The day I met Dubai in hospital

It was a cold November morning last year and I was on my way to meet my friend ‘Dubai' at the hospital Intensive care. I had heard of his ill health and it came as a shocker to me (and a lot of us) that such a healthy looking person from the outside could have been so terminally ill on the inside. A debt restructuring consultant friend of mine who was part of the team tending to him at the ICU had said he was in the weakest condition they had ever seen a patient of this category.

As I walked into the hospital on that day, I could see a team of fund managers and bankers all standing outside the hospital and shouting in the top of their voice that they had been predicting this situation for my friend for the past 2 years, but no one had been listening!!!. I said to myself ‘That was not true, you guys may not have necessarily created this mess, but you didn’t help him in any way and only goaded him along into this path to the ICU’, but I kept quiet and didn’t want to add to the cacophony.

Today, a year had passed since that fatal day and I was on my way to meet my dear friend. It was a near miracle, Dubai had survived a very close shave with death and had lived to tell the tale. As I walked into Dubai’s residence, I could see the change. A couple of years back the same place was filled with blue/ black suited men with cheques waiting for signatures, now they were no more there. The suits had been asked to stay off for a while by the expert team of medics.

I spotted my friend resting in the shaded greens and on first glance it was evident, I was looking at a new Dubai in front of me. Gone was the naughtiness and innocence from those eyes and there seemed to be a sheet of boredom drawn over the eyes. He saw that I noticed the same and said “I know, the doctors (restructuring consultants) worked very hard, but there is no medication for bringing back a state of mind to its old self, medical science has only found cures to bring back the body to its old self, not the mind”. I nodded quietly. I knew what he was going through.

A year on, from the state I had seen him at the hospital when some of his Nakheel cells had turned cancerous and resulted in several more related complications, he was now physically back to his old healthy self. The team of consultants, bankers and Global lobbyists had worked tirelessly on him by bringing in infusion of new capital medication; undertaking continuous chemotherapy to remove the advanced real estate/ mortgage finance cancer cells. Importantly they also made him live a completely changed lifestyle away from the private equity vices.

As I was leaving the house later in the day, I reflected on what this Reborn Dubai had told me and thought; “Miraculously the body was almost back to the old self, but the mind …that may need more time to recover. The confidence had been shattered, and the only medication for treating that was time”

As they say in Spanish "El tiempo da beun consejo"....time will tell

(Disclaimer: These views are purely personal and do not in any way represent the views of my employer)

The ‘Geek Vs Cool’ Wars

As a blackberry owner, I was a certified member of the ‘Not-so-cool guys in office’ group. Then should I not be thrilled with the Blackberry Playbook launch, because it’s supposed to bring the missing Pizzazz to my boring blackberried life??? Well here’s my take on the Playbook; but first a background on why and how I ended up with the ‘not so cool’s’.

My experiments with 'Cool'
The first day I bought an iphone (trying to join the cool guys gang in office), I had this business dinner engagement with a lady. The moment she saw me at the restaurant, she went shades of pink and whispered, “my my ..are you HAPPY to see me or what (staring at my pants)”. I was zapped and had to quickly whisper back” I AM happy to see you, but THAT’s just an iphone in my trouser pocket”. Then the other time we had this Asian housekeeper (No, I’m not racist, so I won't state the nationality of the philipino.. :), I could never realize how a random ‘yes’ to a statement from her “I phone you tomorrow, I phone you tomorrow” could lead to a major confusion. For a month, our house remained a disaster and dusty, until she confronted me and said “you cheat me, you not give iphone to me..you always say tomorrow, tomorrow, yes yes” and I’m like whoa! I decided that the iphone and me have some karmic disconnect somewhere and a complex relationship with a fat phone was not worth it.

And the ‘not-so-cools’
I decided my fate was written long back and whatever I tried, I would always end up being part of the boring guys group in office; so I went ahead and got myself blackberry anyway (the bosses were thrilled too –email, calander, messenger, roaming number..I was tracked for life now). But to be honest I find the average blackberry user also a weird and sometimes rude species. Haven’t you noticed they always hold the berry cupped in their palm, in a meeting they listen to what you’re saying and then compare what you’ve just said with something that’s written on the blackberry ; and without looking at your face they just reply back ‘ yeah yeah’ and keep fiddling with the blackberry.

So finally what is my identity now– not-so-cool, grey suited, boring, borderline geek and happy blackberry user; feels good that there are now over 50Mn of us in the world!

