Where Can We Go From Here?

Where Can We Go From Here?                                              20 May 2022

HH Sheikh Mohamed bin Zayed, Ruler of Abu Dhabi, has been elected the country’s president, following a meeting in Abu Dhabi of the seven rulers of the Emirates. He becomes the third president in UAE’s history, following last Friday’s death of Sheikh Khalifa. The President, Sheikh Mohamed “expressed his appreciation for the dear trust that his brothers, their highnesses, members of the Federal Supreme Council, have entrusted him with, praying that Almighty God helps him succeed, helps him in taking on this great responsibility and meeting it in serving the UAE and its loyal people”. Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, offered his congratulations, tweeting, “Today, the Federal Supreme Council elected my brother, His Highness Sheikh Mohamed bin Zayed Al Nahyan, as President of the State. We congratulate him and we pledge allegiance to him, and our people pledge allegiance to him.”

For the past week, ending 20 May 2022, Dubai Land Department recorded a total of 2,043 real estate and properties transactions, with a gross value of US$ 1.96 billion. A total of 228 plots were sold for US$ 311 million, with 1,328 apartments and villas selling for US$ 975 million. The two top transaction sales were for plots of land – one in Hadaeq Sheikh Mohammed Bin Rashid for US$ 35 million, and another sold for US$ 23 million in Al Merkadh. The three leading locations for sales transactions were Al Hebiah Fifth, with 117 sales worth US$ 85 million, followed by Al Merkadh, with 22 sales transactions worth US$ 60 million, and Al Yufrah 2, with 19 sales transactions, worth US$ 7 million. The top three apartment sales were one sold for US$ 231 million in Burj Khalifa, another for US$ 214 million in Palm Jumeirah, and third at US$ 95 million in Marsa Dubai. The sum of mortgaged properties for the week was US$ 612 million, with the highest being for a plot of land in Al Muteena, mortgaged for US$ 126 million. 171 properties were granted between first-degree relatives worth US$ 78 million.

Last month, Dubai real estate posted a massive 45.5% hike in transactions and a 66.2% surge in value compared to a year earlier – and this despite a marked rise in property prices. Home sales recorded year-on-year growth of 55.9% in April, as the demand for villas and apartments continued in positive territory, but transactions registered a 17.4% decline on a month-on-month basis. According to Valustrat, month on month, cash and mortgage sales of ready properties declined 13.0% and off-plan Oqood (contract) registrations were down 23.3%. Property Finder indicated that Dubai posted almost 7.0k real estate sales transactions, worth US$ 4.96 billion, the highest ever for the month of April since 2009. Of that total, secondary market sales transactions accounted for 4.2k, (60% of transactions), valued at US$ 3.51 billion, while off-plan properties, comprising the remaining 40 %, (2.8k), was worth a total of US$ 1.45 billion. In April, both the number of transactions and the value were higher compared to a year earlier – up by 45.5% and 66.6% respectively. Off plan sales volume transactions and values were 44.0% and 73..7% higher, with secondary transactions up 46.2% and 63.9%.

By the end of April, the residential price index came in 1.0 higher to 79.8, compared to the January 2014 base period; the index, recorded nineteen transactions for residential units over US$ 8.2 million (AED 30 million), including one for US$ 26.2 million (AED 96 million) in Dubai Hills. It was noted that the latest ValuStrat Price Index showed a slowing in the capital value growth for Dubai villas, which represent 13% of the market, slowing to 95.7, with apartments flat at 69.7. On the month, capital value was up 1.8%, with average year-on-year villa prices surging 33.8% in April. The five locations, with the biggest annual increases, were  Arabian Ranches (40.6%), Jumeirah Islands (38.8%), The Lakes (36.6%), Jumeirah Village (34.9%), and Palm Jumeirah (34.6%).

Apartment prices rose, over the past twelve months, at a much slower rate – recording an average 8.1% increase. Over the year, the four locations registering the highest price increases were Palm Jumeirah (20.8%), Burj Khalifa (16.4%), JBR (15.6%), and The Views (10.3%). At the other end of the spectrum were Jumeirah Village and Dubai Sports City, both only recording 1% growth, with Dubai Production City (0.5%) being one of the lowest annual growth in April. It is expected that the gap between the percentage growth of apartment and villa prices will continue to narrow in 2022. The top five developers – accounting for 53.0% of the total sales in April – were Emaar (24.2%), Damac (15.1%), Nakheel (6.3%), Select Group (3.7%), and Dubai Properties (3.7%). Location-wise, Business Bay (12.7%), Dubai Creek Harbour (8.8%), and Downtown Dubai (8.8%) were the leading off-plan locations, while Damac Lagoons (13.4%), Jumeirah Village (8.4%), Dubai Marina (7.0%) and Business Bay (4.7%) were the most transacted areas for ready homes. Meanwhile, Property Finder posted that the top areas of interest in terms of transactions for villas or townhouses in April 2022 were Dubai Hills Estate, Palm Jumeirah, Arabian Ranches, Damac Hills and The Springs. Marina, Downtown Dubai, Palm Jumeirah, Business Bay and Jumeirah Village Circle led the charge for apartments.

In Q1, UAE’s tourism sector welcomed over six million visitors, who spent 25 million hotel nights, with this figure up 10%, compared to the same pre-Covid period in 2019. Hotels’ revenue came in almost 20% higher than its 2019 comparative figure, at US$ 2.9 billion. The federal Ministry of Economy noted it was “one of the best years in terms of economic growth in general and tourism in particular”. The UAE economy and hospitality sector recovered quicker than most others because it executed one of the world’s fastest inoculation campaigns that boosted economic recovery and helped to attract tourists over the past year. Other government measures, including large-scale advertising campaigns and the introduction of long-term and multiple-entry tourist visas, have also aided growth. It was also noted that the average duration of hotel guest stays rose from three nights to four, while the occupancy rate of hotels touched global highs of 80%. The top four source markets continued to be India, Saudi Arabia, the UK and Russia.

A decree by HH Sheikh Mohammed bin Rashid Al Maktoum sees the dissolution of a special 2009 tribunal that was set up to resolve disputes pertaining to financial settlements related to Dubai World and its subsidiaries that hit the buffers during the GFC. The statement noted “all cases and claims related to the financial settlement of Dubai World and its subsidiaries, filed after this decree comes into effect, will be referred to specialised courts.” All cases and requests that have not been resolved by a final judgment before December 2022 will be referred to the special courts, in line with judicial legislation in Dubai, without any new fees being charged; until then, the tribunal will continue to review all pending cases and claims during a transition period.

Sheikh Hamdan bin Mohammed has issued directives in relation to the latest developments in the digital economy in a move to enhance Dubai’s position in the metaverse. The Crown Prince noted that “the move will help us fully understand reality and explore unique ideas that will shape a brighter future for Dubai and the UAE, maximising future business opportunities.” He has directed the formation of a higher committee to supervise technological developments in the emirate that will oversee developments in the digital economy. The committee will work on the objectives of the Dubai Metaverse Strategy, with the target of increasing the contribution of the metaverse sector to Dubai’s economy to US$ 4 billion by 2030 and increase its contribution to the emirate’s GDP to 1%.

With almost 2.5k commercial dhows in operation, and Dubai authorities keen to revitalise the sector, Q1 saw activity 8.0% higher, compared to the same period in 2021.The traditional wooden vessels, that have been a cornerstone of Dubai trade for centuries, will continue to further economic growth in the emirate. Dubai’s Ports, Customs and Free Zone Corporation set up the Marine Agency for Wooden Dhows in 2020 to streamline and regulate the activities of traditional vessels in the emirate’s waters, with the three key hubs being Dubai Creek, Deira Wharfage and Al Hamriya Port.

In a bid to diversify its global operations network, e& has acquired a 9.8% stake, (some 2.766 billion shares) in UK mobile carrier Vodafone Group, for US$ 4.4 billion, as it seeks to diversify operations globally. The UAE’s biggest telecoms operator, formerly known as Etisalat, commented that “we are looking forward to building a mutually beneficial strategic partnership with Vodafone with the goal of driving value creation for both our businesses, exploring opportunities in the rapidly developing global telecom market and supporting the adoption of next-generation technologies.”

The DFM opened on Tuesday, (following the death of President His Highness Sheikh Khalifa bin Zayed Al Nahyan), 17 May, 301 points (8.5%) down on the previous fortnight, and shed a further 301 points (8.9%), in another torrid week of trading, to close on Friday 20 May, on 3,394. Emaar Properties, US$ 0.20 lower the previous fortnight, gained US$ 0.07 to close on US$ 1.61. Dewa, Emirates NBD, DIB and DFM started the previous week on US$ 0.73, US$ 3.72, US$ 1.63 and US$ 0.63 and closed on US$ 0.71, US$ 3.61, US$ 1.63 and US$ 0.62. On 20 May, trading was at 76 million shares, with a value of US$ 62 million, compared to 96 million shares, with a value of US$ 126 million, on 13 May 2022.

By Friday 20 May 2022, Brent, US$ 2.99 (2.6%) lower the previous week, nudged up US$ 0.19 (0.1%), to close on US$ 110.35. Gold, US$ 165 (8.5%) lower the previous four weeks, gained US$ 25 (1.4%), to close Friday 20 May, on US$ 1,835.  

With downstream margins improving on the back of soaring energy prices, with Brent at US$ 110.35 at the tail end of last week, and increased volumes, Saudi Aramco posted Q1 net profit, (after zakat), 81.7% higher on the year, and 22.0% on the quarter, at US$ 39.47 billion. The world’s largest oil company is planning to reward investors by paying a Q1 dividend of US$ 18.8 billion and distributing one bonus share for every ten shares held in the company. Its chief executive, Amin Nasser, noted that “against the backdrop of increased volatility in global markets, we remain focused on helping meet the world’s demand for energy that is reliable, affordable and increasingly sustainable.”  Because of the ongoing Ukraine war, and other production disruptions, it is expected that Brent will trade at over US$ 100 for the remainder of the year – and could easily hit US$ 135 – and this despite the expected global slowdown. The Saudi energy minister, Prince Abdul-Aziz bin Salman, expects the Kingdom’s oil daily oil production to increase by over 8% within the next five years, to a daily output of thirteen million bpd.

To end its reliance on Russian fuel fossils, and to speed up its transition to green energy, the EC is planning to invest US$ 233 billion into extra energy investments by 2027; currently, Russia supplies 40% of the Europe’s gas and 27% of its imported oil, and this dependence see EU nations struggling to agree to certain sanctions on Russia. Apart from the increased monetary input, (with investments of US$ 91 billion, US$ 59 billion, US$ 31 billion and US$ 29 billion for renewable energy, energy savings/heat pumps, power grids and hydrogen infrastructure), measures will include a mix of EU laws, non-binding schemes, and recommendations to governments in the EU’s 27 member countries. Some money will still need to be spent on fossil fuel infrastructure – US$ 11 billion for a dozen gas and liquefied natural gas projects, and up to US$ 2 billion for oil, targeting land-locked Central and Eastern European countries. EC president, Ursula von der Leyen, noted that “RePowerEU will help us to save more energy, to accelerate the phasing out of fossil fuels and, most importantly, to kickstart investments on a new scale.” The EC has replaced its current 40% target by an additional 5% to 45% relating to using renewable energy by 2030, and to double that capacity to 1.236k gigawatts (GW) by then, via laws allowing simpler one-year permits for wind and solar projects. The EU also proposed phasing in obligations for countries to fit new buildings with solar panels. Another objective is to cut EU energy consumption by 13%, (up from the current 9% aim), over the next eight years.

Ryanair posted an almost tripling of revenue to US$ 4.1 billion, but a US$ 369 million loss for its fiscal year ending 31 March – an improvement on the US$ 1.0 billion deficit recorded a year earlier. Europe’s biggest discount airline, which carried 165 million passengers over the year, commented that it was hoping for a return to “reasonable profitability” this year, and that it was “cautiously optimistic” that peak-season fares will be somewhat ahead of 2019 levels. Chief executive, Michael O’Leary, also noted that getting through airports will be “challenging” this summer, and that there are “pinch-points” at airports, such as Heathrow and Manchester, where he said “too many people” have been sacked. On the day, Ryanair shares traded at US$ 14.16, 30% lower than three months ago.

Not helped by factors such assupply chain problems, rising raw material costs, surging energy prices and the war in Ukraine, food shopping has become more expensive. Iceland has come up with an innovative way to assist shoppers over the age of sixty – they have  launched a 10% discount for this consumer sector  every Tuesday as surging prices have hit dwindling household budgets. With prices rising at their fastest pace in forty years – and up 5.9% on the year – some supermarket chains, including Morrisons and Asda, which have been losing shoppers to discounters, Aldi and Lidl, have already introduced discounting on a big scale. Last Christmas, the retailer also ran a regional trial offering US$ 37 vouchers to those receiving a state pension and could also roll our something similar this summer. Matters can only get worse for most of the population, including pensioners and the poor, who will be more badly impacted, as inflation, which rose from 7% to 9% on the month in April, heads inexorably towards double digit territory, as energy prices rose a further US$ 870 last month.

With the UK ending all forms of restrictions, and demand for overseas holidays soaring, airlines are struggling to return to pre-Covid staffing levels. Budget airline EasyJet is even offering new and existing cabin crew a US$ 1.23k, (GBP 1k) bonus at the end of the summer holiday season. With an ongoing airline battle to retain and recruit staff, and a limited supply of staff, even BA is offering the same amount to new joiners, as a “golden hello”. With a current shortage of staff, airlines have had to cancel hundreds of flights, exacerbated by the recent hiatus in the Omicron variant pushing staff absences higher. To add to holidaymakers’ woes, some have missed flights because of the lack of staff at airports, including Manchester and Luton, resulting in long queues and many disappointed passengers not making their flight. Another problem facing airlines is that it can take months to train and get security clearance for new staff. One innovative measure sees EasyJet considering taking out the back row seats on some aircraft that would allow the carrier to fly with three cabin crew – and not four.

Another sector with staff shortage problems is found in Wall Street, where many of the financial institutions there face problems to retain talent in a heated job market. The latest is Goldman Sachs that has decided to allow senior staff an unlimited number of annual leave days – they can take time off when needed “without a fixed vacation day entitlement”. More junior employees still have limits on holiday but will be given at least two extra days off each year. All Goldman employees will be required to take three weeks off each year, starting in 2023, and that includes at least one week of consecutive time off.

Probably not before time, McDonald’s has decided to exit Russia, after having closed its 847 restaurants in the country. It plans to sell all its Russian restaurants, of which 84% are owned by the world’s largest burger chain, and that it will take a related non-cash charge of up to US$ 1.4 billion. There is no doubt of the popularity of McDonald’s among Russians, even though when it opened its first branch on 31 January 1990 the cost of one burger was several times higher than many city dwellers’ daily budgets. Last year, revenue from Russia and Ukraine generated US$ 2.0 billion, equating to about 9% of its total sales. McDonald’s confirmed it would ensure its 62k employees in Russia continue to be paid until the close of any transaction and that they have future jobs with any potential buyer. This week, French car maker Renault posted that it would sell its majority stake in Avtovaz to a Russian science institute.

Having earlier posted impressive Q1 results, driven by a recovery in its ride-hailing and delivery businesses, Uber unveiled new products and services to enhance its product range and boost its bottom line. They include hotel/flight reservations, charter bus bookings, electric vehicle options for customers, and electric vehicle hub and charging map for drivers. Its travel service, initially limited to North America, will allow users to reserve rides for each leg of their itinerary, with Uber assisting with the organisation of hotel, flight and restaurant reservations; users will receive 10% for each reserve ride. Users will also be able to access the new Uber charter service app and be able to book a party bus, passenger van or a coach bus. Initially the new comfort electric service will only be available in four locations, including Dubai, along with three Californian cities – Los Angeles, San Francisco and San Diego. Uber is still looking at 2040 as the deadline to become a zero-emissions mobility platform, and in 2021, it made an agreement with Hertz to take up to 50k Tesla vehicles available for drivers to rent by 2023.

According to the IIF, global debt grew US$ 3.3 trillion in Q1 to a record high of US$ 305 trillion, driven by increased borrowing by the world’s two largest economies, US, (US$ 1.8 trillion higher) and China, (up US$ 2.5 trillion), and an economic slowdown attributable to the war in Ukraine. This figure equates to more than 348% of global GDP, with the debt about 15% below its Q1 peak. It is expected that soaring inflation will also play a role in global debt and will continue to help reduce debt ratios in general, as the global debt-to-GDP ratio declined for the fourth consecutive quarter. The IIF did warn that “as central banks move ahead with policy tightening to curb inflationary pressures, higher borrowing costs will exacerbate debt vulnerabilities,” This will have a more damaging impact on poorer economies around the world, as high interest payments push them into more debt, at the same time when food and energy prices are also surging. There is no doubt that interest expense is becoming an increasingly heavy burden for global central banks and this debt has to be repaid – another expense to be repaid probably via increased taxation. It is estimated that rising finance costs, coupled with heightened geopolitical risks, erased more than US$ 16 trillion from global stock markets this year, and that 33% of all SMEs are now facing difficulty covering interest expenses. The outlook is a bit like Dubai’s strange overcast weather this week.

With its lockdowns rising by the day, and its economy slowing in tandem, China’s jobless rate rose to 6.1% last month, its highest level since the 6.2% pre-Covid peak of February 2020. The two sectors hardest hit were retail, (11.1% down on the year in April), and manufacturing 2.9% lower on the back of the two-month long full or partial lockdowns imposed in dozens of cities, including the country’s commercial centre Shanghai. March had seen retail decline by 3.5%, whilst industrial production had been 5.0% higher. The government’s jobless rate target remains at 5.5% for the year, as next week Shanghai sets out to return to some form of normalcy after six weeks of complete lockdowns.

Wheat importers received another setback this week following Russia’s invasion of the Ukraine which saw that country’s wheat exports plunge.  (Russia and Ukraine were the third and eighth leading producers in the world at 85.9 million tonnes and 24.9 million tonnes). At the time, India, the world’s second largest producer after China, with 107.6 million tons, was looking at exporting ten million tonnes to partially fill the void but has banned any exports because a heatwave has slashed output, leading to domestic prices surging to a record high, reaching US$ 323 per tonne, 24.1% higher than the government’s minimum support price of US$ 260. Even though India is not one of the top exporters, this ban will no doubt push global prices even higher and will hit the poorer countries in Asia and Africa hard.

After Wall Street suffered its worst daily sell off in two years, the Australian market tanked on Thursday, with the ASX 200 and the All Ordinaries both dipping to 1.7% to 7,065, and 7,303 respectively. On Wall Street, the Dow Jones index shed 1,165 points, or 3.6 per cent, to 31,490, its heaviest single-day loss since June 2020. It was the lowest close for the Dow since March 2021. The S&P 500 shed 4.0% to 3,924, its worst drop since June 2020, and down 17.0% YTD, whilst the Nasdaq lost 4.7% to 11,418, which has plunged about 27% already in 2022. Nearly all sectors were affected, led by consumer stocks with the likes of Wesfarmers (-7.8%), JB Hi-Fi (-6.6%), Super Retail Group (-6.0%), Woolworths (-5.6%) and Harvey Norman (-5.5%). The big players also saw smaller losses including Westpac (-4.1%), Graincorp (-4.0%), REA Group (-3.7%) and Rio Tinto (-2.1%). After announcing that it was fighting an apparent losing battle with inflation and had seen quarterly profit halved, US retailer Target lost 25% in value on the day. Retailers are realising that they are being hit with a double whammy of rising fuel, supply and freight costs and that there will be an ever-increasing problem, as inflation results in eroding consumer purchasing power.

The Bank of England Governor continues to act like an alien who has no understanding on the state of the economy and the negative impact it has on most of the nation. Andrew Bailey, who is paid a salary of US$ 708k last year, has advised people, particularly those on higher incomes, not to ask for a pay rise this year and told a meeting of MPs that he does not think the bank “could have done anything differently” to avoid sharp price rises. He reiterated that he felt “helpless”, as he defended the Bank’s monetary policy despite the country facing soaring inflation; the current 9% level – and certain to reach double digits by year end – is well above the 2% BoE target. Inflation targeting is based on the assumption that the BoE’s monetary policy is to use interest rates, with pushing rates higher will slow a heating economy to cool it down and rein in inflation, with reducing rates having the opposite impact – accelerating the economy and boosting inflation. In this way, economic growth is best supported by price stability, and that is best attained by controlling inflation. The argument is that the UK central bank has left it too late and should have begun to move rates higher when inflation began to surge away from its 2% target. A year ago, the CPI was at just over 2%; the bank expects it reach 8% this month and to top out at over 10% in Q4.

Another person completely out of touch with reality is Rachel Maclean MP and Parliamentary Under Secretary of State at the Department for Transport. This week, she told Sky News “over the long-term, we need to have a plan to grow the economy and make sure that people are able to protect themselves better – whether this is by taking on more hours or moving to a better-paid job”.  Prior to becoming an MP in 2017, the Oxford graduate had high-flying jobs, including HSBC, and in 2005, she founded a publishing company, specialising in IT, with her husband; last year, the firm made a US$ 2.2 million profit. It is reported that, as an MP last year, she claimed over US$ 266k in expenses on top of her combined salary of US$ 132k. The good lady has had annual rent of over US$ 29k paid on her London home paid by the taxpayer, a US$ 2k working from home allowance to pay for equipment during Covid and took out a US$ 3.4k loan from standards body IPSA to avoid having to pay the deposit on the London home herself. All claims are within parliamentary guidelines.

Debt ridden, and apparently corrupt-led Sri Lanka defaulted on its debt for the first time in its history as the country struggles with its worst financial crisis in more than 74 years; this week, it failed to repay US$ 78 million of unpaid debt interest and is in a “pre-emptive default”. In recent weeks, there have been large, sometimes violent, protests against President Gotabaya Rajapaksa and his family due to the growing crisis. The Indian Ocean Island is mired in turmoil and civil unrest, with inflation possibly topping 40% later in the year, its currency tanking, losing almost half in value in recent weeks, and an almost penniless exchequer, with no foreign reserves.

(The Rajapaksa family had become too powerful during Mahindra Rajapaksa’s presidency, which began in 2005, when many members of the family occupied senior positions in the Sri Lankan state but he was defeated in the 2015 election. In 2005, the president appointed his brother Gotabayar as Defence Secretary whilst another Basil became Senior Presidential Advisor. Things got even worse after the 2010 election, with three of his brothers, Basil, Namal and Chamal occupying five government ministries and reportedly directly controlled 70% of the national budget. After the defeat of Mahinda Rajapaksa, some of his brothers reportedly fled from the country to avoid being arrested).

At the time, there were reports of authoritarianism, corruption, nepotism and bad governance during the decade he was in charge. Surprisingly, his brother Gotabaya became president in 2019. Numerous other members of the extended family have also been appointed to senior positions state institutions, including former president Mahindra returning to the fold as Prime Minister for over three years until earlier this month when he was replaced by Ranil Wickremesinghe. No wonder that in recent weeks, there have been large, sometimes violent, protests against President Gotabaya Rajapaksa and his family due to the growing crisis. Sri Lankans must be asking Where Can We Go From Here?

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What You Waiting For?

What You Waiting For?                                                             13 May 2022

President His Highness Sheikh Khalifa bin Zayed Al Nahyan passed away today, 13 May. In a statement issued today, “The Ministry of Presidential Affairs mourns the death of the nation’s President His Highness Sheikh Khalifa bin Zayed Al Nahyan”. He was the second President of the UAE, (and sixteenth ruler of the emirate of Abu Dhabi), succeeding his late father, who died on 02 November 2004.

The Ministry has also declared an official mourning period for the late His Highness Sheikh Khalifa bin Zayed Al Nahyan, with the flag flown at half-mast for forty days starting from today. Work in ministries, departments, federal and local institutions and the private sector will be suspended for three days starting from Saturday, 14 May, and work will resume on Tuesday, 17 May.

As required by law, the rulers of the seven emirates have to meet within thirty days and will probably convene tomorrow Saturday 14 May. Until then, the constitution appears to appoint HH Sheikh Mohammed bin Rashid Al Maktoum as interim president.

With today’s sad news of the passing of the UAE President Sheikh Khalifa bin Zayed Al Nahyan, the public sector entered a three day mourning period, so there is no Dubai Land Department weekly property report yet available for the week, ending 13 May 2022.

According to Knight Frank, some locations in Dubai’s prime residential market, including Palm Jumeirah, Emirates Hills and Jumeirah Bay Island, have seen prices skyrocket 60% over the past twelve months. The consultancy reported that Palm Jumeirah and Emirates Hills have posted annual rises of 38% and 20%, and 11% and 6.5% in Q1. Last year, the agency sold ninety-three ultra-private homes, (valued over US$ 10 million) and a further thirty-two in Q1.

As the Dubai economy improved quicker from the pandemic, than most expected, and with 26k property transactions recorded in Q1 – the highest number of quarterly deals since 2010 – overall, local house prices in Dubai were 10.6% higher on the year, with the market up 2.6% in Q1. However, the study also estimated that average prices are still almost 25% lower on their 2014 peak, with villas 12.9% lower than in 2014. It also noted that there had been a slowdown in the rate of growth in certain market segments, as the average Q1 villa price rose 3.2% – 0.2% lower than the 3.4% growth registered in Q4 –  the slowest quarterly increase in more than two years. The results came with a caveat that Dubai’s most expensive locations have been witnessing surging prices, driven by the influx of overseas UHNWIs (ultra-high net worth individuals) looking for suitable accommodation. Knight Frank forecasts another 100k units, (75k apartments and 25k villas), will enter the market by the end of 2025, including 50k due to be completed by the end of the year. These figures seem to be a little skewed.

In a deal to promote Emirati start-ups, in the healthcare and allied sectors, Dubai Healthcare City is offering a five-year 20% rental discount to Emirati entrepreneurs when they establish their business at the free zone. Other SME-related incentives include the health authority dedicating 10% of its procurement budget for purchases from national companies listed with Dubai SME, as well as assigning locations within the free zone to host food truck projects free of charge and give access to marketing and customer service support.

Emirates has announced that tickets for its much-vauntedfull Premium Economy offering will start from next month and that, as from 01 August, it will be introduced on A380 flights to London, Paris and Sydney, with Christchurch on board from December. The new cabin class will offer passengers luxurious seats, more legroom, and a service to rival many airlines’ business class offering; Emirates is the only regional airline to offer a Premium Economy cabin. In November, it will begin its retrofit programme to install Premium Economy on 67 A380s and 53 Boeing 777s. Last year, the airline introduced Premium Economy seats in January 2021.

Emirates Airline anticipates there will be no changes to the costs of flying on Emirates this summer, as they have already built in the increased fuel cost into ticket prices to absorb further costs within the company. As indicated earlier in the month, the carrier is operating on 90% of pre-COVID routes and at 70% capacity, as the recovery gains momentum; it hopes to top 85% of pre-COVID capacity by year end and 100% in 2023. The airline’s chairman, Sheikh Ahmed bin Saeed Al Maktoum, also confirmed that Emirates is planning to repay the US$ 4.1 billion it received from the government as a rescue package at the onset of Covid-19. Speaking at this week’s ATM, he intimated that it will be in the form of dividend starting this financial year. At the event, Emirates also picked up four Business Traveller Middle East industry awards – ‘Best Airline Worldwide’, for the ninth consecutive time, ‘Best Premium Economy Class’, ‘Best Economy Class’ and ‘Best Frequent Flyer Programme’.

With its fiscal year ending 31 March, Emirates Airline posted a 91% surge in annual revenue to US$ 16.13 billion, with the carrier expanding global capacity as Covid restriction were eased. Over the year, with its network growing to over 140 destinations by 31 March, and an extra five A-380s added to its fleet, the airline managed to reduce its annual loss from US$ 5.53 billion to US$ 1.06 billion. Group revenue, helped by dnata’s “significant revenue growth”, was 86.0% higher at US$ 18.04 billion, with a closing cash balance of US$ 7.03 billion – 30.0% higher on the year.

 Dubai International has posted its busiest quarter since 2020 with 13.6 million passengers, 15.7% higher than recorded in the previous quarter, and 238% higher than Q1 2021 – a sure indicator that business is slowly returning to pre-pandemic levels. It is looking at an annual total of 58.3 million by year end. The facility handled 520k tonnes of cargo, 15.5% lower than the previous quarter. Flight movements were 5.8% higher on the previous quarter at 82.0k. Four countries accounted for 34.0% of the total traffic, equating to 4.63 million passengers – India (1.6 million), Saudi Arabia (1.1 million), Pakistan (997k) and UK (934k). The four leading city destinations were London, Riyadh, Jeddah and Istanbul with totals of 617k, 517k, 337k and 324k.

Dubai’s hospitality sector continues to recover strongly from the pandemic recording a massive 214% improvement in Q1 to 3.97 million international overnight visitors, with hotel occupancy rates at global highs of 82%, compared to the likes of London (56.0%), New York (55.3%) and Paris (51.2%), according to data from hotel management analytics firm STR. March proved a stellar month with 1.78 million international visitors, 11.0% higher on pre-pandemic figures. 73% of visitors came from three markets – Mena/GCC (35%), Western Europe (24%) and South Asia (14%). All key hospitality metrics in Q1 were markedly higher on pre-pandemic returns – Average Daily Rate of US$ 177 (30.3%), Guests’ Length of Stay at 4.3 nights, (22.9%) and Occupied Room Nights of 10.22 million (18.4%).. There has been an 8.0% increase in the number of hotel establishments to 769 and a 19.4% hike in the number of rooms to 140.2k. From these figures, there is no doubt that Dubai is well on its way to becoming the world’s most visited destination.

Another factor that will benefit the emirate’s hospitality sector is that TripAdvisor Travellers’ Choice Awards 2022 selected Dubai as the world’s most popular destination, the No.1 destination for ‘City Lovers’ and the fourth destination for ‘Food Lovers’. This will be enhanced by announcements that Michelin Guide Dubai will open in June, followed by the arrival of the renowned fine dining food critique brand Gault&Millau. Dubai is also home to over 12k restaurants and cafes. The emirate, with more than 97% of the population vaccinated, is one of the safest cities in the world and is ranked third globally in Bloomberg’s Covid Resilience Ranking.

On Monday, Sheikh Ahmed bin Saeed Al Maktoum officially inaugurated Arabian Travel Market (ATM) 2022 – the 29th edition of the Middle East’s largest travel and tourism exhibition. At the opening, he noted that Dubai continues to strengthen its position at the forefront of global travel and tourism recovery by hosting such global events, and lauded Dubai’s ability to provide a safe environment for both tourism and prominent global events post-Covid. The four-day event, 85% larger than last year, with an expected 20k attendance, attracted 1.5k exhibitors from 158 global destinations. This year sees the introduction of the ATM Draper-Aladdin Start-up Competition, which has fifteen travel, tourism, and hospitality innovators pitching for up to US$ 500k of funding – as well as the possibility of a further US$ 500k of investment as part of the hit TV show, Meet the Drapers.

At the ATM, the Dubai Health Authority revealed that, last year, Dubai received 630k international health tourists who spent an estimated US$ 2.0 billion in the emirate. A breakdown of these figures indicates that:

  • a total of 38% from Asia, 24% from Europe and 22% from Arab and GCC nations
  • 55% were male and 45% were female
  • a total of 70% received treatment at multidisciplinary clinics, 16% at hospitals, and 14% at one-day surgery centres
  • a total of 43% were from Asia, 24% from Europe and 22% from Arab/GCC nations
  • the three medical specialties that attracted the most health tourists were dermatology (43%), dentistry (18%), and gynaecology (16%)

Blockchain consultancy, ColossalBit, announced that The Alves Trophy Collection NFTs will be launched next month at Dubai’s MetaTerrace. The Brazilian international footballer, who also played for Barcelona, PSG and Juventus, will be launching a line of luxury watch non-fungible tokens, created in collaboration with UK watchmaker Backes & Strauss. The collection, with forty three virtual timepieces , will commemorate each trophy Dani Alves won in his illustrious career. The launch will only enhance Dubai’s growing reputation in the world of NFTs, (which are unique digital properties in the form of art or media bought using blockchain technology). It is estimated that in 2021, NFT collectors sent a global US$ 40 billion worth of digital assets to NFT marketplaces, with the this year’s figure already topping US$ 37 billion.

