James Bond and the Middle East markets

We’ve seen quite a bit in 2010, haven’t we, and if you ask me it’s almost been like watching a James Bond Movie with its high points, creepy suspense and finally the ‘good guy saves the world’ moments. Scandals, unexpected stock market busts, political turmoil, bad guys beating up the good guy and finally histories (sporting) being created. Over the Christmas weekend, I was having lunch with a friend and we got into discussing the same and comparing the stock market with a action thriller movie and here’s the thought.

You're watching a thriller, you laugh at the happy moments, lose interest at the slow dragging dialogues and then when the suspense creeps in and the movie twists and turns, it scares the living daylights out of you. The movie could as well be called “The Middle East stock Market” and it wouldn’t be any different.

Ok, there are no blond babes and Daniel Craigs in tight shorts strutting around (thankfully) in our 3000Xtra/ Eikon terminals, but think of it laterally and you’ll find a action thriller storyline no different from DFM, ADX, Doha or Tadawul markets. In a Bond movie for example – we know what we’re getting into even before the movie begins, Bond is going to walk around with the coolest gadgets, hottest babes and get himself nearly killed (remember you nodded in agreement with the word ‘nearly’).

Take this classic James bond movie clip (Click Here) , Bond is all tied up and has a laser which is slowly going to cut him into two pieces and burn his “ahem! ahem!” off. Even if we have 30+ years of past James bond movies (stock market) data, which points out that James Bond cannot at any instance have his “ahem! Ahem!” burnt into fine dust particles; you still sit up at the edge and experience anxiety and tension, wondering ‘what next’.

Ever thought why this happens, and the only answer we could figure out was that , we experience this anxiety because in those 'moments', we're not only following the movie (stock market) with our eyes, but also our brain cells move into autopilot and an emotional brain takes over.. That means the intellectual brain goes into sleep mode and the emotional one takes complete control. Makes sense?

When we’re watching the movie (market), we’re not thinking of the long term, we’re sucked into thinking of the moment and we get drawn into the emotion and struggle to see the big picture. If the movie shifts from being a James Bond movie to watching ‘Dracula’, what would be the reaction - we hold our partner’s hand tightly (strictly speaking it may not be the way it happens in the market situation). Ok, maybe you don’t hold your partners hand, you probably just close your eyes..right?

I think its great advise when someone says with reference to the market that - Get out of the momentary reaction (short term) and focus on the big picture (long term), its also great advise when someone tells us to supplement emotion with intelligence when handling the stock market…but hey, it would make the whole James Bond movie one heck of a bore!!!

All this year end intellectual exercise is fine, but hey what’s a good ol’ action thriller without enjoying its moments :)

Happy New Year 2011 to all of you,

A City is where your heart (money) is...

Guess what, some nut offered me this really juicy offer from New York a month back and I decided to say no to it. No I’m not mentally ill; I just have a problem with reality. To top the job losses, and meager commissions, the poor investment banking souls I know down there are into their last million and are still taxed to death.

I wanted to quantify my argument, since my wife had already started apartment hunting in NY when she heard about this. I did a bit of research and came across this interesting study done by Mercer Inc (www.mercer.com). It’s called the Worldwide Cost of Living Survey 2010. From what I could read, these are the cities which I knocked out of the list and here’s a few surprise cities I’ve added

- Africa : I know Africa is booming, but just in case you get a $$$ million dollar offer from a blue chip investment bank in Luanda, Angola, remember it’s the most expensive city in the world for expats to live in. Chad and Gabon are also quite expensive and rank number 3 and 7 globally. Errr..and just a bit of friendly advise from someone who’s been quite a bit,.” In case you didn’t know…everything. I repeat everything.. in Africa bites too’

- Europe: Oh Africa is not in your radar and its Europe, I would highly recommend that you ignore all offers from London, Paris and Frankfurt and if you get one from Tirana in Albania, grab it with both hands. It’s apparently the cheapest city to live in all of Europe!!!! Oh! You’ve accumulated a zillion miles on Skywards already, am not sure what you’ll do with that, the only airline which could take you to Albania is Albanian airlines and they fly converted Hercules and Antonov Cargo planes.