3 reasons why the Blackberry Playbook won’t take off
1) What’s in a name, sometimes everything
What’s with fruit names and tech devices anyway. Apple, Blackberry,…I dread the day some tech geek comes out with a brainwave and invents a mobile communicator which becomes an inseparable part of my life and to further torture me he names it a ‘Banana; and I still end up buying it.

Coming back to the Playbook, We’re the ‘not so cools’, and we’re not supposed to be carrying anything that even remotely suggests that we use our gadgets to play around in office. Then why is this called playbook, and why is it not called the workbook. I’d bet 6 out of 10 blackberries around the world have been sponsored by a corporate. How would it sound if you go to the CEO for an approval for 15 ‘Play’books for your team. Chances are that the CEO (struggling with red ink all over his desk), would probably call his HR manager to do a employee productivity review.

2) Missing Pebblekeys
The blackberry caught on because of the enormous amount of fat fingered guys like me in the world. Do you know there was a phone launch called the Blackberry Storm? It's highly likely that you don’t know about it, and why is that? The Blackberry Storm does not have any keys to punch on and is a full touch phone. As expected, in a hurried way, RIM released another product called calling it the Blackberry Torch. The major difference - They took the Storm and fixed a sliding keypad below the Storm and gave us back the pebble keys. I looked around for a sliding keypad somewhere in the Playbook and couldn’t see one. I’d wait for a sliding keypad to be put in very soon in the playbook before I spend money on it.

3) Diluting the core Product Positioning

On the website it says the playbook is great for gaming and media and in the same breath it says it’s a CIO’s delight(mail exchange server etc.). I mean, have the RIM guys lost it, that’s like tomorrow ‘ Emirates Bank saying ‘we’re not just a great commercial bank, but soon we’ll also be a great grocery store chain’. Just because you built a gadget with monster processing speeds (The Cortex A9-based, dual-core 1GHz CPU is on par/slightly ahead of iPAD’s 1Ghz A4 processor) does not mean, you move so far away from your strongest selling point that we dont recognize you anymore. There’s an identity crisis here and even RIM is not able to figure out if the playbook is supposed to be a testosterone deficient boring officey gadget or a red bull drinking hip hopper's accessory

Let's wait and watch...

Caution: Mad men around

The Mad Men TV Series hit the world at the right time. The boom years of 2007 were all about idolizing the protagonists in Mad Men. Every male character in the series was successful, rich, cigarette smoking and a hard drinking womanizer; every female counterpart was an unintelligent, polygamous, attractive blondie. You couldn't’t help us not to be carried away in that wave. After all, those were the times when Gordon Gekkos and the Mad Men were omnipresent in our board rooms. Watching the series; I wondered if TV inspired real life or real life inspired TV; it was more like watching a reality TV show in a different setting.

Is their rule ending globally
I am neither rich, successful nor famous, So I guess I can write quite dispassionately about this whole affair. In the last couple of months in case you haven’t noticed (oh you haven’t noticed, can’t blame you for not noticing while sitting in your 160th floor Burj Pad or Yacht parked at the Marina), letters have gone out to most of these mad men who remained in office globally stating ‘Dear Big Cheese who ruled our world; we regret to inform you that you have been fired. We’re really sorry about having to let you go but in case you did’nt noticed, the world has changed while you have not'.

Aaah, I can see that smirk; you don’t believe me. Here’s the hard facts for writing this piece:

• August 2010 – Mike Hurd - HP’s CEO gets fired by his board, he’s caught in a sexual harassment case (Source: Tech Eye)
• July 2010 – Robert Moffat – IBM’s Sr Vice President & Sam Palmisano’s prodigy gets jailed after being caught in a web of sex and hedge fund leaks (Source : Fortune)

Collectively these two gentlemen resulted in a net loss in valuation of IBM & HP of around USD 20 Billion (check out the stock prices slipping on the days the news broke out last month). This was just a sample, I could list more. With due respect to all these big cheeses, they were not mere mortals. These were some of the brightest best minds in the business. Why is it that men who were authoring some of the best turn around strategies failed miserably in this case in something as simple as keeping their fly zipped!!!