Based on data from the Financial Times Ltd. ‘fDi Markets’, Sheikh Hamdan bin Mohammed, revealed that last year, Dubai was ranked first in the world in attracting foreign direct investment, with a record number of 418 greenfield FDI projects. The Crown Prince noted that, “Dubai has created a stable, sustainable economic environment and a vibrant business ecosystem for companies and entrepreneurs to launch new ventures, tap new opportunities and expand their business both in the country and beyond its borders”. The annual ‘Dubai FDI Results and Rankings Highlights Report 2021’ confirmed that the emirate had surpassed London and Singapore for the first time, registering more than fifty FDI projects than its two main rivals. The share of global greenfield FDI projects attracted into Dubai came in 0.7% higher on the year to 2.8%. Dubai continued to perform well across a broad range of metrics

  • first in the Mena and third globally in FDI capital inflows
  • first in the Mena and third globally in First In Reinvestment FDI projects
  • first in the Mena and fifth globally, for FDI job creation
  • first in the Mena and tenth globally in Global Venture Capital FDI Projects

There was significant annual growth in all key FDI indicators where the estimated value of 2021 FDI capital flows into Dubai was 5.5% higher at US$ 7.1 billion from a total of 618 announced FDI projects. FDI job creation, at 2.9k, was 35.7% higher on the year. Only Singapore surpassed Dubai, as the emirate attracted forty-three Headquarters FDI projects in the year, whilst it also ranked third globally in terms of HQ FDI capital flows, which amounted to US$ 763 million. It was also reported that eighty-four Dubai-based start-ups successfully attracted Venture Capital Backed FDI, worth US$ 638 billion during the year.

In a bid to further enhance the participation of Emirati talents in the private sector, the UAE Cabinet has introduced a package of incentives to increase the competitiveness of the Emirati workforce. They include an 80% reduction in the service fees of the Ministry of Human Resources and Emiratisation for private sector establishments, which accomplish major achievements in terms of recruitment and training of Emirati citizens, and an increase to an annual 2% of the Emiratisation, (and to reach the target of 10% by 2026), from high-skilled jobs in establishments that employ fifty workers or more. It is expected that this will attract over 12k job opportunities annually for citizens in all economic sectors. This is in line with the federal Nafis programme (meaning to compete in Arabic), that aims to increase the competitiveness of the Emirati workforce and to facilitate the private sector employment of UAE citizens. The programme also offers benefits such as the Emirati Salary Support Scheme, where UAE citizens will be offered a monthly US$ 2.2k (AED 8k) one-year salary support during training and a monthly support of up to US$ 1.4k (AED 5k) will be paid for up to five years for university graduates. The program also has other incentives including subsidised five-year government-paid contribution on the company’s behalf against the cost of pension plans for Emirati staff and full support for the Emirati’s contribution across the first five years of their employment. Its Private Sector Child Allowance Scheme is a monthly US$ 218 (AED 400) grant made to Emirati staff working in the private sector. Since its launch last September, 5.6k new Emiratis have joined the private sector, involving 1.8k companies. Non-compliance will result in monthly fines of US$ 1.6k, (AED 6k), for every citizen who has not been employed.

April figures confirm that Dubai’s business activity climbed at its second-fastest improvement in almost three years, although the headline S&P Global Dubai PMI dipped 0.8 to 54.7 on the month; it was the seventeenth consecutive month that the figure remained over the neutral 50 threshold which differentiates between expansion and contraction. One of the main drivers is the fact that overall new business grew, including in the travel and tourism industry, remaining strong in post-Covid April. During the month, output growth, markedly in wholesale and retail segment, was supported by a sharp rise in customer sales as the emirate’s economy continued to recover from the easing of pandemic-related restrictions. Monthly dips were seen in construction and travel and tourism sectors from post-pandemic highs in March, whilst volumes of new orders headed higher but at a slower pace. The country’s non-oil economy had expanded an annual 7.8% in Q4, driven by the easing of Covid-related restrictions and travel curbs.

Last month, the first federal auction government announced that it would be launching the country’s first auction of the dirham denominated federal Treasury Bonds. Reflecting investor confidence in the buoyant UAE economy, the first T-Bond issue of AED 1.5 billion, (US$ 409 million), was 6.3 times oversubscribed.  The strong demand was equally spread across both the two year, (with a spread of 28bps), and three year tranches (29bps).  This initial trade is part of the AED 9 billion (US$ 2.45 billion), T-Bonds issuance programme for 2022. This auction will be followed by a series of subsequent periodic auctions, with the T-Bonds being issued initially in two, three, and five year tenures, followed by a ten-year bond at a later date. Sheikh Maktoum bin Mohammed commented that “this successful first issuance is a milestone towards building a dirham denominated yield curve and providing safe investment alternatives for investors which contributes to strengthening the local financial market and developing the investment environment”; UAE’s Deputy Ruler also invited international investors to participate in the T-bonds issuance programme. There is no doubt that this successful issue will enhance the UAE’s position as an attractive hub for investment, its strong creditworthiness and economic and competitive capabilities at the global level.

Under Law No 8 of 2022, HH Sheikh Mohammed bin Rashid has announced the establishment of a Debt Management Office, to be regulated and managed by the emirate’s Department of Finance which has been invested with several responsibilities. They include meeting the government’s financing requirements, managing the sovereign debt portfolio, setting strategic objectives and policies, pursuing risks to ensure government financial sustainability, as well as maintaining high levels of transparency to enhance investor confidence and develop robust relationships with stakeholders. Rashid Ali bin Obood Al-Falasi has been appointed the Chief Executive Officer of the DMO.

Shuaa Capital posted a 76%, year on year, slump in Q1 net profit to just US$ 1.6 million but this included an US$ 8.4 million write down in intangible assets. The region’s leading asset management and investment banking platform noted EBITDA (earnings before interest, taxes, depreciation, and amortisation) was 10.6% higher, on the year, at almost US$ 23 million, and a major improvement on the Q4 negative return of US$ 5 million. In Q1, “it acquired another vessels company within the Thalassa fund, launched Shuaa Venture Partners and successfully raised a US$ 100 million SPAC during the quarter, demonstrating our ability to effectually execute in a challenging environment.”

Emaar Properties posted more than a threefold increase in Q1 net profit to US$ 610 million, on revenue 12.0% higher at US$ 1.80 billion, driven by a property market rebounding from the pandemic; property sales were up 17.0% to US$ 2.26 billion. Dubai’s leading developer also posted a 22.0% hike in international real estate operations to US$ 400 million, with revenue of US$ 269 million from its business operations in Egypt and India, also contributing to 15% of the company’s total revenue. It has a sales backlog at a high US$ 12.32 billion.

It noted that its “hospitality and shopping malls have recorded a solid performance in the first quarter of this year,” and will  “continue to capitalise on the very attractive supply and demand dynamics” in the sector. Although revenue declined 7.0% to US$ 954 million in Q1, Emaar Development reported a 34% hike in profit at US$ 286 million as property sales grew 16 per cent to US$ 1.85 billion. Earlier in the year, the developer said it planned to increase its stake in Emaar Developments “by up to 3%.” Its shopping malls and retail arm also reported higher net profit, up 136%,  during the first quarter. as revenue grew 336.0% to US$ 327 million. Its hospitality, leisure, entertainment and commercial leasing businesses saw revenue 120% higher at US$ 230 million, with average occupancy in its managed hotels standing at 80%.

Dubai Investments PJSC has posted a 63.6% surge in Q1 consolidated net profit to US$ 55million, as revenue, at US$ 207 million, was 19.4% higher on the year, attributable to strong results in the property and the manufacturing, contracting and services segments. By the end of March, both Total Assets and Total Equity remained relatively flat at US$ 6.0 billion and US$ 3.4 billion. Last month, DI divested a 50% stake in Emirates District Cooling, with the deal being finalised by the end of Q2, with ‘profit on the sale of an asset’ bring included in that quarter’s results.

Deyaar posted a massive 67% increase in Q1 net profit to US$ 7 million on the back of a 9.0% hike in revenue to US$ 44 million. The Dubai property developer advised that the results did not include any revenue from the company’s Regalia project but noted that it was expecting “an increase in revenues in the coming months attributable to … our Regalia project, which was successfully sold out with a total value of nearly AED1 billion (US$ 272 million)”. Deyaar has also managed to expand its revenue portfolio by “diversifying into areas such as strengthening its projects portfolio, property and facilities management services, and in the hospitality sector.”

Union Properties posted its Q1 financials indicating a 7.6% hike in revenue to US$ 29 million, attributable to the continued rebound in Dubai’s real estate sector, and its subsidiaries showing marked performance results. Despite the one-off gains of almost US$ 2 million due to the sale of assets in 2021 and additional legal costs of US$ 0.6 million related to claims from a prior period in Q1 2022, EBIT remained flat at US$ 1.4 million; administration expenses fell 21.2%. Helped by the launch of Motorsport Business Park 2 warehouse complex, Dubai Autodrome recorded a 38.0% hike in revenue, with profit 61.2% higher, whilst the merging of property management and cold store management operations with EDACOM saw a notable decline in costs, allied with improved operational efficiencies.

Amanat Holdings posted an 11.7% rise in Q1 revenue to US$13 million. Its healthcare platform revenue more than quintupled to US$ 4 million, driven by a full quarter contribution of Cambridge Medical and Rehabilitation Centre, (which only contributed to March’s result in Q1 last year on a compariave basis), a narrowing of losses at the Royal Hospital for Women and Children in Bahrain – with Q1 revenues doubling on the year – and a marked improvement in the performance of Sukoon, driven by a successful turnaround. With Middlesex University Dubai showing a 13.0% rise in Q1 revenue, the firm’s education platform saw a 3.0% rise in income to US$ 9 million.

Dubai Electricity and Water Authority posted a 15% jump in Q1 revenue to US$ 1.38 billion, with profit at US$ 188 million, driven by an increase in consumption across all sectors and the transition to a normalised tariff structure at the beginning of this year. Sector-wise, all three segments rose – electricity by 17.5%, water – 20.2%, and district cooling 17.6%. The utility’s consolidated gross fixed assets grew 1.3% to US$ 55.64 billion over the period.

The DFM opened on Monday, (after the Eid Al Fitr holiday), 09 May, 24 points (0.6%) down on the week, and shed 277 points (7.5%), in a torrid week of trading, to close on Friday 13 May, on 3,695. Emaar Properties, US$ 0.02 lower the previous week, lost US$ 0.18 to close on US$ 1.54. Dewa, Emirates NBD, DIB and DFM started the previous week on US$ 0.77, US$ 4.11, US$ 1.76 and US$ 0.72 and closed on US$ 0.73, US$ 3.72, US$ 1.63 and US$ 0.63. On 13 May, trading was at 96 million shares, with a value of US$ 126 million, compared to 171 million shares, with a value of US$ 66 million, on 06 May 2022.

By Friday 13 May 2022, Brent, US$ 11.40 (11.2%) higher the previous fortnight, dipped US$ 2.99 (2.6%), to close on US$ 110.16. Gold, US$ 92 (4.6%) lower the previous three weeks, lost US$ 73 (3.9%), to close Friday 13 May on US$ 1,810.

Blaming rising interest rates and political instability, Japan’s SoftBank Group became the latest mega tech group to post a loss, reporting a record quarterly US$ 26.2 billion loss; last year, it posted a then record profit. No doubt questions are being asked of chief executive, Masayoshi Son’s penchant for apparently relying on riskier, high-growth stocks. Three of his investments – South Korean e-commerce company Coupang, and ride-hailing companies, Didi Global and Grab, have seen dramatic falls, with the former 70% off its March 2001 IPO price. Vision Fund has 475 companies in its portfolio and made forty-three investments during the quarter but is slowing the pace of investment. It has a loan to value ratio of 20.4% but with pledges not to push that over 25% in 2022, it is inevitable that its investments will be at least 50% lower in the coming twelve months.

Supermarket group Morrisons, beating EG Group’s offer, has won a battle to rescue McColl’s, the convenience store and newsagent chain. The deal included Morrisons paying off McColl’s US$ 10 million debt, retaining all 1.16k shops and its pension scheme with 2k members. and taken on all 16k staff members. PwC put the retailer into administration which was immediately sold to Morrisons. Last week, it seemed that when Morrisons’ initial bid was rejected by the administrator, the Issa brothers’ (owners of Asda), were the frontrunners but then a better deal was offered over the weekend, which pushed the deal over the line.

Despite all its economic woes, US labour figures still remain firm with employers adding 428k jobs to the payroll last month, as the unemployment rate remained flat at 3.6%. The gains, which were better than expected, represent the sixteenth straight month of expansion. Furthermore, certain sectors have found it difficult to find workers and with supply not able to meet demand, wages have risen at their fastest rate in years – up 5.5% on the year. Normally such increases would be welcome but the fact that inflation is running at 8.5% means that real wages are lower. April figures also showed that the number of people in the labour force – working or looking for work – fell by more than 360k, the first decline in months.  Obviously with less people in the labour market, supply issues will only get worse.

Trouble is brewing for Australians with mortgages – and maybe for the big four banks, ANZ, CBA, NAB and Westpac, holding a worryingly high whopping US$ 1.3 trillion in home loans. Little wonder to see these four banking behemoths posting after tax profits of over US$ 10 billion in fiscal H1 ending December. Despite all the warning signs, Australians keep on taking bigger mortgages — including 300k of them with loans worth more than six times their income, with about 25% of home loans of fiscal Q2 loans, representing this segment. There is no doubt that borrowers in this category are at higher risk of mortgage default, when the economy slows.

All pointers see rates rising with the CBA expecting the cash rate to lift to 1.60% within nine months, Westpac, 2.25% by May 2023, NAB 2.60% by August 2024, and ANZ 2.25% by May 2023. It seems that, in a competitive segment, bank margins have been dipping – by 14bp to 1.75% in fiscal H1 – as fixed rate loans have enticed people to move lenders. However, as rates head higher so will the banks’ margins. A study by RateCity estimates that if and when  the cash rate reaches 2.60%, a US$ 350k (AUD 500k) mortgage will see monthly  repayments rise by US$ 470 (AUD 675) and  by  US$ 840 (AUD 1.35k) for a US$ 700k (AUD 1 million) loan. The consultancy sees that with the rate increases, Australian house prices could easily decline by 15% over the next two years.

A widely held belief in Australia is that when their dollar is trading at under $0.75 to the greenback, it is good news for exporters, as international trade becomes cheaper and more competitive. It seems that the rest of nation has to deal with the impact of a falling dollar, with shoppers and businesses having to learn to survive with less purchasing power. Other segments feeling the pinch include business owners, when the cost of purchasing supplies and equipment sourced from overseas rises, and travellers when they go to exchange their dollars for greenbacks and receive 10% less than would have been the case just weeks ago. The ANZ-Roy Morgan consumer confidence index fell by 0.2 last week to a twenty-month low of 90.5. Consumer views on whether it is a good ‘time to buy a major household item’ dropped 2.2% in the past week to a 2-year low of -15.9 points, with the Westpac-Melbourne Institute Index of Consumer Sentiment sliding 6.0 to 90.4 in May – its lowest level since August 2020. Rather belatedly, the RBA has finally realised that surging inflation, that started some eighteen months ago, is no longer transitory and would just fade away over time when post-Covid trading conditions improved. This has not been the case and now the central bank has been forced to launch an aggressive monetary policy tightening program (raising interest rates). The end result is that the cost of borrowing for consumers (and everyone else) will rise and mean a further reduction in consumer spending and that the country’s exports become more expensive (and less competitive) on the global stage; this in turn will slow economic growth and could lead to a marked deceleration in GDP.

This week, the National Institute of Economic  and Social Research think tank warned   that the squeeze on household incomes may cause the UK to fall into recession in H2, as consumer spending continues to slow, with latest data showing that March shop sales were “well below expectations”, along with a downturn in “big ticket, non-essential items”. The services sector was the main contributor to the economy contracting in March, with the worst performer being the motor industry as the month’s new car registrations were the lowest since 1998, as supply chain problems continued to hamper carmakers. The GDP did grow 0.8% in fiscal Q4, performing better than most comparable economies, but when split into individual months, it can be seen that there has been a marked deterioration – all the growth happened in January, with a flat February and a small contraction in March. The bad news will arrive when the impact of April taxes, rising interest rates, and ongoing surging inflation all lead to a slowdown or even a recession before the end of 2022. The UK is flirting with the distinct possibility of a recession, and there is no doubt that higher prices are beginning to drag the economy lower and if the 10% inflation forecasts by year end ring true, allied with ever-increasing fuel, food and energy costs, it is certain to happen.

Monday saw Bitcoin decline to its lowest level of US$ 33.3k since January, when it traded at US$ 33.0k, driven by slumping equity markets. It seems that cryptocurrency trading is considered more of a risky asset and as the tech stocks start to plummet, with Nasdaq already 22.0% lower on the year, so do the likes of Bitcoin. Furthermore, the fact that interest rates continue to move north, and the global economy slowing amid inflation almost reaching double digit levels, the short-term progress for cryptocurrency is limited. On Tuesday, the world’s largest digital token, Bitcoin extended its losses as it fell 3.1% below US$ 30k for the first time since July 2021, putting its decline, at more than 55%, from a November record high amid a global flight from riskier investments.

This week has seen a blood bath in the cryptocurrency market, as exemplified by the Terra Luna token which was trading at US$ 118 last month only to tank this week to be valued at US$ 0.09 yesterday. The market was well and truly spooked and two so-called “stablecoins” soon followed suit – TerraUSD sliding to US$ 0.40 and Tether falling off its US$ peg and sinking to an all-time low of US$ 0.95. (Stablecoins try to remain in parity by being linked to an asset such as the US$, with a token equating to say US$ 1). Even the ‘big boys’ did not escape, with Bitcoin at US$27k, having traded at US$ 70k late in 2021and at its lowest level since December 2020, with Ethereum, the second largest coin by value, shedding 20% in just twenty-four hours. The damage to crypto confidence cannot be exaggerated, with the current value of all cryptocurrencies having sank by over 66% since November, with more than 35% of that deficit occurring this week. This blog suggested some months ago, when Bitcoin was edging US$ 60k, to wait until it fell to under US$ 30k before entering the market and then exit when it climbs back to US$ 50k. It ended the week on US$ 29.3k. What You Waiting For?

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Skating On Thin Ice

Skating On Thin Ice                                                                     06 May 2022

With the public sector on a nine-day Eid Al Fitr break, there is no Dubai Land Department weekly property report for the week, ending 06 May 2022.

There is no doubt there are plenty of landlords rubbing their hands with glee as Dubai property prices shoot north. However, many will be disappointed to hear that their percentage returns on rentals will decrease – sometimes dramatically. For example, a US$ 637.6k, (AED 1.8 million), Springs townhouse rented out pre-Covid at 6.5%, would have given a gross return of US$ 31.9k (AED 117.1k). Rera utilises a rental calculator that will show the “market” value of any location in Dubai which is used to regulate the market and stop it from overheating. Some of its parameters include location, size and current rent.

A look at the rental calculator for the Springs indicates that “no rent increase where the rent of the real property unit is up to 10% less than the average rental value of similar units. The rent for a 2 B/R villa in Springs is in range of AED 97k to AED 119k per year, (does not include water, electricity or any other fees)”. Assume the property has gone up 30% to US$ 828k, (AED 2.34 million) and the landlord wishes to raise the rent likewise to US$ 41.5k (AED 152.2k), then no rent increase is allowed. Instead of receiving a 6.5% return, his investment will now yield just 5.0% – and with inflation at over 5%, real income is flat.

The same conclusion will apply with the updated calculation. A rental increase is allowed under the following protocol when prices are lower than the following parameters:

  • below 10% – no increase
  • between 11% and 20% – a 5% increase
  • between 21% and 30% – 10% increase
  • between 31%and 40% – a 15% increase
  • over 41% – a 20% increase

If a landlord chooses to sell a property, that is being leased by a tenant, the terms of the contract remain intact. To evict an existing tenant, the landlord must provide one of four reasons as to why they are doing so before putting the tenant on a twelve-month eviction notice.

  • If the landlord wants to sell the property
  • If they wish to move into the property, or wish to move immediate family into the property, provided the landlord does not own a suitable alternative property for that purpose (evidence provided in advance)
  • If the property requires extensive modernisation work that would prevent the tenant from living in it while the work is being carried out (evidence of plans or approvals for work provided in advance)
  • If the property needs to be demolished (evidence provided in advance)

Theoretically, it appears that a tenant can only be evicted following a twelve-month written notice served upon expiry of an existing tenancy agreement. However, in practice, it seems that the landlord can give the twelve-month eviction notice at any time during a contract period.

If  landlords want to increase the rent, they also need to give a 90-day notice period, unless the contract states otherwise. If no written communication is served, the rental contract is automatically renewed at the same rental price and based on the same conditions as in the previous agreement.

Sheffield Holdings, founded by Abu Ali Shroff, first started construction of Marina 101 in 2007, with a plan for a 2014 completion, but things did not work out. Dubai’s second tallest building, at 425 mt, with 101 storeys encompassing 1.65 million sq ft, is now “close to completion.” Having run out of cash, the developer left the project, in JBR, uncompleted in 2019, with the three main lenders being the Bank of Baroda, the Indian Overseas Bank and Bank of India. At that time, the building was “almost complete … over 95% work is done”. When this happened, and in line with Article No 15 of the law, concerning escrow accounts for real estate development in Dubai, the account trustee at Bank of Baroda, and the investors met with Rera officials. Although there is no proposed opening date announced, it is reported that Rera has contacted entities such as Dewa and RTA, and that a date has been fixed to make a list of the housing units and to commence issuing certificates of completion. Rera has also urged owners who have not paid up to 90% of their due amounts to do so and is “beginning to issue final warnings to those who are violating the payment plan before starting any other legal procedures against the unit owners who defaulted on payments”.

According to a UK survey, Dubai has become the most profitable and expensive global location for Airbnb landlords. It is estimated that local landlords can earn an average US$ 1.15k per night, equating to US$ 339k per annum; based on this estimate, break-even will take only four months. The survey was based on the price of an average 1 B/R, 450 sq ft apartment, (estimated at US$ 139k or AED 510k) divided by the average Airbnb price for one night. However, the report noted that “the average price to buy an apartment in the city is £112,624 (US$ 139k or AED 510k), meaning just 121 nights need to be sold for this cost to be earned back. However, this is only a profitable location for landlords who have a property near Burj Khalifa, as those further away rent for just £181 (US$ 223 or AED 820) per night.” Maybe the researchers should go back and revise these figures which give potential investors such suspect figures!

Little surprise to see that Dubai has become a haven for fleeing Russians who would have been badly impacted by the sanctions if they had stayed home. The BBC has reported that

Russian billionaires and entrepreneurs have been arriving in the UAE in unprecedented numbers, with Better Homes reporting property purchases by Russians surging 67% in Q1. There are reports that some 200k Russians had already fled in the first ten days of the sanctions (obviously not all to Dubai). Virtuzone has registered five time the usual number of enquiries from Russians since the crisis stated in late February. Most want to set up in Dubai to avoid the almost inevitable economic meltdown in Russia, as well as to secure their wealth.

In Q1, Mena mergers and acquisitions grew 11% to US$ 21 billion, with deals of under US$ 500 million reaching US$ 4.6 billion, marking the strongest start to a year since records began in 1980. Unsurprisingly, UAE was the most active in the region, with the largest deal being NMC’s US$ 2.25 billion sale to its creditors. Furthermore, the country notched up the most deals, volume wise at 303 transactions, with Saudi Arabia turning over the most money at US$ 47.4 billion. Mena witnessed a 66.5% hike in deals, on the year, at 661 deals and 16.2% higher at U$ 99.0 billion.

Sheikh Hamdan bin Mohammed bin Rashid has launched the Dubai Virtual Asset Regulatory Authority in “The Sandbox” – the first global regulators in the Metaverse, with the Sheikh noting “it is a new model for managing and expanding government business”. The Dubai Crown Prince commented that VARA will provide regulatory and supervisory services to a wide audience that crosses borders and with reliable future technologies; he also expects the authority will build a new, powerful economic sector that contributes to the nation’s economy and creates new investment opportunities. It is another step in government strategy to enhance Dubai’s position as an international leader and to be at the forefront of the technological transformation that is sweeping the world.

At this week’s AGM, Union Properties’ shareholders approved a motion to continue the company’s operations, as well as a revised turnaround strategy that will see the developer tapping into its existing real estate portfolio and adjacent services subsidiaries to capitalise on the current momentum in the Dubai property market. Last year, it posted a US$ 263 million loss, compared to a US$ 55 million profit in 2020, resulting from rectifying the value of its property portfolio that “had been inflated in prior years”. Last October, the Securities and Commodities Authority filed a complaint against its senior executives, accusing them of forgery, abuse of authority, fraud and damage to the interests of the company. Accumulated losses to the capital amounted to 68.3% which meant that the company had to decide within 30 days from the date of disclosure, to convene the general meeting to “consider a decision regarding the continuity of the company’s activity or to dissolve the company prior to the expiry of its term”.

The DFM opened on Wednesday, (after the Eid Al Fitr holiday), 04 May, 369 points (11.0%) up on the previous seven weeks, shed 24 points (0.6%) to close on Friday 06 May, at 3,695. Emaar Properties, US$ 0.39 higher the previous nine weeks, lost US$ 0.02 to close on US$ 1.72. Dewa, Emirates NBD, DIB and DFM started the previous week on US$ 0.77, US$ 4.16, US$ 1.76 and US$ 0.73 and closed on US$ 0.77, US$ 4.11, US$ 1.76 and US$ 0.72. On 06 May, trading was at 96 million shares, with a value of US$ 66 million, compared to 129 million shares, with a value of US$ 89 million, on 29 April 2022.

By Friday 06 May 2022, Brent, US$ 5.84 (5.7%) higher the previous week, gained US$ 5.56 (5.2%), to close on US$ 113.15. Gold, US$ 78 (4.0%) lower the previous fortnight, shed US$ 14 (0.7%), to close Friday 06 May on US$ 1,883.

Oil prices moved higher on Friday, as the 23-producer Opec+ alliance stuck with its output plan and ratified a 432k bpd production increase from next month, despite concerns over weak demand in China and as a result of the ongoing the Russia-Ukraine conflict. Whether the market can add that relatively small amount to the market next month is in doubt, as Opec could only add 10k bpd last month against its targeted 274k barrels.

Despite soaring petrol prices, BP posted a US$ 20.4 billion loss in Q1, after taking a major hit by pulling out of Russia, including divesting its 19.75% stake in Russian oil producer Rosneft, with the reported results including items before tax of US$ 30.8 billion. Its underlying profit of US$ 6.2 billion was double that of the same quarter in 2021. The energy giant advised that it would be investing over US$ 22.5 billion in upgrading UK’s energy system and spending US$ 2.5 billon on a share buyback.

Q1 saw Shell reporting its highest ever quarterly profits at US$ 9.1 billion – almost threefold higher than in the same period in 2021 – but announced a loss of US$ 3.9 billion from pulling out of its operations in Russia. Shell’s rivals, including BP and TotalEnergies, have also reported a sharp rise in underlying profits, with Norway’s Equinor, which supplies a quarter of the UK’s gas, also posting record earnings this week.  Oil prices were already rising before the Ukraine war, as economies started to recover from the Covid pandemic, but the war in Ukraine – and its impact on supply – has sent prices through the roof

Two US oil giants returned impressive Q1 results on the back of surging oil prices. Chevron saw profits skyrocket over fourfold to US$ 6.3 billion, as revenue jumped 70% to US$ 54.4 billion. Although ExxonMobil’s Q1 profit more than doubled to US$ 5.5 billion, it would have been greater if it had not written off more than US$ 3.4 billion, as it withdrew from the vast Russian Sakhalin offshore oilfield; revenue rose 52.4% to US$ 87.7 billion. However, it appears that both have yet to increase their capex budgets to fund drilling and development, as ExxonMobil announced an increased spending on share buy-backs by US$ 20 billion, and Chevron doubling its share buy-backs to US$ 10 billion. There is every possibility that, as the oil market tightens with demand moving higher, the market will suffer from a supply shortage because of prior years’ reduced capital expenditure leaving suppliers unable to meet any increase in demand.

This week saw global airlines’ capacity reach its highest level this year, 2.9% (2.5 million seats) higher at 88.5 million passengers, driven by an increase in Chinese traffic despite the recent shutdowns there. In Q2, it is expected that the numbers will gradually move to pre-pandemic 2019 figures of 109 million seats a week. International airlines are ramping up operations, as demand rebounds on the back of easing travel restrictions. It is noted that there were 43% more seats available than in the same week in 2021. NE Asia, driven by China but also with Japan and South Korea moving higher, is the fastest-growing regional market this week, expanding 10% in capacity on the week. South Asia, Central Asia and Central America have had more capacity available in the week than they did in 2019, with India 10% higher than two years ago.

Airbus reported a 237% annual jump in Q1 net profit of US$ 1.3 billion, as revenue rose 15%, on the year, to US$ 12.0 billion, on the back of a solid performance in its commercial aircraft, helicopter and defence businesses. Guillaume Faury, chief executive of Airbus, was confident of future results, noting that “looking beyond 2022, we see continuing strong growth in commercial aircraft demand driven by the A320 family,” but commented that “the risk profile for the rest of the year has become more challenging due to the complex geopolitical and economic environment.” In Q1, the plane maker delivered 142 commercial aircraft – 109 A320s, sixteen A350s, eleven A220s and six A330s – and is looking at increasing monthly production of its workhorse A320 to seventy-five by 2025; it hopes to reach sixty-five a month by 2023. Airbus had a 7k backlog of commercial aircraft at the end of Q1 and saw a 60% increase, to US$ 3.3 billion in the first three months of 2022. The company aims to achieve 720 commercial aircraft deliveries for the whole of this year.

IAG, BA’s owner, posted a Q1 US$ 1.13 billion loss – a slight improvement on the US$ 1.5 billion recorded in the same period in 2021. The airline cited “normal seasonality, the impact of Omicron and costs associated with ramping up operations” for the disappointing figures but noted an improvement in business travel and an uptick in the overall proportion of seats filled on flights. BA expects to return to profitability in Q2 and for the rest of the year, with demand “recovering strongly”.  Q1 flight capacity, at 65% of pre-pandemic levels, is expected to rise to 80%. The carrier also accused Heathrow of underestimating passenger numbers, which means there is  “a lack of resources” at the airport, making it “impossible to operate the capacity that we have in our minds”.

Uber has posted a surprise US$ 5.9 billion Q1 loss due to its share value in other companies, such as China’s Didi and SE Asia’s Grab, plunging US$ 5.3 billion on the New York Stock Exchange this year, since their 2021 listing. In 2016, Uber, having struggled to get a foothold in the world’s second biggest economy, sold its business there to Didi in exchange for an 18% stake. Since it US$ 4.4 billion debut on the New York bourse, its market value has tanked by over 80%, not helped by the Chinese internet regulator ordering online stores not to use the Didi app, claiming it was illegally collecting users’ personal data. In a similar manner to the 2016 Didi agreement, Uber sold its businesses in SE Asia to Grab for a 27.5% stake in the Singapore-based company. Since Grab’s December New York IPO, its market value has collapsed by 75%. To add to its investment woes, Uber acquired a stake in Indian food delivery firm Zomato, in 2020 , in exchange for its Uber Eats operations in India; since going public last July, its shares have almost halved in value.

Starbucks posted a 2.3% hike in quarterly net income, ending 03 April, to US$ 675 million, driven by an improvement in US returns. Launched in 1971, it is the world’s largest coffee chain, with more than 34.6k outlets, in over eighty global counties, of which 51% are company operated and the balance, licensed stores. 61% of the stores are to be found in the US (15.5k) and China (5.7k), and by the end of the reporting period it had opened 313 net new stores. Along with other major US service companies, Starbucks is facing a major unionisation push and has announced US$ 1 billion investment for the fiscal 2022 on salary rises, employees’ training and store improvements but will not offer new benefits to workers at the cafes that have voted to unionise; to date, fifty company-owned stores have voted in favour of unionising. Because of China’s lockdowns, (which have seen store sales 23% lower), escalating inflation and new investments in its stores and employees, Starbucks suspended its fiscal 2022 financial forecast.

G-III Apparel Group, which already has the likes of Levi Strauss & Co and Tommy Hilfiger in its line-up, has bought the remaining 81% stake that it does not already own in Karl Lagerfeld in a US$ 210 million cash deal. As well as expanding G-111’s global presence, it is expected to add US$ 200 million to its top line and generate “in excess of US$ 2.0 billion in sales to end consumers”. The deal also includes Karl Lagerfeld’s existing 10% stake in its established joint venture in China.  Last year, global revenue in the apparel segment was 10.9% higher on the year, with 2022 estimates at US$ 1.7 trillion, rising to US$ 1.95 trillion in 2026.

UK convenience store chain McColl’s has collapsed into administration, putting 16k jobs and 1.4k shops, at risk, with the company confirming that lenders did not want to extend banking agreements in the present economic climate. Appointed administrator, PriceWaterhouseCoopers, will look for a buyer “as soon as possible”, with supermarket giant Morrisons having already proposed a rescue deal to try to safeguard the chain. McColl’s already has a wholesale tie-up with Morrisons, as well as Martin’s newsagents, with a strategy centred around an image of a “neighbourhood retailer”. There is also a chance that EG Group, owner of Asda, has proposed a deal to McColl’s lenders which involved injecting funds to keep the struggling retailer open.

