Mar
16
2014

Why Putin Won’t Win

Lesser Coat of Arms of Ukraine

Lesser Coat of Arms of Ukraine (Photo credit: Wikipedia)

My grandfather was a Ukrainian freedom fighter in the second World War sparring with the Nazis and communists to create a free Ukrainian state. He was on the losing side, and his country was consumed by Stalin’s Soviet Union. His hope for a free Ukraine lived on, along with those in the Ukrainian diaspora who recreated Ukrainian hamlets in the East Village in New York City, in the camps of the Catskills and all around the world from Canada to Argentina to Australia. These Ukrainians who lost their nation taught my generation how to be Ukrainian – by speaking the language and by continuing the refrain:

Слава Україні! – Slava Ukrainy! – Glory to Ukraine!

response: Героям слава! – Geroyam slava! – Glory to our Heros!

He did not live to see the Soviet Union’s fall and the blue and yellow flag of the nation he so loved flying high. I am glad he is not here today to see the Ukraine that he longed for coming apart at the seams. Today’s referendum in Crimea conducted under Soviet guns is history redux. The struggle is one for the very soul of Ukraine.

Ukraine has balanced its two faces throughout its history – the two faces in opposition today. The face of Janus turning to the East harkens back millenia. My first day in a graduate seminar on the History of Ukraine, I had to answer the question – did Ukraine as a country ever exist? Its origins in  an early Slavic state called Kievan Rus are also considered the birth of Russia. Its borders have  shifted as empires suppressed minority nationalities and traded territory like baseball card collectors. Stalin’s Russification and division of Ukraine was more of the same. The country’s split behooved Stalin so that he could maintain control of Ukraine’s natural assets – not just its breadbasket but also its coalmines in the East, which fed an enormous steel-making complex that propelled the Soviet Union’s industrialization. After starving millions of Ukrainians during the Great Famine, and purging millions more, Stalin filled Ukraine with those loyal to him and forced those who weren’t to conform.

Putin is pursuing the same tactics. Taking control of assets, moving in troops, suppressing the voices of those who disagree with him. He is using propaganda to play up divisions that exist but do not have to be divisive (many people, me included, speak both Ukrainian and Russia for example so it’s not a language division). And it looks like he’s playing to shift the borders once again.

The face of Janus to the West are all who see the potential of Ukraine in Europe. Ukraine has been looking to Europe for centuries. Today, Ukrainian citizens see opportunities for Ukraine to reshape its political landscape to be more democratic and less despotic, the chance to restart the economy with a version of shock therapy like Poland did back in 1989, the ability to build social, cultural, and literary links that have already bloomed. Take for example my cousin from the south of Ukraine (near Odessa, i.e. near the Crimea flashpoint) who is now studying in Poland where hundreds of Ukrainians like her are learning how to create a new future for their Ukraine. These ties cannot be severed.

Millions of Ukrainians like me in the Diaspora (14 million or so according to recent figures I have read) are tied to the idea of Ukraine as part of the West, not East. We have come together via social media rallying around “Euromaidan” – Ukraine’s Western Janus that toppled Putin’s lackey, Yanukovich, as well as Ukraine’s new leadership. Protests and letter writing campaigns have united young and old – one pre-form letter stating it the most succinctly, “The soviet ways are not ways that these people ever want to see again in their country.”

We cannot go backwards. In our church coffee hour today, we shared news of loved ones in Ukraine and checked our phones every few minutes for news on the referendum. The consensus rising is that Putin will fail in the long-term, even if he gets his Crimean vote. He has opened a Pandora’s box, said many, who believe the protests erupting across Russia will continue to grow. The hope is that sanctions from Europe and the US will further alienate Putin from his people.

There is also the very real sense that Ukrainians at home and abroad will fight – in actions and words – like my grandfather fought during WWII. The Ukrainian spirit is something Putin can never suppress.

Слава Україні! – Slava Ukrainy! – Glory to Ukraine!

 

 

 

 

 

 

 

 

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Mar
08
2014

5 Ways Women Can Find Their Voice

English: Vera Komissarzhevskaya as Nora in Ibs...

