Jean-Patrick Marquet on the Sofia Water System | EBRD

The Sofia Water System concession was Bulgaria’s first major public-private partnership in the water sector. Jean-Patrick Marquet outlines the aims of the project, explains how the European Bank for Reconstruction and Development supported its preparation and financing, and discusses the challenges of aligning the incentives of the sponsor with the needs of Sofia’s 1.2 million inhabitants.

GCC Investment and Development Awards 2013

Best Securities Dealing Services
MENACORP

Best Financial Research Firm
MENACORP

Best Asset Management Company
Alkhabeer Capital

Best Employee Development
Burgan Bank

Best Private Equity Firm
Emirates International Investment Company

Best Shariah-Compliant Investment Advisory Company
Muthanna Investment Company

Best Structured Finance Company
Muthanna Investment Company

Best Fund Management Company
Kuwait Investment Company

Best Conventional Investment Advisory
Global Financial Investment Holding

Best Development Programme Finance Provider
Khalifa Fund for Enterprise Development

Best Bond Issuer
IPIC

Best Real Estate Developer
Ezdan Real Estate Company

Best Sport And Entertainment Project
Formula 1 Abu Dhabi Grand Prix

Best Tourism Development Company
Al Farida Investments Company

Best Industrial Development Company
Saudi Industrial Development Company

Best Infrastructure Development Project
Khalifa Port, Abu Dhabi

Best Passenger Transport Development Project
Al Haramain High Speed Railway Project

Best Airport Facility
Dubai International Airport

Best Free Trade Zone
Dubai Airport Freezone (DAFZ)

Best Industrial Hub
Jubail Industrial City

Best Holding Company
Manafea Holding Company

Urban Planning Excellence Award
Abu Dhabi Urban Planning Council

Foreign Exchange Awards 2013

Best Broker Latin America
OANDA

Best Broker Canada
OANDA

Best Broker Africa
ACM Gold

Best Broker Western Europe
Vantage FX

Best Broker Southern Europe
FxPro

Best Broker Central & Eastern Europe
OctaFX

Best Broker Central Asia
OctaFX

Best Broker Western Asia
Hedefonline

Best Broker South-East Asia
FBS

Best Broker Australasia
ThinkForex

Best Broker Middle East
HY Markets

Best Broker Northern Europe
FinFX | Stan Klebaner accepts the award for FinFX

Best Mobile Trading Platform
HY Markets

Best Retail Trading Platform
AGEA Jinrong

Best Islamic Provider
MasterForex

Best Affiliate Programme
MasterForex

Best White Label Solution Provider
Leverate | Doron Cohen accepts the award for Leverate

Best Trade Executions
Exness

Best Newcomer
ForexTime

Best Mini Broker
Exness

Best Micro Broker
MasterForex

Best Education Provider
4XP

Best Order Management
Exness

Best Execution Provider
Liquid Markets | Nick Bang accepts the award for Liquid Markets

Best Account Management
Hedefonline

Best Liquidity Provider
Commerzbank | Gerald Dannhaeuser accepts the award for Commerzbank

Best STP/ECN Broker
IronFX

Best Trading Software Provider
Olfa Trade

Best Professional Trading Platform
FXCM

Best Social Trading Network
eToro

Best Broker USA
Alpari

Best Post Trade Services
Swissquote

Best Technical Analysis Provider
MIG Bank

Best Binary Options Software Provider
SpotOption

Best Signal Vendor
Esignal

Best Institutional Provider
FxPro

Best Broker Northern Asia
InstaForex

Best Automated Trading Platform
Vantage FX

Outstanding Contribution to the FX Industry
Saxo Bank

The utility paradox

One of the main principles behind mainstream, neoclassical economic theory is that individuals act to optimise their own utility. The definition of utility is somewhat hazy, but basically means whatever is pleasurable or useful. The net result of all this optimising behaviour is maximum utility for society as a whole. Much of economic theory is therefore dedicated to tuning this utility machine.

Policy makers also try, quite sensibly, to steer the economy towards things which look like they should be useful. However there are many examples where an activity’s sheer lack of utility in economic terms can make it, paradoxically, very productive.

Consider for example sports events, such as the Olympic Games. The Olympics is often held up as a stellar example of international cooperation, and is a great success by any standards (it has been going for long enough). But no one thinks that the activities at its core – running, jumping, and so on – are terribly important for society. Of course the stakes are high for the athletes, for local politicians, for advertisers, and for things like national pride. But now that we have cars, there isn’t much practical utility in running 100 metres faster than any other human. Economic benefits are a side effect, not central to the enterprise.

This lack of real world relevance is not a handicap – in fact it is what makes cooperation between countries possible. Competition is intense, of course, but it is relatively safe and friendly, exactly because the real-world stakes are low. It’s a spectacle.

