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XTB’s Achraf Drid Discusses FX Growth and MENA Region

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In this interview published on Finance Magnates: XTB’s Achraf Drid Discusses FX Growth and MENA Region, and yet not only that. In effect, it does enlighten us on how:

  • The MD of XTB MENA believes that the FX market will continue to grow in 2022.
  • Drid highlighted XTB’s growing sponsorship activities to increase its global presence.

By Bilal Jafar

The above image is for illustration and is of Finance Magnates by Daily Advent.

Achraf Drid

In an exclusive interview with Finance Magnates, Achraf Drid, Managing Director of XTB MENA, recently discussed the global growth in trading volumes across the FX and CFD market. Drid believes that the MENA region holds a special place in the global financial services industry.

XTB is one of the largest financial brokerages in the world. Listed on Warsaw Stock Exchange, the financial trading services provider witnessed rapid growth in 2021.

It’s a pleasure having you with us Mr. Drid, for our readers, can you please introduce yourself?

Thank you for having me; it is my pleasure. I am the Managing Director of XTB MENA DIFC in Dubai, and XTB is one of the world’s leading brokerage companies. In my role, I’m actively involved in the company’s business development, legal processes, and all compliance aspects. I am also deeply involved in the company’s financial strength in investing in Fintech since we provide our customers not only the highest level of customer support but also the highest level of technology. Since XTB entered the MENA region, I have focused mainly on setting up and managing the company’s core sales and risk management processes. I’m also involved in the regulatory framework of the company to lead XTB into the future with integrity and transparency.

We are new to the MENA region, but we have been around since 2005 when XTB was founded in Warsaw as a company. We are one of the biggest brokerages in Europe and are also listed on the Warsaw Stock Exchange. Worldwide, we have been offering CFDs, Forex, commodities and indices for years, and then we saw an opportunity in the MENA region to cater to the increasing demand for a reliable and trustworthy broker in this part of the world.

What differentiates us from other brokers? First, we are not just a financial company, we are a fintech firm, since we employ more than 200 IT developers in our headquarters, and we keep improving our offering and services every month. We are not looking to be compared with other brokers; our goal is to be the Amazon or Netflix of trading.

Secondly, many brokers rely on the MetaTrader 4 platform, but we also offer our proprietary platform called xStation, which has won numerous awards. We have a large IT team responsible for keeping it up-to-date and who ensure it’s always working at top efficiency. I’m proud of our GUI platform and honestly believe it’s one of the best in the market.

Finally, we place a significant focus on education. I believe we’re one of the most education-focused brokerages in the world. Many resources are found on our platform, including various educational videos and reading material. The content recorded hasn’t only been produced by us and by some of the world’s most famous traders. We heavily focus on education when we present our platforms to the clients virtually and when we meet them in person.

Trading volumes across the FX and CFD industry jumped substantially in 2020 due to the lockdown, while the industry sustained growth levels in 2021, do you think the trend will continue into 2022?

The actual gross market value of OTC FX and CFDs has been rising; the Covid-19-induced market turmoil and strong policy responses drove developments in FX markets throughout 2020. This increase coincided with the significant depreciation of the US dollar against other major currencies. Acting as the primary vehicle currency, the US dollar was on one side of more than 80% of all currency pairs (measured by both notional amount and gross market value). Sizeable US dollar exchange rate movements can lead to more trading in FX and CFDs in the current year (2022).

Additionally, if you look back into the last ten years, forex trading has grown exponentially. Looking at the forex market in 2008, there were about US$48 trillion traded, and today that number is closer to US$80 trillion, which shows a growth of over 50%. I believe that the volume will continue to grow in 2022 at a steady rate, with forex trading making up 40% of the world’s total market.

In terms of financial services, the MENA region is one of the fastest-growing regions in the world, what makes MENA different from other locations?

The Middle East’s importance is rapidly growing in the global forex market, especially with its retail segment, compared to a relative slowdown and decline in other international markets.

It is driven by increased investor awareness of the opportunities available in global trading and the region’s strategic location between Asia and Europe as a hub. The local time zone enables it to capture market opening hours in the Far East and the US…and closing hours in the same working day, giving it better access to the broader global market, particularly the G7 currencies.

As we are based out of Dubai and regulated by the DIFC, we have experienced substantial growth of the UAE economy and the increasing number of ex-pats coming to live and work here; we have seen FX transactional flows rising, both in and out of the country.

Going forward into 2022, how is XTB MENA planning to expand its presence in the region?

The MENA region did go through significant challenges during the last two years, (with) the COVID-19 pandemic having an impact on the regional economy, like the rest of the world. However, some countries have adopted rapid, decisive and innovative measures to contain the virus, such as the smooth crisis management developed by regional governments.