English: Vera Komissarzhevskaya as Nora in Ibsen’s A Dolls House (Photo credit: Wikipedia)

Last night I saw A Doll’s House at BAM. The play by Henrik Ibsen debuted in 1879. The message is still relevant 2014. And that’s not a good thing.

Ibsen was was inspired by the belief that “a woman cannot be herself in modern society,” since it is “an exclusively male society, with laws made by men and with prosecutors and judges who assess feminine conduct from a masculine standpoint.” His protagonist Nora lives this life. She is a pet, a bird made to sing for her husband. I was so annoyed; I didn’t think I could sit through Nora being objectified. And then a glimmer, we find out Nora saved her husband by secretly taking out a loan and secretly repaying it (even though her imbecile of a husband accuses her of being a spendthrift and clothes horse because she continually asks him for money). Nora knows everyone is underestimating her, but she keeps playing the role, dancing for dollars. I am again annoyed. And then in the finale, shouted down by her husband, Nora finally looks up – and leaves him. Pump fist, “You go girl!”

Nora walks away to find her voice. It is something we women are still doing 135 years later! Over the past year, I have been listening to my female friends talk about feeling unheard. Not just unappreciated – unheard. We are losing our voice as our families grow and there are more to take care of, as our work responsibilities become more demanding with new job titles, as more people take our shrinking time. When we constantly give, we lose our voice.

So on this International Women’s Day, here are 5 ideas to get our voice back.

1. Roar.

Yes maybe listen to Katy Perry. But also give yourself a shout out – literally. Shout how awesome you are, it feels so good. Get your friends to do it with you, and definitely your kids. I was leading my Girl Scout troop this week and telling them about Women’s History month and we shouted out several times about how women rock. We talked about famous women and the contributions women have made. We celebrated each other and talked about what each girl wanted to be when she grew up. I wish all of these little girls grow up in a world where they never feel their voice is unheard.

2. Write yourself a love note.

Even when we hear thank you and praise from friends, family and colleagues, we fail to give ourselves praise. Take a minute and write down what you have done in the past day, week or month that you are proud of. You’ll see how long the list is and you’ll know that you – and your voice – is irreplaceable.

3. Spend at least one hour every week not thinking about anyone else.

I was going say give yourself an hour say everyday, but I know that’s unrealistic when we are pulled in twenty different directions every minute. Let’s start with once a week: lock yourself in the bathroom for an hour and take a bath or sit down and indulge in one hour straight of reading that book that’s been sitting on your bedside table. Just you time. These moments help redraw the outline of you because when you are constantly caring for others or working, your outline fades and you become a shadow.

4. Save up for a treat.

We put away money for college for the kids. We save up for a family vacation. But when do we indulge in something just for us? Something impractical, something totally selfish? We feel so guilty when there are other priorities. But ladies, we are the priority! I am dreaming of saving up enough money to go to Mandy Aftel and have her make me my own perfume. A scent that says Tatiana. That is mine. My voice. (and for those of you who remember Tatiana perfume from the 1980s, that is totally NOT my scent!)

5. Reconnect.

Call your mom, sister, oldest friend. Do not email or text. Call. We need to HEAR the voices that inspired us in our lives. And in that way we will know our own voice.

Happy International Women’s Day!

 

 

 

 

 

 

 

 

 

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Mar
08
2013

International Women’s Day, C-Suite News and the Juggling Act

A 1932 Soviet poster for International Women's...

A 1932 Soviet poster for International Women’s Day. (Photo credit: Wikipedia)

On this International Women’s Day, I am once again in angst over the very very delicate topic of women finding a balance between career and family. I struggle every day as many of my peers I know do. In a recent interview with a leading Latin American CEO for a very timely report on women in senior leadership, I was able to articulate it out loud because of her frankness. She said – and I agree – that women carry more of the guilt of not being 100% focused on career or family, the guilt of always thinking you are missing something when you are at the other. I know I can’t be 100% when I want to do two very separate things to the best of my ability, I don’t want to give up either but I also don’t have a clone. Sound familiar?

