Reinvesting Wisely

Countries and companies have at least one thing in common when it comes to devising ways to improve upon both.  The answer is reinvestment; for example investing in the country’s infrastructure makes transportation and other necessary services more reliable and faster.  This helps businesses and citizens alike making everything more efficient and productive.  For businesses reinvestment means keeping all of your workers ‘ skills and the company’s systems up-to-date. It also means funding research in various sectors that could yield improvements and benefits down the road.  Countries and companies which do this successfully will see economic improvement and long lasting benefits.

One place in the world where this fundamental fact of investment is catching on is Abu Dhabi in the UAE.  Hussain Al Nowais, the chairman of Waha Capital an investment company, recently announced that the company intends to invest over US$1 billion in energy and other important assets in the UAE and the Gulf region.  Hussain Al Nowais said they are evaluating a number of deals however he didn’t offer any clues to how many deals Waha would confirm this year.

Waha Capital recently posted amazing record net profits in the fourth quarter of 2014 at Dh142 million from 2013’s 4th quarter Dh75.6 million.  A majority of this 88 percent increase came from the company’s dividends in the NY-listed airline leasing company AerCap.  In May of 2014 Waha Capital created a new branch which would develop and oversee its future investments in the energy sector for North Africa and the Middle East.  The company has already invested Dh274 million in the Dubai-based oil and gas company – National Petroleum Services.  That gave Waha Capital a 20% stake in the company and they also have a 25% in Dunia Finance.

These investments being made by Hussain Al Nowais and Waha Capital demonstrate the understanding required for helping transform the Middle East.  The region is continuing to face many tumultuous conflicts and one of the underlying reasons behind all of this is economic instability.  The UAE is one of the few places that has found stability and success and this is partly due to their economic stability.  The country has also come to the realization that it must diversify away from oil in order to protect its economy from the ups and downs in the cost of this natural resource.  This has helped to strengthen the country over the last year despite the drop in the price of oil per barrel.  Hopefully this investment and action will spur others in the region to follow this role model.

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