Bernie Ecclestone has been dragged into a court case involving money laundering operations worth millions of dollars to guarantee a series of gold transactions that made “no commercial sense”. The F1 mogul, who has not been accused of any wrongdoing, provided a US$ 12.3 million personal guarantee for a gold deal for his then son-in-law, James Stunt. Prosecutors claim that he and seven others laundered US$ 328 million cash, banked by NatWest, from criminal activity. A financing arrangement, provided by Canada’s Bank of Nova Scotia, was intended to help in paying for branded gold bars and coins, but only a few branded bars were ever made, and no F1 gold coins were minted. It appears that the money was used to acquire gold that would be later melted and broken up.

Despite moves to unseat him as chairman of Berkshire Hathaway, Warren Buffet maintained the position he has held since 1965. The 91 year old also holds the position as chief executive and steps to remove him were also not carried by the meeting, despite the largest US company supporting move; Calpers had earlier in the week invested US$ 460 billion. It also helps that he holds 16% of Berkshire’s stock and controls 32% of its voting power. It is expected that the nonagenarian’s son, Howard, already a Berkshire director, will become non-executive chairman when his father is no longer in charge. The shareholders also rejected moves that the company should disclose more about its climate-related risks and efforts to improve diversity among its diverse portfolio of companies. The chairman also commented on Berkshire investing in Chevron and “Call of Duty” game maker Activision Blizzard, (after Microsoft agreed to buy the company for US$ 68.7 billion); it has now boosted its investment in the two companies sixfold to US$ 31 billion. Its Q1 operating profit was flat at US$ 7.04 billion.

The Suez Canal, which accounts for almost 10% of global trade, has posted its highest ever revenue record, of US$ 629 million, last month – a 13.6% increase on the previous year. It also recorded its highest ever volume of cargo, at 114.5 million tonnes, and this despite the war in Ukraine and surging energy prices. Twice this year, the SCA has already raised passage tolls for transiting vessels, including fuel tankers, and these fees are one of Egypt’s main sources of foreign currency revenues. The country has been badly impacted by the war in Ukraine – as well as other economic factors that have hit the global economy – as its foreign reserves dipped US$ 3 billion to US$ 37 billion. Further worrying economic data sees the pound losing 18% of its value in March and inflation topping 12%. The Sisi government is in loan discussions with the IMF which has already approved three separate loans, totalling US$ 20 billion, over the past six years.

It is certain that UK house prices, which hit a fresh record for the tenth straight month at US$ 353k (GBP 286k), will begin to slow, as the double whammy of increased mortgage rates and surging inflation takes hold and gnaws into household spending. Halifax reckons that house prices rose 1.1% in April and by 10.8% over the past twelve months. Interest rates rose to their highest level since 2009 and even before this week’s 50 bp increase, the house price to income ratio was already at its highest ever level. What is currently stopping any fall in property prices is the lack of supply in the market, with the biggest demand for larger, family homes. If you are thinking of buying property in the UK, wait until the autumn when many of the economic indicators will be in free fall and property prices will be a lot lower.

April Turkish consumer prices surged almost 70% on the year, hitting a two-decade high, with

transport, food prices, (89.1% higher over the past twelve months), and household furnishings, (up 77.4%), recording the highest increase in annual inflation, with transport costs more than doubling over the year; in April, prices came in 7.3% higher. Its economic problems have not been helped by President Recep Tayyip Erdogan prioritising exports over currency stability, and his reluctance to raise interest rates to temper inflation surging – since last September, rates have dropped from 19% to 14%, but have remained flat over the past four months. It seems that the rest of the world’s rates are heading in the other direction and that Erdogan is the only global leader swimming against the tide.

Initial Q1 estimates show that the Saudi economy grew at its fastest pace in a decade, up 9.6%, on the year, driven by a 20.4% hike in oil activities, with a 3.7% increase in non-oil activities and a 2.4% rise in government services.

Not before time, Ursula von der Leyen, the president of the European Commission, has finally unveiled a proposal to impose an EU-wide ban on Russian oil imports. Whilst Ukraine bears the brunt of the Russian might, it seems that some EU nations are still in easy street when it comes to sanctions, as the proposed embargo gives member states up to six months to phase out purchases of Russian crude. The EU, which last year spent almost US$ 77 billion on Russian oil, (and a total of US$ 108 billion in total energy imports), buying around 3.5 million barrels of crude and refined products on a daily basis, is not showing much of being a united bloc. To the outsider, it does seem that the EU is waiting for the time until Germany, which imported 35% of its oil from Russia before the war, is better prepared to cope. Other member states have raised concerns that a total Russian ban would have on their economies, including Hungary and Slovakia, which are highly dependent on Russian oil. Italy, Greece and Austria will need more time to adapt their energy supply chains, while Malta, Cyprus, Belgium and the Netherlands were worried about losses to their respective shipping sectors. There is no doubt that, if the war drags on, the whole European economy, and the world, will suffer from double digit inflation and a period of deceleration.

US markets ended April in a financial quagmire, as Amazon and other major tech companies witnessed a sell-off, with the Nasdaq down over 4% last Friday as investors began to worry that the inevitable collapse may have started. With the bourse tanking 13%, April has become the worst month for the tech-heavy index since the 2008 GFC. The other two major US indices did little to boost investors’ hopes, with the S&P having its worst one-day decline since June 2020, and almost 14% lower YTD, whilst the Dow Jones Industrial Index fell 5% in the  month and 9% YTD. There is no wonder that global markets are having jitters, not helped by the quadruple whammy of surging inflation, (at forty-year highs), rising energy prices, ongoing supply chain problems, and the war in Ukraine. On top of these factors, there is the reoccurrence of Covid, with China bearing the brunt having to close down major parts of their two major cities – Shanghai and Beijing.

Another country trying – better late than never – to combat surging inflation is Australia which lifted its cash rate to 0.35% yesterday; the rise is the first hike in rates for more than a decade. The move is to try and combat inflation which is the highest seen since the turn of the century. This increase may be a game changer in the upcoming general election later in the month as any rise will impact on household budgets – with the rising cost of living being a major player. This could prove Prime Minister ‘s Scott Morrison’s swansong.

As expected, on 04 May, the US Federal Reserve announced a 50bp increase on the Interest on Reserve Balances – a day a later, the Central Bank of the UAE did likewise with the Base Rate applicable to the Overnight Deposit Facility effective from Thursday, 05 May 2022. To fight the Covid impact, the bank probably purchased too many assets, including US government debt and mortgage-backed securities, to boost the economy. Next month, it will start reducing its holdings by US$ 47.5 billion a month until September and thereafter doubling that monthly amount to US$ 95.0 billion. The Fed is another central bank that has arrived late to the party, with the country’s inflation of 8.5% at forty-year highs. Like the BoE, its inflation target had been pegged at 2.0% for far too long! Finally Fed Chair, Jerome Powell has had to admit that “inflation is much too high and we understand the hardship it is causing,” and that “we are moving expeditiously to bring it back down.” The aim of the exercise is to contain spiking costs, which are affecting all the world economies, but this move is definitely too little too late. The Fed has messed up its policies of late and if it continues with its error-ridden moves, the US economy will inevitably slow down and could easily land in recession by next year. The Fed need to get their options spot on as they are now Skating On Thin Ice.

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Who Pays The Price?

Who Pays The Price?                                                                              29 April 2022

For the past week, ending 29 April 2022, Dubai Land Department recorded a total of 2,259 real estate and properties transactions, with a gross value of US$ 1.80 billion. A total of 197plots were sold for US$ 313 million, with 1,628 apartments and villas selling for US$ 959 million. The two top transaction sales were for plots of land – one in Business Bay for US$ 20 million, and another sold for US$ 19 million in Al Thanayah Fourth. The three leading locations for sales transactions were Al Hebiah Fifth, with 76 sales worth US$ 47 million, followed by Jabal Ali First, with 24 sales transactions worth US$ 33 million, and Al Yufrah 2, with 15 sales transactions, worth US$ 6 million. The top three apartment sales were one sold for US$ 157 million in Marsa Dubai, another for US$ 84 million in Burj Khalifa, and third at US$ 66 million in Business Bay. The sum of of mortgaged properties for the week was US$ 471 billion, with the highest being for a plot of land in Al Yelayiss 2, mortgaged for US$ 81 million. 75 properties were granted between first-degree relatives worth US$ 73 million.

The Mo’asher/Property Finder’s official sales price index noted that in Q1, Dubai registered 26.0k property transactions – the highest number of quarterly deals since 2010. During the quarter, 20.5k sales transactions, worth US$ 15.11 billion, were recorded. In March, there were 8.4k sales transactions, 83% higher, and 109% higher on an annualised basis, to US$ 6.15 billion. Property Finder reckoned that Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay and Jumeirah Village Circle, were the top areas searched for apartment sales, whilst for villa sales. Dubai Hills Estate, Palm Jumeirah, Arabian Ranches, Damac Hills and The Springs, came out on top. With 60.3% new contracts, and the balance renewals, 44.8k rental contracts were signed in Dubai last month; 61.5% of the total emanated from five locations – Jabal Ali First, Al Warsan First, Business Bay, Naif and Al Karama.

HH Sheikh Mohammed bin Rashid Al Maktoum has approved a new housing package worth US$ 1.72 billion for UAE citizens in Dubai, including housing and land allotments for 4,610 Emiratis in the city, on the occasion of Eid al-Fitr, and as part of the Housing Programme for Dubai Citizens. A new housing complex in Al Khawaneej area 2, will include 1.1k residential villas and a plan for 3.5k plots in Umm Nahad 4 and Al Aweer. The Dubai Ruler emphasised that the housing programmes and social services projects were government priorities, aimed at meeting the needs of Emiratis and their families. Last year, he had approved the allocation of US$ 17.71 billion to an Emirati housing programme in Dubai, to be allocated over the next two decades to provide quality housing for Emiratis, and he also issued directives to quadruple the number of citizens benefiting from the housing programme effective from next year.

Last October, Samana Developers launched its Park View development which saw 80% of the project sold within four days. This week, the developer broke ground on its US$ 35 million G+6 storey Park Views, comprising 176 apartments, scheduled for hand over within eighteen months. Encompassing over 183k sq ft, it will house studio, 1 B/R and 2 B/R apartments, with private pools. Located close to a community park, Dubai Miracle and Butterfly Gardens, prices for a studio start at US$ 125k, with a flexible payment plan – 10% down payment, 1% every month for seventy months, 10% in the sixth month, 5% in the twelfth month, and 5% in the eighteenth month. The unit sizes range from 361 sq ft for studios, 937 for 1B/R, and 1,301 for 2 B/R apartments.

According to The Best Cities for Retirement Index, Dubai has been ranked fourteenth in terms of living standards for retirees but first for financial security and legacy management. A variety of factors such as quality of healthcare services, financial security, wealth management benefits available to retirees, mobility, connectivity, safety and availability of housing are used to draw up the list of cities. When all factors had been analysed, the top six cities turned out to be Tokyo, Wellington, Singapore, Paris, Vienna and Zurich. Other regional locations did not fare as well as Dubai, with Abu Dhabi in at 51st, Doha -70th and Riyadh 84th. Attracting retirees has become big business and many governments have introduced incentives to entice senior citizens to their shores. Dubai has its retirees’ visa, allowing residents and citizens from around the world to live in the emirate if they fulfil one of three requirements: earn a monthly income of US$ 5.45k, have US$ 272k in cash savings or own a property in Dubai worth at least US$ 545k. A retired expatriate and their spouse can apply for the five-year visa with the possibility of automatic renewal online, provided they continue to meet the criteria. Eligible applicants must be older than 55 and have valid UAE health insurance.

Savills has rated fifteen global cities to ascertain which is the best for digital nomads and it was no surprise to see Dubai third behind Lisbon and Miami. The real estate consultancy’s Executive Nomad Index is based on internet speed, quality of life, climate, air connectivity and prime rents. The Algarve, Barbados, Barcelona Dubrovnik, Saint Lucia, Malta and Antigua & Barbuda make up the top ten cities for long-term remote workers. As Covid accelerated the remote working trend, new technology also helped to encourage more workers to move from their traditional home bases; the government took advantage of the situation and quickly enacted appropriate legislation, such as a one-year residency permit, to entice such a labour sector to ‘set up shop’ in the emirate.

The Emirates Tourism Council confirmed that the country’s hotels welcomed 29% more visitors on the year to nineteen million tourists in 2021, generating a 70% surge in revenue to US$ 7.63 billion. Of the total number of tourists, 58% were domestic. There is no doubt that factors such as a successful vaccination protocol, stringent safety measures and a successful and quick economic recovery programme have benefitted the hospitality sector. During 2021, booked hotel nights jumped 42% to seventy-five million, with occupancy rates of 67% among the highest in the world. There was a 5.0% hike in the number of UAE hotels to 1.14k, whilst room numbers rose to 194k, of which 144k can be found in Dubai. The emirate also posted occupancy rates of 77% in the first two months of 2022.

Dubai’s administration has approved a three-year plan for the Dubai International Financial Centre Courts to establish a new digital economy court, dedicated departments for intellectual property rights, online courts with electronic capabilities, a new will deposit centre, digital will management system and multilingual consultancy services. This strategy is planned to enhance Dubai’s position as a global business and finance centre. Dubai’s Deputy Ruler, Sheikh Maktoum bin Rashid, noted “we approved the new strategic work plan that serves to further instil confidence that the DIFC Courts will forge ahead to shape the new dynamics of global dispute resolution.” The digital economy contributes about 4.3% to the UAE’s GDP which is equal to US$ 27.2 billion, a figure that will inevitably rise significantly in coming years.

Sheikh Hamdan bin Mohammed has launched a new fund targeted at enhancing the emirate as a global FinTech hub. The Crown Prince announced that the US$ 100 million ‘Venture Capital Fund for Start Ups’ will finance SME projects, supporting their development in Dubai and gradual expansion to global markets. The DIFC, a 15% contributor, will manage the fund that will create an integrated funding system with a number of suitable options that can cater to the needs of enterprises. It is expected that during the eight-year implementation period, the Fund will bolster the emirate’s GDP by US$ 817 million, will provide more than 8k jobs for emerging talents, and strengthen Dubai’s position as a regional centre for entrepreneurship and FinTech.

To meet the increased demand for air travel, Emirates is hoping to recruit 6k new cabin crew to boost numbers to an appropriate level. Last August, it announced that it required 3k cabin crew, as well as 500 airport services employees, and received 300k applications so it is certain that its HR division will be working overtime over the coming months. It seems that applicants need to have “a personality that shines, the ability to adapt to any situation and make people feel at ease”. Applicants need to have more than a year’s experience in hospitality and customer service, be a high-school graduate”, and be fluent in in written and spoken English. Entry level starting salary is US$ 2.66k plus housing and other benefits, with height requirements starting at 160 cm and the ability to reach 212 cm, while standing on tiptoes.

There are reports that Emirates is expecting to return to pre-pandemic levels by next year, as demand for global travel and tourism recovers. Currently, the carrier is operating at 70% of its pre-pandemic capacity and it is hoped that this will increase to 80% before the end of the summer, and 85% by the start of the winter season. For the year ending 31 March 2021, the world’s largest long-haul airline posted a loss of US$ 5.5 billion, not helped by the ongoing pandemic and despite a US$ 3.1 billion cash injection by its owner, the Dubai government, with Dnata, its airport services provider, received US$ 218 million in relief from authorities during that fiscal year. The latest 2021-22 accounts will be released shortly, and the airline is expecting a “good set of results” for its fiscal year ended March 31, narrowing losses for the last 12 months; it expects to return to profit in the next fiscal year, 2022-23.

The UAE fuel price committee announced petrol and diesel prices for the month of May 2022 with minor price reductions for both Super 98, down 2.1% US$ 0.022 to US$ 0.997, and E Plus 91 petrol by US$ 0.019 (2.0%) to US$ 0.948. Diesel prices headed in the other direction, with a US$ 0.163 rise to US$ 1.112.

In Q1, more than 10k companies joined Dubai Chamber of Commerce – a 64% hike in numbers compared to the comparative 2021 figure – bringing its total to almost 300k. It is estimated that member exports and re-exports saw 11.3% growth over the year, while their value reached US$ 16.6 billion. The number of certificates of origin issued by the Chamber was 7.1% higher to 179k. The Expo 2020 impact was one of the main drivers behind the much-improved figures that reflect Dubai’s strengthening position as a preferred business hub.

With the six-month extravaganza closing its doors last month, figures show that more than 25% of all Expo 2020 Dubai contracts, in terms of , were won by SMEs; in 2016, the organising committee had made a commitment that at least 20% of all contracts would go to SMEs. More than 3.2k contracts were awarded, of which 66% were SMEs, and of that total 1.39k were local and the balance 760 were from overseas. 52% of the overseas total came from five countries – UK (24%), USA (16%), France (4%), India (4%) and Australia (4%) – and that overall, suppliers from outside the UAE were sourced from ninety-four countries.

Dubai has become the latest emirate to approve a nine-day Eid Al Fitr break for federal government staff which will start on Sunday, 30 April, to 08 May, with work resuming on Monday, 09 May. Recently, the Sharjah public sector saw the same nine-day break, broken down to 30 April to 05 May and the fact that Sharjah has a three-day weekend, Friday 06 May to 08 May. Eid Al Fitr is marked on the first day of Shawwal – the month that comes after Ramadan in the Hijri calendar – and is expected to fall on Monday 01 May, as per astronomical calculations. The Ministry of Human Resources and Emiratisation had earlier announced that private sector staff would have four-day break from Ramadan 29 until Shawwal 3 – Sunday 30 April to Wednesday 03 May.

Last Saturday, in the 74th weekly live Mahooz Grand Draw, forty-five lucky participants shared the US$ 272k, (AED1 million), second prize in the 74th weekly live Mahzooz Grand Draw.  They had picked four of the five lucky numbers, with a further 1.7k claiming US$ 95 (AED 350) for matching three of the five numbers. The total prize money, which also included three lucky raffle prize winners, was US$ 514k.The top prize of US$ 2.72 million (AED 10 million) is still waiting to be won and perhaps tomorrow Saturday 30 April, could be someone’s lucky day; even if not won, someone will drive off in a 2022 Nissan Patrol Platinum V8, 5.6L Engine in an Eid-special Mega Raffle Draw. To enter the draw, entrants will have to register via http://www.mahzooz.ae and by purchasing a bottle of water, for almost US$ 10 (AED 35).

The Emirates Development Bank has agreed with Food Tech Valley, launched last May, to provide financing for SMEs and start-ups operating within Dubai’s food tech hub. Both parties will support tech-based companies operating, or seeking to operate, in the hub with financing, roadshows, seminars, mentorships and knowledge transfer. Al Wasl is developing the project in partnership with the Ministry of Food and Water Security, with the aim of attracting local and foreign direct investments within the field to achieve the government’s mission of transforming the UAE into a global hub for tech-based food and agricultural solutions. It also targets tripling the country’s food production and make the UAE more self-sufficient.

With no financial details of the deal disclosed, Swvl has acquired  the four-year old Turkish company Volt Lines  which provides mass transit solutions to corporate clients working in more than 110 companies, in major cities such as Istanbul and Ankara The Dubai-based shared mobility services provider’s strategy seems to be expansion of its operations in Europe, and it currently offers intercity, intracity, business-to-business and business-to-government transport across more than one hundred  cities in more than twenty countries. It was also the second Arab technology company to be listed on Nasdaq.  Over the past six months, it acquired Argentina’s Viapool and European tech-enabled mass transit solutions, provider door2door.

Husain Sajwani’s Damac Group, recently delisted from the Dubai Financial Market, is planning to invest US$ 100 million to build digital cities, using their own companies, property developer Damac Properties, data centre firm Edgenex, luxury jeweller de-Grisogono and fashion house Roberto Cavalli. As one of the first local entrants into the world of metaverse, it will be in a good position to cater to the needs of the entire Group when it comes to digital assets, including virtual homes, digital property, digital wearables, digital jewellery and a digital treat of Damac’s Mandarin Oriental Resort Bolidhuffaru in the Maldives. The Damac Group has ambitions to move into digital assets and non-fungible tokens and has the ultimate goal to become a leading global digital brand.

With its latest listing – a US$ 1.6 billion Sukuk for the Islamic Development Bank (IsDB) –  Nasdaq Dubai’s portfolio of Sukuks increased to US$ 77.5 billion, making the Dubai bourse  one of the world’s largest Sukuk listing centres. The five-year Trust Certificates were priced at par, with a profit rate of 3.213%, payable on a semi-annual basis. IsDB has currently thirteen issuances, totalling US$ 18.05 billion, with the latest issuance being used to finance projects under the development mandate of the Bank.

Emirates Integrated Telecommunications Company PJSC – du – posted an 8.5% hike in Q1 revenue of US$ 852 million, with EBITDA and net profit both higher – by 13.3% to US$ 346 million and 21.0% to US$ 85 million respectively. A breakdown of revenue sees mobile services up 6.9% at US$ 382 million, fixed services 22.8% higher at US$ 222 million and handset sales coming in on US$ 60 million. Capex was at US$ 83 million and is expected to rise over the rest of the year. There was a 10.4% growth in mobile customers to 7.5 million, with post-paid customers at 1.4 million and prepaid at 6.1 million.

In Q1, the Commercial Bank of Dubai posted a 32.6% hike in net profit of US$ 117 million, as the bank’s operating income rose 17.5% to US$ 234 million, driven by net interest income, fees and commissions, operating expenses dropping 2.1% to US$ 64 million from Q4 2021. Operating profit was US$ 170 million, up 16.4% year on year, while net impairment allowances atUS$ 52 million, were down 8.6%. CBD also posted a record US$ 32.42 billion billion in assets attributable to a 3.4% growth in loans over the quarter. The bank also received a major award during Q1, being ranked by Forbes as the Number One Bank in the UAE in the World’s Best Banks 2022 report.

Via a special resolution, Deyaar’s shareholders approved a directors’ proposal to write off its accumulated losses through the company’s legal reserve, (US$ 82 million) and cancellation of shares, (by US$ 381 million to US$ 1.19 billion), equal to the remaining losses of US$ 463 million at 31 December 2021. The company, majority owned by Dubai Islamic Bank, posted a US$ 14 million profit – following a US$ 59 million loss a year earlier – as revenue grew 22% to US$ 138 million. The company noted that the restructuring will increase “the company’s attractiveness to investors and the possibility of obtaining funds for its future projects, which will reflect positively on the share price in the Dubai Financial Market”.

Dubai Islamic Bank reported a Q1 58% year-on-year surge in net profit to US$ 354 million, as revenue climbed 11% to US$ 672 million, driven by lower impairments and stronger top-line growth. The largest Islamic bank in the UAE, and the second-largest Islamic bank in the world, noted that total income was 6% higher at US$ 822 million, with net operating profit up 10% to US$ 440 million. DIB’s net financing and sukuk investments grew 3.0% to US$ 64.1 billion, with gross new financing of nearly US$ 4.4 billion being driven by strong growth of wholesale bookings on the back of an improved economic outlook. During the quarter, the balance sheet grew 3.0% to US$ 78.3 billion, as customer deposits remained steady at US$ 55.7 billion. Impairment provisions were reduced 44% to US$ 114 million.

The DFM opened on Monday, 25 April, 333 points (7.5%) up on the previous six weeks, moved 36 points (1.0%) higher to close on Thursday 28 April, at 3,719. (The bourse will be closed for the next four trading days and will reopen on Thursday 05 May, after the Eid Al Fitr holiday). Emaar Properties, US$ 0.37 higher the previous eight weeks, nudged US$ 0.02 up to US$ 1.74. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.78, US$ 4.14, US$ 1.71 and US$ 0.73 and closed on US$ 0.77, US$ 4.16, US$ 1.76 and US$ 0.73. On 28 April, trading was at 129 million shares, with a value of US$ 89 million, compared to 115 million shares, with a value of US$ 83 million, on 22 April 2022.

For the month of April, the bourse had opened on 3,527 and, having closed the month on 3,719 was 192 points (5.4%) higher. Emaar traded US$ 0.11 higher from its 01 April 2022 opening figure of US$ 1.63, to close the month at US$ 1.74. Four other bellwether stocks, Dewa, Emirates NBD, DIB and DFM started the month on US$ 0.00, (it only started trading in mid-April), US$ 4.09, US$ 1.68 and US$ 0.66 and closed on 30 April on US$ 0.77, US$ 4.16, US$ 1.76 and US$ 0.73 respectively. The bourse had opened the year on 3,196 and, having closed April on 3,719, was 523 points (16.4%) higher, YTD. Emaar traded US$ 0.41 higher from its 01 January 2022 opening figure of US$ 1.33, to close April at US$ 1.74. Four other bellwether stocks, Dewa, Emirates NBD, DIB and DFM started the year on US$ 0.00, US$ 3.69, US$ 1.47 and US$ 0.72 and closed on 29 April on US$ 0.77, US$ 4.16, US$ 1.,76 and US$ 0.79 respectively.

By Friday 29 April 2022, Brent, US$ 9.95 (8.9%) lower the previous week, gained US$ 5.84 (5.7%), to close on US$ 107.59. Gold, US$ 42 (2.5%) lower the previous week, shed US$ 36 (1.9%), to close Friday 29 April on US$ 1,897.

Brent started the year on US$ 77.68 and gained US$ 29.91 (38.5%), to close 29 April on US$ 100.05. Meanwhile, the yellow metal opened January trading at US$ 1,831 and has gained US$ 66 (3.6%) during 2022, to close on US$ 1,897. For the month, Brent opened at US$ 100.05 and closed on 29 April, US$ 7.54 (7.5%) higher, on US$ 107.59. Meanwhile, gold opened April on US$ 1,943 and shed US$ 46 (2.4%) to close at US$ 1,897 on 29 April.

Driven by a dip in Q1 sales and charges arising from the Ukraine war, Boeing has posted a US$ 1.2 billion net loss, compared to a US$ 519 million deficit a year earlier. Q1 revenue slowed 8.0% to US$ 14.0 billion, driven by “lower defence volume and charges on fixed-price defence development programmes”, partially offset by commercial services volume”. Commercial aircraft sales dipped 3.0% to US$ 4.2 billion, with a delivery of ninety-five aircraft, as well as a 4.2k plane backlog, valued at US$ 291 billion. A 20.6% decline in operating margin reflects “abnormal costs and period expenses, including charges for impacts of the war in Ukraine and higher research and development expense”. Revenue from defence, space and security decreased 24% to nearly US$ 5.5 billion, whilst R&D spend jumped 26% to US$ 633 million. Its global services unit’s first-quarter revenue increased 15% to US$ 4.3 billion, as the unit secured a fuel-saving digital solutions contract for Etihad Airways’ 787 fleet and was awarded a contract for KC-135 horizontal stabilisers from the US Air Force.

Beset by mostly self-made problems over the past decade, and maybe longer, Boeing’s 777X programme could face a new delay that could push deliveries, a year later than earlier expected, to early 2025. The report claims that the certification target will take place in late 2024, with deliveries following nine to twelve months later. Last month, the Federal Aviation Administration warned Boeing that existing certification schedules for the 737 MAX 10 and 777X were “outdated and no longer reflect the programme activities”. It has to be remembered that the 777X has been in development since 2013 and at one point was expected to be operational by June 2020. The plane maker is also hoping to gain approval for the 737 Max 10 by the end of the year and has been requested by regulators to provide a “mature certification schedule”. To complete the trifecta, Boeing is also working to resume 787 Dreamliner deliveries after halting them nearly a year ago over structural flaws.

Californian-based Lease Corporation expects to lose US$ 802 million because of it writing off the value of the remaining twenty-seven aircraft it has in Russia; twenty-one of the planes are company-owned and the remaining six in its managed fleet. The loss will be reflected in accounts due to be published next month.

Last week,  Netflix warned its revenue growth had slowed considerably after it lost subscribers due to stiff competition from rivals and the rising cost of living. This week, there was good news and bad news for Facebook, reporting that it has stopped losing users in Q1, growing its customer base to 1.96 billion, but posted its slowest revenue growth in a decade – 7% higher at US$ 27.9 billion; overall, Meta’s Q1 profits were US$ 7.46 billion.  Last year, the social network noted a decline in users for the first time, and since the news was released in February 2022, its market value has lost billions from the firm’s market value. Since executives disclosed the fall in February, the firm’s share price has nearly halved, but on Wednesday when Meta’s Q1 details were published, shares jumped 19% in after-hours trade. Facebook is facing more competition against the likes of TikTok and Amazon.

Q1 brings some disappointing news for Amazon, as it reported its first loss, (at US$ 3.8 billion), since 2015, as online sales slipped 3%, with the pandemic-induced boom to its business starting to fade; overall sales headed 7% higher to US$ 116.4 billion, driven by a 37% hike in Amazon Web Services and advertising revenue 23% higher. However, growth in other sectors continued but the loss was further exacerbated by its investment in electric carmaker Rivian. Amazon, like many other global conglomerates, is also facing the impact of rising costs brought on by surging inflation, supply chain pressures and the Ukraine war. Its share value sank more than 10% in after-hours trade, with concerns spreading to other online retailers, sending shivers through US markets, which had already started moving south in recent weeks.

Even though iPhone maker Apple posted increases in Q1 sales and profit by 9% to US$ 97.3 billion and 10% to US$ 25.0 billion, it warned of a “challenging macroeconomic environment”, noting that “we are not immune to these challenges”. iPads tablets, which contribute US$ 7.6 billion to total sales was down  2%, and was the only segment that experienced a dip in Q1 sales. It also indicated that the company was more worried about Covid-related shutdowns in China and chip shortages, (that are impacting the firm’s ability to meet demand for its products), than that buyers will cut spending. It was noted that the supply chain frictions would dent Apple’s sales in the current Q2 by up to US$ 8 billion, and that it will be “substantially larger” than its impact in the last quarter. Apple also announced a 5% increase in cash dividend to US$ 0.23 per share.

On Monday, the irrepressible Elon Musk paid US$ 44 billion in cash to acquire Twitter, a social media platform populated by millions of users and global leaders. Twitter said Musk secured US$ 25.5 billion of debt and margin loan financing and is providing a US$ 21 billion equity commitment. The world’s richest person, worth US$ 268 billion, has long been a critic of Twitter on several fronts including its algorithm for prioritising tweets should be public and giving too much power on the service to corporations that advertise. Twitter shares rose 5.7% on Monday to close at US$ 51.70, well below the US$ 70 range where Twitter was trading last year; however, the offer price shows a near 40% premium to the closing price, the day before Musk disclosed he had bought a more than 9% stake, two weeks ago.

Days after Elon Musk acquired the microblogging site, Twitter had posted a seven-fold plus Q1 net income of US$ 513 million, compared to US$ 68 million a year earlier; revenue was 16% higher at US$ 1.2 billion. 92% of the revenue was from advertising sales which expanded by 23% to US$ 1.1 billion but revenue from subscriptions and other streams dropped 31% yearly to US$ 94 million. However, the net income figure included a pre-tax gain of US$ 970 million from the sale of MoPub — a platform for promoting and monetising apps — to AppLovin for US$ 1.05 billion and income taxes related to the gain of US$ 331 million. Daily active users rose 16% in the quarter to 229 million, split between international users (up 18.1% to 189 million) and US ones (6.4% higher at 40 million).

This week, Elon Musk divested US$ 4 billion of his shares in Tesla but indicated that he had no plans to sell anymore, after earlier in the week shares the had fallen, (on Tuesday wiping US$ 125 billion off its market value), on news that he was to sell part of his stake in the firm to help pay for his takeover of Twitter.  This was his first sale of Tesla shares since offloading US$ 16.4 billion worth of stock late last year. Earlier in April, Tesla shares had fallen almost 20% when he earlier announced that he had bought a 9.2% stake in Twitter.

A Californian court has ruled against Zoom Communications and handed out an US$ 85 million penalty, including US$ 21 million in legal fees. The payment is in relation to settle a case stemming from privacy concerns and a number of hacking and video-crashing incidents, with claims that the owner of the popular video conferencing application misled its users about the security of its encryption technology. Further allegations include that Zoom shared their data through third-party software from companies like Facebook, Google and LinkedIn without consumer consent. The global video conferencing market is expected to grow by almost 250% over the next five years to US$ 22.5 billion, at a compound annual rate of almost 20%.

According to research firm Kantar, over the 12 weeks to 17 April, Lidl and rival discounter Aldi were the fastest growing UK grocers. UK’s sixth biggest supermarket, Lidl has 920 sites and wants to grow that number by 19.6% to 1.1k by 2025. This week, Lidl has introduced a finder’s fee, (either 1.5% of a freehold price or 10% of the first year’s rent), to anyone who can find a suitable site for a new store. As it expands its operations, there is no doubt that it is taking market share from the big four supermarket chains, so much so that Asda and Morrisons announced they were cutting prices on hundreds of products as they try to compete.