- Americas: You’re looking at the Americas, how nice, you and my wife will get along well….the last I heard the economic crisis is so bad out there, they caught a truck load of Americans trying to sneak into Mexico!!! On a more serious note, It turns out Sao Paulo (21), Brazil is more expensive than New York (27). If any of you get tickled into packing your bags for this rapidly developing economy, you’d better read the fine print very carefully. Am sure most of us won’t look very good dancing around in a thong at the Rio Carnival to earn a few extra bucks to make ends meet.

- The United States of India : And if you thought you should take revenge on Indians because they just off-shored some jobs from your office to Slumdog millionaire country, think again. Someone calculated that if you’re a single guy with no kids and were offered a Million dollar job in Mumbai, 458K would get eaten up by the tax bogeyman. So let’s get India out of the list too.

Just for the heck, let me throw in some stats which I found on another blog (Singapore Hedge Fund) “KPMG’s calculations are based on the assumption that the employee is single, has no children and earns a salary of 1 million pounds a year. Tax and social security payments are calculated from Jan. 1 to Dec. 31, 2010 As of April 2010

City -->Income Tax -->Social Security -->Total
London --> £477,519 --> £13,759 --> £491,278
Frankfurt -->£476,469 -->£10,339 -->£486,808
Paris -->£350,786 -->£110,342 --> £461,128
New York -->£414,250 -->£18,520 -->£432,770
Tokyo -->£349,655 -->£12,260 -->£361,915

Good ol Dubai, Abu Dhabi, Jeddah and Muscat rank quite low in this list!!! Add in the Sun, the bling, gasoline costs and friends like you, I’ll happily pay my traffic fines and toll tax and stick around here for some more time.

Stick around guys and God bless!

To all those who taught me how to hunt!

The dream begins with a teacher who believes in you, who tugs, pushes, yells but leads you through the crossfire, sometimes poking you with a sharp stick called 'truth'

I have been fortunate to have had some of the most amazing teachers at work and life. What I am today is undoubtedly because of having had the good fortune of having either directly or indirectly worked under these awesome guys . When I happened to come across a video the other day (posted by another person whose blog I admire a lot ), it reminded me of similar situations where I have been through at work. Have a peek at Al Pacino's speech from 'Any given Sunday' . If only I had recorded some of the moments at work on a camcorder, they would not have been any less inspiring! Read on or watch the video on youtube on the link provided.

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I have reproduced the Al Pacino speech for easier reading below

I don't know what to say really. Three minutes till the biggest battle of our professional lives. It all comes down to today. Now either we heal as a team, or we're gonna crumble. Inch by inch, play by play, till we're finished. We're in hell right now, gentlemen. Believe me. And we can stay here, get the shit kicked out of us, or we can fight our way back into the light. We can climb out of hell. One inch at a time.


Now I can't do it for you. I'm too old. I look around, I see these young faces, and I think... I mean I've made every wrong choice a middle-aged man can make. I pissed away all my money, believe it or not. I chased off anyone who's ever loved me, and lately, I can't even stand the face I see in the mirror. You know when you get old in life, things get taken from you. That's part of life. But you only learn that when you start losing stuff. You find out life's this game of inches. And so is football. Because in either game, life or football, the margin for error is so small. I mean... one half a step too late or too early and you don't quite make it. One half second too slow too fast, you don't quite catch it. The inches we need are everywhere around us. They are in every break of the game, every minute, every second. On this team, we fight for that inch. On this team, we tear ourselves and everyone else around us to pieces for that inch. We claw with our fingernails for that inch. Because we know when we add up all those inches, that's gonna make the f%*ing difference between winning and losing! Between living and dying! I'll tell you this - in any fight, its the guy whose willing to die who's gonna win that inch. And I know if I'm going to have any life anymore, it's because I'm still willing to fight and die for that inch.Because that's what living is! The 6 inches in front of your face...


I can't make you do it. You've got to look at the guy next to you, look into his eyes. Now I think you're gonna see a guy who will go that inch with you. You're gonna see a guy who will sacrifice himself for this team, because he knows when it comes down to it, you're gonna do the same for him.



That's a team, gentlemen. And either we heal, now, as a team, or we will die, as individuals. That's football, guys. 


That's all it is. Now, what are you going to do?
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To all my teachers at work and life who have taught me to hunt and love the game! Remembering you this moment! and a big thank you for everything...

