Aliko Dangote
Davos. – BILLIONAIRES attending the World Economic Forum’s annual meeting this week in Davos, Switzerland, expect to be richer when they return to the Alpine village next year. About half a dozen of the wealthiest participants, including Aliko Dangote, Africa’s richest person, and Irish telecommunications mogul Denis O’Brien, say stocks will rise, interest rates will remain low, and they had avoided investing in the virtual currency Bitcoin this year.
“The bull market will continue, we’ve actually turned the corner,” Mr Dangote said in an interview at the forum’s Congress Centre on Tuesday.
“I believe it’s going to be a whole new ball game. Things are improving in all sectors: in banking, in vehicle manufacturing, almost all the sectors. And I think we’ve left the bad past behind.”
He is one of at least 80 billionaires joining more than 2 500 business and political leaders in Davos this week, according to a list of attendees and promotional materials obtained by Bloomberg News.
As billionaires bet on accelerating growth and rising asset prices, income inequality is emerging as a key theme for this week’s annual meeting.
A study released last week by the forum identified the income gap as the most probable menace to the global economy during the next decade. Wealth disparity — driven by globalisation and the recent financial crisis — threatens to breed poverty and social disorder, it said.
Billionaires attending Davos two years ago said that income inequality was an issue they wanted to discuss against the background of the Occupy Wall Street movement, which targeted the world’s richest 1 percent.
The wealthiest people on the planet got even richer last year, adding US$524bn to their collective net worth, according to the Bloomberg Billionaires index, a ranking of the world’s 300 wealthiest individuals. The aggregate net worth of the top billionaires stood at US$3,6-trillion at the market close yesterday, according to the ranking.
Bill Gates, the founder and chairman of Microsoft Corporation, was last year’s biggest gainer. The tycoon’s fortune rose US$15,8bn to US$78,5bn and he recaptured the title of world’s richest person last May from Mexican investor Carlos Slim.
Denis O’Brien, the chairman of Hamilton, Bermuda-based Digicel Group, the largest telecommunications company in the Caribbean, says he is bullish on equities.
“I’m going to stick with global telecom stocks,” he says.
Mr O’Brien has attended Davos for more than a decade and flew in last year on his Gulfstream 550 jet plane for the event’s penultimate day.
He says if he had US$100m to invest, he would bet US$40m on Vodafone Group, US$20m in Bharti Airtel, $20m in SoftBank Corporation and US$20m in Bangkok-based Advanced Info Service.
Mr O’Brien says the biggest hurdle facing the global economy is politicians.
“They are more and more worried about their re-election than growing their economies.
“Also, certain European banks still have issues particularly in the Benelux region, Spain, Italy, France and Germany. It will take many more years to sort them out.”
Vladimir Evtushenkov, the founder and largest shareholder of Moscow-based investment company AFK Sistema, says that he is not sure if stocks will rise this year. Mr Evtushenkov, who is the world’s 132nd-richest person, says he would prefer to invest in new companies in sectors that are not affected by changes in central bank policies.
The billionaire, whose publicly traded company maintains interests in Mobile TeleSystems, Russia’s biggest mobile-phone operator, and Bashneft, an oil production and refining company, says that the biggest risk to the world’s economy are anti-global attitudes.
Enrique Razon, a casino and cargo terminal billionaire, who does not gamble, says he had invested US$100m in Nigerian companies instead of stocks, Picasso paintings or Bitcoins.
“I believe there will be a correction coming” in the stock market, he says.
The Filipino billionaire funnelled US$200m of his own money into the Solaire Resort & Casino, a US$1,2bn gambling complex with 1 200 slot machines and 300 gaming tables that opened in March last year.
He also owns half of International Container Terminal Services, a port operator with facilities stretching from Brazil to Madagascar to India, which he inherited when his father died in 1995. The billionaire says the biggest challenge facing the global economy is “liquidity”, and that central banks will not be able to keep interest rates at their low levels for this year.
Billionaire Adi Godrej agrees interest rates will rise “somewhat in the developed world”, though he expects them to “come down in the developing world”.
Mr Godrej, who has visited Davos for more than 20 years, forecasts that the bull market in stocks would continue.
His family’s holdings, which include real estate and consumer goods, had revenue of $4,1bn in the year ended March last year and are used by more than half–a-billion Indians every day.
Up to 19 Indian billionaires are expected at the gathering this year.
“I see the bull market continuing,” says billionaire Malvinder Singh, executive chairman of New Delhi-based Fortis Healthcare, India’s second-biggest hospital operator. “Interest rates will continue to remain low through 2014 as economies work out ways of kick-starting recovery by boosting demand.”
Torbjorn Tornqvist, CEO of oil trader Gunvor Group, says he will continue to invest in stocks this year, targeting under-performing sectors, such as natural resources. — Bloomberg.