The biggest shareholder and chairman of retail-to-energy group Reliance Industries is reportedly interested in a potential bid, with US buyout firm Apollo Global Management, for UK high street chain Boots. Billionaire Mukesh Ambani has yet to confirm what the share split will be for the retailer, which has more than 2.2k pharmacies, health and beauty stores in the UK, and that could be valued at US$ 7.5 billion. If successful, the deal would see Boots expand into India, Southeast Asia and the Middle East as well as growing the business in the UK.

Having initiated an investigation last May into suspected fraud and money laundering by parent firm GFG Alliance, the Serious Fraud Office has visited the offices of Sanjeev Gupta’s Liberty Steel. The parent company owns a myriad of businesses, focussing on energy, steel and trading, with a global workforce of some 35k, many of whom are in the UK.  Mr Gupta and Liberty Steel came under the spotlight because its main lender, Greensill Capital, collapsed after its insurer refused to renew cover for the loans it was making. It was the main lender to GFG’s Liberty Steel, which employs 3k people. The parent company, GFG, utilised Greensill’s supply chain finance services, which effectively allowed it to send any of its invoices to its lender and receive almost immediate payment. The problem arises when dummy or fraudulent invoices are used, including related party transactions, as may have been the case; in addition, concerns have been raised as to GFG’s unusual funding and company structures.

UK car production continues to disappoint as it headed south, with Q1 figures of 207k – 32.8% lower on the year. The main drivers behind the fall were the ongoing global supply chain problems, a worldwide shortage of computer chips and rising energy costs for manufacturers. Furthermore, the closure of Honda’s Swindon plant in 2021 did not help matters, having contributed to much reduced UK car exports to the US; US and EU car exports declined by 63.8% and 25.5% respectively. Q2 figures will also be impacted by the Ukraine crisis, as the two combatant countries supply integral parts such as wiring systems.

The UK government has introduced new food laws that Kellogg’s has taken umbrage with and has threatened to take the Johnson administration to court. The issue revolves around some cereals being prominently displayed in stores because of their high sugar content, with data showing that cereals are eaten with milk or yoghurt, in 92% of cases. Including added milk would change the calculation by reducing the proportion of sugar and salt content relative to the weight of the overall serving but the government has remained steadfast as some of their products are high in fat, sugar or salt in their dry form. The new law will come in force in October and would see products covered by the restrictions not being allowed to be displayed in prominent places within a store – and also their online equivalents. The aim of the new law is to halve childhood obesity by 2030.

The latest Putin edict sees countries that refuse to pay for their Russian energy in roubles having their gas flows cut off, starting with Bulgaria and Poland where gas supplies were severed from last Wednesday. Energy may well prove a major economic weapon in the on-going conflict in the Ukraine. On the details being released, European gas prices surged as much as 17%, with traders calculating the risk of other European countries being hit next. As the situation currently stands, European nations will soon have to decide whether to accept Putin’s terms or lose crucial supplies – and face the prospect of energy rationing. It will be interesting to see what the German and Italian governments  do, with both countries heavily dependent on Russian supplies.

Following Vladimir Putin’s March decree earlier that “unfriendly countries” would have to start paying for its oil and gas in roubles to prop up its currency after Western allies froze billions of dollars it held in foreign currencies overseas, one major German energy company, Uniper, has acquiesced to the request and announced that it will pay in euros which will be converted into roubles, meeting a Kremlin demand for all transactions to be made in the Russian currency. To the neutral observer, this seems to be a flagrant disregard of the sanctions, and, with its usual bending of the rules, the EC said that if buyers of Russian gas could complete payments in euros and get confirmation of this before any conversion into roubles took place, that would not breach sanctions. Meanwhile, this week an EU official confirmed that any attempt to convert cash into roubles in Russia would be a “clear circumvention of sanctions” as the transaction would involve Russia’s central bank. Even the EC boss, Ursula von der Leyen, noted that firms could still be breaking the rules. Poland has reiterated that the EU should penalise countries that used roubles to pay for Russian gas and was particularly critical of Germany, Hungary and Austria for resisting the gas embargo.

European leaders branded Russia’s announcement it is cutting off gas supplies to Poland and Bulgaria after they refused to pay for the deliveries in roubles — a measure Moscow imposed on so-called “unfriendly” foreign buyers in response to sanctions over its invasion of Ukraine. Poland imports about 50% of its gas requirements, and Bulgaria, 75%, European Council President Charles Michel, commented that the move was  “another aggressive unilateral; move by Russia with EC chief, Ursula von der Leyen, declaring Gazprom’s decision “yet another attempt by Russia to use gas as an instrument of blackmail” and that it was “unjustified and unacceptable”; the Belgian-born German leader should realise that ‘all’s fair in love and war’. It is hard to justify why European countries are still remitting up to US$ 850 million a day for Russian oil and gas and shows that certain countries are not adhering to the spirit of imposing sanctions.

Even before the onset of the Ukraine crisis, the world had begun to see inflation spiralling and food and energy prices heading north at a quick pace. History teaches that the uptick in energy prices, over the past twenty-four months, have been the highest since the 1973 oil crisis and that for food commodities and fertilisers the largest since 2008; Russia and Ukraine are large producers of both. The World Bank has forecast the average 2022 price of Brent will hover around the US$ 100 mark, down to an average US$ 92 next year, driven by disruptions in both war-related trade and production. The IMF expects 2022 inflation to hit 5.7%, in advanced economies, and 8.7%, in emerging market and developing economies, and next year 2.5% and 6.5% respectively. (Somebody should advise the world body that official inflation rates in the US and UK currently stand at 6.6% and 7.0%).

Q1 saw the US economy contracting – at an annualised rate of 1.4% – driven somewhat by trade disruption from the Ukraine war, and further exacerbated by the double whammy of a surge in imports, as businesses accelerated purchases, and a fall in exports, as overseas demand weakened. This quarter last year posted a 6.9% annualised growth rate. Despite inflation running at a forty-year high, households are still spending but will have to pull pack as economic conditions deteriorate further and growing inflation further erodes purchasing power. Wells Fargo has indicated that it considers that there is a 30% possibility of a US recession next year.

Yesterday, Joe Biden asked Congress for US$ 33 billion in military, economic and humanitarian assistance to support Ukraine so that it could defend itself better in the war with Russia. Most of the money will be used for the military, (US$ 20 billion), economic aid (US$ 8.5 billion), and humanitarian assistance (US$ 3.0 billion). The 78-year old US leader noted that the US had already supplied ten anti-tank weapons for every tank that Russia has deployed to Ukraine but clarified that the US was not attacking Russia. “We are helping Ukraine defend itself against Russian aggression.” Some of the US partners should be asking themselves whether they are shouldering their fair share of the burden in fighting the Russians.

With Australian cost of living 5.1% higher on the year – the most since June 2001 when the 10% GST was introduced – it is highly likely that there will be a chance of a pre-election interest rate hike next week. However, it must be noted thata federal election on 21 May and the timing of the release of quarterly wage figures may delay any rate announcement until June.  Any rate increase could be at 0.5%, rather than the traditional 0.25%. Latest data indicates that consumer prices jumped 2.1% in Q3, of the fiscal year ending in June. Underlying inflation – that takes out the most extreme price moves – came in at 3.7%, (and 1.4% on the quarter), and well above the RBA’s 2%–3% target, and the highest figure seen in twelve years.

Average April UK house prices hit a record high of US$ 458k, (GBP 360k), the third month in a row a new benchmark has been set, with prices rising over a record US$ 24k for the period. Rightmove estimated that 53% of properties are selling at, or over, their final advertised asking price, amid high demand for a limited stock of properties, and that they are achieving 98.9% of the final advertised asking price on average. Two interesting facts were that three years ago, the average time to sell a property was sixty-seven days, but that now stands to thirty-three days, and the recent three-month price rise momentum has been even greater than during the stamp duty holiday-fuelled market of last year. There are some who think that this property balloon is soon set to deflate, (with a probable softer landing than some may expect), and prices will decline (not tank) beginning in June, with the process being sped up by the triple whammy of continuing upward inflationary momentum, declining consumer spend and rising mortgage rates.

Government borrowing – the difference between spending and tax income – in the fiscal year ending last month was 52.2% lower, on the year, at US$ 191.1 billion, as the UK has had to borrow less, with expensive schemes such as furlough having ended  and tax receipts moving 17.9% higher to US$ 780.5 billion. Last month, the Office for Budget Responsibility said it expected borrowing in 2021-22 to be US$ 160.9 billion, which came in 18.8% higher than expected. Although the US$ 22.8 billion borrowed last month was the second-highest amount for the month since records began in 1993, borrowing in March remained well above pre-pandemic levels but was US$ 11.1 billion less than the amount borrowed in March 2021.The total amount the government borrowed equated to about 6.4% of GDP. Despite the fall in government borrowing, it is still the third-highest level for a financial year since records began in 1947. The recent surge in inflation has seen the government debt interest payments to reach a record high for a financial year at US$ 88.0 billion. There are no prizes guessing Who Pays The Price?

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Who Pays The Price?

Who Pays The Price?                                                                              29 April 2022

For the past week, ending 29 April 2022, Dubai Land Department recorded a total of 2,259 real estate and properties transactions, with a gross value of US$ 1.80 billion. A total of 197plots were sold for US$ 313 million, with 1,628 apartments and villas selling for US$ 959 million. The two top transaction sales were for plots of land – one in Business Bay for US$ 20 million, and another sold for US$ 19 million in Al Thanayah Fourth. The three leading locations for sales transactions were Al Hebiah Fifth, with 76 sales worth US$ 47 million, followed by Jabal Ali First, with 24 sales transactions worth US$ 33 million, and Al Yufrah 2, with 15 sales transactions, worth US$ 6 million. The top three apartment sales were one sold for US$ 157 million in Marsa Dubai, another for US$ 84 million in Burj Khalifa, and third at US$ 66 million in Business Bay. The sum of of mortgaged properties for the week was US$ 471 billion, with the highest being for a plot of land in Al Yelayiss 2, mortgaged for US$ 81 million. 75 properties were granted between first-degree relatives worth US$ 73 million.

The Mo’asher/Property Finder’s official sales price index noted that in Q1, Dubai registered 26.0k property transactions – the highest number of quarterly deals since 2010. During the quarter, 20.5k sales transactions, worth US$ 15.11 billion, were recorded. In March, there were 8.4k sales transactions, 83% higher, and 109% higher on an annualised basis, to US$ 6.15 billion. Property Finder reckoned that Dubai Marina, Downtown Dubai, Palm Jumeirah, Business Bay and Jumeirah Village Circle, were the top areas searched for apartment sales, whilst for villa sales. Dubai Hills Estate, Palm Jumeirah, Arabian Ranches, Damac Hills and The Springs, came out on top. With 60.3% new contracts, and the balance renewals, 44.8k rental contracts were signed in Dubai last month; 61.5% of the total emanated from five locations – Jabal Ali First, Al Warsan First, Business Bay, Naif and Al Karama.

HH Sheikh Mohammed bin Rashid Al Maktoum has approved a new housing package worth US$ 1.72 billion for UAE citizens in Dubai, including housing and land allotments for 4,610 Emiratis in the city, on the occasion of Eid al-Fitr, and as part of the Housing Programme for Dubai Citizens. A new housing complex in Al Khawaneej area 2, will include 1.1k residential villas and a plan for 3.5k plots in Umm Nahad 4 and Al Aweer. The Dubai Ruler emphasised that the housing programmes and social services projects were government priorities, aimed at meeting the needs of Emiratis and their families. Last year, he had approved the allocation of US$ 17.71 billion to an Emirati housing programme in Dubai, to be allocated over the next two decades to provide quality housing for Emiratis, and he also issued directives to quadruple the number of citizens benefiting from the housing programme effective from next year.

Last October, Samana Developers launched its Park View development which saw 80% of the project sold within four days. This week, the developer broke ground on its US$ 35 million G+6 storey Park Views, comprising 176 apartments, scheduled for hand over within eighteen months. Encompassing over 183k sq ft, it will house studio, 1 B/R and 2 B/R apartments, with private pools. Located close to a community park, Dubai Miracle and Butterfly Gardens, prices for a studio start at US$ 125k, with a flexible payment plan – 10% down payment, 1% every month for seventy months, 10% in the sixth month, 5% in the twelfth month, and 5% in the eighteenth month. The unit sizes range from 361 sq ft for studios, 937 for 1B/R, and 1,301 for 2 B/R apartments.

According to The Best Cities for Retirement Index, Dubai has been ranked fourteenth in terms of living standards for retirees but first for financial security and legacy management. A variety of factors such as quality of healthcare services, financial security, wealth management benefits available to retirees, mobility, connectivity, safety and availability of housing are used to draw up the list of cities. When all factors had been analysed, the top six cities turned out to be Tokyo, Wellington, Singapore, Paris, Vienna and Zurich. Other regional locations did not fare as well as Dubai, with Abu Dhabi in at 51st, Doha -70th and Riyadh 84th. Attracting retirees has become big business and many governments have introduced incentives to entice senior citizens to their shores. Dubai has its retirees’ visa, allowing residents and citizens from around the world to live in the emirate if they fulfil one of three requirements: earn a monthly income of US$ 5.45k, have US$ 272k in cash savings or own a property in Dubai worth at least US$ 545k. A retired expatriate and their spouse can apply for the five-year visa with the possibility of automatic renewal online, provided they continue to meet the criteria. Eligible applicants must be older than 55 and have valid UAE health insurance.

Savills has rated fifteen global cities to ascertain which is the best for digital nomads and it was no surprise to see Dubai third behind Lisbon and Miami. The real estate consultancy’s Executive Nomad Index is based on internet speed, quality of life, climate, air connectivity and prime rents. The Algarve, Barbados, Barcelona Dubrovnik, Saint Lucia, Malta and Antigua & Barbuda make up the top ten cities for long-term remote workers. As Covid accelerated the remote working trend, new technology also helped to encourage more workers to move from their traditional home bases; the government took advantage of the situation and quickly enacted appropriate legislation, such as a one-year residency permit, to entice such a labour sector to ‘set up shop’ in the emirate.

The Emirates Tourism Council confirmed that the country’s hotels welcomed 29% more visitors on the year to nineteen million tourists in 2021, generating a 70% surge in revenue to US$ 7.63 billion. Of the total number of tourists, 58% were domestic. There is no doubt that factors such as a successful vaccination protocol, stringent safety measures and a successful and quick economic recovery programme have benefitted the hospitality sector. During 2021, booked hotel nights jumped 42% to seventy-five million, with occupancy rates of 67% among the highest in the world. There was a 5.0% hike in the number of UAE hotels to 1.14k, whilst room numbers rose to 194k, of which 144k can be found in Dubai. The emirate also posted occupancy rates of 77% in the first two months of 2022.

Dubai’s administration has approved a three-year plan for the Dubai International Financial Centre Courts to establish a new digital economy court, dedicated departments for intellectual property rights, online courts with electronic capabilities, a new will deposit centre, digital will management system and multilingual consultancy services. This strategy is planned to enhance Dubai’s position as a global business and finance centre. Dubai’s Deputy Ruler, Sheikh Maktoum bin Rashid, noted “we approved the new strategic work plan that serves to further instil confidence that the DIFC Courts will forge ahead to shape the new dynamics of global dispute resolution.” The digital economy contributes about 4.3% to the UAE’s GDP which is equal to US$ 27.2 billion, a figure that will inevitably rise significantly in coming years.

Sheikh Hamdan bin Mohammed has launched a new fund targeted at enhancing the emirate as a global FinTech hub. The Crown Prince announced that the US$ 100 million ‘Venture Capital Fund for Start Ups’ will finance SME projects, supporting their development in Dubai and gradual expansion to global markets. The DIFC, a 15% contributor, will manage the fund that will create an integrated funding system with a number of suitable options that can cater to the needs of enterprises. It is expected that during the eight-year implementation period, the Fund will bolster the emirate’s GDP by US$ 817 million, will provide more than 8k jobs for emerging talents, and strengthen Dubai’s position as a regional centre for entrepreneurship and FinTech.

To meet the increased demand for air travel, Emirates is hoping to recruit 6k new cabin crew to boost numbers to an appropriate level. Last August, it announced that it required 3k cabin crew, as well as 500 airport services employees, and received 300k applications so it is certain that its HR division will be working overtime over the coming months. It seems that applicants need to have “a personality that shines, the ability to adapt to any situation and make people feel at ease”. Applicants need to have more than a year’s experience in hospitality and customer service, be a high-school graduate”, and be fluent in in written and spoken English. Entry level starting salary is US$ 2.66k plus housing and other benefits, with height requirements starting at 160 cm and the ability to reach 212 cm, while standing on tiptoes.

There are reports that Emirates is expecting to return to pre-pandemic levels by next year, as demand for global travel and tourism recovers. Currently, the carrier is operating at 70% of its pre-pandemic capacity and it is hoped that this will increase to 80% before the end of the summer, and 85% by the start of the winter season. For the year ending 31 March 2021, the world’s largest long-haul airline posted a loss of US$ 5.5 billion, not helped by the ongoing pandemic and despite a US$ 3.1 billion cash injection by its owner, the Dubai government, with Dnata, its airport services provider, received US$ 218 million in relief from authorities during that fiscal year. The latest 2021-22 accounts will be released shortly, and the airline is expecting a “good set of results” for its fiscal year ended March 31, narrowing losses for the last 12 months; it expects to return to profit in the next fiscal year, 2022-23.

The UAE fuel price committee announced petrol and diesel prices for the month of May 2022 with minor price reductions for both Super 98, down 2.1% US$ 0.022 to US$ 0.997, and E Plus 91 petrol by US$ 0.019 (2.0%) to US$ 0.948. Diesel prices headed in the other direction, with a US$ 0.163 rise to US$ 1.112.

In Q1, more than 10k companies joined Dubai Chamber of Commerce – a 64% hike in numbers compared to the comparative 2021 figure – bringing its total to almost 300k. It is estimated that member exports and re-exports saw 11.3% growth over the year, while their value reached US$ 16.6 billion. The number of certificates of origin issued by the Chamber was 7.1% higher to 179k. The Expo 2020 impact was one of the main drivers behind the much-improved figures that reflect Dubai’s strengthening position as a preferred business hub.

With the six-month extravaganza closing its doors last month, figures show that more than 25% of all Expo 2020 Dubai contracts, in terms of , were won by SMEs; in 2016, the organising committee had made a commitment that at least 20% of all contracts would go to SMEs. More than 3.2k contracts were awarded, of which 66% were SMEs, and of that total 1.39k were local and the balance 760 were from overseas. 52% of the overseas total came from five countries – UK (24%), USA (16%), France (4%), India (4%) and Australia (4%) – and that overall, suppliers from outside the UAE were sourced from ninety-four countries.

Dubai has become the latest emirate to approve a nine-day Eid Al Fitr break for federal government staff which will start on Sunday, 30 April, to 08 May, with work resuming on Monday, 09 May. Recently, the Sharjah public sector saw the same nine-day break, broken down to 30 April to 05 May and the fact that Sharjah has a three-day weekend, Friday 06 May to 08 May. Eid Al Fitr is marked on the first day of Shawwal – the month that comes after Ramadan in the Hijri calendar – and is expected to fall on Monday 01 May, as per astronomical calculations. The Ministry of Human Resources and Emiratisation had earlier announced that private sector staff would have four-day break from Ramadan 29 until Shawwal 3 – Sunday 30 April to Wednesday 03 May.

Last Saturday, in the 74th weekly live Mahooz Grand Draw, forty-five lucky participants shared the US$ 272k, (AED1 million), second prize in the 74th weekly live Mahzooz Grand Draw.  They had picked four of the five lucky numbers, with a further 1.7k claiming US$ 95 (AED 350) for matching three of the five numbers. The total prize money, which also included three lucky raffle prize winners, was US$ 514k.The top prize of US$ 2.72 million (AED 10 million) is still waiting to be won and perhaps tomorrow Saturday 30 April, could be someone’s lucky day; even if not won, someone will drive off in a 2022 Nissan Patrol Platinum V8, 5.6L Engine in an Eid-special Mega Raffle Draw. To enter the draw, entrants will have to register via http://www.mahzooz.ae and by purchasing a bottle of water, for almost US$ 10 (AED 35).

The Emirates Development Bank has agreed with Food Tech Valley, launched last May, to provide financing for SMEs and start-ups operating within Dubai’s food tech hub. Both parties will support tech-based companies operating, or seeking to operate, in the hub with financing, roadshows, seminars, mentorships and knowledge transfer. Al Wasl is developing the project in partnership with the Ministry of Food and Water Security, with the aim of attracting local and foreign direct investments within the field to achieve the government’s mission of transforming the UAE into a global hub for tech-based food and agricultural solutions. It also targets tripling the country’s food production and make the UAE more self-sufficient.

With no financial details of the deal disclosed, Swyl has acquired  the four-year old Turkish company Volt Lines  which provides mass transit solutions to corporate clients working in more than 110 companies, in major cities such as Istanbul and Ankara The Dubai-based shared mobility services provider’s strategy seems to be expansion of its operations in Europe, and it currently offers intercity, intracity, business-to-business and business-to-government transport across more than one hundred  cities in more than twenty countries. It was also the second Arab technology company to be listed on Nasdaq.  Over the past six months, it acquired Argentina’s Viapool and European tech-enabled mass transit solutions, provider door2door.

Husain Sajwani’s Damac Group, recently delisted from the Dubai Financial Market, is planning to invest US$ 100 million to build digital cities, using their own companies, property developer Damac Properties, data centre firm Edgenex, luxury jeweller de-Grisogono and fashion house Roberto Cavalli. As one of the first local entrants into the world of metaverse, it will be in a good position to cater to the needs of the entire Group when it comes to digital assets, including virtual homes, digital property, digital wearables, digital jewellery and a digital treat of Damac’s Mandarin Oriental Resort Bolidhuffaru in the Maldives. The Damac Group has ambitions to move into digital assets and non-fungible tokens and has the ultimate goal to become a leading global digital brand.

With its latest listing – a US$ 1.6 billion Sukuk for the Islamic Development Bank (IsDB) –  Nasdaq Dubai’s portfolio of Sukuks increased to US$ 77.5 billion, making the Dubai bourse  one of the world’s largest Sukuk listing centres. The five-year Trust Certificates were priced at par, with a profit rate of 3.213%, payable on a semi-annual basis. IsDB has currently thirteen issuances, totalling US$ 18.05 billion, with the latest issuance being used to finance projects under the development mandate of the Bank.

Emirates Integrated Telecommunications Company PJSC – du – posted an 8.5% hike in Q1 revenue of US$ 852 million, with EBITDA and net profit both higher – by 13.3% to US$ 346 million and 21.0% to US$ 85 million respectively. A breakdown of revenue sees mobile services up 6.9% at US$ 382 million, fixed services 22.8% higher at US$ 222 million and handset sales coming in on US$ 60 million. Capex was at US$ 83 million and is expected to rise over the rest of the year. There was a 10.4% growth in mobile customers to 7.5 million, with post-paid customers at 1.4 million and prepaid at 6.1 million.

In Q1, the Commercial Bank of Dubai posted a 32.6% hike in net profit of US$ 117 million, as the bank’s operating income rose 17.5% to US$ 234 million, driven by net interest income, fees and commissions, operating expenses dropping 2.1% to US$ 64 million from Q4 2021. Operating profit was US$ 170 million, up 16.4% year on year, while net impairment allowances atUS$ 52 million, were down 8.6%. CBD also posted a record US$ 32.42 billion billion in assets attributable to a 3.4% growth in loans over the quarter. The bank also received a major award during Q1, being ranked by Forbes as the Number One Bank in the UAE in the World’s Best Banks 2022 report.

Via a special resolution, Deyaar’s shareholders approved a directors’ proposal to write off its accumulated losses through the company’s legal reserve, (US$ 82 million) and cancellation of shares, (by US$ 381 million to US$ 1.19 billion), equal to the remaining losses of US$ 463 million at 31 December 2021. The company, majority owned by Dubai Islamic Bank, posted a US$ 14 million profit – following a US$ 59 million loss a year earlier – as revenue grew 22% to US$ 138 million. The company noted that the restructuring will increase “the company’s attractiveness to investors and the possibility of obtaining funds for its future projects, which will reflect positively on the share price in the Dubai Financial Market”.

Dubai Islamic Bank reported a Q1 58% year-on-year surge in net profit to US$ 354 million, as revenue climbed 11% to US$ 672 million, driven by lower impairments and stronger top-line growth. The largest Islamic bank in the UAE, and the second-largest Islamic bank in the world, noted that total income was 6% higher at US$ 822 million, with net operating profit up 10% to US$ 440 million. DIB’s net financing and sukuk investments grew 3.0% to US$ 64.1 billion, with gross new financing of nearly US$ 4.4 billion being driven by strong growth of wholesale bookings on the back of an improved economic outlook. During the quarter, the balance sheet grew 3.0% to US$ 78.3 billion, as customer deposits remained steady at US$ 55.7 billion. Impairment provisions were reduced 44% to US$ 114 million.

The DFM opened on Monday, 25 April, 333 points (7.5%) up on the previous six weeks, moved 36 points (1.0%) higher to close on Thursday 28 April, at 3,719. (The bourse will be closed for the next four trading days and will reopen on Thursday 05 May, after the Eid Al Fitr holiday). Emaar Properties, US$ 0.37 higher the previous eight weeks, nudged US$ 0.02 up to US$ 1.74. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.78, US$ 4.14, US$ 1.71 and US$ 0.73 and closed on US$ 0.77, US$ 4.16, US$ 1.76 and US$ 0.73. On 28 April, trading was at 129 million shares, with a value of US$ 89 million, compared to 115 million shares, with a value of US$ 83 million, on 22 April 2022.

For the month of April, the bourse had opened on 3,527 and, having closed the month on 3,719 was 192 points (5.4%) higher. Emaar traded US$ 0.11 higher from its 01 April 2022 opening figure of US$ 1.63, to close the month at US$ 1.74. Four other bellwether stocks, Dewa, Emirates NBD, DIB and DFM started the month on US$ 0.00, (it only started trading in mid-April), US$ 4.09, US$ 1.68 and US$ 0.66 and closed on 30 April on US$ 0.77, US$ 4.16, US$ 1.76 and US$ 0.73 respectively. The bourse had opened the year on 3,196 and, having closed April on 3,719, was 523 points (16.4%) higher, YTD. Emaar traded US$ 0.41 higher from its 01 January 2022 opening figure of US$ 1.33, to close April at US$ 1.74. Four other bellwether stocks, Dewa, Emirates NBD, DIB and DFM started the year on US$ 0.00, US$ 3.69, US$ 1.47 and US$ 0.72 and closed on 29 April on US$ 0.77, US$ 4.16, US$ 1.,76 and US$ 0.79 respectively.

By Friday 29 April 2022, Brent, US$ 9.95 (8.9%) lower the previous week, gained US$ 5.84 (5.7%), to close on US$ 107.59. Gold, US$ 42 (2.5%) lower the previous week, shed US$ 36 (1.9%), to close Friday 29 April on US$ 1,897.

Brent started the year on US$ 77.68 and gained US$ 29.91 (38.5%), to close 29 April on US$ 100.05. Meanwhile, the yellow metal opened January trading at US$ 1,831 and has gained US$ 66 (3.6%) during 2022, to close on US$ 1,897. For the month, Brent opened at US$ 100.05 and closed on 29 April, US$ 7.54 (7.5%) higher, on US$ 107.59. Meanwhile, gold opened April on US$ 1,943 and shed US$ 46 (2.4%) to close at US$ 1,897 on 29 April.

Driven by a dip in Q1 sales and charges arising from the Ukraine war, Boeing has posted a US$ 1.2 billion net loss, compared to a US$ 519 million deficit a year earlier. Q1 revenue slowed 8.0% to US$ 14.0 billion, driven by “lower defence volume and charges on fixed-price defence development programmes”, partially offset by commercial services volume”. Commercial aircraft sales dipped 3.0% to US$ 4.2 billion, with a delivery of ninety-five aircraft, as well as a 4.2k plane backlog, valued at US$ 291 billion. A 20.6% decline in operating margin reflects “abnormal costs and period expenses, including charges for impacts of the war in Ukraine and higher research and development expense”. Revenue from defence, space and security decreased 24% to nearly US$ 5.5 billion, whilst R&D spend jumped 26% to US$ 633 million. Its global services unit’s first-quarter revenue increased 15% to US$ 4.3 billion, as the unit secured a fuel-saving digital solutions contract for Etihad Airways’ 787 fleet and was awarded a contract for KC-135 horizontal stabilisers from the US Air Force.

Beset by mostly self-made problems over the past decade, and maybe longer, Boeing’s 777X programme could face a new delay that could push deliveries, a year later than earlier expected, to early 2025. The report claims that the certification target will take place in late 2024, with deliveries following nine to twelve months later. Last month, the Federal Aviation Administration warned Boeing that existing certification schedules for the 737 MAX 10 and 777X were “outdated and no longer reflect the programme activities”. It has to be remembered that the 777X has been in development since 2013 and at one point was expected to be operational by June 2020. The plane maker is also hoping to gain approval for the 737 Max 10 by the end of the year and has been requested by regulators to provide a “mature certification schedule”. To complete the trifecta, Boeing is also working to resume 787 Dreamliner deliveries after halting them nearly a year ago over structural flaws.

Californian-based Lease Corporation expects to lose US$ 802 million because of it writing off the value of the remaining twenty-seven aircraft it has in Russia; twenty-one of the planes are company-owned and the remaining six in its managed fleet. The loss will be reflected in accounts due to be published next month.

Last week,  Netflix warned its revenue growth had slowed considerably after it lost subscribers due to stiff competition from rivals and the rising cost of living. This week, there was good news and bad news for Facebook, reporting that it has stopped losing users in Q1, growing its customer base to 1.96 billion, but posted its slowest revenue growth in a decade – 7% higher at US$ 27.9 billion; overall, Meta’s Q1 profits were US$ 7.46 billion.  Last year, the social network noted a decline in users for the first time, and since the news was released in February 2022, its market value has lost billions from the firm’s market value. Since executives disclosed the fall in February, the firm’s share price has nearly halved, but on Wednesday when Meta’s Q1 details were published, shares jumped 19% in after-hours trade. Facebook is facing more competition against the likes of TikTok and Amazon.

Q1 brings some disappointing news for Amazon, as it reported its first loss, (at US$ 3.8 billion), since 2015, as online sales slipped 3%, with the pandemic-induced boom to its business starting to fade; overall sales headed 7% higher to US$ 116.4 billion, driven by a 37% hike in Amazon Web Services and advertising revenue 23% higher. However, growth in other sectors continued but the loss was further exacerbated by its investment in electric carmaker Rivian. Amazon, like many other global conglomerates, is also facing the impact of rising costs brought on by surging inflation, supply chain pressures and the Ukraine war. Its share value sank more than 10% in after-hours trade, with concerns spreading to other online retailers, sending shivers through US markets, which had already started moving south in recent weeks.

Even though iPhone maker Apple posted increases in Q1 sales and profit by 9% to US$ 97.3 billion and 10% to US$ 25.0 billion, it warned of a “challenging macroeconomic environment”, noting that “we are not immune to these challenges”. iPads tablets, which contribute US$ 7.6 billion to total sales was down  2%, and was the only segment that experienced a dip in Q1 sales. It also indicated that the company was more worried about Covid-related shutdowns in China and chip shortages, (that are impacting the firm’s ability to meet demand for its products), than that buyers will cut spending. It was noted that the supply chain frictions would dent Apple’s sales in the current Q2 by up to US$ 8 billion, and that it will be “substantially larger” than its impact in the last quarter. Apple also announced a 5% increase in cash dividend to US$ 0.23 per share.

On Monday, the irrepressible Elon Musk paid US$ 44 billion in cash to acquire Twitter, a social media platform populated by millions of users and global leaders. Twitter said Musk secured US$ 25.5 billion of debt and margin loan financing and is providing a US$ 21 billion equity commitment. The world’s richest person, worth US$ 268 billion, has long been a critic of Twitter on several fronts including its algorithm for prioritising tweets should be public and giving too much power on the service to corporations that advertise. Twitter shares rose 5.7% on Monday to close at US$ 51.70, well below the US$ 70 range where Twitter was trading last year; however, the offer price shows a near 40% premium to the closing price, the day before Musk disclosed he had bought a more than 9% stake, two weeks ago.

Days after Elon Musk acquired the microblogging site, Twitter had posted a seven-fold plus Q1 net income of US$ 513 million, compared to US$ 68 million a year earlier; revenue was 16% higher at US$ 1.2 billion. 92% of the revenue was from advertising sales which expanded by 23% to US$ 1.1 billion but revenue from subscriptions and other streams dropped 31% yearly to US$ 94 million. However, the net income figure included a pre-tax gain of US$ 970 million from the sale of MoPub — a platform for promoting and monetising apps — to AppLovin for US$ 1.05 billion and income taxes related to the gain of US$ 331 million. Daily active users rose 16% in the quarter to 229 million, split between international users (up 18.1% to 189 million) and US ones (6.4% higher at 40 million).

