How would you assess the year 2018 in terms of business prosperity and economic output? What are some of your most recent developments/acquisitions you can report on?
Dubai has continued to make excellent progress in implementing its vision for the Emirate's future prosperity, with the provision of world-class healthcare and education both key to this. As the only publicly listed investment company focused on education and healthcare in the GCC, based here on the Dubai Financial Market, we at Amanat are proud to have played our part in this ongoing progress. In 2018, we were highly active in identifying and securing high-quality assets in our chosen sectors, education and healthcare, including here in Dubai. The acquisitions we have made in the past year in Dubai reflect our support for the government's agenda and the confidence we have in the market dynamics here. In particular, we have acquired Middlesex University Dubai and the real estate assets of North London Collegiate School, both attractive assets that tap into the continued demand for high quality education at both a K-12 and higher education level. As a result, we ended 2018 having deployed almost 80% of our paid-up share capital, a significant milestone in our growth.
What recent economic and market trends have you noticed in Dubai? How have these changes influenced the way Amanat Holding has been investing?
Amanat continues to benefit from the compelling market trends in our chosen investment sectors, education and healthcare. In education, the government has put a knowledge-based economy at the heart of its vision; this is supported by positive socio-economic dynamics including a growing population and improving affluence which is driving an increase in enrollment. In healthcare, the need for services aligned to demographics, together with an increasing specialization of provision (for example around chronic lifestyle diseases including obesity, diabetes, and cardiovascular disease), remains key to increasing demand. Overall, our investments are well placed to benefit from these trends, supporting confidence in our investment strategy and ambitions. Other initiatives from the government, for example, the Dubai Health Authority's Health Investment Guide, which it launched in 2018, are also important in shaping our views on investment opportunities in Dubai. This is because we seek to become the investment partner of choice in healthcare and education, helping to deliver high quality services aligned with the Emirate's requirements.
What are the biggest challenges investors are facing in the Dubai Market?
Volatility in oil prices since mid-2014, and the ensuing effect on the economy, has impacted Dubai's main bourse index and liquidity in the UAE's stock markets, which are still seeing much lower average trade values. Additionally, rising interest rates in the UAE have also affected investor costs when it comes to accessing funds. That being said, the government is addressing these challenges, for example, by approving the largest federal budget in the country's history, with more than half allocated for education and social development. The fiscal year of 2019 will have a balanced budget of Dh60.3 billion, an increase of 17.3% from this year's Dh51.4bn budget, which also prioritized community development and education. Education will receive Dh10.25bn, 17%, and the Healthcare sector will receive Dh4.40bn, or 7.3%. So, whilst we recognize that there are challenges, we also believe that there are a number of interesting opportunities arising from this backdrop.
Amanat Holding specializes in investments around health and education, why did you select these specific sectors? How are these sectors evolving in Dubai?
At Amanat, we are focused on collaborative investments that make help improve people lives. We are on a mission to enhance people's prosperity, physically, intellectually, and financially. On a practical level, our team benefits from a wealth of expertise in our chosen sectors of healthcare and education. We aim to leverage these strengths to empower our portfolio companies to create long-term sustainable returns and a lasting legacy. We are also aware of the fact that the challenge for both the healthcare and education sectors is to continually enhance and adapt their offerings in an ever more demanding environment, underpinned by technological advances and growing demographic pressures. We perceive this challenge as an opportunity for Amanat to add significant value and support continual improvement. We firmly believe that Amanat has the potential to become a game changer in healthcare and education, not only in the UAE but at an international level.
How is increasing digitalization and specifically AI transforming businesses and operations in Dubai?
Dubai has demonstrated a strong commitment toward the development and implementation of a digital-first economy, including through AI technologies. Whether this be through the launch of smart pharmacies or the use of AI in the classroom, the government is working together with businesses to lead the way in this arena. We expect that the digital transformation agenda, and specifically AI, will significantly increase the competitiveness of companies by driving efficiencies, enabling them to streamline their operations and better address their customers. This is especially relevant to labor-intensive sectors, including healthcare, where we should see exciting gains from AI. In light of this, Amanat continues to explore and address opportunities in AI across its investment portfolio to ensure our businesses can benefit from this potential.
How would you assess the way businesses in Dubai are reacting to initiatives to increase diversity and inclusion?
The UAE as a country is fully committed to fostering diversity and inclusion and this is a clear strategic priority for more than half of UAE organizations as it enables them to be more competitive. Over the last few years, Dubai has made great strides in driving forward the diversity and inclusion agenda. The public sector, in particular, has shown its commitment to supporting and empowering women in the workplace. The private sector is also closely following suit through targeted initiatives including mentoring programs and flexible ways of working.
What are your main goals and objectives for 2019?
Born out of Dubai and the UAE, Amanat's strategy is to invest in attractive healthcare and education opportunities across the GCC and beyond. To date, our portfolio has primarily been focused on the top two regional economies of Saudi Arabia and the UAE, and we recently expanded our geographic footprint to Bahrain, where we acquired a leading healthcare asset. In 2019, we have plans to expand our footprint to take advantage of opportunities, both close to home in the UAE and beyond the Arabian Gulf. Looking ahead, Amanat will continue to invest in businesses that are distinctive, differentiated and competitively sustainable, where we can build long term value and the investment landscape for education and healthcare in Dubai is ideally aligned with these criteria, supported by initiatives such as Dubai Plan 2021.