I was heartened in writing the recent Forbes Insights / Grant Thornton study that showed that women are making headway to top spots in the corporate world globally. This even though many of the CEOs and C-Suite executives I interviewed said that they still see many women leaving mid-career to start families, and it is a challenge to bring these women back into the workforce. A weak pipeline of women moving up the ranks means that it will be difficult to crack today’s tally of 24% of women in senior leadership.

I’ve written more about the study on my Forbes blog; NYSE Euronext today hosted several conferences around the globe bringing women leaders together. Starting the conversation is important because from the numbers we can see what progress is or isn’t being made and know that we need to do more to harness the energy of half the global population.

Back in the 1930s, the Soviet state tried to do just that redefining gender roles. Richard Stites, a former professor of mine at Georgetown writes in Revolutionary Dreams: Utopian Vision and Experimental Life in the Russian Revoltion that “women were promoted, put into technical schools, and afforded wide opportunities to enter and rise in economic life, to establish their own identity through personal earnings, and even to gain a certain sense of self-respect and public respect as well.” The 1932 poster says it all.

But where did the promise go then? And possibly today? Stites continues, “women were saddled with a triple burden: of wage earning in the economy, of principal responsibility for domestic work and child care, and of public or voluntary work. This stripped them of their ability to use economic opportunity to advance along paths to power equal to men.”

We can get our power back by education, talent management and flexible work options says the report I wrote. Let’s keep looking for more solutions.

 

 

Jul
02
2012

Warsaw 2012

The DJ was pumping summer specials (“Call me Maybe” anyone?), the drinks were free flowing and the bride and the groom looked spectacular, but yesterday at my table all were glued to my cousin’s phone watching the final between Spain and Italy. There were grumbles about how Poland should have done better in its division, but overall awe and joy at Poland and Ukraine getting their moment in the sun after years behind the Iron Curtain.

Though I am not a soccer devotee, it is hard to not be impressed by the spectacle of Eurocup 2012. And even more impressed at how far Poland and Ukraine have come.

I first saw the new Warsaw stadium last year on my return to Poland. Pretty impressive and now how everyone sees Warsaw in their mind’s eye after stupendous event coverage and smashing soccer tourism.

Last year I came back to Warsaw for the first time since 1985. Back then, Poland was just shaking off the ill will of martial law and suffering from a crumbling planned economy. I remember waiting to buy a refrigerator for my great-grandmother who lived in a small village outside Cracow and still did not own one. My family had tried sending her money to buy one, but each time there was none to be had. In the winter, having no icebox was no problem – milk and butter stayed fresh out in the cold; in the summer, these were kept in the well or in the cellar.

At the time, I was 12 and didn’t really understand, or appreciate, why everything was so Little House on the Prairie. I knew we wanted to make my great-grandmother’s life a bit easier. So one day, we got a tip from someone about a truck arriving at an appliance store. Rumor had it that the drivers would be selling the refrigerators straight off the back of the truck before they even had a chance to hit the shelves. We weren’t the only ones getting that same tip. There was queuing, pushing, haggling — dozens of frenzied voices and bodies ready to carry these refrigerators on square backs if need be.

It was the same everywhere. Enormous lines or empty shelves. We went into a restaurant one time, got a menu only to be told they were out of everything. Hours later, somehow a chicken was found and we had our dinner.

Now faded photographs of that time before remain (see my 1985 vintage photo). Today Warsaw is full of four and five star hotels that are at your service 24/7 (including going back to the airport to pick up a forgotten stroller!) and the restaurants are packed, from hip and trendy (U Kucharzy on ul. Ossolinskich, run by the Gessler family which have a restaurant empire a la Batali, www.gessler.pl) to excellent pubs (BrowArmia on ul. Krolewska) and even a superb wine bar (Mielzynski on ul. Burakowska).