This week, Elon Musk divested US$ 4 billion of his shares in Tesla but indicated that he had no plans to sell anymore, after earlier in the week shares the had fallen, (on Tuesday wiping US$ 125 billion off its market value), on news that he was to sell part of his stake in the firm to help pay for his takeover of Twitter.  This was his first sale of Tesla shares since offloading US$ 16.4 billion worth of stock late last year. Earlier in April, Tesla shares had fallen almost 20% when he earlier announced that he had bought a 9.2% stake in Twitter.

A Californian court has ruled against Zoom Communications and handed out an US$ 85 million penalty, including US$ 21 million in legal fees. The payment is in relation to settle a case stemming from privacy concerns and a number of hacking and video-crashing incidents, with claims that the owner of the popular video conferencing application misled its users about the security of its encryption technology. Further allegations include that Zoom shared their data through third-party software from companies like Facebook, Google and LinkedIn without consumer consent. The global video conferencing market is expected to grow by almost 250% over the next five years to US$ 22.5 billion, at a compound annual rate of almost 20%.

According to research firm Kantar, over the 12 weeks to 17 April, Lidl and rival discounter Aldi were the fastest growing UK grocers. UK’s sixth biggest supermarket, Lidl has 920 sites and wants to grow that number by 19.6% to 1.1k by 2025. This week, Lidl has introduced a finder’s fee, (either 1.5% of a freehold price or 10% of the first year’s rent), to anyone who can find a suitable site for a new store. As it expands its operations, there is no doubt that it is taking market share from the big four supermarket chains, so much so that Asda and Morrisons announced they were cutting prices on hundreds of products as they try to compete.

The biggest shareholder and chairman of retail-to-energy group Reliance Industries is reportedly interested in a potential bid, with US buyout firm Apollo Global Management, for UK high street chain Boots. Billionaire Mukesh Ambani has yet to confirm what the share split will be for the retailer, which has more than 2.2k pharmacies, health and beauty stores in the UK, and that could be valued at US$ 7.5 billion. If successful, the deal would see Boots expand into India, Southeast Asia and the Middle East as well as growing the business in the UK.

Having initiated an investigation last May into suspected fraud and money laundering by parent firm GFG Alliance, the Serious Fraud Office has visited the offices of Sanjeev Gupta’s Liberty Steel. The parent company owns a myriad of businesses, focussing on energy, steel and trading, with a global workforce of some 35k, many of whom are in the UK.  Mr Gupta and Liberty Steel came under the spotlight because its main lender, Greensill Capital, collapsed after its insurer refused to renew cover for the loans it was making. It was the main lender to GFG’s Liberty Steel, which employs 3k people. The parent company, GFG, utilised Greensill’s supply chain finance services, which effectively allowed it to send any of its invoices to its lender and receive almost immediate payment. The problem arises when dummy or fraudulent invoices are used, including related party transactions, as may have been the case; in addition, concerns have been raised as to GFG’s unusual funding and company structures.

UK car production continues to disappoint as it headed south, with Q1 figures of 207k – 32.8% lower on the year. The main drivers behind the fall were the ongoing global supply chain problems, a worldwide shortage of computer chips and rising energy costs for manufacturers. Furthermore, the closure of Honda’s Swindon plant in 2021 did not help matters, having contributed to much reduced UK car exports to the US; US and EU car exports declined by 63.8% and 25.5% respectively. Q2 figures will also be impacted by the Ukraine crisis, as the two combatant countries supply integral parts such as wiring systems.

The UK government has introduced new food laws that Kellogg’s has taken umbrage with and has threatened to take the Johnson administration to court. The issue revolves around some cereals being prominently displayed in stores because of their high sugar content, with data showing that cereals are eaten with milk or yoghurt, in 92% of cases. Including added milk would change the calculation by reducing the proportion of sugar and salt content relative to the weight of the overall serving but the government has remained steadfast as some of their products are high in fat, sugar or salt in their dry form. The new law will come in force in October and would see products covered by the restrictions not being allowed to be displayed in prominent places within a store – and also their online equivalents. The aim of the new law is to halve childhood obesity by 2030.

The latest Putin edict sees countries that refuse to pay for their Russian energy in roubles having their gas flows cut off, starting with Bulgaria and Poland where gas supplies were severed from last Wednesday. Energy may well prove a major economic weapon in the on-going conflict in the Ukraine. On the details being released, European gas prices surged as much as 17%, with traders calculating the risk of other European countries being hit next. As the situation currently stands, European nations will soon have to decide whether to accept Putin’s terms or lose crucial supplies – and face the prospect of energy rationing. It will be interesting to see what the German and Italian governments  do, with both countries heavily dependent on Russian supplies.

Following Vladimir Putin’s March decree earlier that “unfriendly countries” would have to start paying for its oil and gas in roubles to prop up its currency after Western allies froze billions of dollars it held in foreign currencies overseas, one major German energy company, Uniper, has acquiesced to the request and announced that it will pay in euros which will be converted into roubles, meeting a Kremlin demand for all transactions to be made in the Russian currency. To the neutral observer, this seems to be a flagrant disregard of the sanctions, and, with its usual bending of the rules, the EC said that if buyers of Russian gas could complete payments in euros and get confirmation of this before any conversion into roubles took place, that would not breach sanctions. Meanwhile, this week an EU official confirmed that any attempt to convert cash into roubles in Russia would be a “clear circumvention of sanctions” as the transaction would involve Russia’s central bank. Even the EC boss, Ursula von der Leyen, noted that firms could still be breaking the rules. Poland has reiterated that the EU should penalise countries that used roubles to pay for Russian gas and was particularly critical of Germany, Hungary and Austria for resisting the gas embargo.

European leaders branded Russia’s announcement it is cutting off gas supplies to Poland and Bulgaria after they refused to pay for the deliveries in roubles — a measure Moscow imposed on so-called “unfriendly” foreign buyers in response to sanctions over its invasion of Ukraine. Poland imports about 50% of its gas requirements, and Bulgaria, 75%, European Council President Charles Michel, commented that the move was  “another aggressive unilateral; move by Russia with EC chief, Ursula von der Leyen, declaring Gazprom’s decision “yet another attempt by Russia to use gas as an instrument of blackmail” and that it was “unjustified and unacceptable”; the Belgian-born German leader should realise that ‘all’s fair in love and war’. It is hard to justify why European countries are still remitting up to US$ 850 million a day for Russian oil and gas and shows that certain countries are not adhering to the spirit of imposing sanctions.

Even before the onset of the Ukraine crisis, the world had begun to see inflation spiralling and food and energy prices heading north at a quick pace. History teaches that the uptick in energy prices, over the past twenty-four months, have been the highest since the 1973 oil crisis and that for food commodities and fertilisers the largest since 2008; Russia and Ukraine are large producers of both. The World Bank has forecast the average 2022 price of Brent will hover around the US$ 100 mark, down to an average US$ 92 next year, driven by disruptions in both war-related trade and production. The IMF expects 2022 inflation to hit 5.7%, in advanced economies, and 8.7%, in emerging market and developing economies, and next year 2.5% and 6.5% respectively. (Somebody should advise the world body that official inflation rates in the US and UK currently stand at 6.6% and 7.0%).

Q1 saw the US economy contracting – at an annualised rate of 1.4% – driven somewhat by trade disruption from the Ukraine war, and further exacerbated by the double whammy of a surge in imports, as businesses accelerated purchases, and a fall in exports, as overseas demand weakened. This quarter last year posted a 6.9% annualised growth rate. Despite inflation running at a forty-year high, households are still spending but will have to pull pack as economic conditions deteriorate further and growing inflation further erodes purchasing power. Wells Fargo has indicated that it considers that there is a 30% possibility of a US recession next year.

Yesterday, Joe Biden asked Congress for US$ 33 billion in military, economic and humanitarian assistance to support Ukraine so that it could defend itself better in the war with Russia. Most of the money will be used for the military, (US$ 20 billion), economic aid (US$ 8.5 billion), and humanitarian assistance (US$ 3.0 billion). The 78-year old US leader noted that the US had already supplied ten anti-tank weapons for every tank that Russia has deployed to Ukraine but clarified that the US was not attacking Russia. “We are helping Ukraine defend itself against Russian aggression.” Some of the US partners should be asking themselves whether they are shouldering their fair share of the burden in fighting the Russians.

With Australian cost of living 5.1% higher on the year – the most since June 2001 when the 10% GST was introduced – it is highly likely that there will be a chance of a pre-election interest rate hike next week. However, it must be noted that a federal election on 21 May and the timing of the release of quarterly wage figures may delay any rate announcement until June.  Any rate increase could be at 0.5%, rather than the traditional 0.25%. Latest data indicates that consumer prices jumped 2.1% in Q3, of the fiscal year ending in June. Underlying inflation – that takes out the most extreme price moves – came in at 3.7%, (and 1.4% on the quarter), and well above the RBA’s 2%–3% target, and the highest figure seen in twelve years.

Average April UK house prices hit a record high of US$ 458k, (GBP 360k), the third month in a row a new benchmark has been set, with prices rising over a record US$ 24k for the period. Rightmove estimated that 53% of properties are selling at, or over, their final advertised asking price, amid high demand for a limited stock of properties, and that they are achieving 98.9% of the final advertised asking price on average. Two interesting facts were that three years ago, the average time to sell a property was sixty-seven days, but that now stands to thirty-three days, and the recent three-month price rise momentum has been even greater than during the stamp duty holiday-fuelled market of last year. There are some who think that this property balloon is soon set to deflate, (with a probable softer landing than some may expect), and prices will decline (not tank) beginning in June, with the process being sped up by the triple whammy of continuing upward inflationary momentum, declining consumer spend and rising mortgage rates.

Government borrowing – the difference between spending and tax income – in the fiscal year ending last month was 52.2% lower, on the year, at US$ 191.1 billion, as the UK has had to borrow less, with expensive schemes such as furlough having ended  and tax receipts moving 17.9% higher to US$ 780.5 billion. Last month, the Office for Budget Responsibility said it expected borrowing in 2021-22 to be US$ 160.9 billion, which came in 18.8% higher than expected. Although the US$ 22.8 billion borrowed last month was the second-highest amount for the month since records began in 1993, borrowing in March remained well above pre-pandemic levels but was US$ 11.1 billion less than the amount borrowed in March 2021.The total amount the government borrowed equated to about 6.4% of GDP. Despite the fall in government borrowing, it is still the third-highest level for a financial year since records began in 1947. The recent surge in inflation has seen the government debt interest payments to reach a record high for a financial year at US$ 88.0 billion. There are no prizes guessing Who Pays The Price?

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And The First One Now Will Later Be Last!

And The First One Now Will Later Be Last!                                                22 April 2022

For the past week, ending 22 April 2022, Dubai Land Department recorded a total of 2,145 real estate and properties transactions, with a gross value of US$ 1.72 billion. A total of 225 plots were sold for US$ 305 million, with 1,436 apartments and villas selling for US$ 872 million. The two top transaction sales were for two plots of land – one in Hadaeq Sheikh Mohammed Bin Rashid for US$ 26 million, and another sold for US$ 14 million in Palm Jumeirah. The three leading locations for sales transactions were Al Hebiah Fifth with 114 sales worth US$ 69 million, followed by Jabal Ali First, with 33 sales transactions worth US$ 39 million, and Wadi Al Safa 5, with 11 sales transactions worth US$ 13 million. The top three apartment sales were an apartment sold for US$ 126 million in Marsa Dubai, another for US$ 96 million in Burj Khalifa, and third at US$ 77 million in Palm Jumeirah. The sum of the amount of mortgaged properties for the week was US$ 474 billion, with the highest being for a plot of land in Nad Al Shiba Third, mortgaged for US$ 47 million.

Latest figures from March’s ValuStrat Price Index reported property prices surging 18.8%, year-on-year, and 1.2% month-on-month. When split between villas/townhouses and apartments, the profits were up 34.1% and 2.1% and 8.4% and 0.4% for apartments respectively.  In the villa sector, the four leading locations, with the highest price rises, were Jumeirah Islands (40.3%), Arabian Ranches (40.3%), The Lakes (37.1%) and Jumeirah Village (35.5%). Some areas such as Mudon and Green Community West, performed better and recorded above average price growth of 0.5% and 0.8%, respectively. The index, which measures Dubai’s residential capital value performance, also reported that the leading locations for apartment price rises were Palm Jumeirah (21.9%), Jumeirah Beach Residence (16.0%), Burj Khalifa (15.3%), The Views (10.9 per cent), and The Greens (9.7%). The study also noted that “the villa capital values index reached 94.1 points last month, just 5.9 points below the price index base of January 2014.’ as the weighted average capital value for villas grew 6.3% quarterly and 34.1% annually. Meanwhile apartment capital values index reached 69.5 points in March, 30.5 lower than the price index base of January 2014. As Dubai’s global popularity grows, there is no doubt that Dubai’s property sector will benefit from the fact that its property prices are very cheap, when compared to those of their international rivals. The outlook for both segments remains positive, with villa prices moving faster and are expected to cross 2014 peak levels by the end of 2022.

CBRE noted that Dubai’s total Q1 transaction volumes reached 19k, the highest ever recorded in any first quarter of the year. Total transactions volumes recorded 75.1%, year-on-year growth, with off-plan and ready transactions increasing by 114.9% and 52.9% respectively. Secondary market transactions accounted for 56.1% of total transactions, with off-plan transactions accounting for the 43.9% balance, but that 68.6% of total Q1 sales were initial sales from the developer, and 31.4% of sales were for subsequent sales of properties. Over the remainder of 2022, an additional 42k units are expected to be completed to meet rising demand for residential units.

According to Luxhabitat Sotheby – utilising data from the Dubai Land Department – Dubai luxury property prices dipped 6.0% in Q1, with an average price of prime property at US$ 1.23 million. In this sector, it estimated that 5.3k apartments and 742 villas were sold, with the three leading locations, in terms of sales volume, being Mohammed Bin Rashid City at US$ 869 million, Palm Jumeirah at US$ 845 million and Downtown Dubai at US$ 708 million. In the prime residential market, the Jumeirah Islands area sales more than doubled to US$ 55 million, followed by Mohammed Bin Rashid City and Al Barari. During Q1, there was a 32.3%, quarter on quarter, jump in the prime villa market, with total sales of US$ 1.12 billion at an average villa price of US$ 2.89 million. The most popular areas for villa transactions in Q1 were Mohammed bin Rashid City, followed by Palm Jumeirah and Emirates Living. Sales volume of apartments decreased by 10% to US$ 2.97 billion with the average prime apartment selling at US$ 654k, equating to an average price of US$ 390 per sq ft. The three most popular ‘apartment areas’ were Downtown Dubai, Business Bay and Palm Jumeirah. The top six villa transactions in Q1 were Palm Jumeirah – Frond N (US$ 76 million), Jumeirah Bay Island (US$ 24 million), Palm Jumeirah Frond J (US$ 24 million), Emirates Hills – Sector L (US$ 20 million), Burj Khalifa apartment (US$ 20 million) and Business Bay Dorchester Collection (US$ 19 million).

Having invested US$ 272 million in a plot of land in Dubai South, and signing an exclusive agreement with the local authority, Discovery Land is planning to build an ultra-luxury golf community. The US-based developer indicated that the project will consist of a two sq mt golf community with mansions, villas, an 18-hole golf course and other premier amenities. This will become the fifth golf community in the emirate, following Emirates Hills, Arabian ranches Jumeirah Golf Estates and Dubai Hills.

Launched in 2006, Dubai South was planned to be an emerging 145 sq km, master-planned city which also includes Al Maktoum International Airport and the Expo 2020 site, which is currently being transformed into District 2020. This will become the country’s first fifteen-minute city, a cycle-friendly, traffic-free suburb of the growing metropolis, and will include an autonomous-vehicle route, a 10 km cycling track, interconnected, wide pedestrian pathways and a 5 km jogging track. The former Expo village will house fifteen mid-rise residential buildings, in four clusters, which will open “in different phases between now and October”.

HH Sheikh bin Mohammed announced further changes in the government’s residency visa law, making it easier, for skilled professionals, earning more than US$ 100k a year, as well as those purchasing a property worth more than US$ 545k, to apply for a ten-year ‘Golden Visa’. Undoubtedly, Dubai property sector will be a beneficiary of the ten changes made this week, as the initial introduction of the scheme in 2020, (which saw 44k visas issued in Dubai), was one of the main drivers in the sector’s post-Covid bounce back.Most analysts agree that the new changes are a further step in opening up Dubai to foreign investors and will likely lead to a significant influx in property buyers in both the residential and commercial sectors. Another change was that off-plan investors can also apply for residency, with buyers no longer restricted having to have a title deed of a ready property in hand.

The latest Knight Frank report indicates that, in Q1, Dubai office rents, in five out of the twenty-seven locations, have returned to pre-pandemic levels. The best performing location was Business Bay where rents were 33.0% higher, on the year, at US$ 28 per sq ft, with the major sector being technology business, many of which are set-ups, which seem to be filling in the space left by the likes of global international entities – professional services, banks and blue-chip companies – that have been shrinking their occupancy footprint in a move to hybrid working models. Average Grade A rents in the CBD were up 9.0%, year-on-year, to US$ 500 per sq mt per annum in Q1 2022; financial and technology firms remain the main drivers of demand for Grade A office space. There is no doubt that the local booming economy is helping growth in this sector – it is estimated that Q4 GDP growth came in at 7.8%. The Federal Competitiveness and Statistics Centre confirmed that the country’s non-oil sector contribution to the 2021 GDP equated to 72.3% – 1.0% higher than in 2020, and 3.8% at constant prices. The hotels & restaurants, wholesale & retail and health & social services sectors contributed 21.3%, 14.1% and 13.8% respectively. JLL’s Q1 2002 market review confirmed that the UAE’s hotel market performed strongly, driven by Expo 2020 Dubai and returning international visitors, with both upper-upscale and midscale hotels witnessing higher average daily rates.

This month saw Dubai’s population top the 3.5 million mark, according to Dubai Statistics Centre’s latest data and that despite the pandemic, it has increased by over 100k since 2020, driven, of late, by an influx of foreigners, especially the high net worth individuals. 69.2% of the population, 2.4 million, is male. The quicker than expected economic recovery has resulted in the labour-intensive industries, such as retail, hospitality, aviation, tourism and real estate increasing their payroll numbers. Despite the population continuing to grow, the DSC estimates the unemployment rate in Dubai stood at just 0.5%, resulting in the emirate having one of the world’s lowest unemployment rates.

With the NFT market booming, (with some exceptions as noted later), Emirates is hoping to cash in by planning to launch collectible and utility-based non-fungible tokens, with a launch expected in the coming months; it will also build brand experiences in the metaverse. Five years ago, Emirates Introduced Virtual Reality technology on its website and app, and last year, it became the first airline to launch its own VR app on the Oculus store, offering users cabin interior experiences on board the carrier’s A380 and Boeing 777-300ER aircraft. The airline’s chairman, Sheikh Ahmed bin Saeed, noted that “Dubai and the UAE are blazing the way in the digital economy, having a clear vision supported by practical policies and regulatory frameworks in areas such as virtual assets, artificial intelligence and data protection.”

With global trade picking up, the resultant higher volumes in the Asia Pacific – 1.2% up at 8.5k TEUs (twenty-foot equivalent units), Middle East, Europe and Africa (1.4% higher to 8.0k TEUs), and Americas regions, (up 4.0% to 2.8k TEUs) – pushed DP World’s gross container shipping volumes 1.7% higher in Q1 to 19.3 million TEUs. In Q1, the company signed two important deals in Africa – one acquiring South Africa’s Imperial Logistics, an integrated logistics and market access company, for US$ 890 million, and a preliminary agreement with the Angolan government to develop the country’s trade and logistics sector. DP World is “looking ahead, the near-term outlook is mixed given the geopolitical environment, but we remain positive on the medium to long-term fundamentals of the industry,”

This week, the Ministry of Finance, the Issuer, in collaboration with the Central Bank of the UAE, as the issuing and paying agent, launched conventional AED denominated Treasury Bonds of the Government of the UAE (T-Bonds), with a benchmark auction size of US$ 409 million; the first auction date is scheduled next month, followed by a raft of periodical auctions. Initially the securities will be in 2/3/5-year tenures; followed later by a ten-year bond. The main purpose for the issuance of T-Bonds is to assist in the building of a local currency bond market, diversifying financing resources, and boosting the local financial and banking sector. Apart from the issuance providing a pricing reference for other UAE markets (bond and equity), it enhances the ability to cover future funding needs in UAE dirham and provides opportunities for foreign investors to invest in UAE dirham-denominated bonds (in local currency). It will also help in the development of a Dirham local market for securities issued by the public sector in the country.

Following the success of the initial fifty-dirham polymer note, enhanced by advanced technical characteristics and security features. the Central Bank of the UAE has launched two new banknotes, The ten-dirham banknote entered circulation yesterday 21 April and the five dirham note is out next Tuesday 26 April. Current banknotes of both denominations will remain in circulation, along with the new polymer notes which are more durable and sustainable which will last two or more times longer in circulation.

This week, HH Sheikh Mohammed bin Rashid Al Maktoum issued Decrees No. (15) forming the Supreme Committee to Supervise the Expo 2020 Dubai District, and No. (16) of 2022 extending the terms of the Expo 2020 Dubai Preparatory Committee, and the Expo 2020 Dubai Bureau and its Director General by six months. The new Committee will be chaired by Sheikh Ahmed bin Saeed Al Maktoum, with members of the Supreme Committee to Supervise the Expo 2020 Dubai District being Mohammed Ibrahim Al Shaibani, Reem bint Ebrahim Al Hashimy, Abdul Rahman Saleh Al Saleh and Helal Saeed Al Marri. Their main roles and functions include general policy for the Expo 2020 Dubai District’s development and supervising the implementation, governance and development of all projects, initiatives, programmes and activities within the District. It will supervise the rehabilitation of the Expo 2020 Dubai District’s infrastructure and the provision of investment opportunities in the area in partnership with the private sector.

Sheikh Maktoum bin Mohammed, Deputy Ruler of Dubai, chaired the second meeting of the year of the Board of Directors of the Federal Tax Authority (FTA) which adopted the FTA’s financial statements for 2021. It noted the number of VAT registrants grew 2.4%, on the quarter, to 367.2k by the end of Q1, with the number of Excise Tax registrants 3.0% higher at 1.4k, and the number of Tax Agents increasing 3.0% to 446.  It also discussed new applications from UAE citizens to recover VAT (that came in 56.1% higher in Q1 to over US$ 50 million), incurred on building their new residences. The FTA board also examined the progress made on developing the draft corporate tax law, due to be implemented in 2023. Sheikh Maktoum also commented that “the Federal Tax Authority is committed to strengthening its relations with all entities involved in implementing the tax system in the government and private sectors, and to fulfilling its role in driving nationwide economic diversification policies through the administration and collection of federal taxes, in line with best practices.”

In December 2021, there were increases in M1 M2 and M3 Money Supply by 2.3% to US$ 186.9 billion, 3.0% to US$ 425.9 billion and 1.5% to US$ 505.9 billion respectively. The rise in M1 was due to an AED 16.6 billion increase in Monetary Deposits, with the increase in M2 down to the rise in M1, and an US$ 8.2 billion uptick in Quasi-Monetary Deposits. Although Government Deposits shed US$ 5.3 billion, M3 headed north because of the increases seen in M1 and M2. Gross banks’ assets, including bankers’ acceptances, increased by 0.8%, to US$ 905.0 billion at the end of December 2021. Gross banks’ assets, including bankers’ acceptances, increased by 0.8%, US$ 905.0 billion. Gross credit increased by 0.3% to US$ 488.8 billion due to 0.1% and 2.6% increases in Domestic Credit and Foreign Credit, respectively. Total Bank Deposits increased by 1.5% to US$ 544.0 billion because of 1.6% and 0.6% rises in both Resident Deposits and Non-Resident Deposits.

Saeed Al Tayer, MD of Empower and Chief Executive of Dewa, confirmed that Dubai’s leading district cooling provider – a nineteen-year old JV between Dewa and Tecom Investments – will probably go public by the end of the year; it seems likely that Salik and Tecom Investments may be at the front of the queue.  The company, which has a 79.5% share of Dubai’s district cooling market, serving 1.4k residential, commercial, healthcare, hospitality, education, retail and entertainment buildings. Empower posted a 4.0% increase in its 2021 profit to US$ 255 million, driven by a 9.0% revenue growth to US$ 682 million, resulting in a US$ 136 million dividend.

According to its MD, Saeed Al Tayer, Dewa is set to announce its Q1 results next month and has recorded a “strong performance”, and that “Dewa has strong cash flows and will not need to take on debt … We have no issues for the next five years and we will not seek loans”. It expects 2022 profits to be in the region of US$ 2.0 billion. Based on today’s close of trading figures, the utility has a market value of US$ 39 billion. It has projects valued at US$ 23.4 billion over the next five years, that will help it meet the increase in demand for electricity and water as the emirate’s population continues to boom; last year alone, energy demand rose 11%, nearly triple the company’s estimates.

At this week’s AGM, Emaar shareholders approved the dividend distribution proposal from the board of directors representing 15% of the share capital, along with the board of directors’ 2021 report on the company’s activities and financial position and the auditor’s report. Last year, it recorded total revenue of US$ 7.7 billion, with an EBITDA of US$ 2.5 billion. In 2021, the company posted real estate sales of US$ 9.2 billion – its highest on record – and an impressive sales backlog totalling more than US$ 12.5 billion.

Emirates NBD posted an 18.0% hike in Q1 net profit to US$ 735 million, as revenue came in 3.0% higher at US$ 1.74 billion, driven by stronger non-interest income, 4.0% higher to US$ 1.17 billion and declining impairment allowances, by 20%, to US$ 381 million. Expenses rose 5.0%, year on year, to US$ 545 million, driven by staff costs, Dubai’s biggest lender by assets also recorded its customer loan balance was 1.0% higher at US$ 115.8 billion and deposits 2.0% higher at US$ 127.8 billion; total assets remained flat at US$ 189.1 billion. The bank raised its interest rate by 15bp because of a similar decision by the Central Bank of the UAE, following the Fed’s move last month; it is expected that rates could be raised five more times this year. Despite rates moving higher, it is felt that local lending growth is likely to accelerate, underpinned by the UAE’s economic growth.

Emirates Islamic recorded a 62% increase in net profit to US$ 93 million, driven by a 14% growth in income and a 72% improvement in provisions; operating expenses surged by 10% on the year. There were increases across the board, with operating profit 17% higher, total assets up 8% to US$ 19.1 billion, customer financing rising 66% to US$ 12.3 billion and customer deposits 9% to the good at US$ 14.0 billion.

The DFM opened on Monday, 18 April, 252 points (7.5%) up on the previous five weeks, moved 81 points (2.2%) higher to close on Friday 22 April, at 3,683. Emaar Properties, US$ 0.31 higher the previous seven weeks, nudged US$ 0.06 higher to US$ 1.72. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.78, US$ 4.03, US$ 1.71 and US$ 0.71 and closed on US$ 0.78, 4.14, US$ 1.71 and US$ 0.73. On 22 April, trading was at 115 million shares, with a value of US$ 83 million, compared to 170 million shares, with a value of US$ 142 million, on 15 April 2022.

By Friday 22 April 2022, Brent, US$ 12.28 (3.4%) higher the previous fortnight, had shed US$ 9.95 (8.9%), to close on US$ 111.70. Gold, US$ 48 (2.5%) higher the previous fortnight, lost most of that gain, losing US$ 42 (2.1%), to close Friday 22 April on US$ 1,933.

Yesterday, Elon Musk confirmed that he has secured a funding commitment of US$ 46.5 billion to finance his bid to buy Twitter, of which US$ 33.5 billion has been personally committed by means of US$ 21 billion of equity and another US$ 12.5 billion coming from margin loans Furthermore, banks, including Morgan Stanley and “certain other financial institutions”, have committed to offer a further US$ 13 billion in debt secured against Twitter. Last week the Tesla founder offered to buy Twitter for US$ 43 billion.

Tesla shares jumped 5.2%, to US$ 1,028, when the electric vehicle maker posted a record US$ 3.3 billion Q1 profit, driven by an increased delivery of cars, despite Covid-induced supply disruptions and a global shortage of semiconductors; the profit figure dwarfed the 2021 comparative figure of US$ 500 million. This is the eleventh straight profitable quarter and the fourth consecutive three-month period with more than US$ 1 billion profit. Revenue was 81% higher at US$ 18.7 billion and a record 310k vehicles were delivered – 68% up on an annual basis; of that total, 295k were either Model 3 or Model Y, with the 15k balance being its more expensive Model S and Model Y. Tesla commented that  its cash and cash equivalents “increased sequentially by US$ 300 million to US$ 18 billion”, driven mainly by free cash flow of US$ 2.2 billion, partly offset by debt repayments of US$ 2.1 billion, with its total debt of less than US$ 100 million, excluding vehicle and energy product financing. It has ambitious expectations and is looking at a 50% average annual growth in vehicle deliveries, although they could be scuppered by external factors such as continuing supply chain problems, chip shortages and further lockdowns.

With French prosecutors investigating claims that fugitive former head of Nissan, Carlos Ghosn, had syphoned millions of euros from Renault through Suhail Bahwan Automobiles., there was no surprise to hear that French authorities have eventually issued an international warrant for his arrest. Ghosn fled Japan in 2019, when facing charges for financial misconduct and is now holed up in Lebanon from where he is unable to leave, as he is the subject of an Interpol Red Notice issued by Japan. It is thought that he would prefer a trial in Lebanon, on any charges brought against him by the French and Japanese courts – and was “totally confident” he could prove his innocence.

Having reported a Q1 loss of 200k subscribers, (against its forecast of a 2.5 million growth in numbers), and quarterly profit down 6.4% to US$ 1.5 billion, Netflix share value plunged 35%, and lost more than US$ 50 billion off its market value, in after-hours trading on Tuesday, making it the worst performer in the S&P 500 this year; YTD, the stock is down 62%. This was the first time in over a decade that the global streaming giant reported losing subscribers, whilst it predicted more contraction in Q2. The Ukraine crisis has seen it suspend service in Russia, resulting in a loss of 700k members. Netflix attributed some of the declineto “relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds;” it also noted that other drivers included various macro-economic factors such as sluggish economic growth, increasing inflation, geopolitical events and some continued disruption from the Covid-19 pandemic have affected its growth. Its global paid subscribers stood at 221.64 million at the end of Q1, with the company forecasting a Q2 1% fall in numbers to 219.6 million. It also announced the purchase of Helsinki-based gaming company Next Games. It does indeed face a major struggle to get back on track.

Bill Ackman’s Pershing Square Capital Management, one of the company’s twenty largest shareholders, has ditched his stake in troubled Netflix. The US billionaire investor and hedge fund manager disclosed that, in January, his firm had acquired a US$ 1.1 billion stake in Netflix, just after it had fallen 30% following a disappointing Q1 outlook. At the time, he praised Netflix’s “best-in-class management team” and said he long admired Netflix CEO Reed Hastings and the “remarkable company he and his team have built.” It is estimated that this investment, comprising 3.1 million shares, has lost him US$ 430 million in less than three months.

It is reported that Next has acquired a 46% stake in baby goods retailer JoJo Maman Bebe, with the majority 56% taken by companies managed or advised by hedge fund Davidson Kempner.  Its founder, Laura Tenison, will leave the business that she founded nearly thirty years ago. No financial details were made available but there will be no immediate job losses at the retailer, with 950 employees, which has eighty-seven brick-and-mortar shops across the UK. Next will also spend US$ 21 million in the brand, using its own cash, and plans to keep the JoJo brand distinct and grow the business globally using its online shopping infrastructure.

Workers at Apple’s Grand Central Station store in New York could become the first union at one of the tech giant’s US stores – and if successful it will follow the “union trend” started by Starbucks and Amazon. To qualify for a union election, the so-called Fruit Stand Workers United need to obtain signatures of support from 30% of colleagues at the store to qualify for a union election. The group is looking at a US$ 30 minimum hourly wage for all workers, additional holiday time and information on more robust safety protocols at the Grand Central location. Employees working in at least three other Apple stores are also attempting to organise a union.

Last year, Sina Estavi, invested US$ 2.9 million when purchasing a non-fungible token of the first tweet posted on Twitter by co-founder Jack Dorsey. Last month, the Malaysian entrepreneur decided he would sell the NFT, (and was expecting to receive at least US$ 25 million for the sale), with half of the proceeds earmarked for the charity GiveDirectly. By the beginning of the week the highest bid was at 10.1 Ether, equal to about US$ 29k.

In Australia, global hotel booking giant Trivago has been fined US$ 33 million (AUD $45 million), plus legal costs, for misleading customers with advertising that claimed it made it easy to find “the best price” for rooms. The case was brought against the company by the Australian Competition and Consumer Commission, which was pushing for a penalty twice that amount. It was estimated that consumers, who have yet to receive any compensation to date, lost around US$ 22 million. The Federal Court found the company had breached Australian Consumer Law over a “lengthy period of time”, and noted that “the television advertising conducted by Trivago during the early part of the relevant period was highly misleading,” It was noted that the firm did not make clear that it was being paid by the online booking sites and that more often or not the hotels listed at the top of the search results were not the best or cheapest deal., with Trivago promoting hotels that paid it the biggest fees.