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 :)

Building Abu Dhabi 2.0

At Abu Dhabi I had a chance meeting a few ‘so called’ real estate industry experts on UAE (loosely translated they were a bunch of expats who had landed in UAE on a sortie to make a quick buck). They were explaining how they were helping build a new Abu Dhabi and how they were going to do some great things in this country. They supposedly knew every building facing the cornice by name and every building that was coming up in Saadiyat Island.

After listening for about 30 minutes of this non stop banter, I decided to pull my favourite test on real estate experts here. I casually weaved in a question into the conversation, when the discussion was on Abu Dhabi. I asked ‘What do you guys think about the Qasr Al-Hosn, the building looks great now, don’t you think?’.Blank stares, the ‘Qasr who?’ and the ‘Qasr What’ was all I got back; and they ignored me and the conversation went on.

A smart Emirati banker had once told me, at the heights of the real estate boom, he used to put this question, just to test the knowledge of some real estate industry experts who came to him with ‘plans extraordinaire’ and he rarely found anyone not stumbling on it.

Qasr Al Hosn, the white fort in Abu Dhabi is the oldest stone building in the city of Abu Dhabi. At a time when everyone still referred to the city as Abu zaby, the fort had come up. I must be honest, I don’t know more about the building, you can search out the rest of the historical significance of the building, but what matters is if someone does not know the history of buildings in Abu Dhabi, and has never heard about the Qasr Al Hosn (because of its significance as the first stone building in Abu Dhabi), he may as well not be the guy with whom you place your buck/ brick, however smart he may be.

The context of telling this story is not to explain that I know about the building, it is to share with you that, I think there are too many people in Abu Dhabi nowadays who seem to be vending their ‘plans extraordinaire’ schemes in Abu Dhabi, I wish Abu Dhabi would take a breath between the quick strides it is taking as part of its transformation.

The Abu Dhabi 2030 blue print which was the centre piece of city scape is extraordinary. In today’s bleak times globally, it looked like a honey pot to me. Take a look at these numbers which would go into building the new Abu Dhab

- USD 200 Billion to be spent between 2008 & 2013 in infrastructure development in the state of Abu Dhabi, with 40% coming from Govt and the rest through a private sector-public partnerships. That’s USD 80 billion of contracts to be won in 5 years, now wonder the honey pot had attracted crooks, amateurs and experts alike.

- From a Louvre to the Guggenheim, SaadiyatIsland (the USD 28 Billion development) will house an extraordinary vision which is designed to attract 1.5 Million visitors

- A 130+ Km Metro line is planned to come up and bids were invited last year and is expected to start by 2015. A 75 km line in Dubai was built at a cost of a Billion dollars upwards recently, Abu Dhabi’s plans are double that of Dubai.

And why should Abu Dhabi not dream, it has all the right to dream big:

- Abu Dhabi accounts for 94% of the proven oil reserves of UAE. The proven oil resources of UAE are at 98 Billion barrels, and at the expected yearly production rate, they would last for a century.

- Vision Abu Dhabi 2030 is planned based on a budget of oil at USD 47 per barrel, which was further revised to USD 40 per barrel. At the time of writing this blog oil was hovering at the 80’s mark.

Abu Dhabi deserves a renovation; the city really is stretched in several ways. Does it need so much infrastructure investments is none of my business, but as a friend of the nation, I hope for the benefit of all of us that the great men who rule this nation are not swayed by those who do not even know the Qasr Al-Hosn!

Here's to the future of Abu Dhabi 2.0

Islamic RMBS is heading our way now…

The headlines that grabbed my attention was ‘Deutsche Bank and Saudi Investors launch Shariah mortgage Financing company targeting Saudi Arabia’. DB and retail home loans and that too of a Shariah compliant variety was a bit of a surprise. I told a colleague of mine ‘…the brand does not necessarily have top of the mind recall in the mortgage industry…’ Before I could finish he said ‘..but remember they have some fabulous expertise in packaging mortgages off as nifty products and selling them back to us in those halcyon days.’

What I found hilarious was that the moment this was said, my eyes hit upon the huge quote by the Managing Director and Global Head of Residential Mortgage Backed Securities Lending and Trading at DB. He said ‘We are pleased…..Islamic Home Finance is going to boom!..DB will be partnering with local big big biiig Saudi family…. etc’. ..ok I got it! So more than the CEO and COO of the Finance company, we had the MD of RMBS who was drolling all over the press release.