Warsaw is also safe and child friendly! The Chopin Museum (ul. Okólnik) is an excellent place to spend an afternoon with a special children’s room full of musical games to a room where you can sit quietly and listen to his music — actually my favorite was reading George Sand’s letters to Chopin! Another fun place: Teatr Malego Widza u(l. Jezuicka 4 ) in Old Town which has shows for little ones.

Indeed, the arts are thriving in Warsaw, especially around the area where the once imposing Palace of Science and Culture (built between 1952 and 1955 as Joseph Stalin’s “gift” to Warsaw) doesn’t seem so imposing anymore. It’s now more on an arts complex, surrounded by half a dozen theaters. I also went to my first theater piece this year in Warsaw, Ingmar Bergman’s Wiarolomni (aka “Faithless”).

The acting was powerful, the neighborhood very Williamsburg. (check out the company site: (http://www.trwarszawa.pl/wydarzenia/wiarolomni). I felt at home. Then I met the cousin of my best friend who is starting a gallery specializing in antique photographs. He moved from Paris a year ago, enticed by the artistic opportunity in Poland.

And much more! One of Warsaw’s mall offerings, Arkadia (al. Jana Pawla), is the antithesis of my 1985 experience. Shelves are stuffed, shoppers overflowing. There are imported foods from around the world, designers galore, an English language bookstore. You can even get your Starbuck’s fix (on Krakowskie Przedmieście) where I love sitting so I can to feel the youthful vibe of the Warsaw University students passing by.

Warsaw 2012. I may have missed the soccer, but I think the city is amazing!

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Mar
07
2012

What’s Next For Forbes’ Billionaires

I’ve once again had the privilege to work on Forbes’ World’s Billionaires list with a great team (I was a country editor). This year, we heard a lot more anxiety from billionaires as they manage uncertain markets. As a quick aside, I think our relationships with billionaires is what differentiates us from Bloomberg’s new Billionaires Index (which by the way was started by a former Forbes billionaires editor, Matt Miller). I spend a lot of time on the phone and messaging billionaires and their representatives to understand how they view their businesses and global economic prospects. This one-on-one relationship has given me and my colleagues at Forbes a clear indication of what the world’s global entrepreneurs think the near-term future holds.

Despite a bumpy 2011, billionaires I spoke with are cautiously optimistic for the next twelve months. As one former real estate billionaire, Jorge Perez, put it when I was speaking to him recently, he made money last year after a couple of unprofitable years, and that’s good news – he may find himself back on the billionaires list next year if all his projects continue to grow as planned.

The one constant across the board is that many billionaires are diversifying. Perez for example, who made a bundle on high-end condos during the boom is now looking at middle-market and affordable housing, condos as well as rentals. Billionaires are investing in new areas like tech which happens to the hottest (if one of the only hot) IPO sectors at the moment. When you see Mark Zuckerberg ready to hit the jackpot with his Facebook IPO, or Japan’s Yoshikau Tanaka doubling his fortune as his online social network Gree skyrockets, it make sense. Two of Ukraine’s billionaires who made their billions from heavy industry like pipes and steel are investing in the tech space: Victor Pinchuk announced plans to invest in e-commerce, telecommunications and social network start-ups at Davos and Ukraine’s richest , Rinat Akhmetov, is staking out space on the internet by merging operations with new Ukrainian billionaire, Petro Poroshenko.

Three other sectors are also making billionaires particularly happy: food, retail and energy. I see it as getting back to basics with what most people seek: something to eat, shelter and heat. That’s how Ukraine’s Poroshenko got on the list (see Forbes newcomer slideshow). The value of his chocolate business (he is known as Ukraine’s chocolate king) is increasing. In the Czech Republic, Andrej Babis’s food conglomerate Agrofert, continues to grow. As for shopping, Japanese billionaire Tadashi Yanai’s Fast Retailing stock price is up 35% over the past year; it encompasses brands from price conscious, Uniqlo, to fashionista brands, Theory and Helmut Lang. (see my comment on diversifying)

And then there is energy, and I am not talking so much about oil, as I am about electricity. Several Turkish conglomerates for example are making big energy plays which are buoying net worths even as the Turkish stock market falters, and the Turkish lira is down against the dollar. Ahmet Calik, who publishes Forbes Turkey, is investing  in energy distribution and renewable energy, building power plants in Iraq, Turkmenistan and Uzbekisan. Ukraine’s Rinat Akhmetov whose steel fortune is suffering, is buoyed by investments in coal mines and electricity generation. Solar and wind energy are also important areas; Romania’s sole billionaire, Dinu Patriciu, is investing in solar and wind projects in Europe.