Laying the blame at the doors of Covid lockdowns in China, shortages of materials and sky-high shipping costs, Appliances Direct warned that even though the prices of fridges, freezers and dishwashers are up by a third since last year, they are set to climb higher, as wholesale prices have jumped a further 9% in Q1.The company also noted that the cost of shipping  a fridge used to cost US$ 16, with a six-month lead time; now the cost has skyrocketed to US$ 104, with a led time of up to fourteen months. The sector does not see any improvement over the rest of the year and that factors such as shipping costs, material input prices and consumer price will continue to push prices higher, with consumer spending set to decline. Indeed, the price comparison site, Price Runner, found that prices of white goods and gadgets had soared by nearly 50% in just two years.

Not helped by yet another lockdown – this time in Shanghai – China’s March consumer spending fell, (with retail sales down 3.5% on the year), and unemployment rose, to 5.8%, (the highest level since May 2020), as Covid lockdowns confined millions of people to their homes. Meanwhile, the Q1 country’s economy grew at a faster pace than expected, with GDP up by 4.8%, compared to a year earlier. The impact of the latest lockdown measures, which started in mid-March, was initially limited but will result in a significant drag on economic growth for at least the next three months, not helped by the war in Ukraine. Analysts estimate that technology, industrial and automobile supply chains “will come to a complete halt” if Shanghai does not resume production by early May.  It is safe to report that some of the city’s residents are not happy with the situation.

Since the start of the Ukraine war, the EU has paid US$ 37.8 billion for Russian energy but any embargo on oil and gas seems a long way off, at a time when European ministers have been discussing a potential sixth round of sanctions against Russia; last year, the EU imported roughly 40% of its gas and 25% of its oil from Russia. The countries that would suffer most from a full embargo would be Germany, Italy, Austria and Hungary in particular, with their dependence on Russian gas – one thing is certain is that the EU will not throw Germany under the bus. Ukraine’s President Zelenskyy has urged the EU to impose sanctions on Russian oil and to set a deadline for ending gas imports from the country, but in reality, this is some time off. What seems likely is that coal may be banned by the end of Q3.

With pressure mounting at home, Prime Minister Boris Johnson may have found some relief in his two-day visit to India where he met with Narendra Modi to discuss a free trade deal. In recent weeks, the Indian government has signed such deals with both the UAE and Australia. However, there is every chance that this will take time and much discussion between the two parties but if it comes to fruition, it could double total trade between the UK and India to US$ 73 billion by 2035. Strangely, it seems that the UK currently sells less to India, with a population of 1.4 billion, than it does to Belgium and its 11.5 million people. Bargaining chips will include the likes of the UK wanting increased access to India’s manufacturing and services sector, areas in which India has traditionally resisted foreign involvement, as well as doing away with the protection that trade barriers have provided for Indian industries and workers. On the other side, there may be more Indian visas being allowed for Indian workers and pressure to allow Indian products, such as medicines into its market. If a free deal went through, two UK industries would benefit – Scotch whiskey, which currently attracts a 150% tariff – and the motor vehicle makers, as foreign cars attract tariffs of up to 100%. A trade deal with India would add just 0.2% to the UK’s GDP – and that’s over the course of a decade, and only if there is a substantial reduction in trade barriers. Is it worth all the bother?

As the rise in the cost of living begins to hit home in the UK, March retail sales dropped 1.4%, with online sales falling sharply, as consumers cut back on non-essentials because of lower levels of discretionary spending, and fuel sales were reduced, as people cut travel amid record petrol prices. Food sales dipped for the fifth consecutive month, as rises across the board have seen inflation rising above 7.0% and at its highest level in over thirty years. It is to be noted that although the current Ukraine crisis is a major inflationary driver, energy and fuel prices had been rising even before the onset of the war. The situation is likely to worsen, as the data was collected before April’s 54% hike in gas and electricity bills and the fact that consumer confidence continues to tank – now at its lowest level in fourteen years and the GFC.

Known for constantly changing its economic forecasts, the IMF has lowered its 2022 forecast from its January’s estimated 4.4% to its much amended 3.6%, driven by the triple whammy of surging inflation, war in Ukraine and a lingering pandemic. (The World Bank also said it was lowering its growth forecast from 4.1% to 3.2%). Global inflation pressures continue unabated and most central banks have been behind the eight ball for too long and future drastic action could weigh down on output and economic activity. Inflation is higher in most countries and is expected to persist longer; there is the possibility of social unrest as energy and food prices head inexorably higher. Meanwhile the Ukraine crisis, (which will see  the embattled nation hit with a massive 35% contraction this year), has led to increasing energy and commodity prices around the world and is resulting in less output and more inflation. On top of this comes yet another slowdown of the Chinese economy with more frequent lockdowns due to Omicron, with the latest being Shanghai in lock down further exacerbating the ongoing supply chain problems.

The IMF has not only cut global forecasts but has also cut that for the UK by 1.0% to 3.7% this year, noting that the war in Ukraine will “severely set back” the global economic recovery, with the UK hit harder than most.; a direct consequence of the conflict is that prices for energy and food have moved markedly higher. In 2021, the IMF placed the UK as the fastest growing G7 economy – a year later it is marked as the second fastest growing economy, whilst in 2023, it is slated to be the slowest growing member of the G7, at 1.2%, (down from the initial 2.3%), driven by price pressures forcing households to cut spending, while rising interest rates are expected to “cool investment”. Although part of the reason was that the UK rebounded quicker from the pandemic than its G7 peers, a bigger problem seems to be the fact that inflation could top 9% later this year – don’t forget that the BoE still had a 2.0% target as late as last month. UK inflation is expected to be 5.3% next year – the highest in the G7, and higher than all EU members, and only exceeded in the G20 by crisis-ridden Argentina, Turkey and Russia. Another dampener for consumer confidence is the inevitable rise of interest rates that will slow economic progress in the UK. Sixty-one years later, Bob Dylan’s words come to mind – And The First One Now Will Later Be Last!

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And The First One Now Will Later Be Last!

And The First One Now Will Later Be Last!                                                22 April 2022

For the past week, ending 22 April 2022, Dubai Land Department recorded a total of 2,145 real estate and properties transactions, with a gross value of US$ 1.72 billion. A total of 225 plots were sold for US$ 305 million, with 1,436 apartments and villas selling for US$ 872 million. The two top transaction sales were for two plots of land – one in Hadaeq Sheikh Mohammed Bin Rashid for US$ 26 million, and another sold for US$ 14 million in Palm Jumeirah. The three leading locations for sales transactions were Al Hebiah Fifth with 114 sales worth US$ 69 million, followed by Jabal Ali First, with 33 sales transactions worth US$ 39 million, and Wadi Al Safa 5, with 11 sales transactions worth US$ 13 million. The top three apartment sales were an apartment sold for US$ 126 million in Marsa Dubai, another for US$ 96 million in Burj Khalifa, and third at US$ 77 million in Palm Jumeirah. The sum of the amount of mortgaged properties for the week was US$ 474 billion, with the highest being for a plot of land in Nad Al Shiba Third, mortgaged for US$ 47 million.

Latest figures from March’s ValuStrat Price Index reported property prices surging 18.8%, year-on-year, and 1.2% month-on-month. When split between villas/townhouses and apartments, the profits were up 34.1% and 2.1% and 8.4% and 0.4% for apartments respectively.  In the villa sector, the four leading locations, with the highest price rises, were Jumeirah Islands (40.3%), Arabian Ranches (40.3%), The Lakes (37.1%) and Jumeirah Village (35.5%). Some areas such as Mudon and Green Community West, performed better and recorded above average price growth of 0.5% and 0.8%, respectively. The index, which measures Dubai’s residential capital value performance, also reported that the leading locations for apartment price rises were Palm Jumeirah (21.9%), Jumeirah Beach Residence (16.0%), Burj Khalifa (15.3%), The Views (10.9 per cent), and The Greens (9.7%). The study also noted that “the villa capital values index reached 94.1 points last month, just 5.9 points below the price index base of January 2014.’ as the weighted average capital value for villas grew 6.3% quarterly and 34.1% annually. Meanwhile apartment capital values index reached 69.5 points in March, 30.5 lower than the price index base of January 2014. As Dubai’s global popularity grows, there is no doubt that Dubai’s property sector will benefit from the fact that its property prices are very cheap, when compared to those of their international rivals. The outlook for both segments remains positive, with villa prices moving faster and are expected to cross 2014 peak levels by the end of 2022.

CBRE noted that Dubai’s total Q1 transaction volumes reached 19k, the highest ever recorded in any first quarter of the year. Total transactions volumes recorded 75.1%, year-on-year growth, with off-plan and ready transactions increasing by 114.9% and 52.9% respectively. Secondary market transactions accounted for 56.1% of total transactions, with off-plan transactions accounting for the 43.9% balance, but that 68.6% of total Q1 sales were initial sales from the developer, and 31.4% of sales were for subsequent sales of properties. Over the remainder of 2022, an additional 42k units are expected to be completed to meet rising demand for residential units.

According to Luxhabitat Sotheby – utilising data from the Dubai Land Department – Dubai luxury property prices dipped 6.0% in Q1, with an average price of prime property at US$ 1.23 million. In this sector, it estimated that 5.3k apartments and 742 villas were sold, with the three leading locations, in terms of sales volume, being Mohammed Bin Rashid City at US$ 869 million, Palm Jumeirah at US$ 845 million and Downtown Dubai at US$ 708 million. In the prime residential market, the Jumeirah Islands area sales more than doubled to US$ 55 million, followed by Mohammed Bin Rashid City and Al Barari. During Q1, there was a 32.3%, quarter on quarter, jump in the prime villa market, with total sales of US$ 1.12 billion at an average villa price of US$ 2.89 million. The most popular areas for villa transactions in Q1 were Mohammed bin Rashid City, followed by Palm Jumeirah and Emirates Living. Sales volume of apartments decreased by 10% to US$ 2.97 billion with the average prime apartment selling at US$ 654k, equating to an average price of US$ 390 per sq ft. The three most popular ‘apartment areas’ were Downtown Dubai, Business Bay and Palm Jumeirah. The top six villa transactions in Q1 were Palm Jumeirah – Frond N (US$ 76 million), Jumeirah Bay Island (US$ 24 million), Palm Jumeirah Frond J (US$ 24 million), Emirates Hills – Sector L (US$ 20 million), Burj Khalifa apartment (US$ 20 million) and Business Bay Dorchester Collection (US$ 19 million).

Having invested US$ 272 million in a plot of land in Dubai South, and signing an exclusive agreement with the local authority, Discovery Land is planning to build an ultra-luxury golf community. The US-based developer indicated that the project will consist of a two sq mt golf community with mansions, villas, an 18-hole golf course and other premier amenities. This will become the fifth golf community in the emirate, following Emirates Hills, Arabian ranches Jumeirah Golf Estates and Dubai Hills.

Launched in 2006, Dubai South was planned to be an emerging 145 sq km, master-planned city which also includes Al Maktoum International Airport and the Expo 2020 site, which is currently being transformed into District 2020. This will become the country’s first fifteen-minute city, a cycle-friendly, traffic-free suburb of the growing metropolis, and will include an autonomous-vehicle route, a 10 km cycling track, interconnected, wide pedestrian pathways and a 5 km jogging track. The former Expo village will house fifteen mid-rise residential buildings, in four clusters, which will open “in different phases between now and October”.

HH Sheikh bin Mohammed announced further changes in the government’s residency visa law, making it easier, for skilled professionals, earning more than US$ 100k a year, as well as those purchasing a property worth more than US$ 545k, to apply for a ten-year ‘Golden Visa’. Undoubtedly, Dubai property sector will be a beneficiary of the ten changes made this week, as the initial introduction of the scheme in 2020, (which saw 44k visas issued in Dubai), was one of the main drivers in the sector’s post-Covid bounce back.Most analysts agree that the new changes are a further step in opening up Dubai to foreign investors and will likely lead to a significant influx in property buyers in both the residential and commercial sectors. Another change was that off-plan investors can also apply for residency, with buyers no longer restricted having to have a title deed of a ready property in hand.

The latest Knight Frank report indicates that, in Q1, Dubai office rents, in five out of the twenty-seven locations, have returned to pre-pandemic levels. The best performing location was Business Bay where rents were 33.0% higher, on the year, at US$ 28 per sq ft, with the major sector being technology business, many of which are set-ups, which seem to be filling in the space left by the likes of global international entities – professional services, banks and blue-chip companies – that have been shrinking their occupancy footprint in a move to hybrid working models. Average Grade A rents in the CBD were up 9.0%, year-on-year, to US$ 500 per sq mt per annum in Q1 2022; financial and technology firms remain the main drivers of demand for Grade A office space. There is no doubt that the local booming economy is helping growth in this sector – it is estimated that Q4 GDP growth came in at 7.8%. The Federal Competitiveness and Statistics Centre confirmed that the country’s non-oil sector contribution to the 2021 GDP equated to 72.3% – 1.0% higher than in 2020, and 3.8% at constant prices. The hotels & restaurants, wholesale & retail and health & social services sectors contributed 21.3%, 14.1% and 13.8% respectively. JLL’s Q1 2002 market review confirmed that the UAE’s hotel market performed strongly, driven by Expo 2020 Dubai and returning international visitors, with both upper-upscale and midscale hotels witnessing higher average daily rates.

This month saw Dubai’s population top the 3.5 million mark, according to Dubai Statistics Centre’s latest data and that despite the pandemic, it has increased by over 100k since 2020, driven, of late, by an influx of foreigners, especially the high net worth individuals. 69.2% of the population, 2.4 million, is male. The quicker than expected economic recovery has resulted in the labour-intensive industries, such as retail, hospitality, aviation, tourism and real estate increasing their payroll numbers. Despite the population continuing to grow, the DSC estimates the unemployment rate in Dubai stood at just 0.5%, resulting in the emirate having one of the world’s lowest unemployment rates.

With the NFT market booming, (with some exceptions as noted later), Emirates is hoping to cash in by planning to launch collectible and utility-based non-fungible tokens, with a launch expected in the coming months; it will also build brand experiences in the metaverse. Five years ago, Emirates Introduced Virtual Reality technology on its website and app, and last year, it became the first airline to launch its own VR app on the Oculus store, offering users cabin interior experiences on board the carrier’s A380 and Boeing 777-300ER aircraft. The airline’s chairman, Sheikh Ahmed bin Saeed, noted that “Dubai and the UAE are blazing the way in the digital economy, having a clear vision supported by practical policies and regulatory frameworks in areas such as virtual assets, artificial intelligence and data protection.”

With global trade picking up, the resultant higher volumes in the Asia Pacific – 1.2% up at 8.5k TEUs (twenty-foot equivalent units), Middle East, Europe and Africa (1.4% higher to 8.0k TEUs), and Americas regions, (up 4.0% to 2.8k TEUs) – pushed DP World’s gross container shipping volumes 1.7% higher in Q1 to 19.3 million TEUs. In Q1, the company signed two important deals in Africa – one acquiring South Africa’s Imperial Logistics, an integrated logistics and market access company, for US$ 890 million, and a preliminary agreement with the Angolan government to develop the country’s trade and logistics sector. DP World is “looking ahead, the near-term outlook is mixed given the geopolitical environment, but we remain positive on the medium to long-term fundamentals of the industry,”

This week, the Ministry of Finance, the Issuer, in collaboration with the Central Bank of the UAE, as the issuing and paying agent, launched conventional AED denominated Treasury Bonds of the Government of the UAE (T-Bonds), with a benchmark auction size of US$ 409 million; the first auction date is scheduled next month, followed by a raft of periodical auctions. Initially the securities will be in 2/3/5-year tenures; followed later by a ten-year bond. The main purpose for the issuance of T-Bonds is to assist in the building of a local currency bond market, diversifying financing resources, and boosting the local financial and banking sector. Apart from the issuance providing a pricing reference for other UAE markets (bond and equity), it enhances the ability to cover future funding needs in UAE dirham and provides opportunities for foreign investors to invest in UAE dirham-denominated bonds (in local currency). It will also help in the development of a Dirham local market for securities issued by the public sector in the country.

Following the success of the initial fifty-dirham polymer note, enhanced by advanced technical characteristics and security features. the Central Bank of the UAE has launched two new banknotes, The ten-dirham banknote entered circulation yesterday 21 April and the five dirham note is out next Tuesday 26 April. Current banknotes of both denominations will remain in circulation, along with the new polymer notes which are more durable and sustainable which will last two or more times longer in circulation.

This week, HH Sheikh Mohammed bin Rashid Al Maktoum issued Decrees No. (15) forming the Supreme Committee to Supervise the Expo 2020 Dubai District, and No. (16) of 2022 extending the terms of the Expo 2020 Dubai Preparatory Committee, and the Expo 2020 Dubai Bureau and its Director General by six months. The new Committee will be chaired by Sheikh Ahmed bin Saeed Al Maktoum, with members of the Supreme Committee to Supervise the Expo 2020 Dubai District being Mohammed Ibrahim Al Shaibani, Reem bint Ebrahim Al Hashimy, Abdul Rahman Saleh Al Saleh and Helal Saeed Al Marri. Their main roles and functions include general policy for the Expo 2020 Dubai District’s development and supervising the implementation, governance and development of all projects, initiatives, programmes and activities within the District. It will supervise the rehabilitation of the Expo 2020 Dubai District’s infrastructure and the provision of investment opportunities in the area in partnership with the private sector.

Sheikh Maktoum bin Mohammed, Deputy Ruler of Dubai, chaired the second meeting of the year of the Board of Directors of the Federal Tax Authority (FTA) which adopted the FTA’s financial statements for 2021. It noted the number of VAT registrants grew 2.4%, on the quarter, to 367.2k by the end of Q1, with the number of Excise Tax registrants 3.0% higher at 1.4k, and the number of Tax Agents increasing 3.0% to 446.  It also discussed new applications from UAE citizens to recover VAT (that came in 56.1% higher in Q1 to over US$ 50 million), incurred on building their new residences. The FTA board also examined the progress made on developing the draft corporate tax law, due to be implemented in 2023. Sheikh Maktoum also commented that “the Federal Tax Authority is committed to strengthening its relations with all entities involved in implementing the tax system in the government and private sectors, and to fulfilling its role in driving nationwide economic diversification policies through the administration and collection of federal taxes, in line with best practices.”

In December 2021, there were increases in M1 M2 and M3 Money Supply by 2.3% to US$ 186.9 billion, 3.0% to US$ 425.9 billion and 1.5% to US$ 505.9 billion respectively. The rise in M1 was due to an AED 16.6 billion increase in Monetary Deposits, with the increase in M2 down to the rise in M1, and an US$ 8.2 billion uptick in Quasi-Monetary Deposits. Although Government Deposits shed US$ 5.3 billion, M3 headed north because of the increases seen in M1 and M2. Gross banks’ assets, including bankers’ acceptances, increased by 0.8%, to US$ 905.0 billion at the end of December 2021. Gross banks’ assets, including bankers’ acceptances, increased by 0.8%, US$ 905.0 billion. Gross credit increased by 0.3% to US$ 488.8 billion due to 0.1% and 2.6% increases in Domestic Credit and Foreign Credit, respectively. Total Bank Deposits increased by 1.5% to US$ 544.0 billion because of 1.6% and 0.6% rises in both Resident Deposits and Non-Resident Deposits.

Saeed Al Tayer, MD of Empower and Chief Executive of Dewa, confirmed that Dubai’s leading district cooling provider – a nineteen-year old JV between Dewa and Tecom Investments – will probably go public by the end of the year; it seems likely that Salik and Tecom Investments may be at the front of the queue.  The company, which has a 79.5% share of Dubai’s district cooling market, serving 1.4k residential, commercial, healthcare, hospitality, education, retail and entertainment buildings. Empower posted a 4.0% increase in its 2021 profit to US$ 255 million, driven by a 9.0% revenue growth to US$ 682 million, resulting in a US$ 136 million dividend.

According to its MD, Saeed Al Tayer, Dewa is set to announce its Q1 results next month and has recorded a “strong performance”, and that “Dewa has strong cash flows and will not need to take on debt … We have no issues for the next five years and we will not seek loans”. It expects 2022 profits to be in the region of US$ 2.0 billion. Based on today’s close of trading figures, the utility has a market value of US$ 39 billion. It has projects valued at US$ 23.4 billion over the next five years, that will help it meet the increase in demand for electricity and water as the emirate’s population continues to boom; last year alone, energy demand rose 11%, nearly triple the company’s estimates.

At this week’s AGM, Emaar shareholders approved the dividend distribution proposal from the board of directors representing 15% of the share capital, along with the board of directors’ 2021 report on the company’s activities and financial position and the auditor’s report. Last year, it recorded total revenue of US$ 7.7 billion, with an EBITDA of US$ 2.5 billion. In 2021, the company posted real estate sales of US$ 9.2 billion – its highest on record – and an impressive sales backlog totalling more than US$ 12.5 billion.

Emirates NBD posted an 18.0% hike in Q1 net profit to US$ 735 million, as revenue came in 3.0% higher at US$ 1.74 billion, driven by stronger non-interest income, 4.0% higher to US$ 1.17 billion and declining impairment allowances, by 20%, to US$ 381 million. Expenses rose 5.0%, year on year, to US$ 545 million, driven by staff costs, Dubai’s biggest lender by assets also recorded its customer loan balance was 1.0% higher at US$ 115.8 billion and deposits 2.0% higher at US$ 127.8 billion; total assets remained flat at US$ 189.1 billion. The bank raised its interest rate by 15bp because of a similar decision by the Central Bank of the UAE, following the Fed’s move last month; it is expected that rates could be raised five more times this year. Despite rates moving higher, it is felt that local lending growth is likely to accelerate, underpinned by the UAE’s economic growth.

Emirates Islamic recorded a 62% increase in net profit to US$ 93 million, driven by a 14% growth in income and a 72% improvement in provisions; operating expenses surged by 10% on the year. There were increases across the board, with operating profit 17% higher, total assets up 8% to US$ 19.1 billion, customer financing rising 66% to US$ 12.3 billion and customer deposits 9% to the good at US$ 14.0 billion.

The DFM opened on Monday, 18 April, 252 points (7.5%) up on the previous five weeks, moved 81 points (2.2%) higher to close on Friday 22 April, at 3,683. Emaar Properties, US$ 0.31 higher the previous seven weeks, nudged US$ 0.06 higher to US$ 1.72. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.78, US$ 4.03, US$ 1.71 and US$ 0.71 and closed on US$ 0.78, 4.14, US$ 1.71 and US$ 0.73. On 22 April, trading was at 115 million shares, with a value of US$ 83 million, compared to 170 million shares, with a value of US$ 142 million, on 15 April 2022.

By Friday 22 April 2022, Brent, US$ 12.28 (3.4%) higher the previous fortnight, had shed US$ 9.95 (8.9%), to close on US$ 111.70. Gold, US$ 48 (2.5%) higher the previous fortnight, lost most of that gain, losing US$ 42 (2.1%), to close Friday 22 April on US$ 1,933.

Yesterday, Elon Musk confirmed that he has secured a funding commitment of US$ 46.5 billion to finance his bid to buy Twitter, of which US$ 33.5 billion has been personally committed by means of US$ 21 billion of equity and another US$ 12.5 billion coming from margin loans Furthermore, banks, including Morgan Stanley and “certain other financial institutions”, have committed to offer a further US$ 13 billion in debt secured against Twitter. Last week the Tesla founder offered to buy Twitter for US$ 43 billion.

Tesla shares jumped 5.2%, to US$ 1,028, when the electric vehicle maker posted a record US$ 3.3 billion Q1 profit, driven by an increased delivery of cars, despite Covid-induced supply disruptions and a global shortage of semiconductors; the profit figure dwarfed the 2021 comparative figure of US$ 500 million. This is the eleventh straight profitable quarter and the fourth consecutive three-month period with more than US$ 1 billion profit. Revenue was 81% higher at US$ 18.7 billion and a record 310k vehicles were delivered – 68% up on an annual basis; of that total, 295k were either Model 3 or Model Y, with the 15k balance being its more expensive Model S and Model Y. Tesla commented that  its cash and cash equivalents “increased sequentially by US$ 300 million to US$ 18 billion”, driven mainly by free cash flow of US$ 2.2 billion, partly offset by debt repayments of US$ 2.1 billion, with its total debt of less than US$ 100 million, excluding vehicle and energy product financing. It has ambitious expectations and is looking at a 50% average annual growth in vehicle deliveries, although they could be scuppered by external factors such as continuing supply chain problems, chip shortages and further lockdowns.

With French prosecutors investigating claims that fugitive former head of Nissan, Carlos Ghosn, had syphoned millions of euros from Renault through Suhail Bahwan Automobiles., there was no surprise to hear that French authorities have eventually issued an international warrant for his arrest. Ghosn fled Japan in 2019, when facing charges for financial misconduct and is now holed up in Lebanon from where he is unable to leave, as he is the subject of an Interpol Red Notice issued by Japan. It is thought that he would prefer a trial in Lebanon, on any charges brought against him by the French and Japanese courts – and was “totally confident” he could prove his innocence.

Having reported a Q1 loss of 200k subscribers, (against its forecast of a 2.5 million growth in numbers), and quarterly profit down 6.4% to US$ 1.5 billion, Netflix share value plunged 35%, and lost more than US$ 50 billion off its market value, in after-hours trading on Tuesday, making it the worst performer in the S&P 500 this year; YTD, the stock is down 62%. This was the first time in over a decade that the global streaming giant reported losing subscribers, whilst it predicted more contraction in Q2. The Ukraine crisis has seen it suspend service in Russia, resulting in a loss of 700k members. Netflix attributed some of the decline to “relatively high household penetration — when including the large number of households sharing accounts — combined with competition, is creating revenue growth headwinds;” it also noted that other drivers included various macro-economic factors such as sluggish economic growth, increasing inflation, geopolitical events and some continued disruption from the Covid-19 pandemic have affected its growth. Its global paid subscribers stood at 221.64 million at the end of Q1, with the company forecasting a Q2 1% fall in numbers to 219.6 million. It also announced the purchase of Helsinki-based gaming company Next Games. It does indeed face a major struggle to get back on track.

Bill Ackman’s Pershing Square Capital Management, one of the company’s twenty largest shareholders, has ditched his stake in troubled Netflix. The US billionaire investor and hedge fund manager disclosed that, in January, his firm had acquired a US$ 1.1 billion stake in Netflix, just after it had fallen 30% following a disappointing Q1 outlook. At the time, he praised Netflix’s “best-in-class management team” and said he long admired Netflix CEO Reed Hastings and the “remarkable company he and his team have built.” It is estimated that this investment, comprising 3.1 million shares, has lost him US$ 430 million in less than three months.

It is reported that Next has acquired a 46% stake in baby goods retailer JoJo Maman Bebe, with the majority 56% taken by companies managed or advised by hedge fund Davidson Kempner.  Its founder, Laura Tenison, will leave the business that she founded nearly thirty years ago. No financial details were made available but there will be no immediate job losses at the retailer, with 950 employees, which has eighty-seven brick-and-mortar shops across the UK. Next will also spend US$ 21 million in the brand, using its own cash, and plans to keep the JoJo brand distinct and grow the business globally using its online shopping infrastructure.

Workers at Apple’s Grand Central Station store in New York could become the first union at one of the tech giant’s US stores – and if successful it will follow the “union trend” started by Starbucks and Amazon. To qualify for a union election, the so-called Fruit Stand Workers United need to obtain signatures of support from 30% of colleagues at the store to qualify for a union election. The group is looking at a US$ 30 minimum hourly wage for all workers, additional holiday time and information on more robust safety protocols at the Grand Central location. Employees working in at least three other Apple stores are also attempting to organise a union.

Last year, Sina Estavi, invested US$ 2.9 million when purchasing a non-fungible token of the first tweet posted on Twitter by co-founder Jack Dorsey. Last month, the Malaysian entrepreneur decided he would sell the NFT, (and was expecting to receive at least US$ 25 million for the sale), with half of the proceeds earmarked for the charity GiveDirectly. By the beginning of the week the highest bid was at 10.1 Ether, equal to about US$ 29k.

In Australia, global hotel booking giant Trivago has been fined US$ 33 million (AUD $45 million), plus legal costs, for misleading customers with advertising that claimed it made it easy to find “the best price” for rooms. The case was brought against the company by the Australian Competition and Consumer Commission, which was pushing for a penalty twice that amount. It was estimated that consumers, who have yet to receive any compensation to date, lost around US$ 22 million. The Federal Court found the company had breached Australian Consumer Law over a “lengthy period of time”, and noted that “the television advertising conducted by Trivago during the early part of the relevant period was highly misleading,” It was noted that the firm did not make clear that it was being paid by the online booking sites and that more often or not the hotels listed at the top of the search results were not the best or cheapest deal., with Trivago promoting hotels that paid it the biggest fees.

Laying the blame at the doors of Covid lockdowns in China, shortages of materials and sky-high shipping costs, Appliances Direct warned that even though the prices of fridges, freezers and dishwashers are up by a third since last year, they are set to climb higher, as wholesale prices have jumped a further 9% in Q1.The company also noted that the cost of shipping  a fridge used to cost US$ 16, with a six-month lead time; now the cost has skyrocketed to US$ 104, with a led time of up to fourteen months. The sector does not see any improvement over the rest of the year and that factors such as shipping costs, material input prices and consumer price will continue to push prices higher, with consumer spending set to decline. Indeed, the price comparison site, Price Runner, found that prices of white goods and gadgets had soared by nearly 50% in just two years.

Not helped by yet another lockdown – this time in Shanghai – China’s March consumer spending fell, (with retail sales down 3.5% on the year), and unemployment rose, to 5.8%, (the highest level since May 2020), as Covid lockdowns confined millions of people to their homes. Meanwhile, the Q1 country’s economy grew at a faster pace than expected, with GDP up by 4.8%, compared to a year earlier. The impact of the latest lockdown measures, which started in mid-March, was initially limited but will result in a significant drag on economic growth for at least the next three months, not helped by the war in Ukraine. Analysts estimate that technology, industrial and automobile supply chains “will come to a complete halt” if Shanghai does not resume production by early May.  It is safe to report that some of the city’s residents are not happy with the situation.

Since the start of the Ukraine war, the EU has paid US$ 37.8 billion for Russian energy but any embargo on oil and gas seems a long way off, at a time when European ministers have been discussing a potential sixth round of sanctions against Russia; last year, the EU imported roughly 40% of its gas and 25% of its oil from Russia. The countries that would suffer most from a full embargo would be Germany, Italy, Austria and Hungary in particular, with their dependence on Russian gas – one thing is certain is that the EU will not throw Germany under the bus. Ukraine’s President Zelenskyy has urged the EU to impose sanctions on Russian oil and to set a deadline for ending gas imports from the country, but in reality, this is some time off. What seems likely is that coal may be banned by the end of Q3.

With pressure mounting at home, Prime Minister Boris Johnson may have found some relief in his two-day visit to India where he met with Narendra Modi to discuss a free trade deal. In recent weeks, the Indian government has signed such deals with both the UAE and Australia. However, there is every chance that this will take time and much discussion between the two parties but if it comes to fruition, it could double total trade between the UK and India to US$ 73 billion by 2035. Strangely, it seems that the UK currently sells less to India, with a population of 1.4 billion, than it does to Belgium and its 11.5 million people. Bargaining chips will include the likes of the UK wanting increased access to India’s manufacturing and services sector, areas in which India has traditionally resisted foreign involvement, as well as doing away with the protection that trade barriers have provided for Indian industries and workers. On the other side, there may be more Indian visas being allowed for Indian workers and pressure to allow Indian products, such as medicines into its market. If a free deal went through, two UK industries would benefit – Scotch whiskey, which currently attracts a 150% tariff – and the motor vehicle makers, as foreign cars attract tariffs of up to 100%. A trade deal with India would add just 0.2% to the UK’s GDP – and that’s over the course of a decade, and only if there is a substantial reduction in trade barriers. Is it worth all the bother?

As the rise in the cost of living begins to hit home in the UK, March retail sales dropped 1.4%, with online sales falling sharply, as consumers cut back on non-essentials because of lower levels of discretionary spending, and fuel sales were reduced, as people cut travel amid record petrol prices. Food sales dipped for the fifth consecutive month, as rises across the board have seen inflation rising above 7.0% and at its highest level in over thirty years. It is to be noted that although the current Ukraine crisis is a major inflationary driver, energy and fuel prices had been rising even before the onset of the war. The situation is likely to worsen, as the data was collected before April’s 54% hike in gas and electricity bills and the fact that consumer confidence continues to tank – now at its lowest level in fourteen years and the GFC.

