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Eddy Abramo

UAE, DUBAI - Finance

Yield Space

Regional CEO, Middle East, Société Générale Private Banking

Bio

In 1996, Eddy Abramo joined Société Générale Private Banking as a Discretionary Portfolio Manager in Paris, a job in which he remained for six years. He then joined Société Générale Asset Management in 2002, where he was responsible for creating a discretionary management product offer for private clients. In 2006, he returned to Société Générale Private Banking as Global Head of the Hedge Fund Advisors center of expertise, based in New York City. He was appointed as Regional CEO in 2009.

How did the global financial crisis impact operations here, and how has it recovered since? Société Générale is based in the Middle East region since 1997, originally through a representative […]

How did the global financial crisis impact operations here, and how has it recovered since?

Société Générale is based in the Middle East region since 1997, originally through a representative office based in Bank Street, and then with a Regional Head Office located since 2007 in the Dubai International Financial Centre (DIFC) (Société Générale Bank and Trust—Middle East). Nowadays, we have two business lines based in the GCC: Private Banking (PRIV) and Corporate and Investment Banking (CIB). Apart from our regional headquarters in Dubai (for both PRIV and CIB), we also have one representative office in Abu Dhabi and a subsidiary in Riyadh (CIB). Société Générale was created in 1864 and has successfully passed through several global financial crises. At the end of 2007 the financial crisis hit the markets, but it didn’t hit Dubai until the end of 2009. So as a conclusion, I would say that this was not the first crisis for us and it will undoubtedly not be the last we will overcome. Crisis or not, we continue to advise our clients investments, as usual.

Are there other ways in which banking in the Middle East is different than in Europe?

Yes, the most important thing being that our clients based in the Middle East have a much more global exposure than those based in Europe. This definitely implies a lot of changes within the bank as we need to have the capability to follow our clients all around the world. That’s why we need to be very well connected within the bank, which is one of the strengths of Société Générale. As an international group, Société Générale is considered as a universal bank. Our PRIV division is present all around the world, through 18 offices. As a matter of fact, if we have a client here in Dubai who wants to invest in one of those places, we can ensure that he will have the same level of understanding and expertise thanks to these local teams.

Would you say the appetite for high-risk investments has returned to Dubai?

Yes, we are definitely seeing an increase in the risk appetite of Dubai investors. First of all, Dubai real estate has performed very well recently, topping the world’s property market. This excellent performance brings confidence to local investors and also helps them to redeploy their assets toward other asset classes. Secondly, our 2014 economic scenario of accelerating global growth translates into a bias toward risk assets, especially in the US. We have seen no new top-down fact that would change our risk position since early summer. Economic releases even tend to confirm that the recovery is gaining speed in developed countries. Our clients want to be able to benefit from this good environment for equities and many of them requested to invest in products linked to equity market performance. Thirdly, in relation with this new appetite for Western equities, we have seen clients reducing their exposure to fixed-rate bonds and asking for products with floating rates. Indeed, the long-awaited rise in US Treasuries has materialized from May, starting with better than expected US employment figures and increasing likelihood of Fed tapering from September. The 10-year has moved up more than 115 basis points in yield since then. At this current level, we believe that investment grade credit spreads are much too tight in the context of credit ratios stabilizing at best. Given the fact that default rates remain low for the foreseeable future, we believe the high-yield space is the place to be invested in. At the end of the day, it may seem paradoxical, but riskier investments, such as equities and high-yield bonds, seem safer than the sovereign bonds that have a too low yield to really protect investors. It is another legacy of the financial crisis.

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