Where work needs to be done: mining and banking. The Bloomberg World Mining Index is down 22% over the past year. That has helped shave off nearly a billion from the net worths of the Kazakh trio – Alijan Ibragimov, Patokh Chodiev and Alexander Machkevich (2012 NW each: $2.8 billion versus 2011 NW each $3.7B). Declining bank stocks knocked three Kazakh billionaires off the list: Timur Kulibaev, Dinara Kulibaeva and Nurzhan Subkhanberdin. (see Forbes dropoff slideshow) My hypothesis: they’ll be working on diversifying over the next year.

Русский: Фотография Рината Леонидовича Ахметова

Rinat Akmetov, Ukraine's richest

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Mar
09
2011

Forbes Billionaires and the Global Economy

GDP (PPP) Per Capita based on 2008 estimates h...

Image via Wikipedia

This is the eighth year I have worked on Forbes’ World’s Billionaires. As always, I find the personal tales fascinating. I met with new Ukrainian billionaire Yuri Kosiuk at the Four Seasons in New York last fall when he was pitching Wall Street for investment dollars for his poultry producer. We had coffee and a long chat about how his business is faring in Ukraine’s often fraught political environment. His take: if you know how to play the game you can succeed. We heard the same from Aliko Dangote, the Nigerian billionaire who increased his fortune six-fold when he took his cement operations public. He is convinced he can maneuver the politics in Africa to build a continental (and global) cement giant.

On a macro level, the total net worth and number of billionaires says a great deal about how a country is doing. My thesis: in Ukraine and Russia, a disproportionate amount of wealth looks to be accumulated in a few hands, the relic of a centralized Soviet system (in Kazakhstan we don’t see the same because the state still controls many assets under the tight grip of President Nursultan Nazarbaev) (Caveat: some of the wealth is held in investments in other countries but I think my thesis holds true for the most part). Meanwhile, in Eastern Europe, though central planning was also instituted, the political systems and opposition to communism emerged differently and there appears to be more spreading of wealth and perhaps the opportunity to still amass wealth. (see stats below) Indeed, Poland’s robust stock exchange has regional players flocking to go public. Poland is serving as a model for wealth creation.

We can also see where money is coming from – US’ biggest billionaire names come from tech, investments/finance and retail – think Bill Gates, Warren Buffet and Waltons of Wal-Mart whereas Western Europe is all about luxury brands like LVMH’s Bernard Arnault or Tod’s Diego Della Valle. In Eastern Europe, we see finance as a leader, and agribusiness. In the CIS, commodities dominate, though agribusiness is growing.

US

  • Total 2011 Billionaires Net Worth: $1.3 trillion
  • GDP 2011 forecast (World Bank): $15.3 trillion
  • 8% of country’s GDP
  • Total 2011 Billionaires: 412
  • Total Population: 315 million

Russia

  • Total 2011 Billionaires Net Worth: $432.7 billion
  • GDP 2011 forecast (World Bank): $1.6 trillion
  • 27% of country’s GDP
  • Total 2011 Billionaires: 101
  • Population: 140 million

Ukraine

  • Total 2011 Billionaires Net Worth: $30.3 billion
  • GDP 2011 forecast (World Bank): $165 billion
  • 18% of country’s GDP
  • Total 2011 Billionaires: 8
  • Population: 45 million

Kazakhstan

  • Total 2011 Billionaires Net Worth: $12 billion
  • GDP 2011 forecast (World Bank): $144 billion
  • 8% of country’s GDP
  • Total 2011 Billionaires: 5
  • Population: 15.6 million