Another example of this inverse utility effect comes, perhaps surprisingly, from science. The scientific enterprise is often thought to be driven largely by utilitarian motives. But in many respects science resembles a sport like ping pong, or the long jump, in its obsession with things that really aren’t that useful.

The scientific equivalent of the Olympics has been the search for the tiny particles that make up matter. As with the Olympics, the quest for what Democritus in the fourth century BC called atomos goes back to the ancient Greeks. The venue of the modern version of this quest has switched a few times from one international laboratory to another. The latest record-beating particle – the famous Higgs boson particle – was recently spotted at the Large Hadron Collider (LHC) near Geneva.

At around £6bn, the LHC budget is similar to that of hosting a typical Games. The London Olympics involved about 10,000 athletes from over two hundred countries; the LHC is the result of the work of around 10,000 scientists from over a hundred countries. In the ancient games, champions were decorated with laurel leaves; today our scientific heroes are named laureates.

The boson in question is important because it is evidence for the existence of a kind of energy field, known as the Higgs field, which permeates space, and is responsible for giving other particles their mass. It is therefore a tremendously useful particle in itself. Without it, atoms would never have had a chance to form, because everything would be whizzing around very fast. The Olympics would be redundant. However, knowing this is not, in strictly utilitarian terms, a very useful piece of information. It is not something you can take to the bank.

In fact, compared to areas like solid-state physics, which has given us the technology behind computer chips and much of consumer electronics, particle physics has a low rate of direct commercial spin-offs. This makes sense from a complexity science perspective (as opposed to the reductionist paradigm which has long dominated science), since what counts is the emergent properties at a macro scale, rather than the components at the micro scale, which need not be directly related.

For example, the electron was discovered in the late 19th century using an early accelerator known as a cathode ray tube (later used in TVs). Electrons in the form of electrical current have certainly proved useful in the wiring-up of the planet, and this is sometimes held up as an example of a useful application. However the discovery of the electron particle did not drive the progress of electrical engineering – rather it was the other way round. The cathode ray tube used to discover the electron was itself powered by electricity.

Accelerator research has led to advances in all kinds of useful things, from superconducting cables to tunnel construction. The most famous spin-off, which has had major economic implications, was the World Wide Web – its HTML language was invented by Tim Berners-Lee while he was at CERN (the organisation which now runs the LHC). But as with the economic benefits of the Olympics, these were side effects, related to the technology used in laboratories rather than the actual physics.

With the boson, the main thing at stake is the shared joy of filling another gap in the puzzle of our understanding of nature. If its discovery had real commercial or military applications, one can bet that cooperation would be more difficult. There is of course Olympic-scale competition between different teams over things like who will be awarded a Nobel Prize, but it is a friendly competition around shared goals. So as with sports, the somewhat utility-lacking nature of particle physics has been key to its success.

Of course most scientists probably don’t see it quite this way. They are used to festooning their grant request forms with references to the likely benefits for society of their work. Few would agree with the mathematician GH Hardy, who famously toasted: “Here’s to pure mathematics, may it never find an application.”

And the lack of direct applications does not of course mean that particle physics is of no value, any more than art or sports or pure mathematics is without value. It is just the sort of value that is not easily captured by economic metrics.

It is a shame that the spirit and energy seen in particle physics or sports seems to elude us for things like world peace, conquering climate change, or even fixing the euro. Unlike the quest for a tiny particle, these require real action, and the upsetting of stake holders. But at least we can draw inspiration from science and sports, while envying them their relative freedom from the restraints of utility.

Greg Secker on forex trading | Knowledge to Action | Video

In 2003, Greg Secker quit his job in the city to set up his own trading floor. Since then he has shared the secrets of his success around the world through his training companies Knowledge to Action and Learn to Trade. Greg describes how he transformed his one-time hobby into a multinational business, and explains why it’s so important to actively help new traders cross the bridge from trading theory to practical application.

Mark Hussein on pensions in Brazil | HSBC Seguros | Video

The global pensions crisis is a widely discussed issue. In Brazil, the problem is magnified by an unsustainable public pensions system and a population which is not taking sufficient steps to prepare for retirement. Mark Hussein of HSBC Seguros explains how the onus is now on companies to ensure their employees’ pensions, and how HSBC is helping to address the problem with administration services, education, and the security that comes with being the number one provider in the market.

Ties develop between GCC and China

The world’s fastest growing economy over the last decade is set to significantly increase its trade with the Gulf Cooperation Council (GCC) over the coming years. China already has strong links with GCC member states, enthusiastically buying as majority of its oil from the region. As well as energy, trade between the two regions is increasing at such a rate that The Economist Intelligence Unit expects that by the end of this decade, China will be the GCC region’s most important trading partner.