Look out: They still rule around here
What is it with successful men that gets them tripping over something as commonplace as beautiful women (any expat into the Middle East would agree that it is one commodity this region has aplenty other than Oil). My personal analysis is that Middle East region is full of Mad Men and teeming with Gordon Gekkos who are idolized and eulogized every day in print. Here’s why

Surrounded by Psychopathic ‘Yes’ Men
Out here of all the places I’ve worked, I have found that on an average most CEO’s are surrounded by too many psychopathic ‘yes’ men. Some of these men seem to be vying for the CEO’s post itself and the others are overpaid expats who just don’t care what happens as long as the money keeps coming. So for approximately 12 hours a day, the CEO (our central character) is fed with a daily dose of how great his decisions have been. Can’t really blame the poor guy to start getting this false sense of invincibility leading to the birth of the Mad men.

Living in a Material world
Again of all the places, the Middle East is the most brand conscious, material conscious region I have witnessed. Want to test it out - go to the office on a weekend and check out how many men you find in there who’re wearing T shirts with a horse on the right side and a number on the arm. Check out the watch being worn by your pizza delivery boy, chances are they’re from Jacob & co. When you start living in such a material world, you cant blame the over paid exec – He’s not worried about his strategies poisoning mother nature, he’s not bothered about painting the economy in various shades of red. He’s just busy making his buck being cocksure of his false arrogance of ruling the world.

If you’re one of those totally idealistic, hopelessly naive and laughably unrealistic guys you may not agree with the above OR worse you may have just become on of those mad men we’re talking about above.

The Extinction of Homo sapiens FinancialMarketus Arabia

This bipedal primate (Homo Sapiens FinancialMarketus Arabia) used to occupy large tracts of the Arabian Peninsula during the great boom years of easy credit. The Lehman bomb followed by the subsequent Nano Aktomic Eliminator Bomb (also known as the Naakel Bomb) dropped in the region resulted in the virtual extinction, migration or mutation of a large number of this sub species. An analysis of this species and sub species in greater detail led us to identify certain distinct migration and extinction patterns.

By definition ‘Extinction’ is the end of an organism or species. They become extinct when they are no longer able to thrive in the changed environment. Before we begin, here's a bit on the ‘Homo Sapiens Financiual Marketus’ - They were a prolific talking, good looking species, well fed and the mature ones developed beautiful feathers around themselves. During their hey days, they took an exceptional interest in dressing themselves up in finery (brands) to attract prey and mates.

The Extinct/ Migrated Species

• IPO Lead Managers - With the way the markets have been headed this summer, there is no realistic chance that we will find them in the region till around 2020, It is predicted by experts that the last of the few healthy remaining species of this class will starve to death or migrate to by the end of this summer.
• Foreign Institutional investors - They vanished by the end of 2009 from the GCC region. A few of them were seen eking a living by putting whatever AUM remained with them in emerging markets and some printing press stocks in the United states
• Real Estate Fund Managers - Scientifically they should have been renamed locusts – wikipedia defines locusts as ‘a species that can breed rapidly under suitable conditions and subsequently become gregarious and migratory. They form bands and rapidly strip fields and people. They have migrated after leaving a trail of destruction across the gulf region
• The ‘Oh I get a skin rash unless I wear Armani’ Hedge Fund Managers - In the late part of 19th century, this species roamed a certain parts of United States dressed in Stetson, cowboy boots and six gun. In the GCC a few years back these Jacksons, oh I meant these Texans…oops, I meant Hedge Managers were found in plenty investing in one hare brained scheme after the other. The last of this breed now survive in some parts of a place known as Abu Zaby.

Bomb radiation Mutated Species

Nature has an amazing way of evolving newer species from the old. Guess that’s life. The following have been found in large numbers in the region. We believe it is a mutated version of the old species.

• Chinese ‘looking’ Investment managers - Remember, they just look the part. At one instance, we found that one of them turned out to be actually the Nepali security guard of the investment bank who was given a suit by the CEO and taken for his press meetings and pow wow with local HNIs for announcing his Shariah compliant Asian Equity Fund. Today this security guard/fund manager is considered among the top Asian market experts residing in the middle east region.
• Commodities Experts - Suddenly the guy whom you knew as a equity day trader pops up with a visiting card saying Biriyani Rice & Pulses Portfolio Manager for Blue chip asset manager co.He confessed privately to us that he did not lie in the interview to get the job, he just said ‘yes’ and was not allowed to elaborate his answer to a question on ‘Does he have several years of experience in buying of these products,
• ETF Experts - Before the Bomb blast they were hidden away in the back office of a mutual fund and had not even managed to generate a proper NAV weekly is now going to give you an intraday NAV. Now they are ETF structuring experts who plan to generate Real time NAVs.
• Charitable Institution Development Manager - This has been one of Nature’s most interesting mutation. The guy whom you saw as a Private Banker/HNI relationship manager just before the bomb dropped is now chasing you for a meeting to show you some pictures of children starving in third world countries, and ask for some money. Same begging bowl in a different garb, nature’s wonders.