To make the press release more balanced DB had pulled out some moth eaten complex research saying ‘the total outstanding home finance provided by the private sector in Saudi Arabia aggregates to less than 1% of GDP compared with well over 50% in most developed countries, and approximately 6% in Kuwait and 7% in the UAE’. Ok, so now I get it, that’s why you guys started a home finance company in Saudi. Darn!

I mean it is so obviously evident that DB is only interested in the securitization part of this whole game and has no interest whatsoever in the loan business

Inherently by launching it in Saudi Arabia, a few things are taken care :
- Credit Risk: Surely would be low in these loans. Credit scorecard validation algos would be a fairly easy to set up and unless your name is George Bush, most of you who have the right name will get a loan. (and if you or me get this loan and default, you don’t want me to tell you the gory details of what can happen if you don’t pay your Shariah compliant loans off in Saudi Arabia…do you?)
- Pricing: Residential prices are pretty sensible in Saudi Arabia (the last time I asked an estate agent for a nice duplex in Riyadh, he told me I was searching for it in the wrong country, he said the whole middle east quota got completed in a 3 sq km stretch in Dubai)
- Early Redemption risk: The super rich taking to the novelty of the home loan concept for their new pad on the hand bag shaped building in Riyadh, may just forget about the loan linked to their bank account. I mean who will bother changing from a variable rate loan to a lower fixed rate loan in the future etc. so don’t fret on your prepayment risk and interest rate risk on your MBS

So overall we’re all set up nice and cozy on this whole Shariah complaint loan thingy being launched by BD.

So what are the plans for 2012: Shariah compliant securitization, Shariah compliant Residential mortgage backed securities, Shariah compliant collateralized mortgage obligation with a guarantee against home owner default risk with full faith and guarantee from one of the richest families in Saudi Arabia.

...and if anything goes wrong, DB has only put in USD 44 Million of initial capital into this experiment

Small change for creating a new world order in the Kingdom and the world of Islamic Investment management

Exchange Traded Funds (ETFs) – Middle East's Flavour of the month

National Bank of Abu Dhabi lists its ETF on ADX on 25th March– First in the region screamed the headlines. Back in Riyadh there were some grumbles at Falcom Financial Services for losing out on the ‘first’ tag because of a technicality that they listed their ETF on 28th March. So now UAE and Saudi Arabia join the elite club of 36 countries where there are ETFs listed in their exchanges.

It was a coincidence that I was sitting with an executive of one of these firms, when the regulator faxed across the ETF approval to their office. There were whoops of joy, shoulder pats and a general sense of achievement across the office. A few days after that eventful day, I got a call from a fund house asking me how the heck will they manage to generate an iNAV( Intraday NAV) for the ETF. (We figured out how they could do that in quick time, but that is too boring for an average reader to know)

In a region where 9 out of 10 fund houses have no clue on how to generate an NAV every day, and will never manage to generate one even if they wanted, managing an ETF’s iNAV ( Intraday NAV) will be a steep learning curve. This got me thinking on how infantile ETFs are to the region and may be one of the reasons why every fund house CXO I bump into nowadays wants to launch its own ETF yesterday.

It is also a strange correlation, that as I write this blog today, the European ETF industry celebrates its 10th anniversary this exact week. It also needs a mention that the European ETFs which are only 10 years old have been outpacing the AUM growth over their American cousins who started off way back in 1993.

I knew about the existence of ETFs (Exchange Traded Funds) as an investment class, but when a certain private banker shared an ETF handbook with me about 6 months back, I never expected him to give me a 200+ page A4 sized book listing all the global ETFs in the industry for reading (Barclays Global Investors Handbook, though I think the name of the hand book for 2010 may have got changed to BlackRock in 2010).

As per Barclays Global Investors/ BlackRock latest compiled data (As of December 2009)

- Global Exchange Traded Funds (ETFs) assets under management total a whooping $1 trillion (US$1,032 Bn) at the end of December 2009 – 45.2% above US$ 710.9 Bn at the end of 2008, according to the latest figures from BlackRock published today in its ETF Landscape Year End 2009 preview report.

- The global ETF industry had 1,939 ETFs with 3,775 listings from 109 providers on 40 exchanges around the world at the end of December 2009.

