Good news – at least for the animals in the over-crowded Jumeirah zoo, with reports that they will be shortly relocated to a 400 hectares redevelopment in Al Warqa’a. Furthermore, the new complex will include golf courses, along with entertainment and recreational areas. The move is long overdue and this ambitious project, costing US$ 40 million, will add another attraction for both Dubai’s residents and the ever increasing number of visitors.
Dubai Municipality have also announced two other major projects – the completion of the Business Bay canal, linking it with the sea, and the expansion of the iconic Creek.
The Business Bay Project – costing US$ 50 million – will see the canal connected to the sea by a three kilometre pipeline and this will be followed by completion of the canal waterway connecting all the existing lagoons. The end product is bound to be something special!
The Dhow Wharfage Development will add an extra three kilometres to the Creek which will allow 450 dhows to berth, with thirty loading areas covering an area of 90,000 square metres. Existing capacity will be increased by 50% as well as allowing bigger vessels to anchor.
Another indicator that Dubai’s fortune is on the up is that real estate prices are edging toward levels last seen in early 2008 and that a further 28,000 units will become available this year. Dubailand (4,400 units), Jumeirah Park (4,200), Jumeirah Village (3,900) and Dubai Marina (3,100) will be the main contributors to adding to the emirate’s residential stock.
It is interesting to note that in Q1, Dubai-based banks saw a profit decline whilst their Abu Dhabi equivalents saw record profit growth over the same period. One of the main reasons for this blip related to increased provisions for bad loans. (How much more potential bad loans in their books still remains to be seen).
Emirates NBD saw profits fall 55% to US$ 175 million, whilst DIB’s profit was down 10% to US$ 60 million and DCB fell 8% to US$ 66 million. Reports indicate a 4% drop in Q1 profits to a total of US$ 1.58 billion for the eighteen listed national banks.
HSBC, the biggest international bank here, saw a 0.8% quarterly shrinkage in its loan book to US$ 27.3 billion – whereas in all its other global regions, there were rises. This may be a pointer that growth is not as robust as it should be and the problem here is further exacerbated by other European lenders who have been forced to cut lending lines to the region under Basel III.
Despite this, current predictions are that Dubai’s GDP will expand at a faster rate than first forecast with some analysts now looking at a growth rate of up to 5% – much better than the 3% recorded in 2011. Not surprisingly, the strong showing in Dubai’s trade, tourism and travel sectors is receiving most of the plaudits. April saw Dubai’s CPI decline 0.3% month on month and 1.9% for the year whereas Abu Dhabi went the other way with 0.2% and 1.3% increases respectively.
Much of the football world has been focussed on Abu Dhabi as Manchester City, owned by Sheikh Mansour bin Zayed Al Nayahan, became the English Premier League champions this week. The moneys involved in the game, at this level, beggars belief. Consider this. When the EPL came into existence in 1991, the average wage in the UK was US$ 30,000 whilst the average pay for a premiership footballer was four times as much at just over US$ 120,000. Now the national average is US$ 51,000 but EPL footballers now earn over US$ 1.85 million (or 36 times the national average) – and that is just from their football income.
The Dubai Financial Market continues into negative territory shedding a further 1% when it ended the week on 1476 points compared to its Sunday opening of 1515. Despite another weekly fall, the market is still up nearly 13% this year.
Whilst on the subject of the DFM, Q1 losses for all the 49 listed brokerage firms amounted to US$ 2.7 million – a major improvement on the US$ 21 million shortfall in the same period last year, as traded values improved from US$ 9.9 billion to US$ 15 billion this quarter.
Just as things go from bad to worse in Europe, the quarterly reporting season from Japan is just as depressing. Who would believe that the likes of Sony and Panasonic could have quarterly losses of US$ 3.2 billion and US$ 5.5 billion respectively? And what does it say about the sorry state of the once powerful Japanese economy?
Nearer home, the fall of the Indian currency indicates that all is not well there. Over the past ten weeks, the rupee has fallen 10% in value and now stands at 54.5 to the US$. Good news for the NRI community sending money home – but a problem for the Indian
The continuing economic tragedy – which is the eurozone – deteriorates by the day. From a Dubai perspective, this could be bad news if (and when) oil prices soften, global trade drops and the flow of European tourists dries up.