MENA countries have responded rapidly to mitigate the economic consequences of the crisis on the private sectors and households and keep the financial market functioning. On average, 2.7% of GDP was allocated to fiscal measures, while 3.4% of GDP (over USD 47 billion) in liquidity injection was activated by Central Banks across the region during the first few weeks of the crisis.

The MENA market is estimated to witness significant growth, and at XTB, we feel very confident. The reason we decided to establish XTB regional office in the UAE is part of our strategic growth plan to support our customers locally, not only in FX but across other asset classes under our portfolio, including oil, gas and bullion.

Sponsorships played an important role in global brand awareness of financial trading platforms, how is XTB planning to use sports sponsorships for its global growth?

In the past, we had a partnership with McLaren Mercedes, then with Hollywood actor Mads Mikkelsen, and now we have a partnership with Jose Mourinho, and we have other plans for the future – for obvious reasons; we would like to keep this as a surprise!

Latest Trends shaping the region’s Start-up Ecosystem

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The increase in entrepreneurship and start-ups in the region has been happening over the past decade as revealed by Arabian Business in the latest trends shaping the region’s start-up ecosystem

Financial technologies and e-commerce businesses dominated the market in the Web 2.0 wave, while blockchain and cryptocurrencies are slowly growing in the region

In the post-pandemic economy, it feels like start-ups are launching almost daily in unprecedented numbers, but the Middle East entrepreneurial ecosystem has been steadily growing for almost a decade now, explained Walid Hanna, CEO and founder of MEVP, a venture capitalist firm.

Talking exclusively to Arabian Business, Hanna looked back at the evolution of start-ups in the region and the major trends that dominated each phase until today.

He also shared what venture capitalists look for when deciding whether to invest in a business or not and what challenges remain in the ecosystem.https://www.arabianbusiness.com/startup/why-we-are-never-too-old-or-too-young-to-be-an-entrepreneur/embed#?secret=Azh8pDLw27

What can you tell us about the regional landscape for start-ups in the post-pandemic economy?

The increase in entrepreneurship and start-ups in the region has been happening over the past decade.

We [at MEVP] began our journey back in 2010 and, at that time, we used to see one or two start-ups a week, while now we receive three or four business plans a day, so the multiplier has been enormous in terms of the number of start-ups.

This has been the case post-Covid as well. When the whole ecosystem realised how important technology is during the pandemic, it gave a boost to our portfolio of companies and they grew faster and it also gave a boost to potential entrepreneurs who left their jobs to start their own businesses.

Why do you think fuelled this growth in the pre-coronavirus days?

It’s a natural progression that happened across the US, Europe and China over the past two decades and since there’s always a lag with the Middle East, it’s finally happening here now.

If you look at the penetration rates in internet usage or mobile phone usage, the Middle East has typically been lagging, the exception being countries like the UAE. But, now they’re all catching up.

What are some of the trends you’ve seen among regional start-ups, in fintech and tech in general?

Trends have been evolving over the past decade as well.

Originally there was the Web 1.0 wave, which was only content-based such as browsing the internet for cooking recipes, for example.[Start-ups] were making money, but it was based on reading, there were no interactions or transactions involved.

Walid Hanna, CEO and founder of MEVP. Image: ITP Media Group

Then it evolved into Web 2.0, where we saw a lot of financial technologies, e-commerce sites and software-as-a-service for enterprises. We’ve invested in 60-plus companies across those verticals.

We’ve also seen a lot of mobility plays, such as Uber, and we’ve seen that model [replicated] across tuk-tuks, motorcycles, electric scooters and trucks which, in a way, is good for the environment.

Within fintech, we’ve seen a lot of sub-verticals, such as the Buy Now, Pay Later model, which is a big trend at the moment – there are around ten [such start-ups] in the region and we’ve invested in an Egypt-based one. But there are so many other trends within fintech, including micro-lending, SME-lending or treasury solutions; payment solutions in general.

The hype over non-fungible tokens and cryptocurrencies, the whole blockchain business model, has evolved tremendously over the past couple of years and is just starting to pick up in the Middle East. We’ve seen two NFT marketplaces and a couple of blockchain business models. It is still quite limited, although I expect it to grow much faster in the next three years.

How do you identify the companies you will invest in?

Just as they say “location, location, location” for real estate, it is “people, people, people” for start-ups.

If a start-up is at the earlier stages, the best thing you can look at is how investment-ready the business is and how qualified the founders are with relevant experience. We look at how dynamic, hardworking and motivated they are.

