In today’s business landscape, the word “volatility” gets thrown around with little thought, and while it may denote random and uncontrollable events, it often describes a movement in what are essentially interlinked economic factors collectively referred to as “market dynamics.” A brief disruption in regional airspace, a sharp movement in oil prices, or the announcement of new trade tariffs should be carefully analyzed to clearly understand the impact of such events in order to put in place a clear strategy to mitigate such impact.

This nuanced understanding is at the core of our approach at Mashreq. We don’t wait for a crisis to strike. We believe in a proactive playbook, one that begins with a deep, ongoing dialogue with our public sector clients and government-related entities. This constant communication allows us to analyze how specific market movements impact their operational models and profitability.

For an airline, for example, a spike in fuel prices is a direct threat to the bottom line. Our role is to provide customized financial solutions that offer a protective buffer. We help them hedge against price movements using a blend of financial instruments like swaps and options. Swaps provide a fixed, predictable cost solution, while options act as an ins. policy, offering them the right to buy oil at a specific price without the obligation.

Furthermore, our analysis is not limited to sector-specific factors. We also apply the proactive playbook on a macro level, like assessing the impact of new trade tariffs. In the case of the UAE, a closer look reveals that the impact is minimal due to the nature of our trade relationship with the US, not to mention the exemption of hydrocarbons all together. This is a testament to the value of careful analysis over a broad-brush reaction.

Our commitment to the proactive playbook extends beyond mitigating traditional financial risks; it means preparing our clients for new market realities and helping them capitalize on structural shifts. Beyond traditional concerns, a new, critical factor is now shaping the financial requirements of the utilities sector: the green mandate. Public utility entities are required to meet the ever-rising demand in a sustainable way. These government-backed, sustainable initiatives are attracting substantial funding and making the sector highly favorable for capital from both loan and debt capital markets.

The proactive playbook is about being a partner who helps clients anticipate, analyze, and strategically mitigate risks before they materialize leading to disruption in operations. It’s a shift from a defensive posture to a strategic, forward-looking one.

Mohab Nematallah, Senior Vice President & Head of Public Sector at Mashreq

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