Poland

  • Total 2011 Billionaires Net Worth: $8.9 billion
  • GDP 2011 forecast (World Bank): $472 billion
  • 2% of country’s GDP
  • Total 2011 Billionaires: 4
  • Population: 38 million

Czech Republic

  • Total 2011 Billionaires Net Worth: $12.3 billion
  • GDP 2011 forecast (World Bank): $185 billion
  • 6% of country’s GDP
  • Total 2011 Billionaires: 3
  • Population: 10 million

Romania

  • Total 2011 Billionaires Net Worth: $3.3 billion
  • GDP 2011 forecast (World Bank): $163 billion
  • 2% of country’s GDP
  • Total 2011 Billionaires: 2
  • Population: 21 million

Nigeria

  • Total 2011 Billionaires Net Worth: $15.8 billion
  • GDP 2011 forecast (World Bank): $230 billion
  • GDP/NW: 7% of country’s GDP
  • Total 2011 Billionaires: 2
  • Population: 160 million
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Jan
26
2011

Middle East Banks: Worth an Investor’s Look

ATM AL RAJHI BANK Riyadh Saudi arabia
Image via Wikipedia

In the fall, I wrote a piece for Forbes Middle East on MENA banks and expected 2011 recovery. Due to some politicking at the magazine (this is the third or fourth edit team I believe I have seen trying to get a Forbes magazine going in the Middle East, it’s a tough market for fully disclosed business stories), they chose not to take my story. I think the content is interesting and relevant to today’s banking discussion and so I am printing it here sans an editor’s so excuse any heavy language.

MENA Banks: A Phoenix RisingAfter a tumultuous three years, the banking sector is set to make a comeback in 2011

Dubai investment firm, Essdar Capital, controlled by two members of the Abu Dhabi Royal Family, recently announced plans to launch a $500 million fund that would buy underperforming GCC loans from regional banks at a discount, then restructure and sell the underlying assets.

One of the first such UAE firms of this kind will have a trove of bad bank loans to choose from. Bad bets made before the crisis are still making their way through MENA banks’ balance sheets. Within the region, a host of financial institutions have written off debts made to Saudi Arabian conglomerates, Saad Group and Al Gosaibi group; globally MENA banks suffered because of their direct exposure to the housing market in the United States, real estate products or collateralized debt obligations. By the end of 2008, MENA countries held foreign assets valued at nearly $2 trillion, 60% of which was denominated in United States dollars according to a United Nations report on the impact of the market meltdown.

As a result, by the end of 2008, the liquidity squeeze and loan defaults shaved bank profits by 16% and stock prices plummeted. The shortfall in banks, which comprise up to 50% of market capitalization in GCC countries, helped slice nearly two-thirds of regional stock market values. Governments scrambled to pump money into economies to no avail. 2009 saw a peak in coverage of bad loans, with $10 billion set aside for provisioning in GCC banks, and flat profits. 2010 was more of the same.

“However, banks will emerge with cleaner balance sheets in 2011; there will definitely be a recovery with profit growth expected,” says M.R. Raghu,Senior Vice President-Research at Kuwait Financial Centre S.A.K. (“Markaz”).

He anticipates that lenders and borrowers, who have been overly cautious heretofore will begin to get back in the game. The difference between now and three years ago is that banks are more rigorously conducting due diligence and limiting their exposure to real estate and construction. “In 2011, loan growth will be back around 10% which will bring profits back,” predicts Mr. Raghu.

Also helping: a recovery in crude oil prices. The combined GCC economic growth rate is expected to be over 5% with a channeling of funds from real estate and other illiquid assets into equity and debt instruments. Investment management is also an opportunity. The estimated $2.7 trillion GCC investment pool, with over 95% of funds invested offshore, could potentially flow back into regional markets.

Qatar is in better shape than most GCC countries. The government has provided a great deal of support to the banking sector – the Qatar Sovereign wealth fund bought upwards of 10% of the capital of banks to boost confidence. The International Monetary Fund forecasts 18.6% growth for gas-rich Qatar in 2011, up from 16% this year – the highest in the region.