At a time of this economic uncertainty and daily flat stock market pain, we all need some comic relief. What is written above is to be taken only in a light hearted way. What is written above is in no way real and any resemblances to people who are living, extinct or mutated is purely accidental :-)

Harvard Fund & Middle East Peace - A correlation!

The 10 year annualized returns of this fund stands at 8.9%; compare this with an average 60/40 stock bond portfolio which invests in S&P 500 & Citi bonds, which would have given you in the same 10 year period an annualized return of 1.4%!!! The current AUM of the fund stands at approximately USD 28 Billlion; and by default the fund has access to some of the brightest economists, politicians and market makers in the world. We're talking about the Harvard Endowment Fund managed by the Harvard Management Company.

Their portfolio model as published on their website consists of 11% domestic equity (U.S), 11% in Foreign equity (which would be Europe etc.) and another 11% on Emerging Markets (ok, guys in Dubai and GCC can stop reading here). They don’t do frontier markets apparently, but they do have another 11% in PE which may interest you. All in all a very balanced portfolio mix.

The returns had always got me fascinated with the fund and I keenly watch out for any tit bit the Harvard Management Company throws out.

Last week’s news that Harvard Fund dumps all of its Israeli stocks, and the following hurriedly put together denial by the Harvard management and then the clarification by the portfolio manager who managed the Emerging markets component was all very badly managed. The Portfolio manager’s clarifications were actually hilarious, he apparently said that Israel was always in the emerging markets index and because of some index change, Israel moved to the develop markets scale in their systems and hence they dumped those stocks (you didn’t understand, well neither did I)

The elephants in the background

Let's take a step back and analyze the sequence of events. It was known that the latest round of direct Mid East peace talks would begin on Sept 2nd. I know ..I know..we’ve been there many a times and we may still end up being there in the next century with a Gay American president in the middle of the table.

This time around there’s one difference from the last 30 years of talks, there’s a black American man who's sane and not a Texan either, flying around in Air force 1 globally. Obama’s thinking might be this way – It may be easier to get a mid east peace treaty rather than get the sluggish American economy back on track, so am sure he’s going to give his best shot at it to win some votes (if not local at least global votes).

Israel clearly has a lot going against it in the past 12 months with one botched up after the other disasters. The Assassination of Al-Mabdouh in Dubai, The Aid Flotilla issue, the Lebanon border rocket firings etc have resulted in a global mood which is slowly moving towards ‘ bad bully boy needs a whipping and a cutting down to size’. This round of peace talks may result in substantial advantages for Palestine as a nation, which could result in Israeli stocks taking a tumbling nose dive.

- Is there someone at Harvard Management Company who is privy to the way the Mid East peace talks are planning to shape up.

- What other reason would be the correlation factor for these chain of events for buying into Turkish positions and selling off all its Israeli positions

Is this going to be the trigger for a rally in GCC markets with a wave of confidence sweeping across the region after the flat summer. From the best and brightest minds at Harvard who's given the world some outstanding returns, I'd say yes. Let’s wait and watch.

Sama Airlines - No longer flying 'high'

I've flown SAMA Airlines a couple of times, not by choice, more so because I didnt have any other option on that day. My 6'2 colleague who came with me for the meeting had an even more desperate look on his face, he was worried about the blood flow into his toes being cut off because of the amazing leg space available in the aircraft.

I may grumbled quite a few !#@#@%$#$ words that day on SAMA (though I was fully aware this was a low cost airline) but at no time had I wished that the airline to go bust. 3 years of average operations, one bad winter and a USD 266 Mn loss really does not count as good enough reasons for shutting down an airline, Do they? I always thought it was fashionable globally across the airline industry to make losses (and in some cases for decades over) until the stock prices becomes junk.


What is surprising is that this airline has/ had some serious backers in investors like Olayan Group, SISCO etc. Questions that remain unanswered at the time of blogging


i) Why had SAMA not listed after 2-3 years of operations?
ii) A low cost airline going should ideally not be going bust
iii) How did they rack up USD 266 Mn in losses, I mean this was a 6 aircraft airline
iv) Why didnt any PE investor/ investors come on board and give a lifeline or facelift


In Saudi Arabia, this is the third local Saudi airline after Saudia and NAS. What remains is NAS and Saudia. Are we to assume that in a country of 20 Mn+ population, there is a market size for local air travel which can be catered by two airlines? I dont believe it.