Known for constantly changing its economic forecasts, the IMF has lowered its 2022 forecast from its January’s estimated 4.4% to its much amended 3.6%, driven by the triple whammy of surging inflation, war in Ukraine and a lingering pandemic. (The World Bank also said it was lowering its growth forecast from 4.1% to 3.2%). Global inflation pressures continue unabated and most central banks have been behind the eight ball for too long and future drastic action could weigh down on output and economic activity. Inflation is higher in most countries and is expected to persist longer; there is the possibility of social unrest as energy and food prices head inexorably higher. Meanwhile the Ukraine crisis, (which will see  the embattled nation hit with a massive 35% contraction this year), has led to increasing energy and commodity prices around the world and is resulting in less output and more inflation. On top of this comes yet another slowdown of the Chinese economy with more frequent lockdowns due to Omicron, with the latest being Shanghai in lock down further exacerbating the ongoing supply chain problems.

The IMF has not only cut global forecasts but has also cut that for the UK by 1.0% to 3.7% this year, noting that the war in Ukraine will “severely set back” the global economic recovery, with the UK hit harder than most.; a direct consequence of the conflict is that prices for energy and food have moved markedly higher. In 2021, the IMF placed the UK as the fastest growing G7 economy – a year later it is marked as the second fastest growing economy, whilst in 2023, it is slated to be the slowest growing member of the G7, at 1.2%, (down from the initial 2.3%), driven by price pressures forcing households to cut spending, while rising interest rates are expected to “cool investment”. Although part of the reason was that the UK rebounded quicker from the pandemic than its G7 peers, a bigger problem seems to be the fact that inflation could top 9% later this year – don’t forget that the BoE still had a 2.0% target as late as last month. UK inflation is expected to be 5.3% next year – the highest in the G7, and higher than all EU members, and only exceeded in the G20 by crisis-ridden Argentina, Turkey and Russia. Another dampener for consumer confidence is the inevitable rise of interest rates that will slow economic progress in the UK. Sixty-one years later, Bob Dylan’s words come to mind – And The First One Now Will Later Be Last!

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Forgive Them Father!

Forgive Them Father!                                                                        15 April 2022

For the past week, ending 15 April 2022, Dubai Land Department recorded a total of 1,968 real estate and properties transactions, with a gross value of US$ 2.13 billion. A total of 246 plots were sold for US$ 406 million, with 1,312 apartments and villas selling for US$ 807 million. A total of 66 land plots and 264 apartments and villas were mortgaged for US$ 292 million and US$ 490 million respectively. Eighty properties were granted between first-degree relatives, worth US$ 136 million.

Dubai recorded its strongest ever Q1 in terms of residential transactions, at 19k, with the total volume of deals reaching 7.9k in March 2022, up 83.4% from a year earlier. Of that total, off-plan sales increased by 94.6% and secondary market sales by 76.1% in the quarter. Prices continue to head north but seem to be growing at a slower rate, ahead of the inevitable rate hikes and a further tightening of payment plans. Dubai’s residential market has yet to see this impact on transactional activity.

One interesting feature is that rents, that seem to have lagged somewhat behind the marked increase in prices, seem to have started catching up; in Q4, average apartment rents in Dubai rose by 4.0% – the steepest increase since 2014. Average annual rents in the twelve months to March 2022 have increased by 13.1%, with average apartment and villa rents increasing by 11.7% and 22.5% respectively, with rents at US$ 21.8k and US$ 65.0k. The latest data from CBRE also notes that March average prices were 11.3% higher on the year – both villa and apartment up 20.2% and 10.0%, with prices per sq ft at US$ 345 and US$ 305; based on this, the consultancy indicates that current prices are 26.2% and 12.3% lower than late 2014 record highs. Palm Jumeirah recorded both the highest average annual rents for apartments – at US$ 54k – and the villas segment of the sales market, at US$ 793 per sq ft. Downtown Dubai recorded the highest apartment average sales rate per square foot at US$ 551, with Al Barari the highest for rents at US$ 219k.

Month on month, March prices for apartments in the thirty-three locations surveyed rose in twenty-one areas, with the biggest rises noted in Green Community (4.9%), Dubai Sports City (4.3%), Arjan (4.2%), Jebel Ali (4.2%), Remraam (4.0%), Business Bay (3.9%), Downtown (3.0%) and Palm Jumeirah (3.0%).  The worst performing were Liwan (-2.9%), Dubai Silicon Oasis (-2.6%), Dubai Production City (2.5%), Dubai Science Park (-1.9%) and Discovery Gardens (-1.6%). Thirty locations for villas saw March price increases in twenty areas, with the six biggest seen in Palm Jumeirah (4.8%), Jumeirah (4.8%), District One (3.8%), Jumeirah Islands (2.9%), Jumeirah Golf Estates (2.9%) and The Meadows (2.7%). The biggest monthly losers were Al Barari (-2.6%), Jumeirah Village Triangle (-2.5%), Jumeirah Park (-2.0%), Victory Heights (-2.0%), Green Community (-1.9%) and The Springs (-1.8%).

Official data indicates that the number of residential units in Dubai, at the end of 2015, stood at 508k and had grown by 245k (48.2%) in the ensuing six years to end 2021 on 753k. Over that period, the population expanded by 960k (38.9%) to 3.43 million. If that trend were to continue – and the probability is that this is on the conservative side – 344k additional residential units will be added to make the total of Dubai residences to 1.087 million, whilst the population by the end of 2027 could be 4.76 million.

Two points to note is that the population expansion stalled in 2020, because of Covid, growing by just 0.4% from 3.19 million to 3.32 million in that year, whilst the number of residential units rose 38k (5.6%) to 712k, (581k apartments and 131k villas/townhouses). Last year, a probable 41k units, (5.8% higher), were added to the emirate’s portfolio, whilst the emirate welcomed only 110k (3.3%) new net residents. There have been reports that the current high property prices could be 20% down on 2015. This should be taken with a pinch of salt because this blog believes that current prices – on a like for like basis – are markedly higher. Since 2015, there has been an almost 50% hike in property numbers so these units did not exist six years ago. Furthermore, it is more than likely that the size of new units have become smaller, so distorting any direct comparison between the two periods.

Since the beginning of March, Azizi Developments announced that it had sold 50% of phase 1 of its three building Park Avenue project in MBR City, and that it would release the remaining, and previously unseen, units in the coming weeks. The development comprises 372 residential and 29 retail units, with each of the three buildings having its own fully equipped gym and swimming pool. Work on all three towers is progressing well, with the structure work on Park Avenue l, ll and lll 66%, 77% and 79% complete.

Hotel occupancy in Dubai reached a 15-year high last month, last recorded in March 2007, on the back of Expo 2020, reporting 91.7% occupancy, driven by the final weeks of Expo 2020, which had attracted over twenty-four million visits over the six months ending 31 March 2022. It must be remembered that in 2007 the emirate’s room portfolio was 80k lower. The latest STR figures confirmed average daily rates hit US$ 243 and revenue per available room at US$ 223, which was the highest since December 2015. Last month, there were twenty-five days when occupancy topped 90%, with 96.0% posted on 24 March. The consultancy also indicated that in January there were forty-eight – to a total of 759 – hotels and hotel establishments accounted for in Dubai.  January guest nights were 14.7% higher, compared to a year earlier, with a total of 3.04 million.

2021 witnessed DMCC’s best ever year by attracting nearly 2.5k new companies to a total of over 20k, with Q1 adding a new record, with a further 665 companies joining the world’s flagship Free Zone – its best ever since the free zone’s formation twenty years ago. This was 13.0% higher on the year and up 25% compared to the five-year average. Ahmed Bin Sulayem, Executive Chairman, noted that “looking ahead, we will keep up the momentum and go further and faster to attract the world’s most ambitious firms looking to set up and do business in Dubai.” Key markets such as India, UK, Germany and France performed stronger than the same period in previous years, whilst there was a 34% hike in new Chinese companies joining DMCC, and a 350% increase in Israeli businesses.

In Q1, the Department of Economy and Tourism noted that 24.7k new business licenses were issued, a 58.3% growth compared to the same period in 2021. The main drivers continue to be the robust fundamentals, resilience and sustainability of Dubai’s economy, investor/business confidence and Dubai’s growth potential across various sectors. The growth is in line with HH Sheikh Mohammed bin Rashid’s vision to support productivity, growth, economic diversification, sustainability and competitiveness in the emirate, as well as to build strategic economic sectors and provide high-quality services that meet the highest international standards. 57% of the new business licences issued during Q1 2022 were professional and 43% were commercial, with Bur Dubai accounting for 16.0k of the new licences and Deira’s 8.1k. With regard to legal entity, 33% of the licences were Sole Establishments, Civil Companies – 26%, and LLCs – 19%. Business registration and licensing transactions were 36% higher at just over 136k.

The Federal Tax Authority has introduced, ‘Raqeeb’, a whistle-blower programme for tax violations and evasion, which will allow the FTA to receive reports from individuals on tax dodges, tax-related fraud, and violations of tax legislation, and, in certain cases, monetary rewards may be involved.  The Authority noted that the highest confidentiality standards will be met and that whistle-blowers’ identity will not be disclosed to any party as well as providing them with full protection and immunity.

HH Sheikh Mohammed bin Rashid Al Maktoum has issued a decree subjecting public-interest entities to the regulatory supervision and control of Dubai’s Community Development Authority which will see its Director General issue a decision about the scope of the Authority’s regulatory oversight of the entities. In future, public entities will have to maintain current financial and administrative records so that they can be reviewed, when required. All government entities must cooperate with the Community Development Authority in Dubai and provide the information and documents necessary for the Authority to perform its legal duties. If any entity fails to adhere to the provisions, the DG is authorised to take appropriate action.

The Dubai Ruler also made changes to Dubai Next, the digital crowdfunding platform for young innovators which has 398 contributors and 62 campaigns approved and running, while the total number of campaigns registered to date is nearly 1.6k.  The aim of the strategy is to boost business, after government and private sectors were given the go-ahead to back crowdfunded projects. Crowdfunding has had a significant impact in ushering in a new generation of entrepreneurs in the UAE. His son, and Dubai’s Crown Prince, launched the campaign last May to attract entrepreneurs into the emirate. In Q1, campaigns have increased by 50%, while contributors have increased by 60%, with 16% of all company registrations being for crypto-related activities. Anyone, with an innovative idea or project, can create a campaign on Dubai Next and seek funds from contributors and there is no doubt that this is one avenue that Dubai can use to its advantage to draw in in a new generation of entrepreneurs.

The headline March S&P Global Dubai PMI, 1.4 higher on the month to 55.5, was at its highest level since June 2019, as the emirate’s non-oil private sector improved at a rate faster than the average in more than twelve years of the survey data. The two main positive factors in March were the last month of Expo 2020, (creating strong tourism demand.), and new orders increasing as pandemic restrictions lessened; however, new business growth was slightly weaker than the recent highs recorded at the end of 2021. Increased client demand headed north, as restrictions were lifted at the back end of the impact of the Omicron wave. Output growth, in both the travel and tourism and construction sectors, were at their highest level since June 2019, with the latter driven by a strong push among contractors to complete outstanding projects.

Emicool was formed in 2003, with a JV between Dubai Investments and Union Properties. The former took 100% ownership after paying UP US$ 126 million for their 50% stake in 2018, This week, investment firm Actis purchased a 50% stake in Dubai Investment’s wholly-owned subsidiary Emirates District Cooling at a corporate valuation of US$ 1 billion and equity valuation of US$ 653 million. Considered to be one of the largest transactions in the district cooling industry in the MENA, the new structure will help Empower in its regional expansion strategy. According to Khalid bin Kalban, chief executive of Dubai Investments, “this divestment deal [is] … a part of the company’s robust plans towards implementing a prudent approach to asset management, facilitating efficient recycling of capital to invest in future growth.” Over the next six years, the size of the Middle East’s district cooling sector is projected to grow at more than 9.0%, CAGR, (compound annual growth rate), having been valued at over the US$ 4 billion-mark last year.

Tuesday saw the debut of Dubai Electricity and Water Authority (DEWA) on the Dubai Financial Market, with a share value starting the day on US$ 0.676 (AED 2.48) and ending 15.7% higher at US$ 0.782 (AED 2.87); by Friday’s close, it was trading 16.1% higher  at US$ 0.78 (AED 2.88).The energy conglomerate’s IPO saw nine billion shares (18%) of it being issued to the public, at its initial value of US$ 2.48 which valued the entire company at US$ 33.8 billion the IPO itself, which raised US$ 6.1 billion; this made it the largest IPO in the UAE and the largest in Europe, Middle East and Africa region so far in 2022. The IPO was oversubscribed by 37 times (excluding cornerstone and strategic investors).

The DFM opened on Monday, 11 April 192 points (5.7%) up on the previous three weeks, moved 60 points (1.7%) higher to close on Friday 15 April, at 3,602. Emaar Properties, US$ 0.30 higher the previous six weeks, nudged US$ 0.1 higher to US$ 1.66. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 1.68 and US$ 0.77 and closed on US$ 0.78, 4.03, US$ 1.71 and US$ 0.71. On 15 April, trading was at 187 million shares, with a value of US$ 108 million, compared to 170 million shares, with a value of US$ 142 million, on 08 April 2022.

By Friday 15 April 2022, Brent, US$ 3.36 (3.4%) higher the previous week, was US$ 8.92 (8.7%) higher, to close on US$ 111.70. Gold, US$ 19 (1.5%) higher the previous week, gained US$ 29 (1.5%), to close Friday 15 April on US$ 1,975.

Two years ago, on 20 April 2020, oil prices tanked and moved into negative territory, with WTI futures starting the day on US$ 56 a barrel and ended at minus US$ 37. On that day, it was alleged that the twelve UK traders were responsible for 29.2% of the total volume in WTI crude oil futures. It has been claimed in a Chicago court that this group, known as the “Essex Boys”, made US$ 700 million and, associating with Vega Capital London, manipulated markets and broke antitrust laws by colluding to push the market down. Trading data shows that several of their transactions on that day, were “highly correlated,”, with between 96.2% and 99.7% moving “in the same direction at the very same time.” The suit was brought by Mish International Monetary who claimed they had lost money on that day, whilst the defendants claimed that, as independent traders, they were following “blaring” market signals. In August 2020, the judge had approved a class-action lawsuit filed against them and, with the ruling unsealed on Tuesday, rejected a motion by the traders to dismiss the case, saying it could proceed against eight of the twelve; he dismissed the case against four of the traders and against Vega Capital,  

The Airports Council International has confirmed Dubai International’s 2021 position as the world’s busiest international hub, 12.7% higher on the year, with 29.1 million passengers; as air travel demand continues to recover, rankings by the Airports Council International (ACI) show Istanbul, Amsterdam, Frankfurt and Paris makig up the top five, as, according to the ACI, “most of the recurrent busiest airports pre-Covid-19 are back at the top.” Hartsfield-Jackson Atlanta led the rankings by overall passenger traffic last year, with a 76.4% year-on-year increase in traffic to 75.7 million travellers, followed by Dallas/Fort Worth, Denver, Chicago’s O’Hare and Los Angeles, all buoyed by a massive domestic market. The world body also noted that “although we are cautious that recovery could face multiple headwinds, the momentum created by reopening plans by countries could lead to an uptick in travel in the second half of 2022.”Total global passenger numbers are estimated at almost 4.5 billion – 25% higher on the year but still 50% lower on pre-pandemic 2019. Air cargo jumped 15% In 2021, to a record 124 million metric tonnes, driven by “continued increase in demand for online consumer goods and pharmaceutical products.”

Despite Air Asia X cancelling sixty-three of the A330-900 version of the A330neo, (an upgrade of the long-established A-330 wide-body model), as well as ten smaller A321neo aircraft, Airbus still managed to pick up sales from other carriers for more than one hundred of its smaller jets. In Q1, the plane-maker delivered 142 planes – over 13% higher on the year – but confirmed that the production of the narrow-body 321neo will increase to sixty-five a month by summer, as demand for that model is booming. At the same time, it has been cleaning up its books on the A330neo orders – at the beginning of March, there were 265 on the books, now only 200 because of closer analysis of orders deemed it unlikely to come to fruition; these include 28 for Iran under a nuclear deal that collapsed in 2018. It also confirmed that it had sold a total of 253 jets in Q1 or a net total of 83 after cancellations.

In the UK, Noel Corry, a former Coca-Cola Enterprises manager has admitted taking more US$ 2.0 million in bribes in exchange for helping three favoured companies – Boulting Group, Tritec Systems, and Electron Systems – win lucrative contracts in a nine-year period to 2013. It was claimed that Corry received at least US$ 1.25 million from Boulting, (via its former contracts manager, Peter Kinsella), with the company benefitting by US$ 17 million from the bogus contracts, whilst Tritec System, (whose director was Gary Haines) and Electron Systems paid more than US$ 800k in bribes. Corry was forced to sell his family home and hand over his pension pot to repay Coca-Cola Enterprises Ltd US$ 2.2 million, when his nine-year scam was discovered.  All three were given suspended sentences of up to twenty months and ordered to do two hundred hours of voluntary work, with the companies involved being fined for failure to prevent bribery. There is nothing special for what seems to be a routine and common case of using bogus invoices or inflated prices to defraud a company. What is different in this case is that it is the first time the Met has charged and convicted a company with failure to prevent bribery.

Despite many problems, including stiff union opposition, and being grounded for three years this month, Jet Airways 2.0 is ready to fly again, probably in Q3.  At one time touted as India’s favourite airline, it is now hoping to operate proving flights using a leased Boeing 737 aircraft and expects to get the AOC (air operator’s certificate) revalidated by early May. Burdened by a huge debt in 2019, that forced its closure, the carrier is being backed by the Jalan-Kalrock consortium of promoters led by Dubai-based entrepreneur Murari Lal Jalan. In its first year, it will utilise only leased aircraft and start with domestic operations so will not use much of the wide body aircraft fleet that is left with the airline until starting international flights in 2024.

Under the guise of protecting staff from potential “retaliation”, the French beauty brand L’Occitane says it will keep its shops operating in Russia, as it continues its online sales open. Whilst many other brands, such as L’Oréal and Estee Lauder, have closed all Russian operations, the brand, which is sold at almost 3.1k global retail outlets, with 2021 sales of US$ 1.7 billion, remains open. Other international outlets, including Burger King and the hotel groups Marriott and Accor, still remain open in Russia claiming that they are unable to shut stores due to complex franchise deals preventing them from withdrawing.

A Jersey court confirmed that it had frozen US$ 7 billion worth of assets linked to Russian oligarch and former Chelsea FC owner, Roman Abramovich, who had been sanctioned by the UK earlier in the month. On Tuesday, Jersey Police searched premises, suspected to be connected to Mr Abramovich’s business activities, with the Royal Court of Jersey imposing. a “formal freezing order on 12 April, known as a saisie judiciaire, over assets understood to be valued in excess of US$ 7 billion which are suspected to be connected to Mr Abramovich and which are either located in Jersey or owned by Jersey incorporated entities.” It has been estimated that US$ 1.2 billion worth of super yachts are currently berthed in SW Turkey – outside the jurisdiction of the EU and the UK.

The last time the Bank of Canada hiked interest rates by 50bp was in May 2000, with BoC governor, Tiif Macklem commenting that “we are committed to using our policy interest rate to return inflation to target and will do so forcefully if needed.” The bank is also proposing to reintroduce quantitative tightening, by allowing Covid-related government bonds to roll off as they mature from 25 April. The money is on for another 50bp rise as early as June. The Reserve Bank of New Zealand also hiked rates by 50 bp (to 1.5%) this week, whilst the Fed is expected to deliver two back-to-back half-point interest rate increases in May and June. In comparison, Australia’s cash rate target is much lower and has been at a 0.1% record low 0.1% low November 2020, whilst it is expected that there will be no rate movement until wages rise at a much faster pace. South Korea also lifted its benchmark interest rate hike —by 25bp to 1.5% – its highest level since August 2019, with rates expected to top 2.0% by 31 December.

The latest World Bank report expects the MENA economy to grow at its fastest pace since 2016, driven by higher energy prices but bearing in mind the impact of the Ukraine crisis, continuing supply chain problems, surging inflation and the possibility of more Covid variants. The recovery will be uneven, with the main beneficiaries being the oil-producing nations and those that have a successful Covid regime in place. The Washington-based lender estimated that the GCC economies will see a 4.5% hike in GDP growth, whilst middle income oil exporters, will expand 3.0% and oil importers 2.4%. It estimates that eleven of the seventeen countries in the survey will not have recovered to pre-pandemic levels by end of 2022.

Facing its worst economic crisis in more than seventy years, since its 1948 independence from the UK, Sri Lanka said it will temporarily default on its foreign debts, with Fitch Ratings lowering its assessment, indicating “a sovereign default process has begun”, and S&P Global Ratings noting a default is now a “virtual certainty”. On Monday, it is due to make US$ 78 million of interest payments on its international sovereign bonds, as the country is beset by mass protests over major power cuts and the soaring cost of food and fuel. The finance ministry cited the impact of the pandemic and that the war in Ukraine made it “impossible” to pay its creditors, but there are many internal – and probably some dubious – factors at play.

Last month, US inflation figures hit a forty-year high, with consumer prices surging 8.5%, driven by a double-digit rise in energy prices, 32% higher on the year, after President Joe Biden banned all imports of oil and gas from Russia following the invasion of Ukraine. Food prices were 8.8% higher, partly down to both Russia and Ukraine being big exporters of widely used goods such as wheat and sunflower oil. Matters have been made even worse by the supply chain issues. Recent figures show that average hourly earnings in the US rose by 5.6% in the year to March, well below the latest 8.8% rise in the cost of living, indicating a decline in future consumer spend. On Tuesday, Russian President Vladimir Putin said that inflation and rising food and petrol prices in Western countries would start to put pressure on politicians there – he may well be right!

Following a 0.8% rise in January, UK’s GDP only nudged 0.1% higher in February, as the cost-of-living crisis took hold; with Omicron cases declining, there was growth noted in the hospitality and leisure sectors, but slowdowns in construction industries, as business confidence took a knock, driven by the cost-of-living crisis and high energy bills, making companies uneasy about deciding on significant investments. It is almost inevitable that these two factors, plus the recent tax increases, and the onset of the Ukraine war, will continue to be a drag on the UK economy in the coming months. Whilst the services sector was only 0.2% higher in the month, there was a noticeable 33.1% uptick in travel agency, tour operator and other reservation services, and 8.6% expansion in accommodation and food services.

With group sales, (excluding fuel), rising 2.5% to US$ 71.8 billion Tesco posted a more than tripling of annual profits in 2021, to US$ 2.67 billion. However, the UK’s largest supermarket chain warned of “significant uncertainties” and said performance would be affected by the investment needed to keep prices down. The company is trying to keep costs as low as possible and would keep the rise in the cost of living a “bit under the number for the overall market”. It was also aware that many of its customers’ household budgets were under severe pressure, and they would be trading down to own-label brands, switching retailers and scaling back on premium purchases.

This time last year, the BoE was still preaching their inflation target would continue at 2.0%. Twelver months later, UK inflation has risen at its fastest rate, 7.0%, since 1992, (and 0.8% higher than the 6.2% posted in February), driven by surging energy prices; average petrol prices were US$ 0.157 higher on the month. Since the end of 2021, prices have been rising faster than wage levels, as pandemic restrictions have been lifted and firms facing higher energy and shipping costs – on top of this double whammy, along comes the Russian invasion of Ukraine, pushing energy and other commodities’ prices even higher. The cost of living is expected to rise even further after the energy price cap was increased, driving up gas and electricity bills for millions, with the latest figures not including the US$ 914, (GBP 700) increase in energy bills. It is evident that nothing is getting significantly cheaper and that the cost-of-living crisis will get even worse over the next six months.

We end the week, with news of the UK Home Secretary in Rwanda, cutting a deal that will see some asylum seekers who cross the Channel to the UK being given a one-way ticket to Rwanda under new government plans. It is reported that the US$ 160 million scheme, (part of a US$ 1.8 billion plan), will focus on single men arriving on boats or lorries. In 2021, it was estimated that 28.5k illegally crossed the Channel to claim refugee status in the UK – more than triple the 2020 figure of 8.4k. Prime Minister commented that the number of people who can be relocated will be “unlimited”, and that Rwanda will have the “capacity to resettle tens of thousands of people in the years ahead”, including those who have arrived “illegally” since the start of the year. There is no doubt that Rwanda is a poor country and relies heavily on agriculture, although its service sector has shown recent growth. Latest trade figures show that it exports about US$ 1.4 billion and imports total US$ 3.1 billion. In 2019, the World Bank noted that GDP, at current prices, stood at US$ 10.36 billion, and with a population of 12.6 million, its per capita GDP is a relatively low US$ 818, compared to the UK’s US$ 40.3k.

It seems that Rwanda signed a similar deal with Israel, between 2014 and 2017, and that most of the 4k detainees involved left the country fairly soon after arrival. It is somewhat ironic that many of them then undertook the perilous journey to Europe, some of whom are understood to have fallen prey to human traffickers en route, notably in Libya. Even the UK government recently condemned Rwanda for failing to investigate human rights violations – and now just months later Boris Johnson agrees to deport thousands of asylum seekers there. The Refugee Council posted that, “far from enabling people to rebuild their lives, we know from where this has been done by other countries [that] it only results in high levels of self-harm and mental health issues and can also lead to people ending up back in the hands of people smugglers.” With Easter upon us, and the most important and oldest festival of the Christian Church Forgive Them Father!

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Batten Down The Hatches

Batten Down the Hatches!                                                                   08 April 2022

For the past week, ending 08 April 2022, Dubai Land Department recorded a total of 2,102 real estate and properties transactions, with a gross value of US$ 1.44 billion. A total of 236 plots were sold for US$ 292 million, with 1,415 apartments and villas selling for US$ 807 million. The top three land transactions were for a plot of land in Hadaeq Sheikh Mohammed bin Rashid, worth US$ 20 million, a plot in Al Merkadh for US$ 6 million, and land for US$ 5 million in Al Satwa. The most popular locations, in terms of volume and value, were Al Hebiah Fifth, with 119 transactions, totalling US$ 73 million, followed by Al Merkadh, with 40 sales transactions, worth US$ 107 million, and Wadi Al Safa 5, with 15 sales transactions, worth US$ 20 million. Mortgaged properties for the week totalled US$ 1.05 billion. 53 properties were granted between first-degree relatives worth US$ 74 million.

The Central Bank of the UAE confirmed that Q4 non-oil economy expanded by an annual 7.8%, attributed to the easing of pandemic-related restrictions and travel curbs. Based on these figures, it still expects that GDP, which was 2.3% higher last year, will expand at 4.2% in 2022; the non-oil economy expansion is estimated to have grown at 3.8% in 2021 and projected to be 3.9% higher this year. Whilst the oil economy dipped 1.4% last year, it is expected to grow at 5.0% in 2022, driven by Opec+ members agreeing to bring additional crude to the market, as UAE’s oil production was ramped up by 9.3% in Q4. IMF estimates are slightly different indicating a 3.5% growth in the economy and 3.4% for the non-oil economy, with Emirates NBD forecasting growth of 4.0% and 3.5% respectively.

Etihad Rail and Dubai International City Plans have announced plans to develop a 510k sq mt advanced freight terminal. DIC is one of the region’s largest manufacturing and logistics hubs and part of TECOM Group, and this project is but one of several  to enhance the UAE’s position as an international trade hub and boost Dubai’s global competitiveness in manufacturing, logistics, transport, trade, and investment.

The RTA has noted a decrease in the number of complaints from customers using taxis, with just 0.03% out of total 88.9 million trips carried out in 2021; the previous two years had seen 0.04% and 0.05%. The RTA taxi sector comprises 11k taxis. with five franchise companies – Dubai Taxi Corporation, Cars, Arabia, National, and City Taxi, in addition to Hala Taxi e-hail.

The Ministry of Economy confirmed that the country attracted US$20.7 billion in foreign direct investment in 2021 – 3.9% higher on the year. FDI was directed at various “traditional” sectors such as renewable energy, financial services, insurance activities, real estate, health, industry and agriculture The Ministry also noted that various aspects of the digital economy, including AI, IoT, VR, blockchain and robotics also attracted “considerable FDI”. UAE’s total FDI balance increased 13.7% on the year to US$ 171.7 billion by the end of last year. The country ranked first in the Arab world and moved four places to 15th globally in Kearney’s FDI Confidence Index for 2021.

In a bid to support the genuine whistle-blower, Dubai Financial Services Authority has launched a new regulatory framework to provide enhanced legal protection to those who report misconduct internally within DFSA-regulated entities, or externally to either their auditor, the DFSA or a law enforcement agency. It will be applicable to all DFSA-regulated entities operating in, or from, the Dubai International Financial Centre. It also aims to increase transparency around how the authority handles regulatory concerns, to assess those concerns and, where appropriate, escalate them. It will also protect the identity of the whistle-blower and to protect them from suffering any negative consequences.

The average seasonally-adjusted Q4 UAE Purchasing Managers’ Index rose 11.3% on the year, posting 55.6 at the end of December – its highest reading since mid-2019. The Central Bank noted the four main drivers for the improvement were “supported by the benefits of Expo 2020, the relaxing of the Covid -19 restrictions, that boosted travel and tourism, higher export orders, and a regain in domestic demand”. Over the quarter, inflation increased 2.3% on the year and 0.6%, quarter on quarter. The first quarter of this year saw inflation reach 3.3%, with a 2.7% average headline inflation forecast for 2022, with “the main drivers would be the pickup in energy prices, imported inflation, that is expected to be record high globally, rising wages and the continuation of the declining trend of rents.” Dubai real estate posted a massive 9.1% property price rise in Q4, as hotel occupancy rates rose to global highs of 82%, compared to 63% a year earlier.

Last year, investments in National Bonds jumped 36.0% to US$ 3.24 billion, as the Shari’a-compliant savings and investment company posted a 64.0% increase in sales, driven by the growth to its innovative savings programmes and services. The company, owned by the Investment Corporation of Dubai, earned savers returns of up to 3.33% and also paid out bondholders US$ 10.0 million in draw prizes; savers also received additional bonuses from the Mudarib’s own funds, based on their invested amount, tenure and savings behaviour.

The Abu Dhabi Commercial Bank lost in its attempt to have a US$ 1.2 billion trial held in London, with Judge Mark Pelling saying the trial should be heard in Abu Dhabi. The bank wanted the case, involving senior managers of plundering private healthcare group NMC before it collapsed in 2020, in London, with the bank hoping that its lawyers could cross-examine former directors of about the “massive fraud” that led to undisclosed debts of up to US$ 5.4 billion. Six executives, including founder Dr BR Shetty, are in court over a “sustained and deliberate” effort to mislead the bank about NMC’s finances to ensure that the bank kept lending money. According to the bank’s lawyer, Adrian Beltrami, “every accused has told the court they were innocent, while at the same time seeking to avoid giving a full account of their actions, distancing themselves from the affairs of NMC Plc, and blaming others.”

e&A shareholders have approved a US$ 0.109 dividend for H2 2021, meaning a full year dividend of US$ 0.218. UAE’s biggest and oldest telecoms operator, founded in 1976, has operations in countries across the Middle East, Asia and Africa, serving more than 156 million customers. Last year, both its revenue and net profit came in 3.0% higher at US$ 14.52 billion and US$ 2.53 billion. Prior to November, it was known as Etisalat but rebranded to its new name as it transforms into a global technology investment conglomerate.

DEWA will raise US$ 6.1 billion from its IPO on the DFM, making it the largest listing in the Middle East, Europe and Africa since Saudi Aramco went public in 2019. On Tuesday, the Dubai government confirmed the final offer price at US$ 0.676 (AED 2.48) – the highest point of the price range set earlier – valuing DEWA at US$ 33.8 billion.  A price range had been set at between US$ 0.61 and US$ 0.67, equitable to a market value of US$ 30.6 billion and US$ 33.8 billion. Nine billion ordinary shares, representing 18% of DEWA’s issued share capital, were offered, which was 37 times oversubscribed.

The DFM opened on Monday, 04 April 187 points (5.4%) up on the previous fortnight, nudged 5 points (0.1%) higher to close on Friday 08 April, at 3,542. Emaar Properties, US$ 0.28 higher the previous five weeks, was US$ 0.2 to the good at US$ 1.65. Emirates NBD, DIB and DFM started the previous week on US$ 4.09, US$ 1.69 and US$ 0.67 and closed on US$ 3.95, US$ 1.68 and US$ 0.77. On 08 April, trading was at 170 million shares, with a value of US$ 142 million, compared to 92 million shares, with a value of US$ 92 million, on 01 April 2022.

By Friday 08 April 2022, Brent, US$ 13.26 (11.8%) lighter the previous week, was US$ 3.36, (3.4%) higher, to close on US$ 102.78. Gold, US$ 29 (1.5%) lower the previous week, gained US$ 19 (0.9%), to close Friday 08 April on US$ 1,946.