As China becomes more urbanised and affluent, the energy demands of its citizens will inevitably rise, therefore increasing the need for a stronger economic relationship with key strategic partners within the GCC. China’s oil demand is said to double by 2030, resulting in a significant increase in the need for imports. The GCC, made up of oil rich Bahrain, Oman, Kuwait, Qatar, Saudi Arabia and the United Arab Emirates, is becoming an ever more important partner for China’s ambitions.

China’s relationship with specific countries in the GCC area is dominated by its relationship with Saudi Arabia, where it buys most of its oil, with the oil rich state supplying just under 1.4m barrels a day to China in February. It has also asked Saudi Arabia to open up its considerable oil and gas reserves to further overseas investment; while a recent deal to build 16 new nuclear reactors in the Kingdom by 2030 will see the Chinese contribute towards the $100bn cost.

Saudi and Chinese collaboration has increased further after departing Prime Minister Wen Jiabao toured the Gulf at the beginning of the year, culminating in an $8.5bn joint venture between state oil firms Sinopec and Saudi Aramco to build a refinery near the Red Sea.

Aside from oil, China is also now the leading exporter to the region, with exports climbing to $60bn per year to GCC over the last ten years. For the entire Middle East and North Africa, trade with China increased 22 percent in early 2012 to $111.7bn. Of this figure, GCC countries contributed to $77bn. During the next decade, trade between the GCC and China is thought to exceed $350bn. China is also increasingly importing other products that include aluminium, industrial chemicals and plastics from the region.

Since 2002, China’s trade with the UAE has increased by five times, from just $3.12bn to $15.6bn last year. Elsewhere, China’s trade with Qatar climbed to $5bn in 2011 off the bank of sales of liquefied natural gas, which could reach five million tonnes each year, according to Zhang Zhiliang, China’s ambassador in Doha.

According to the former US ambassador to Saudi Arabia, Charles Freeman, GCC countries look at China as an ideal trading partner that won’t try to meddle in their political or social affairs: “The Arabs see a partner who will buy their oil without demanding that they accept a foreign ideology, abandon their way of life or make other choices they would rather avoid. They see (in China) a country that is far away and has no imperial agenda in their region, but which is internationally influential and likely in time to be militarily powerful.”

Such is the enthusiasm that each region has for one another; many believe that a significant reshaping of the world economy through a new Silk Route could emerge.

HSBC’s Chief Economist Stephen King recently told Chinese news agency Xinhua that economic collaboration between the regions was “irreversible”. While China requires more energy to help sustain the rapid economic growth of the last decade, ties with resource rich partners in the GCC will only get stronger.

W Y Lin on sustainable technology | Tatung | Video

Electronics conglomerate Tatung is pioneering new ‘smart’ technologies that it hopes will improve its energy efficiency and allow it to expand at the same time. President W Y Lin talks about the company’s approach to energy, its investments in solar technology, and how its partnerships with local education establishments are sustaining Tatung’s prospects.

Gerald Dannhaeuser on forex trading | Commerzbank

As the European debt crisis continues, there is a lot of volatility in the currency markets and widespread debate on the subject of currency wars. Gerald Dannhaeuser of Commerzbank Corporates & Markets discusses the outlook for the EURUSD in light of this, how the industry is moving further towards electronic trading with a broader global reach, and the importance of the Asian market in today’s investment climate.

Paddy Padmanathan on solar energy | ACWA Power | Video

Saudia Arabia-based ACWA Power has developed a name for itself as a responsible energy operator, with a key focus on renewables. With the cost of renewable energy falling dramatically, it is now an economically viable option for many companies. Paddy Padmanathan talks about the company’s three recently acquired solar energy plants, the economic case for investment in renewable energy, and Saudi Arabia’s ambitious energy mix targets.

The voice of the market

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David Wiernik on satellite navigation | NNG | Video

In 2007, many economists believed satellite tech firms and the navigation market would struggle. However, innovative solutions are helping the industry regain strength. Hungary-based solutions company NNG has been a driving force in this, first capturing the industry’s attention in 2006 with its slogan “All of Europe in less than 1GB.” President David Wiernik describes its remarkable growth since then, its move into the auto and wireless markets, and how smartphones are impacting on the industry.

Musa Shihadeh on financing energy | Jordan Islamic Bank

Jordan Islamic Bank started in the early 1980s as a small bank with $3m in capital. Its growth since then has been impressive: it holds 8.3 percent of assets in Jordan’s banking sector, and has a return on shareholder equity of 16.74 percent, the highest in the country.

CEO Musa Shihadeh outlines how this growth has gone hand-in-hand with a commitment to servicing the community, including financing energy opportunities for a country formerly reliant on Egypt for its petrol.