I know I'm missing something in between the lines of this SAMA airlines going bust news...eish I couild pin it down...I have this feeling we'll be seeing SAMA airlines with a new name and new management come out in the market soon..what do you say?

Bahrain – Chugging along not-so-quietly

I was in a conference recently in Bahrain which basically prompted this post. It might be a bit presumptuous to make judgements about a country the moment you land at the airport, but I believe airports are really good barometers of culture. Take an example: If you’ve ever been to Zurich airport what do you see – impeccably pressed uniforms, straight lines, orderly queues, bank and insurance co. adverts and perfectly timed shuttles…almost giving out the message loud and clear ‘Welcome to Switzerland, we have banks, we are very clean, and our clean trains will help you reach our banks on time every time forever and ever’

Touchdown in Bahrain and the first things that always strikes me – Small but right sized airport (unlike the gargantuan wastes in some other cities), Blue worn out carpets, Super fast on-arrival visa processes for business men, 10 mins from city business district – clearly giving out the message ‘Welcome to Bahrain, If you’re here on business we’ll take good care of you, we may lack style and be a bit austere for your sensibilities, but we’ll make it up in our business friendliness’

And has it been rewarded? Ask me how. The Global financial industry seems to be going through a mid life crisis (what with the government beavers now doing your expense approvals), but Bahrain’s love affair with Financial Institutions has never wavered through all these times. Take a look at these stats which I managed to get from the CBB (Central Bank of Bahrain) website:

Size of Bahrain Financial Industry: The 18 Kms X 55 Kms Island of Bahrain has 406 financial institutions registered and regulated by the central bank of Bahrain. That includes 138 Banks (32 Retail Banks and 78 Wholesale Banks and rest being rep offices). It also has 45 Investment Companies registered there, Typically Holding companies, Family offices. Insurance Companies make another 169 (Out of which 39 locally incorporated) out of this whole list. Apart from this list of 406, you have another whooping 2736 Mutual Funds registered there (139 Local & 2597 Foreign Funds domiciled)

Bahrain & Regulations: What is an even bigger vote of confidence is if you go and check the number of funds which have registered in Bahrain in the last 5 months of Yr 2010. I stopped counting after 20, but if you want to count them you could go to this link . The reasons are pretty straight forward. The CBB Rule book has ‘ Exempt schemes’ which permits Hedge Funds, LBOs & other high risk funds to be registered with ease in Bahrain, with these words being treated by the global regulators as something just above slur words, I’d say Bahrain can expect quite a bit of windfall. This does not mean that Charles Ponzi can register his scheme in Bahrain; anyone who has lived in this region will agree with me that the CBB regulations are far ahead of the rest of the GCC pack.

There’s a lot going in favour of Bahrain and the Financial Industry

- Bahrain Institute of Banking & Finance – Ranks quite highly in terms of its courses offered and gives you good access to a pool of financial graduates for your operations
- Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) The Islamic Finance body which defines rules and regulations followed by most of Middle East Islamic Financial Institutions has its hub in Bahrain

Bahrain is not without some worrying black holes either:
- The Dubai imitated buildings of World Trade Centre and Bahrain Financial Harbour, and some other residential real estate companies into which a lot of local Islamic banks have huge exposures is a worry
- The population of the country is 1 Million. There’s no oil, there’s hardly any other manufacturing companies, its trading hub status has been lost and there’s too much dependence on the financial sector to maintain the economy.
- The Financial sector employs 14,000 people directly (about 60% local) and indirectly impacts another 100,000 (family, contracted labour etc.) which means over 10% of the population is dependent on the financial industry in some way or the other.

Dubai, Abu Dhabi, Kuwait, Doha, Riyadh and Jeddah are all biting at the heels to grab a pie out of Bahrain. The growth that the Financial Industry has seen in the past 3 years may no longer be seen in Bahrain, but one thing is for sure – Austere, Mouldy, Out-of-fashion, business friendly Bahrain will continue to be the place where those who want to do some serious money management will continue to maintain as a regional hub. You think not? Take a look:

Zurich Insurance opens operations in Bahrain AND Who hired in Middle East in May 2010

‘aquila non capit muscas’ , the Latin phrase loosely translated into English means ‘an eagle doesn’t catch flies/ an eagle is not interested in catching flies’ –

Take a Bow, Bahrain :)