Mr. Raghu recommends Qatar National Bank (QNB) because of its strong government links. “QNB’s heavy dependence on the government as a source of deposits and a destination for loans works in its favor…[T]he Qatari government is not as likely to default on loans as the private sector would be, providing some measure of assurance and stability to QNB’s outlook,” he writes in a report on the bank.

For the first nine months of 2010, QNB reported net profit increased 32.8% to $1.15 billion compared to the same period last year. Total assets grew 27.1% to $28.8 billion. The bank’s stringent risk management resulted in the ratio of QNB’s non-performing loans at 0.8%, one of the lowest in the region. QNB’s share price is up 33% over the past year, but Mr. Raghu believes there will be more upside. QNB is expanding internationally, growing branches in Oman, Sudan and Syria and adding to investments across the region.

Saudi Arabia, which has the second largest Arab banking sector after the UAE, is recovering as well and worth an investor’s attention. The pros according to Mr. Raghu: limited players and a highly regulated market. The Saudi government aggressively intervened to stabilize the financial system. Saudi Arabia’s monetary agency, Sama, poured $3 billion in long-term deposits into the banking system and the country’s Supreme Economic Council promised to guarantee deposits. And, according to the IMF, with higher oil prices filling government coffers, Saudi Arabia’s GDP is expect to grow to 4.5% in 2011.

Mr. Raghu recommends two Saudia Arabian banks: Al Rajhi Bank and Samba Financial Group. A recent analysis by investment bank, Credit Suisse, found that the two banks generated the highest return on equity of Saudi Arabian banks, 21.5% and 17.6% respectively; both are also well positioned to cover poor performing loans.

For the first nine months of 2010, Al Rajhi, the largest GCC bank by market capitalization and owned by the billionaire Al Rajhi family, reported net income of $1.35 billion. Total assets increased 11% to $48.4 billion based in part on growth in retail loans and deposits. Al Rajhi’s stock price is down 10% from a March annual peak, and Mr. Raghu thinks an uptick is imminent.

Samba, though not growing as quickly – indeed the bank reported a nine-month profitability decline of 5.1% – has a strong balance sheet. “Samba’s financial profile has continued to strengthen, supported by resilient financial performance, solid capitalization and strong funding and liquidity indicators,” according to Standard and Poor’s credit analyst Nicolas Hardy. The company’s stock price is up 9% over the past year. As one of the leading brokers in Saudi Arabia, it is likely to benefit when trading volumes return to higher levels.

Kuwait, which was rocked by a banking panic when its Gulf Bank announced over $1 billion in derivatives losses, is also back on track. The government stepped in with a slew of initiatives from short-term repurchase agreements to give banks funding, to investing in the stock market and to passing laws guaranteeing all bank deposits. The IMF predicts Kuwait’s GDP will expand by 4.4% in 2011, after modest growth this year and a contraction in 2009.

Mr. Raghu says the National Bank of Kuwait (NBK) and Kuwait Finance House are leading Kuwait’s rebound. “Kuwait banks’ balance sheets are in a relatively healthier position than their GCC peers,” according to Mr. Raghu.

For the first nine months of 2010, Kuwait’s largest bank, NBK, announced net profits were up 11.4% to $740 million. Total assets in the same period reached $44 billion. The bank’s stock price is up 27% over the past year, but still below its five-year peek in 2008. Mr. Raghu believes expansion in growing markets like Syria will improve the bank’s position.

Kuwait Finance House, one of region’s largest Islamic banks, reported total assets were up by 11% for the first half of the year to $42.5 billion. The bank’s stock price is up a modest 3% over the past year, and is set to go higher says Mr. Raghu.

Mr. Raghu states that banks in the UAE and Oman continue to be troubled, and other GCC countries are too small for investors to risk. In the broader region, banks in Egypt and Syria may provide opportunities for investors in the future; in the meantime the banks Mr. Raghu recommends are already making inroads into these fertile environments.