- Over the past decade the compound annual growth rate for ETF assets globally was 56.3% (I rechecked it.., there’s no typo mistake here),it was 58.1% in the United States, 53.1% in Canada and 90.5% in Europe

- As of December 2009 – Exposure type of these 1939 ETFs could be broadly divided into Equity ETFs– 1,545 ; Fixed Income ETFs – 279 ; Commodities ETFs – 62 ; Currency ETFs – 14, Mixed ETFs – 37 and 2 Alternative ETFS (If you’re interested in the actual document with further break up of this info, drop me a message or leave a comment on this blog post with your mail ID and I shall mail you the link to get access to this detailed document)

Here we are sitting in a market place where you and I have over 1900+ ETFs to choose from. From a simple equity ETF to a mind boggling Alternative ETF (I have no idea how this ETF is being run), there are so many options available.

Though there are so many types and variants available, My personal reading on ETFs is highly bullish for the Middle East region

- Shariah Compliant ETFs :Malaysia may have taken the leads on Sukuks before the Middle East region, but clearly the Shariah Compliant ETFs wave is eomthing that Middle East can claim as its own. There are some amazing Shariah investment managers in this region, they could take the reins from some lip service Islamic ETFs available in the European market. Clearly, there is a potential to launch Islamic ETFs in the market and the product would have quite a few takers.

- Institution focussed Mutual Fund market: Mutual Funds market space in GCC is still very institutional focussed and has still not become retail’esque. ETFs are perfect fit for such a largely institution dominated mutual fund market.

- Regulations on ETFs: Unlike the European market space which has kept ETFs out of regulatory red tape, the American Regulatory industry regulated ETFs quite well. (which is also why you find a huge amount of complex ETF products in Europe against Americas). From the way things look regulators in the Middle East don’t want to leave ETFs outside their regulatory purview, which is very good for a nascent and developing ETF Market space.

If you have managed to read through this blog post till this line, here’s one more for the road… ‘What the caterpillar (Mutual Fund) calls an end of the world, the master calls a butterfly…(ETF)'

A warm welcome to the world of Middle East ETFs

Why don't you shut down a few branches, Mr.UAE Banker!

In 1953, Stanley Miller, a graduate student of UCLA took two flasks, one containing a little water to represent the primeval ocean and the other holding a mix of methane, ammonia and hydrogen sulphide to represent the earth’s early atmosphere, connected them to rubber tubes and connected them with some electrical sparks to represent lightning. After a few days of passing electricity, the water turned a murky yellow and there was a healthy broth of amino acids, fatty acids and other organic compounds. Miller’s supervisor, Nobel Laurent Harold Urey was delighted and said ‘If God didn’t create life this way, he missed a good bet’. When this news went public, the press hailed this and made it sound as if, all that was now needed was to give the flasks a good shake and life would crawl out of it. Half a century has passed since then, and we are not yet anywhere close to creating life in a bottle.

So what is the intent of referring this story to all of you? I was reminded of this story and Stanley Miller’s experiment when I read two news paper articles yesterday on how the UAE Banking Industry is trying certain experiments to bring life into their balance sheets.

Without naming the financial Institutions (you could do your own research on that one, and I’ll save from getting sued), here they are:

- A certain financial institution in the capital of UAE opens its 100th branch in the region and had put out a full page ad proudly stating the same

- Another financial Institution again based out of the capital opens a 24 hour branch (no its not an ATM, its a full services branch) in an airport. How brilliantly convenient, the next time I go to the airport, I can apply for a home loan, a personal loan and cash a cheque.

The big million dollar question is that, do UAE Banks need another branch, and with another branch and its added operating expenses (salaries, electricity, real estate etc.), will it bring more life into their balance sheets.

I did a quick research and arrived at the following. The UAE has 24 full fledged commercial banks (locally incorporated banks), with 655 Branches across UAE (without including the two branches mentioned above as this data is as of 31-Mar-09). The UAE also has 28 foreign banks authorized to undertake commercial banking operations (these are not the DIFC licensed banks, these are CBUAE licensed ones) and they have 149 Branches in the country. This brings the total tally of branches in this country to 804 Branches.

What’s happening here!