Buy Now, Pay Later model is a big trend at the moment.

We look at the total addressable market and try to understand if it’s big enough and if they are really answering a pain point that is large enough to make serious money. This is because we are not interested in a small niche in a tiny country. For example, if a start-up is trying to solve a small issue in a country like Lebanon and the issue is not the same in Saudi Arabia and the GCC, then we are not interested.

We also look at the business model and the unit economics to see if it is viable, meaning we try to find out if the cost of producing, marketing and selling whatever product is worthwhile. If you look at the cost of acquiring a user and realise that the margin you are making out of this one product is inferior to that, then it is not worth it.

We also look at how robust and scalable the technology itself is and the stack they use. We invest in tech start-ups only.

Growth is key to our assessment of technology companies. We don’t do seed capital so when we invest in Series A, we can already witness a traction behind the start-up. If the traction is interesting, we get interested but if it is not already interesting, we don’t invest.

What are the challenges that remain for entrepreneurs in the region?

It depends on the country. In the GCC, there are no currency risks because they are pegged to the dollar, but if you look at currency in Egypt, they got really hit by the devaluation about three years ago.

There is also a political risk because of the region’s instability and relationship with its neighbouring countries.

Enablers are becoming better and better, but we still have some issues with the banks, for example. Opening up a bank account for start-ups is very challenging across the region. It takes ages and a lot of KYCs.

Five years ago, the logistics were very poor. Even the online payment systems were very poor so it was difficult for start-ups to thrive within that environment. This has been enhanced over the past couple of years but, for some reason, many customers here still want to pay cash-on-delivery and not use credit cards online. Penetration is increasing in terms of card usage but it is still lower than the global average.

Other than that, the ecosystem has evolved well and the enablers have followed. I would say the only challenge that remains is for fintech companies in terms of licence and regulations. Government regulations are making it easier by offering sandbox licences, but other than that, the regulatory framework is quite limited. The process is very slow but will happen one day I am sure.

Exits are happening, but still at a low rate where selling the start-up is difficult. There are more investors from outside the region looking at the region, which is positive, and the big regional conglomerates have also started to acquire start-ups so the trend is good but the numbers are still behind.

We have good start-ups and we want to sell them, but buyers are scarce. We should expand our horizon of buyers towards the global market, such as China or the US.

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The anxiety list for MENA entrepreneurs is long, as is the one curing it

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Hadi Khatib on AMEInfo of 18 September 2021 came up with this deep statement on the anxiety list for MENA entrepreneurs that is long, as is the one curing it

The anxiety list for MENA entrepreneurs is long, as is the one curing it

A research report on the mental health challenges and wellbeing of entrepreneurs due to COVID-19 in the MENA region revealed anxiety has several facets in the minds of these leaders. But all of these insecurities have cures.

  • 55% of startup founders said that raising investment has caused the most stress.
  • More than 95% of entrepreneurs view co-founders as family members and/or friends.
  • Research finds that entrepreneurs are happier than people in jobs.

EMPWR, a UAE-based digital media agency dedicated to mental health and an exclusive mental health partner for WAMDA and Microsoft for startups, published a research report on the mental health challenges and wellbeing of entrepreneurs due to COVID-19 in the MENA region.

The research indicated that startup founders undergo higher levels of stress than the rest of the region, with twice the likelihood of developing depression issues.

55% of startup founders said that raising investment has caused the most stress; the pandemic was the second most-cited reason cited by 33.7% of respondents.   44.2% spend at least 2 hours a week trying to de-stress. 

Other insights, uncovered by the report, include:

  • A good relationship between co-founders can help startups navigate the pandemic-hit market. More than 95% of entrepreneurs view co-founders as family members and/or friends
  • Many entrepreneurs live well below their means to fund their ventures, leading to stress that is detrimental to their health

With only 2% of healthcare budgets in the MENA region currently spent on addressing mental health, the impact of the COVID-19 pandemic on young entrepreneurs and achievers could lead to an economic burden of $1 trillion, by 2030, according to the report.

EMPWR’s MENA partners shared special offers on their mental health services for the region’s entrepreneur community.

From Saudi Arabia:

Labayh is offering the technology ecosystem a 20% discount on their online mental health services for 2 months. Promo code: empwr, with the offer valid until October 29.

From Egypt:

O7 Therapy are offering 50% off their online mental health services, for 50 Entrepreneurs in the MENA region. Promo code: Entrepreneur50, valid until December 1, 2021.

From the UAE:

My Wellbeing Lab is offering 20 one-on-one coaching sessions to entrepreneurs that wish to be coached and helped; alongside unlimited access for any entrepreneur to their “Discovery Lab”, a platform that gives entrepreneurs and leaders insights into their mental wellbeing as well as their teams. Promo code: MWL21.