Shell, who were slower than most to quit Russia, has confirmed it will take a hit of up to US$ 5 billion from offloading its Russian assets, as part of plans to withdraw from the country, including quitting JVs with Gazprom. As part of Shell’s withdrawal plans, it will offload a 27.5% stake in a Russian liquefied natural gas facility, a 50% stake in an oilfield project in Siberia and an energy JV, as well as walking away from its involvement in the Nord Stream 2 pipeline between Russia and Germany,

A US jury has found Roger Ng, the former head ofGoldman Sachs in Malaysia, guilty on all charges in the trial, relating to the theft of billions of dollars from Malaysia’s 1MDB sovereign wealth fund. He is the only Goldman Sachs banker to face a jury over the scandal and his lawyers are declaring that he was “a fall guy`’. The case revolved from bond deals, between 2012-2013, that the US bank helped arrange, that raised US$ 6.5 billion for the 1MDB fund, which had been set up to finance public development projects; it was claimed that more than US$ 4.0 billion was stolen. Prosecutors said 49-year-old Mr Ng, who received US$ 35 million in kickbacks, was central to the scheme, introducing Tim Leissner to Chinese-Malaysian financier Jho Low, the alleged mastermind and a confidant of former Malaysian Prime Minister Najib Razak, who has been subsequently sentenced to twelve years in jail for abusing his power, laundering money and breaching the public’s trust. Goldman has paid out US$ 3.9 billion in a settlement with the Malaysian government and US$ 3.0 billion to authorities in four countries to end an investigation into work it performed for 1MDB.

A keen user of the micro-blogging site, Elon Musk, has just acquired a 9.2% stake, (and a seat on the Board), in Twitter, with the 73.5 million shares bought, valued at US$ 2.9 billion; the Tesla chief, who joined the site in 2009, has over eighty million followers. There was no surprise to see its share value skyrocket 26% on the news. Recently, Twitter’s new biggest shareholder has been critical of the social media platform and its policies, saying the company is undermining democracy by failing to adhere to free-speech principles. 

Musk has been selling his stake in Tesla since November, when he said he would offload 10% of his holding in the electric-car maker and has subsequently sold US$ 16.4 billion worth of shares. Despite the ongoing supply chain problems, and strict coronavirus policies in China, in the first quarter of the year, Tesla delivered a record 310k vehicles – almost 70% higher than the 185k in the corresponding period a year earlier. The bulk of deliveries were of Tesla’s Model 3 sedan and Model Y, the latter launched in 2019, (two years after Model 3), and has a bigger market potential, with its longer range per charge than the Model 3. It has a ‘giga factory’ in Shanghai, which is a high-volume car manufacturing plant, which also produces the lithium-ion batteries that power the vehicles; most of the city is currently under a staggered Covid lockdown.

It could not come at a worse time for, as its Kinder chocolate factory in Belgium has been ordered to close after it was linked to dozens of salmonella cases, in the UK, Germany, France and Belgium, just a week before Easter. Belgium’s food safety authority has also ordered the recall of all Kinder products made at the factory in Arlon, which is owned by Ferrero, who have apologised and acknowledged “internal failures”. Investigations are ongoing but the factory will not reopen until Ferrero provide the necessary guarantees that it complied with food safety regulations. The recall includes all Kinder Surprise, Kinder Surprise Maxi, Kinder Mini Eggs and Kinder Schokobons products, as well as a number of Kinder Surprise chocolate egg products in the UK.

UK’s biggest private employer, Tesco is set to introduce a 5.8% pay rise to US$ 13.20 (GBP 10.10) in July, as its delivery drivers and click and collect assistants will get an 8.9% increase to US$ 14.37 (GBP 11.00) an hour. This will bring the supermarket in line with Lidl and Aldi, which became the UK’s highest-paying supermarkets this year with the same hourly rate. Twelve months ago, Morrisons became the first UK supermarket to announce its minimum staff pay would be US$ 13.10 (GBP 10.00), with Sainsbury’s following suit in January 2022. Tesco will also increase its “colleague clubcard” discount allowance by 50% to take the annual total allowance to US$ 1,960, (GBP 1,500), with immediate effect. It is estimated that, with its 300k employees, the new pay rises will cost an extra US$ 261 million. The National Living Wage, which applies to workers over the age of 23, has increased 6.6% to US$ 12.52 (GBP 9.50), from this month and the National Minimum Wage, for those aged 21 to 22, has gone up to US$ 12.00, (GBP 9.18).

Maggie Thatcher first term as UK Prime Minister saw her popularity drop because of a recession and a jump in unemployment and her re-election in 1983 was not a sure bet but she was saved by the Falklands War. It seems that the electorate do not like change in the midst of any crisis. Likewise, one would expect the same for French President Emmanuel Macron but he is now realising that the expected bounce in the polls has failed to materialise; one month ago, Marine Le Pen was trailing Macron by ten points and fighting for a place in the second round against him, now she is a clear favourite to face Macron in the second round. Many think that Macron has had his day in the sun and France is ready for a change but the polls have been wrong in the past – Brexit, Trump and Le Pen would be some trifecta.

Canada has some of the worst housing affordability issues in the world, so bad that Prime Minister Justin Trudeau has proposed a two-year ban on some foreigners buying homes. With average prices having climbed more than 20.0% to US$ 650k – more than nine times household income – it seems that this move will have little impact, mainly because foreigners account for just 1% of purchases in 2020, down from 9% in 2015 and 2016.  However, the Prime Minister has pledged to tackle the housing affordability problem and, apart from the temporary two-year ban on foreign buyers, his administration has set aside billions to spur new construction and introduced new programmes, such as a tax-free savings account for first-time buyers. He has also discussed banning certain bidding processes that favour investors, who by some measures have accounted for about one in five homes purchased in Canada since 2014. The problem has not been helped by soaring housing costs, a strong population growth and a supply shortage, along with historically low interest rates.

Yesterday, the Pakistani rupee slumped to an all-time low of nearly 189 rupees to the US$ due to political uncertainty in the South Asian country, the impact of high oil prices on the country’s balance of payments and US Federal Reserve’s hawkish policy to contain inflation. To make matters worse, forex reserves declined 3.9% in March, on the month, and it seems there is worse to come. By Friday, the Supreme Court decided that President Arif Alvi could not dissolve parliament on recommendations of prime minister Imran Khan but opposition parties could oust him through a no-confidence vote. Embattled Pakistan Prime Minister Imran Khan on Friday accepted a Supreme Court verdict reinstating the dissolved National Assembly “albeit with a heavy heart”. On Thursday, the Central Bank lifted rates by 250 bp to 12.25% to support the flagging currency and take a grip on the surging inflation rate the 2022 forecast of which has recently been revised upwards to 11.0%. Its current account deficit stands around the 4% mark, whilst liquid foreign reserves are at US$ 17.5 billion, with net foreign reserves held by commercial banks at US$ 6.15 billion, and the State Bank’s US$ 11.32 billion.

Yesterday, 07 April, the Central Bank of Sri Lanka appointed P Nandalal Weerasinghe as the new governor of the country’s central bank, replacing Ajith Nivard Cabraal who resigned on Monday, amid mass protests over rising living costs and power cuts. The new incumbent had been the deputy governor for eight years to 2020, following which he became an independent consultant in Australia. The country, enduring its worst economic crisis in over seventy years, is facing a massive crisis of confidence, exacerbated by shortages and soaring inflation, after the country steeply devalued its currency in March. This week, its rupee has plunged to a record low, as President Gotabaya Rajapaksa struggles to contain a worsening economic and political crisis. By Wednesday it was hovering around the 330 rupees to the US$ – 32% lower YTD – and seen as the world’s worst performing currency, even surpassing the Russian rouble. All 26 of Sri Lanka’s ministers have submitted letters of resignation – but not Prime Minister Mahinda Rajapaksa or his brother, Gotabaya Rajapaksa.

With Australia formally signing a trade deal with India this week, it will see 96% of Indian goods imports entering Australia duty-free and the removal of 85% of tariffs on Australian goods exports to India, worth US$ 9.45 billion. Tariffs will be scrapped on sheep meat, wool, copper, coal, alumina, fresh Australian rock lobster, and some critical minerals and non-ferrous metals to India and a full trade agreement is on the horizon. The Australia-India Economic Cooperation and Trade Agreement comes after a decade of negotiations and weeks before Prime Minister Scott Morrison faces the electorate in a general election. Scot Mo noted that the agreement, with the world’s second-most populous nation, represented “one of the biggest economic doors there is to open in the world today”. Deals like this will help dilute Australia’s long-standing reliance on its biggest trading partner, China, which has seen increased tensions in recent years.

This week, the Australian Federal Court of Australia approved the pay-out of US$ 73 million to hundreds of franchisees of 7-Eleven. It is expected the  six hundred claimants would wind up with about US$ 45 million after fees etc were cleared. It was alleged that the convenience store’s business model was unprofitable unless staff were underpaid and was being pursued by franchisees as part of several class action proceedings. In Australia, it largely operated via a franchise network model, where individual operators buy the rights to operate stores under its logo and guidelines. It was claimed that the “franchisee was being squeezed, and the front-end worker was the major loser,” and that the “they had been sold a lemon”. In some cases, a 2015 ABC investigation found that store staff – many of them migrant – were working twice as long for half the pay. 7-Eleven acknowledged the settlement without admitting to any of the claims made. A  2019 parliamentary inquiry, in part triggered by the 7-Eleven revelations, found that the entire franchise sector required drastic and immediate overhaul.

The European Commission President, Ursula von der Leyen, has proposed an EU-wide ban on imports of Russian coal worth US$ 4.4 billion per year, which equates to about 4% of the  US$ 108 billion that the bloc spent on Russian mineral fuels last year. The new package of sanctions sees a transaction ban on four “key” Russian banks, including its second largest financial institution VTB, that take up 23% of Russia’s banking market, but the country’s largest and third largest banks, Sberbank and Gazprombank, remain untouched; they handle most energy-related payments. The EC is also set to introduce new import bans totalling US$ 6.0 billion, covering wood, cement, seafood and liquor and a set of new export bans worth US$ 11 billion to hit sectors in which Russia is considered “vulnerable,” such as quantum computers, semiconductors and sensitive machinery. No surprise to see no mention of gas imports, with the bloc being accused of funding Russia by not introducing sanctions on purchases of Russian fossil fuels – both the US and the UK have already announced plans to completely phase out imports.

The Ukraine war, and the ongoing global supply chain problems, have led the World Trade Organisation to slash its 2021 global trade growth forecast from 4.7% to 2.5%. It is increasingly concerned with the possibility of a major food crisis, as many food items, including wheat and corn, have been affected following Russia’s invasion of Ukraine, although Russia and Ukraine only make up about 2.5% of global merchandise exports. For example, 46.9% of global exports come from Ukraine and 29.9% from Russia, according to S&P Global. As well as food prices surging, the cost of other commodities has hit record highs amid concerns the war and economic sanctions on Russia will lead to supply disruptions. For example, 40% of the global palladium, a metal essential for the motor industry, is produced in Russia. Although trade is being used as a “weapon” in the war in Ukraine, it does seem strange that the World Trade Organisation has yet to expel Russia from the global body claiming that it is “”not an easy thing to do”, although some leading international trade lawyers disagree.

Rishi Sunak’s wife, Akshata Murthy, has defended her non-domicile status after it was claimed she could have saved millions by not paying UK tax on foreign income. Non-dom usually implies that her permanent home is considered outside of the UK and, although she is still liable for UK tax on income made in this country, she does not have to pay UK tax on foreign income unless it is brought into the UK. This is completely legal and the UK Chancellor’s multi-millionaire wife, (her father is NR Narayana Murthy, the Indian billionaire who founded Infosys), has apparently always paid UK taxes on her UK income. Her stake in Infosys is believed to be worth more than US$ 650 million and she is reported to be a director of capital and private equity firm Catamaran Ventures, gym chain Digme Fitness, and gentlemen’s outfitters New and Lingwood. Earlier in the Ukraine crisis, Rishi Sunak’s advice that firms should pull out of Russia, although Infosys continued to operate in Moscow for more than a month after the war started. The week ended with further bad news for the Chancellor when it was confirmed that he had held a US Green Card for the past eight years.

The average UK company – along with others across the globe – are facing tough economic times. Wednesday saw Rishi Sunak’s US$ 7.8 billion rise in National Insurance come into effect. Add in inflation rates at their highest rate in forty years, pushing up prices relentlessly, along with surging energy prices that in some cases have skyrocketed 250%, then it is obvious that worse is to come. Many firms made it through the pandemic because of government support packages such as furlough, tax reliefs and a moratorium on landlords being able to evict businesses due to rent arrears.  At the onset of the pandemic, inflation was well below the 2.0% BoE target and energy prices had remained flat for some time. February saw a doubling of county court judgements against firms, as well as the number of insolvencies 23% higher than the same month in 2021. There is no doubt that we are in a period of some calm before the inevitable storm and this despite 500k businesses benefitting from a US$ 1.3k tax cut, now being able to claim US$ 6.5k, rather than the US$ 5.2k earlier, a 50% business rate relief, a record fuel duty reduction and the super-deduction, the largest two-year business tax cut in history. However, with inflation only going way – and that is higher – supply chain problems not going away, less consumer spending, more tax, higher mortgage rates and the Ukraine war set to continue, it is time to Batten Down the Hatches!

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The Carnival Is Over!

The Carnival Is Over!                                                                         01 April 2022

For the past week, ending 01 April 2022, Dubai Land Department recorded a total of 2,135 real estate and properties transactions, with a gross value of US$ 2.23 billion. A total of 247plots were sold for US$ 395 million, with 1,423 apartments and villas selling for US$ 842 million. The top three transfers for apartments and villas were all apartments – one was sold for US$ 120 million in Marsa Dubai, a second sold for US$ 83 million in Burj Khalifa, and the third sold for US$ 75 million in Business Bay. The top three land transactions were for a plot of land in Palm Jumeirah, worth US$ 76 million, a plot in Hadaeq Sheikh Mohammed bin Rashid for US$ 8 million, and land for US$ 8 million in Al Warqaa 3.  The most popular locations in terms of volume and value were Al Hebiah Fifth, with 121 transactions, totalling US$ 72 million, followed by Al Merkadh, with 29 sales transactions, worth US$ 19 million, and Hadaeq Sheikh Mohammed bin Rashid, with 15 sales transactions, worth US$ 61 million. Mortgaged properties for the week totalled US$ 921 million, with the highest being for land in Nad Al Shiba First at US$ 87 million. 79 properties were granted between first-degree relatives worth US$ 79 million.

Danube Properties managed to sell 100% of the 300-unit inventory of Pearlz, along with a number of retail and recreational facilities, with a development value exceeding US$ 82 million in one day. It had also recently delivered its ambitious project ‘Lawnz’ to 1k plus property buyers.

This week saw the launch of the Elysian Mansions development, part of the four-year Tilal Al Ghaf project, which will include more than 6.5k freehold homes, ranging from apartments and town houses to larger, luxury villas. At the centre of the development – which will comprise four walkable neighbourhoods, with about 355k sq mt of landscaped open areas, 18 km of walkable trails and 11 km of cycling paths – will be Lagoon Al Ghaf, a 70k sq mt swimmable lagoon with a 120 mt private beach accessible to mansion owners only.. Developed by Majid Al Futtaim, and located close to Dubai Sports City, this initial project comprise ninety-two 5 B/R – 6 B/R “organic-luxe homes inspired by nature”,  with prices ranging from US$ 4.9 million to US$ 9.5 million. These ultra-prime villas come with multiple entertaining areas, spa and wellness spaces, a sky suite with roof terrace, an internal lift and an underground glass-encased car gallery, with a capacity for six to eight vehicles.

On 24 February, STR estimate that record 132k hotel rooms were sold in the emirate and that Expo 2020 was the main driver behind the figure; this could well be broken again this week as the global event closes after a successful six-month season. It is expected that occupancy during the summer months will return to their pre-pandemic levels, whilst the FIFA World Cup in Qatar will inevitably boost demand as many fans will use Dubai as a base (despite the high transport prices). As long as global travel restrictions continue to ease, there is no doubt that Dubai tourism outlook is optimistic and will continue to be one of the busiest global tourist locations.

Following double-digit price rises over the past two months, there is more of the same for April. From today, 01 April, petrol costs jumped to new seven-year highs, on the back of surging global oil prices, allied with tightening supply, as Brent started the week on US$ 100. Super 98, Special 95 and diesel rose by US$ 0.051 (15.79%) to US$ 1.019, by US$ 0.079 (16.02%), to US$ 0.986, and by US$ 0.226 (15.78%) to US$ 1.095. This is the first time that Super 98 and diesel have exceeded the US$ 1.00 mark.

Tributes to the late Easa Saleh Al Gurg, who died on Thursday, have been led by HH Sheikh Mohammed bin Rashid who noted that Al Gurg “was one of the most important men of our national economy.”  He was among the group of visionary people who helped to oversee the rise of Dubai and the modern-day UAE and founded a huge conglomerate spanning twenty-seven companies in retail, building and construction, industrial and property. He started his adult life in the 1950s, with the British Bank in Dubai, before building up his business interests; he was appointed UAE’s ambassador to the UK from 1991 to 2009, and was awarded the Order of Zayed II, by the late Sheikh Zayed bin Sultan Al Nahyan, in 1997.  Apart from his major business and diplomatic works, he also created the Al Gurg Charity Foundation which, inter alia, awarded numerous foundation scholarships to help young students.

The UAE and Israel have now agreed on a Comprehensive Economic Partnership Agreement that it hopes will deepen trade and investment ties, accelerate growth and lead to a new era of peace, stability, and prosperity in the ME. Only six months after the signing of the Abraham Accords last September, talks have been concluded and the agreed text is now being finalised ahead of an expected formal signing, probably after the holy month of Ramadan which is expected to start on Sunday. The benefits of the UAE-Israel CEPA will substantially reduce or remove tariffs on a wide range of goods, enhance market access for services, promote investment flows, create jobs, promote new skills, enhance climate action and deepen cooperation on strategic projects.

It seems that Grant Shapps is no stranger to controversy and has previous form, having to step down, in 2015, as minister of state due to allegations of bullying within the Conservative Party. It had been claimed that, in his previous role as party co-chairman, he had ignored repeated allegations of bullying, involving a party youth organiser, who later took his own life; his father noted the day before Shapps resigned that whoever else is involved in this – clearly these senior members of the party have been telling lies … If they had behaved responsibly … none of these events would have happened; my son would still be alive and many activists wouldn’t have been intimidated and harassed”.

In May 2008, Shapps was cited as one of several shadow ministers who had received cash from firms linked to their portfolios.; all donors had been introduced by Michael Gove. The Commissioner exonerated all shadow ministers indicating that they were permitted to receive donations from organisations covered by their briefs as long as the person has a company in the UK or lives in the UK! He also founded a web publishing business, How To Corp Limited, involved in business publications and software, and allegedly appeared to use at least three people, under the names of Michael Green, Corinne Stockheath and Sebastian Fox, for testimonials. In 2012. He denied having used any pseudonym after entering parliament and, in 2014, threatened legal action against a constituent who had stated that he had. In February 2015 he told LBC Radio “Let me get this absolutely clear … I don’t have a second job and have never had a second job while being an MP. End of story.” However, in March 2015, he admitted to having had a second job while being an MP and practising business under a pseudonym. In his admission, he stated that he had “over-firmly denied” having a second job.  Under the name Michael Green, Shapps had offered customers a “a get-rich-scheme” costing US$ 497 and promised them a “toolkit” that would earn them US$ 20k in twenty days, provided they followed its instructions in an e-book; they included advising the user to create their own toolkit and recruit 100 “Joint Venture Partners” to resell it for a share of the profits.

In August 2018, the FT reported a “secret pay deal” between Shapps and OpenBrix, a British blockchain property portal company, alleging that he would have received a payment in cryptocurrency tokens with a future value of up to US$ 920k. The then chairman of the all-party parliamentary group on blockchain, which he actually had initiated, resigned from OpenBrix as well as his chairmanship from the group. Shapps maintained that he had confirmed with the standards commissioner that he was not required to register the interest. Then in September 2019, the now Secretary of State for Transport oversaw Thomas Cook Group fell into administration, leaving more than 150k UK tourists in need of repatriation.

This week, the same Grant Shapps has given the boss of P&O Ferries “one final opportunity” to reemploy sacked staff on their previous salaries. With his past history, it is laughable that he had the gall to post that “a reversal at this point may also go some way in starting to repair your firm’s reputation”.

Dubai Municipality estimated that the emirate imported 7.9 million tonnes of food last year, with nearly 287k food shipments and over 1.7 million food products, driven by various measures to ensure strong quality control of foodstuff and to enhance the stability of food imports; on a quarterly basis the total weights imported were 1.9 million tonnes, (Q1), 2.3m, 1.81m and 1.83m. The municipality closely monitors the internal and external conditions that impact food safety in Dubai, ensuring the emirate’s leading position in the food safety map at regional and international levels. The municipality networks closely with both federal and local entities to support local and national goals to strengthen food supply chains.

Dubai Electricity and Water Authority’s Initial Public Offering opened for subscription on Thursday, with the subscription period running until 02 April for retail investors and until 05 April for qualified investors. A price range has been set at between US$ 0.61 and US$ 0.67, equitable to a market value of US$ 30.6 billion and US$ 33.8 billion. Initially a total of 3.25 billion shares, or 6.5% of the utility’s existing shares, was offered, but due to such demand this was subsequently increased to 17.0% of its share capital, (8.5 billion ordinary shares); this would see DEWA raising between US$ 5.2 billion to US$ 5.7 billion from the IPO. It does seem that the retail sector will be hugely oversubscribed and could have done with a bigger share than the 325 million of the 8.5 billion shares on offer., DEWA’s debut on the DFM is slated for 12 April.

The M Glory Group has invested US$ 409 million in its new electric vehicle manufacturing hub, located in Dubai Industrial City. When at full capacity, it will be rolling out 55k vehicles annually, to meet an increasing rising demand for green mobility to reduce global carbon emissions. It will be one of the largest such facilities in the region and provide employment for more than 1k and will export not only to the GCC but also to the likes of Egypt, Kenya, Mali, Senegal and Tanzania.

in 2020, Gulf Navigation made a loss of US$ 77 million but managed to make a US$ 17 million profit last year, driven by lower operating and finance costs. The Dubai-based maritime and shipping company posted declines in operating costs by 31.5% to US$ 27 million and finance costs, 13.0% lower at US$ 11 million. Last year, the company restructured its debt which “reflected positively on the company’s results by benefitting from the reduction of debt provisions”, with loans of US$ 82 million being restructured and refinanced under “new and flexible term.

Following a 2020 profit of US$ 55 million, Union Properties sank to a net loss of US$ 263 million, despite a 6.0% rise in revenue to US$ 109 million, after it rectified the value of its property portfolio that “had been inflated in prior years”; there was no surprise to see that the new board changed the company’s independent valuer. The Dubai developer, now in the throes of a major restructuring process, booked a US$ 302 million loss in 2021 following a US$ 203 million gain the previous year. The accounts also showed a US$ 42 million impairment charge, relating to investments in quoted funds and quoted equities, which are “suspected to have been misappropriated by the company’s former officials”. UP shares fell 4.12% on the news to US$ 0.063 and have fallen 28.0% YTD.

The DFM opened on Monday, 28 March 62 points (1.8%) higher on the previous week gained 125 points (3.7%) to close on Friday 01 April, at 3,537. Emaar Properties, US$ 0.17 higher the previous four weeks, was US$ 0.11 higher at US$ 1.63. Emirates NBD, DIB and DFM started the previous week on US$ 3.92, US$ 1.65 and US$ 0.64 and closed on US$ 4.09, US$ 1.69 and US$ 0.67. On 01 April, trading was at 92 million shares, with a value of US$ 60 million, compared to 127 million shares, with a value of US$ 92 million, on 25 March 2022.

For the month of March, the bourse had opened on 3,208 and, having closed the month on 3527, was 319 points (9.9%) higher. Emaar traded US$ 0.25 higher from its 01 March 2022 opening figure of US$ 1.38, to close the month at US$ 1.63. Three other bellwether stocks, Emirates NBD, DIB and DFM started the month on US$ 3.90, US$ 1.66 and US$ 0.63 and closed on 31 March 2022 on US$ 4.09, US$ 1.68 and US$ 0.66 respectively. The bourse had opened the year on 3,196 and, having closed March on 3,527, was 331 points (10.4%) higher, YTD. Emaar traded US$ 0.30 higher from its 01 January 2022 opening figure of US$ 1.33, to close March at US$ 1.63. Three other bellwether stocks, Emirates NBD, DIB and DFM started the year on US$ 3.69, US$ 1.47 and US$ 0.72 and closed on 31 March on US$ 4.09, US$ 1.68 and US$ 0.66 respectively.

By Friday 01 April 2022, Brent, US$ 4.75 (9.3%) higher the previous week, had lost US$ 13.26 (11.8%), to close on US$ 99.42 Gold, US$ 39 (3.7%) higher the previous week, shed US$ 29 (1.5%), to close Friday 01 April on US$ 1,929.  

Brent started the year on US$ 77.68 and gained US$ 22.37 (28.8%), to close 31 March on US$ 100.05. Meanwhile, the yellow metal opened January trading at US$ 1,831 and has gained US$ 112 (6.1%) during 2022, to close on US$ 1,943. For the month, Brent opened at US$ 99.23 and closed on 31 March, US$ 0.82 (0.8%) higher, on US$ 100.05. Meanwhile, gold opened March on US$ 1,921 and gained US$ 22 (1.1%) to close at US$ 1,943 on 31 March.

According to Dr Sultan Al Jaber, the UAE’s Minister of Industry and Advanced Technology, global oil markets face tighter supply in the short term, because of several factors including the long-term underinvestment into the oil and gas sector has left markets more exposed. Although geopolitical situations are in play, in a highly sensitive energy market, at the base of the current volatility in oil prices is a deeper, underlying structural issue. He reiterated that “we have a responsibility to inject a dose of realism into the planning for energy transition,” and ““let’s invest in new and future energies but let’s not defund the current energy system … before a new one can take its place.” The minister noted that annual energy investment into oil and gas was up to US$ 200 billion below where it needs to be and that is just to keep up with demand over the next eight years; last year, sector investment, at US$ 341 billion, was 23% lower than pre-pandemic levels He also warned that “put simply, we can’t, and must not unplug the current energy system before we have built a new one.”

Further to Opec+ announcing earlier in the week that it would be adding another 432k bpd of crude to the market in May, the Biden administration announced yesterday that it would be releasing a further one million bpd for the next six months from its strategic petroleum reserve to tackle soaring inflation and gasoline prices. This is the third time the country has tapped into its SPR in the past six months, with the last time being  60 million barrels in November.

The International Energy Agency said its members have agreed to release more oil from emergency reserves to offset the market turmoil caused by Russia’s war in Ukraine. Details of the new emergency stock release will be announced early next week. The agreement follows last month’s action, taken by IEA members, where they pledged to release 62.7 million barrels of oil from emergency stocks. The IEA commented that Russia’s war in Ukraine continues to put significant strain on global oil markets, which continues to raise concerns about the global energy security.

With Ronin Network, owned by Vietnamese parent company Sky Mavis, announcing that it had US$ 615 million stolen, there could be a million people having lost in the second largest crypto hack in history. It says a hacker transferred US$ 540 million (now valued at US$ 615 million) worth of cryptocurrency to themselves six days ago, but the company only noticed on Tuesday when a customer was unable to withdraw their funds. The platform, which powers the popular mobile game Axie Infinity, with players fighting cartoon pets called Axies to earn cryptocurrency, like Ethereum, and collect the game’s non-fungible tokens (NFTs). It is thought that some may have lost their “life savings” after saving up digital coins from playing the game. Over the past twelve months, it has been estimated that a raft of mass crypto heists has netted over US$ 2 billion.

After fourteen years of being the majority shareholder in the NatWest Group, the UK government’s stake in the troubled bank has fallen below 50%, to 48.1%, as it divested US$ 1.58 billion worth of shares to NatWest. Since the government bailed out the bank at the height of GFC, for US$ 59.3 billion, the plan was always to return the bank to private ownership; initially it held 57% but this was extended to top 84%. During the crisis, the government also bailed out Lloyds Bank, acquiring a 43% stake, and managed to divest this by 2017.

As the rouble continues to struggle, Vladimir Putin has announced that “unfriendly” foreign countries must start paying for gas in roubles or supplies will be cut as from today, 01 April. Foreign buyers of Russian gas will need to open an account at Russia’s Gazprombank and transfer euros or US dollars into it in order to pay for gas exported from Friday onwards. However, it appears that the payments for that gas will not be paid by European buyers until mid-May. As the EU relies heavily on Russia – 40% of its gas and 30% of its coal emanates from there – it has not placed bans on oil or gas, unlike US and Canada. It has been estimated that Russia currently gets US$ 443 million per day from gas sales to the bloc and it has no way of rerouting this supply to other markets.

With a general election just weeks ahead, there is no wonder that the Morrison government gave money back to the voters in this week’s Australian budget Those six million Ozzies, on some form of government payments, will receive a one-off US$ 187 (AUD 250) “cost of living payment” this month; it will be exempt from taxation and will not count as income support for the purposes of any income-support payment. Another cost-of-living tax offset sees the phasing out the so-called Low and Middle Income Tax Offset, first introduced in 2019, but it will increase the payment for everyone, by US$ 315 (AUD 420), for its last year, (2021-2022), of operation. LMITO has resulted in annual tax cuts worth between US$ 191, (AUD 255) and US$ 809, (US$ 1,080), depending on taxable income, to people earning below US$ 94k, (US$ 126k)a year. Much-larger tax cuts are still planned to go ahead from July 2024, which will clearly benefit higher-income earners, and which will be permanent. Many thought that LMITO had a longer shelf life but the fact that it was costing the government over US$ 5.2 billion (AUD 7 billion) a year saw its early demise.

Whilst lower paid Australians will be paying more tax next fiscal year (July 2022 to June 2023), high-income earners will be preparing to receive large and permanent income tax cuts because a few years ago, the government legislated large changes for personal income taxes in the then future. From July 1, 2024,  the government’s so-called “stage three” tax cuts will:

  • increase the income at which the top 45% tax bracket begins from US$ 135k, (AUD 180k), to US$ AUD 150k)
  • abolish the 37% marginal tax rate
  • lower the 32.5% marginal tax rate to 30%, leaving all earnings between US$ 34k, (AUD 45k) and US$ 150k, (AUD 200k), facing a marginal tax rate of 30%

It is estimated that the changes will see around 95% of taxpayers facing a marginal tax rate of no more than 30% from 2024-25, but the Liberal government has no qualms at giving the largest tax cuts to the highest-income earners– those earning more than US$ 150k, (which will include federal politicians), who will be eligible to a permanent tax cut of US$ 7k (AUD 9k). Meanwhile, people earning less than US$ 34k, (AUD 45k), will get nothing at all from the stage three tax cuts, and middle-income earners will get little. It seems that ScotMo must be confident that this move will not cost him his job at next month’s election.

The budget also saw a 50% cut in fuel excise from US$ 0.33, (AUD 0.44), to US$ 0.17 (AUD 0.22), on every litre of petrol or fuel, which will run for the next six months; this will save the average family with two cars US$ 525 (AUD 700) over the next half year but cost the government US$ 2.3 billion (AUD 3.0 billion).

As widely expected, Expo 2020 proved a welcome lifeline for Dubai’s tourism, aviation and hospitality sectors recovering from the pandemic, as it was one of the main drivers enhancing visitor numbers. Consequently, leisure and business travel, hotel occupancy rates, room revenue and footfall at shopping malls all moved higher. According to Sheikh Ahmed bin Saeed Al Maktoum, Emirates group chairman, the airline posted improved load factors and strong travel demand “due to a combination of factors, including the UAE’s successful management of Covid-19, which was critical to many countries quickly easing travel restrictions to and from Dubai and building traveller confidence”. He also noted that the airline had seen “an increase in first-time visitors to Dubai among our customers during the past months, which shows the pull of Expo 2020 and strong traveller interest in Dubai.” Expo 2020 was a key factor in DXB recording its busiest fourth quarter since the onset of the pandemic, with 11.8 million passenger traffic. STR estimates that the hotel occupancy, for the week ending 12 March, at 85%, was the highest in the world for a fourth consecutive week; the average global rate stood at 50.8%. The pandemic-delayed Expo 2020 in the United Arab Emirates closed yesterday after eight years of anticipation, over US$ 7 billion in investment, 240 million labour hours and one hundred and eighty-three days of festivities. By last Saturday, the world fair had attracted 21 million visitors, about 70% of which have been from the UAE, and 2.8 million were children under the age of 18. Even though the Expo 2020 site will soon welcome back visitors, (as early as by October), and  will be transformed into a futuristic city, under the guise of District 2020, where people will live, work and play, for now The Carnival Is Over!

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