generation 6 EDITOR’S LETTER 8 ECONOMY Anxiety plagues global markets but silver linings remain, says Maurice Gravier 10 ECONOMY High-net-worth individuals are purchasing ready-to-move-in projects in the UAE for their families, says Chris Whitehead 14 ECONOMY The UAE has emerged as one of the largest investing countries in Africa, says Zen Dlamini 16 COMMENT With 5 billion people expected to tune into the tournament, it’s the perfect opportunity for the Middle East to show just how great a destination it is for tourists, says Lorenzo Jooris 18 CONSTRUCTION A brand-new lifestyle destination in the heart of Makkah with an integrated ecosystem, Masar Destination is perfectly suited for long-term investment stability 08 1410 18CONTENTS 4 CEO MIDDLE EAST OCTOBER 2022 26 STARTUP Educating the young generation about entrepreneurship with foster unique talents and skills, believes Shadman Sakib 39 HOSPITALITY Dillip Rajakarier, Group CEO, Minor International and CEO, Minor Hotels, explains that gaining traction in this region is the future 41 EDUCATION Dr. Saima Rana of GEMS World Academy explains that in today’s information society, education is the bridge to opportunities which can enable women empowerment 20 26 39 41 Sahar Al Marzouki, the owner and director of Al Faris International School, sits down with CEO Middle East to discuss the importance of education to Saudi Arabia’s ambitious future COVER STORYAN ITP MEDIA GROUP EVENT Celebrating the titans of industry in the Middle East WEDNESDAY 7 TH DECEMBER 2022 DUBAI, UAE NOMINATIONS NOW OPEN FOR PARTNERSHIP AND FURTHER DETAILS CONTACT SARASWATI AGARWAL GROUP COMMERCIAL DIRECTOR Tel: +971 4 444 3352 | GSM: +971 52 895 2214 | Email: saraswati.agarwal@itp.com SAMIR GLOR SALES MANAGER Tel: +971 4 444 3320 | GSM: +971 58 824 6859 | Email: samir.glor@itp.comEDITOR’S LETTER 6 CEO MIDDLE EAST OCTOBER 2022 Saudi Arabia is home to the largest young population in the Gulf, and it is to the kingdom that we turn for this month’s cover. We have featured Sahar Al Marzouki, Owner and Director of Al Faris International School this month. Al Marzouki takes us on a journey through why the education sector is a key pillar of the Vision 2030 agenda, and how technology will continue to evolve the way in which teaching is conducted. “The sustainability of our existence is every person’s responsibility including our learners that are growing to become our future,” Al Marzouki told CEO Middle East. The full interview begins on page 20. This month also inches us closer to the mega-sporting event that is the FIFA World Cup Qatar 2022. The entire Gulf region is standing on the precipice of football mania, with businesses poised to reap the rewards of the influx of millions of fans. Earlier this year, the head of the GCC’s regional airlines came together to announce shuttle flights for fans between their respective nations and Qatar, meaning that countries around the region are now expecting fans to come and stay to see the World Cup. Dubai, which already played host to a mega-event earlier this year with Expo 2020, will likely see a huge boost to its tourism sector from fans staying the emirates. We cover this in more detail on page 16. While the next generation are of critical importance to the future of the Middle East, the region’s economy will also need to be powered by dynamic and innovative startups. Entrepreneurism is already on the rise in the Gulf, but the difficulties of starting a business still need to be overcome. Some experts have already called for starting to reach entrepreneurship at schools (turn to page 26 for more). For those who have already conceived a business idea, starting a company with a friend or family member can often seem like the simplest entry point. However, this is route is not without its pitfalls, a journey which we examine in more detail on page 28. Finally, the conversation on leadership in a post- Covid-19 world, with workforces more disparate and international than ever before, has continued to evolve. Now, leaders need to take into consideration the new normal, a situation which can be difficult to immediately manage. On page 34 we have included some analysis on how leaders can overcome these challenges. 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 THE NEXT GENERATION The Middle East’s bright future depends on its ambitious young population H ello and welcome to the October edition of CEO Middle East. Shepherding in the next generation will be a key focus for countries across the Middle East if they are to succeed in accomplishing the region’s bold plans. In this, the education sector will be key. From an investment perspective, the education industry has already provided successful investments and is a sector of growth. News recently emerged that one of the region’s biggest schooling firms, GEMS Education, would be looking to sell a portion of the company at an estimated valuation as high as $6bn. OCTOBER 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. 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ITP MEDIA GROUP CEO ALI AKAWI CFO TOBY JAY SPENCER-DAVIES MANAGING DIRECTOR ALEX REEVE DEPUTY MANAGING DIRECTOR ANIL BHOYRUL 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 DANIELFEWTRELL +971 4 444 3684 Daniel Fewtrell@itp.com ADVERTISING GROUP COMMERICAL DIRECTOR SARASWATI AGARWAL +971 4 444 3352 saraswati.agarwal@itp.com SENIOR COMMERCIAL MANAGERR MANSI KHATWANINI +971 4 4443242422 mansi.khatwani@ni@i@ittp.c.comm PO BOX 500024, DUBAI, UAE +971 4 4 44 3000 OFFICES IN ABU DHABI, DUBAI & LONDON PHOTOGRAPHY PHOTOGRAPHER JULIUS GARCIA VIDEOGRAPHER MUHAMMAD KALEEM VIDEO EDITOR LIJU CHERUVATHUR 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 PUBLISHED BY AND © 2022 ITP MEDIA GROUP FZ-LLC. MEDIA8 CEO MIDDLE EAST OCTOBER 2022 he summer started on a posi- tive note for financial markets: some signs of moderation in US inflation and overall strong Q2 corporate earnings came out at a time when markets were not expecting any good news. It was a summer rally in both stocks and bonds, but it didn’t last. At the end of August, Fed chairman Jerome Powell delivered an