Out of the population of UAE at 6 Million, there’s 1.75 Mn Indians, 1.25 Mn Pakistanis, 0.5 Mn Bangladeshis (Source: Zawya) and out of this 3.5 Million IPBs, 60% don’t necessarily take a car loan for buying a Ferrari or take a credit card for their weekly grocery shopping convenience (Oh come on, I’m not being racist here, I’m just being practical, so don’t give me that look and roll your eyes here). I divided a Banking capable population of 4 Million (out of 6 Mn) by the total number of branches in this country (remember 804 branches is on 31-Mar-09) and arrived at a figure of 1 branch for 4900 people in this country. Now the question was that the branch figures have only gone up in the last nine months and the population stats I have taken is definitely questionable.

What’s happening there!
I then looked at the per branch per person penetration in some of the wealthiest neighbourhoods in New York and compared it with our UAE and this is what I got. Even Upper West Side, Manhattan (1 Branch for 7100 people) and West Village Manhattan (1 branch for 5400 people), typical higher income neighbourhoods in the ex-financial nerve centre of the world had lesser bank per person penetration than what we have in the UAE!!!! Now you’re not trying to tell me that some CXO just figured out that this country needs more branch banking services than Residential NY. Are you?

Questions here!
- What do you think would be the per branch operating cost in the UAE
- What is the per branch per account holder penetration in the UAE
- What is the desired level of per person per branch penetration and profitability required
- At what per branch operating profitability do UAE Banks currently run
- Can they not outsource non core branch processes and make the branches more like outposts than 24 hr club lounges in airports
- Can UAE Banks start strategizing about centralizing business processes in one location and make their branches leaner

Opening a new branch in a over crowded market like UAE looks more like Stanley Miller’s empty idea from the 50s (of creating life out of glass flasks). Do our UAE banks really need more branches in the country or do they just need to shut down some branches, come up with creative branch banking strategies and make their balance sheets more sensible.

Mr.UAE Banker CXO, are you reading this and please correct me if I am wrong?

Disclaimer : All comments are purely personal

Memento Mori! – Obituary of the GCC Insurance Industry Asset Management

In Ancient Rome, when the Roman General paraded the streets after a victory, standing behind the General was a slave who would continuously whisper into the General’s ears the words ‘Memento Mori’. Roughly translated to English, ‘Memento Mori’ means ‘Remember you’re human, and remember you must die, stay humble and plan’. The reason for saying this was so that the General realizes that even if he has been a victor today, he should remember that he could fall or be brought down. I wish someone had whispered in the ears of the Insurance Industry Portfolio managers way back in 2007 and 2008, the same thing.

Here’s why!
I was reading a really interesting report compiled by Alpen Capital - UAE on the state of the UAE Insurance Industry and also the Takaful Industry in GCC and came across some amazing nuggets of information.

The report states and I quote

• All insurance companies in the UAE surveyed, other than XYZ Insurance Company, have adopted very aggressive investment strategies, with an average of 65%+ of Premiums invested in equities and real estate, mostly locally
• To break it down further, in 2008, the Investment profile of UAE Insurers read as follows – 41.7% in Securities, 34% in Liquid Investments and 23.5% in Real Estate/ properties
• Contrary to insurers in developed markets, the UAE peer group has a very high exposure to regional equity and real estate markets.This has resulted in high volatility in investment returns
• A whooping majority of companies in the UAE has a proportion of over 80% of their investments in ‘risky’ asset classes, some of them going more than 90-95% in high risk assets

So virtually, if you had made any investments into a Insurance company’s stock in UAE, you were virtually investing into nothing more than a highly toxic Mutual Fund with a cocktail of ridiculous investments.

The world over there is regulation that binds Insurance companies to adopt more traditional strategies of investment methods offering assured yet non-extravagant returns. Most Insurance Industry portfolio managers do not even know how to spell equity and only understand Fixed income investment vehicles, while here in UAE and GCC, we have Insurance industry portfolio managers who don’t know anything other than Equity.

US, UK, European and several Asian Countries have regulations which prohibit Insurance premium investments beyond High/Low grade Govt Bonds, Corporate bonds, Cash and short term investments and miniscule amounts of PE/ RE. Life Insurance Industry is even more regulated world over and the composition of High grade fixed income instruments and cash as a major component in the asset allocation mix.