Takalam is offering 10% off for 3 months. Promo code: Impact.

Mindtales is offering the MENA ecosystem 50% off their services for one month. Their App can be downloaded here.

H.A.D Consultants is offering 20 one on one coaching sessions to entrepreneurs. Promo code: HAD_SME01.

From Oman:

Nafas, a meditation app focused on reducing stress, anxiety, and help with insomnia, is offering access to its platform. Register as a user via this link to redeem benefits. 

Entrepreneurs’ mixed emotions

Entrepreneurs must grapple with uncertainty and being personally responsible for any decision they make. They likely have the longest working hours of any occupational group and need to rapidly develop expertise across all areas of management while managing day-to-day business.

Yet despite all this, research finds that entrepreneurs are happier than people in jobs.

To understand this, a comprehensive and systematic review of 144 empirical studies of this topic, covering 50 years revealed:

1. It’s not all about pay

Work on the economics of entrepreneurship traditionally assumed that entrepreneurs bear all the stresses and uncertainties in the hope that over the long term they can expect high financial rewards for their effort. It’s false.

2. Highly stressful, but…

High workload and work intensity, as well as financial problems facing their business, are at the top of the entrepreneurs’ stress list.

But some stressors have an upside. While they require more effort in the here and now, they may lead to positive consequences such as business growth in the long term. Some entrepreneurs appear to interpret their long working hours as a challenge and therefore turn them into a positive signal.

3. Autonomy is both good and bad

The autonomy that comes with being an entrepreneur can be a double-edged sword. Entrepreneurs can make decisions about when and what they work on – and with whom they work. But recent research into how entrepreneurs experience their autonomy suggests that, at times, they struggle profoundly with it. The sheer number of decisions to make and the uncertainty about what is the best way forward can be overwhelming.

4. An addictive mix

The evidence review confirms that, by any stretch of imagination, entrepreneurs’ work is highly demanding and challenging. This, along with the positive aspects of being their own boss coupled with an often competitive personality, can lead entrepreneurs to be so engaged with their work that it can become obsessive.

So the most critical skill of entrepreneurs is perhaps how they are able to manage themselves and allow time for recovery.  

Stress management tips for entrepreneurs

Identify what the actual source of your stress is. Is it tight deadlines, procurement issues, raising capital, managing investors’ expectations, building a talented team, or delay in landing the first sale for your new startup business?

Even if numbering more than a few, break them down because unmanageable tasks look simpler when broken down into smaller segments. Then, list down how you plan to successfully tackle each issue. Meanwhile, exercising multiple times a week has been rated as one of the best tactics for managing stress.  

Another technique for handling stress is to take a break. Rest as much as you can before going back to continue with the tasks.  It’s also a good idea to reach out to friends, family, and social networks because they are likely to understand what you’re going through and offer words of wisdom and courage.

Stay away from energy-sapping junk food. Eating healthy keeps you fueled for the next challenge. Finally, get enough sleep, and power naps. Sleep helps your body and mind recover.   

Hadi Khatib is a business editor with more than 15 years of experience delivering news and copy of relevance to a wide range of audiences. If newsworthy and actionable, you will find this editor interested in hearing about your sector developments and writing about them. He can be reached at:  hadi.khatib@thewickfirm.com

Heimdal: Startup for the Environment

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This article by Tech Times written by Isaiah Richard is about how Heimdal: a Startup for the Environment aiming at a high level of sustainability, is proposing to help in the carbon-free industrial materials like cement, concrete, limestone, and more. from extraction to production. Here it is.

(Photo: Photo by Lukas Schulze/Getty Images)

Steam and exhaust rise from the steel mill HKM Huettenwerke Krupp Mannesmann GmbH on a cold winter day on January 6, 2017 in Duisburg, Germany. According to a report released by the European Copernicus Climate Change Service, 2016 is likely to have been the hottest year since global temperatures were recorded in the 19th century.

Heimdal describes themselves as “decarbonizing industries and the world,” and the main goal of the company is to create materials that people can use without guilt or worries. Why is that? Because its industrial products would be carbon-negative or carbon-free.

This is something that has been achieved before, but what Heimdal aims to debut is the novel.

Heimdal’s focus is to extract different raw materials from the Earth using their renewable energy source and creating what people need without leaving any carbon footprint. Cement and concrete production are known to be major contributors of greenhouse gases in the world, something which startups try to change.

There is a lot of focus which the company aims to venture on, and according to Tech Crunch, it would potentially help in preserving the environment with its efforts. Heimdal demonstrates a high level of sustainability from its extraction to production, something which is not widely that practised in the industry. 