unambigu- ous message: the fight against inflation is the absolute priority, it will mean pain for the economy, and hopes for an im- After a positive start to the summer, all asset classes are back in the red, with serious concerns affecting each of them. The worst is certainly not priced- in but it’s also never certain; we are cautious but less pessimistic than most for the medium-term ANXIETY PLAGUES GLOBAL MARKETS BUT SILVER LININGS REMAIN ECONOMY Viewpoint. Flexibility matters a lot in times of volatility, Gravier believes T minent pause in monetary tightening are delusional. So, we’re back in FUD (Fear, Uncertainty, and Doubt) with reasons to be concerned for all asset classes: safe bonds suffer from higher inflation and rates, while risk assets are affected by a darkened outlook for growth, pressuring future earnings and solvency. Gold is no shelter despite inflation and a war. Even oil prices took a hit, as concerns over demand seem to outweigh supply constraints for the time being. When it comes to investments, it becomes difficult, unpopular and nonconsensual to have even a mildly op- timistic view. Yet, our own analysis of the situation gives us reasons to be less pes- simistic than most when it comes to the medium-term investment perspectives. A major crash is certainly not impos- sible, but we see a stronger probability for a combination of high volatility and low returns for the medium-term. Here is why. Nuances of inflation and growth Importantly, there are material regional divergences which are worth highlight- ing. Let’s start with the worst: the energy crisis in Europe is both the main inflation driver and a headwind on growth. While central banks have no choice but raising rates, to avoid importing inflation through weaker currencies typically, this won’t solve the essence of the problem – energy – while pressur- ing activity further. It’s, sadly, a terrible situation and a recession seems probable, without gas from Russia. Social unrest could be significant with a material squeeze in purchasing power – governments will help, but at the cost of more and costlier debt. The US is different: inflation there has more to see with rising prices in services, due to high demand, and ris- ing wages as the job market keeps on booming. The Fed tightening will have an impact. US inflation may already have turned the corner, between lower gasoline prices, less demand for goods, a strong dol- BY MAURICE GRAVIER, CHIEF INVESTMENT OFFICER AT EMIRATES NBDOCTOBER 2022 CEO MIDDLE EAST 9 ECONOMY Resilient. Inflation may already have turned the corner, between lower gasoline prices, less demand for goods, a strong dollar and rising labour participation Double-edged sword. The energy crisis in Europe is both the a inflation driver and a headwind on growth lar and rising labour participation. It is however too slow, and employment is too strong, to change the Fed’s stance anytime soon. Still, the US economy has proven resilient and a “soft-landing”, where growth would slow down below trend but avoid a deep contraction, doesn’t look impossible to us (unpopular opinion). Needless to say that this would be good news for the world. In China, concerns are less about in- flation and more on activity, due to Covid situation, a troubled real estate market, and slowing global economy. All numbers indicate loss of momen- tum, but the government has started to provide support, and it shouldn’t slow once President Xi’s leadership is con- firmed later this year. Finally, Japan remains an exception with accommodative monetary policy and so far modest inflation pressure. What could go wrong? There are two nightmare scenarios. The first one is geopolitical: further escalation in Ukraine, and more heat in Taiwan at the same time. The second one is about inflation spiraling out of control, which could push the world into a prolonged period of eco- nomic trouble. None of them are a central scenario, but their probability is not neglectable: markets will remain nervous. Behavioral factors are by the way the only bright spot: the levels of pessimism are at record highs for months. “A SIMPLE BUT EFFECTIVE APPROACH WOULD BE TO HOLD CASH AND BUY RISK ASSETS EACH TIME VOLATILITY SPIKES” Investment implications First and foremost, volatility, our key call for 2022, will remain extreme. Hope- fully both ways. Second, we try to find an optimal positioning between valuation on one hand, and the growth/inflation risks on the other. It’s not simple – our active bets are modestly sized, because we can’t find a “no-brainer” opportunity. Still, we underweight the riskiest segments of fixed income, as their spreads look a bit complacent with the current backdrop. In a scenario of moderating infla- tion, safe bonds in the three – five years duration are interesting, we are neutral. By contrast, we are modestly overweight in stocks from emerging markets, espe- cially India and the UAE, where growth is strong. We are neutral on developed markets, where we favour the US. Valuations are not cheap, but we don’t believe that earn- ings will collapse – equities are a nominal asset class which many tend to forget. Flexibility matters a lot in times of volatility: leverage is perilous, and if cash doesn’t compensate for the current inflation, at least it yields something and most importantly provides the ability to buy risk assets on material weakness. Apart from the well diversified portfolios we maintain and recommend, in which we hold significant amounts of cash (up to 15 percent in a conservative profile), a simple but effective approach would be to hold cash and buy risk assets each time volatility spikes, to enhance the long-term expectable returns. In the meantime, there’s only one true catalyst: abating inflation which would trigger a pivot from Western cen- tral banks, which is, we believe, the story of 2023. In the meantime, we are less pes- simistic than most, as we don’t see most valuations as outrageous while sentiment and positioning are very low. The worst is always possible, but never certain. 2.9% The projected global economic growth next year, according to an IMF reportNext >