I fail to understand the thought process behind these Investment managers to invest in Equity and Real estate in such high concentration. Portfolios require short term liquidity to cover early surrender of policies, where were they planning to cough up the money from if they had investments over 30% in Real Estate? Did they never visualize a world where they could face defeat? I can understand that if this were a pension fund, they could have strategy like Warren Buffet to hold stocks forever to squeeze stupendous amounts of returns after something like 20 years of holding it.

With the way, the local equity and real estate markets moved between 07/08 and now, I would presume these ‘smart’ insurance fund investment managers have been napalm bombed into Kingdom Kong already.

Who is to blame out here – Regulator, Insurance Industry associations, Company Owner/ Senior management, a virus in the computer? I don’t know and honestly I don’t want to know, all I hope is that whoever was responsible comes out of this alive and safe.

Memento Mori…Memento Mori…Sorry General, I said it too late. You’ve already been wiped out I guess

The Chinese Altruistic Angel lands in the Arab World

While we were busy worrying ourselves grey with the Dubai World issues, I don’t know if any of you missed this small piece of news, (well I certainly did) ‘Chinese and Egyptian Premiers shake hands on North West Suez Gulf Development’. We've known of this Chinese Alchemy working very well in East and West Africa, but the fact that they were in our backwaters (well not really the GCC backwaters, but Egypt is nearly there, I can see the :) guys) is an interesting development.

In July 2009, TEDA (Tijuan Economic Development Authority), a Chinese SEZ Maker was shortlisted from 29 others, to develop a five sq.km special economic zone, about 120 Kms away from Cairo, with a port available stone’s throw away. As of Nov-09, when the Premiers shook hands, 1.07 sq km had been developed and18 Chinese companies with a Paid up Capital of USD 180 Mn had already set shop there (how conveniently located to export to the EU, no more long ship voyages for those Chinese 'Rebuke' Shoes and 'Mokia' mobile phones). There are a few hundred more companies readying themselves to set shop here, apart from the 800+ Chinese companies already operating in Egypt.

On the Egyptian Ministry of Investment website, it states that, this development will provide huge job opportunities yada yada yada..but I guess someone in Egypt who signed the dotted line does not know that, when the Chinese come, they come with their kitchen sink into the camp. Why do I say so..well here goes:

When the Dragon went to Panama
Someone once told me a story about the Chinese investing in Panama some time back. China bid for a site on Panama Canal to construct a cargo loading and unloading site. A no-brainer that they were obviously the lowest in their bid. Their plan was to use Chinese labour to get the job done. Turned out some smart aleck in Panama forgot to mention to the Chinese that there was a law requiring 90% local labour workforce, and on top of it there’s a minimum wage law in Panama. Last heard, the Chinese were sitting with this piece of land wondering if it was ok to grow poppy on it.

I am sure that after the Panama Debacle, the Egypt story would be different. Firstly this is an SEZ, so i'm presuming there will not be any local labour employment regulations applicable. So guess what, its going to be Chinese labourers, building the site for Chinese companies to manufacture and export Chinese goods using Chinese workers to everywhere except China. So now if you thought Mokia phones had only reached Africa, Europe and the Arab World are not too far away now.

And then again in Afghanistan
Here’s one more example for the road. China Metallurgical Corp (another state company) bid USD 4.3 bn (USD 1 Bn more than closest competition) and won hands down with the most extravagant quote for the development of copper mines in Afghanistan in 2009. Their quote involved development of villages (to house the Chinese), power plants (to run the copper mine), highways and a 580 km railroad (to transport the copper) and much much more. None of the American, European or Indian companies which bid came anywhere near the project bid.

So while the Americans and the rest were busy burning their govt exchequer fighting for the the Af-Pak strategy/cause, the Chinese without even firing a shot took away one of the richest known copper fields ever discovered in history!!!2010 will see the second mine site bid opening and there are 7 finalists in the same, no prizes for guessing, but yes the 7 finalists have only Chinese and Indian mining companies in the race.

I am not someone who is against free market, I fully support free market and capitalism;and I envy the Chinese for having capitalized on a loophole in capitalism, with this capital idea of 'new age altrusim mixed with business'.

Do we need to worry about the Chinese in our backyard now? I don't know, I’ll have to leave this blog post here, I’m getting late for my Chinese Language classes :)

(All views expressed in this blog post are purely p-e-r-s-o-n-a-l)