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Jan
20
2011

Mama Grisly and the Composure Class

DONGGUAN, CHINA - OCTOBER 18:  A worker and he...
Image by Getty Images via @daylife

A couple of weeks ago one of my closest friends expressed concern over the message in Amy Chua’s memoir, “Battle Hymn of the Tiger Mother.” My friend, who is really Chinese from Hong Kong and speaks Chinese and teaches her children Chinese –  as opposed to Chua who is of Chinese descent and grew up in the Midwest and hired a nanny to teach her children Chinese – was aghast that Chua was dictating how she should be raising her children as a “real” Chinese mother, or that anyone would think she is as self-absorbed as Chua. Then ofcourse we all found out the details – how Chua yelled and browbeat her children into being her image of perfection – and I told my friend not give Chua the satisfaction of buying her book. Chua is no more Chinese than I am. What she really is is a second-rate mother.

Look I am guilty of some obsessive helicopter parenting. It’s my generation – my three year old goes to preschool, ballet, gymnastics, music, yoga. I use the time out, I take the toy away (and sometimes threaten to throw it in the garbage when things get rough), and sometimes, yes, I raise my voice. Parenting = tough. But you have to want to be a parent to be a good one. Clearly Chua is missing that gene.

Then I read David Brooks’ brilliant essay in the New Yorker about his so-called, Composure Class. He writes, “They live in a society that prizes the development of career skills but is inarticulate when it comes to things that matter most. The young achievers are tutored in every soccer technique and calculus problem, but when it comes to their most important decisions-whom to marry and whom to befriend, what to love and what to despise-they are in their own. Nor for all their striving, do they understand the qualities that lead to the highest achievement. Intelligence, academic performance, [and playing instruments to perfection is something Ms. Chua would probably add if she were writing], and prestigious schools don’t correlate well with fulfillment, or even with outstanding accomplishment. The traits that do make a difference are poorly understood [Ms. Chua pay attention I say!], and can’t be taught in a classroom, no matter what the tuition: the ability to understand and inspire people; to read situations and discern the underlying patterns; to build trusting relationships; to recognize and correct one’s shortcomings; to image alternative futures.

Mr. Brooks, forgive me for the long quote but in case there are those who don’t get the New Yorker, don’t read your column in the NYT or won’t buy your book, I really feel this should be read. People skills. That’s the ticket. Life is about people, about family and friends. It’s a wonder Chua has any left.

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Nov
24
2010

Speaking with DawnTown founder, Andrew Frey

MIAMI BEACH, FL - DECEMBER 03:  People look at...
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Growing up in New York City, one learns to love architecture. The old, the new – the constantly changing landscape. I had the opportunity to learn about DawnTown, an organization which is as in love with the concept of dynamism in architecture as I am. They have started a design competition that draws international submissions of innovative ideas for Miami, but the concept can certainly be taken to other cities as Andrew Frey discusses. Check out our Q&A: Transforming Miami: Art Basel’s architecture competition, DawnTown by going to the Speakers Corner section of the site. Art Basel is next week, and one year I hope I can attend.

Happy Thanksgiving!

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Nov
09
2010

Forbes Middle East and Infrastructure Investing

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A friend and colleague recently moved to Dubai to help launch Forbes Middle East. She hired me at Forbes many years ago, and reached out to me to freelance. I have posted my first piece on ways to get invest in the infrastructure boom in the MENA (Middle East and North Africa) region in selected clips. It is in Arabic which is the first time a piece I submitted in English has been translated for publication into a different language.

One doesn’t often see pieces coming out of MENA that focus on investing. I believe this is one missing piece in understanding a region which mainly gets discussed in terms of oil or national security.

My piece focuses on the boom in infrastructure spending that regional government stimulus funds have encouraged. “Qatar, UAE, Egypt, Saudi Arabia and Kuwait are embarking on noteworthy infrastructure schemes, with Qatar set to experience the most significant growth.”

That means that publicly traded engineering, cable and pipe firms are solid investment opportunities. I discuss Egypt’s Orascum, ElSewedy Electric, Saudi Basic Industries and Abu Dhabi’s Drake and Scull International which are engaged in a diverse array of projects.

Definitely worth an investor’s look!

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