Heimdal Carbon-Free Industrial Materials

Erik Millar and Marcus Lima founded Heimdal, and this is something that the duo has brought with them upon completing their studies at Oxford University, United Kingdom. Heimdal aims to bring carbon-free industrial materials like cement, concrete, limestone, and more. 

Its main focus of using seawater and CO2 can help in bringing these said industrial materials, which aims to remove the dangerous greenhouse gas from the equation. The company engineers are working on ways to do this, particularly with a design from the founders to extract energy from seawater. 

Heimdal Renewable Energy

(Photo : Jason Weeks from Pixabay)

One of Heimdal’s main focuses as well is to extract energy from seawater, and it would alter the components to several stages such as making it alkalinized. After which, several gases are extracted, and here, they return seawater to its source.

From this process, Heimdal can collect the raw materials it needs to start on its limestone making while using clean and renewable sources of energy to do so. The venture of the company hits two birds with one stone, and can potentially reduce significant uses of raw materials in the environment. 

Related Article: ‘Green Steel,’ aka Carbon-Free Steel, Has Come Sooner than Expected

Read Also: Solar, Wind Power Now Cheaper than Coal, Renewable Energy Revolution Against Climate Change

To Address the MENA Region’s Most Pressing Issues

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You’re reading Entrepreneur Middle East, an international franchise of Entrepreneur Media looking at how to Address the MENA Region’s Most Pressing Issues.

To Address The MENA Region’s Most Pressing Issues, Startups And Their Larger Business Counterparts Need To Come Together

By Roberto Croci, Managing Director, Middle East and Africa, Microsoft for Startups

In a world without assistance, some of humanity’s best ideas would never see the light of day. Those that can guide the next generation of innovators to success have an obligation to do so.

In 2019, the UAE Ministry of Economy revealed that 95% of the country’s private sector were SMEs or startups. With an estimated economic contribution of 40% of GDP, these smaller enterprises employ 42% of the workforce, and they routinely bring the exact kind of innovations needed for a sustainable future.  

The rest of the region, and indeed the world, tells a similar story. We now live on a planet that cries out more loudly than ever for out-of-the-box thinking. For example, the World Resources Institute tells us that one in every four humans live in a country that faces the highest category of water stress. 12 of these 17 countries are in the Middle East and North Africa, and they need ideas, fast. And across the region, governments and businesses that are just starting to extricate themselves from the clutches of the global COVID-19 pandemic are wondering what they can do to mitigate the impact of possible future crises. 

Large enterprises have the economies, positioning, and scale to meet these challenges and others, but they may lack the conceptual spark found in entrepreneurs and their newly formed businesses. While startups will continue to be an important part of all economies, the impact they can make will be greatly amplified by strategic partnerships with bigger businesses. 

It is the ideal meeting of minds. Smaller businesses are traditionally where we look for job creation and bold ideas, but larger businesses have been around long enough to have better understandings of issues such as market strategy, best practice, and compliance. Where startups may face difficulties finding financial backing, technology, or mentorship, larger players can help– if not directly, then by putting founders in touch with the right people. 

Related: How Corporates And Universities Can Work Together To Bring Scientific Innovation To Commercial Markets

In return, B2B startups can help large corporates to extend their capabilities. Together, businesses of different scales can solve societal and commercial challenges. This potential is not exclusive to an individual industry, nor is it confined to a specific nation. Communities everywhere can share in the progress and sustainability delivered by large and small businesses working together. 

But to create such an environment will require input from all parties– government entities, private enterprises, and startups. We need to ensure self-perpetuating environments that allow businesses to fail, learn, create, and then scale. Any incubation initiative –either by government or private enterprise– that accelerates time to market is welcome. We need to create a system that guarantees the success not just of this generation of viable startups, but of all those that come after. 

In the region, the Abu Dhabi Investment Office (ADIO) is one entity that has dedicated itself to working with corporate partners to foment a vibrant startup ecosystem. My enterprise, Microsoft for Startups, works with ADIO to bridge the gap between viable new businesses and those that can help them succeed. With programs like GrowthX Accelerator and Highway to 100 Unicorns, we work to empower entrepreneurs with access to technology, market guidance, and meet with potential investors and large enterprises to demonstrate their value proposition. https://0a129d5710c3eaf47270288d47690651.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html

Opportunities like this are important for startups and corporates. In a world without assistance, some of humanity’s best ideas would never see the light of day. Those that can guide the next generation of innovators to success have an obligation to do so. And as they do, they should be aware that when large- and small-scale operators work together, everybody wins.