It’s All Over Now

AliDamac Properties were quick out of the blocks as they announced the launch of their 270-unit Tenora Tower, adjacent to the Expo site near to Dubai World Central. Prices will start from US$ 166k and should be completed within eighteen months.

Emaar is making great use of the current buoyancy in the property sector. At the beginning of the month, the first batch of 70 properties in its up-market Dubai Hills Project was sold out, within minutes, at prices ranging from US$ 7 million – US$ 10 million. The same sales mania occurred this week with its two-tower Vida Residence Project, comprising 136 units, at starting prices of US$ 790k, selling within minutes of release.

It is expected that Deyaar Development’s Fairview Residency will be complete by March next year. The 18-storey, 172-apartment building is located in Business Bay. The Dubai-based developer is fast recovering from its troubles, following the GFC and Dubai property collapse; the company’s shares surged the next day by 10% on this news.

Dubai’s latest five star hotel is set to open on Christmas Eve. The Al Habtoor Group announced that the Waldorf Astoria, located on Palm Jumeirah, will become the group’s seventh hotel, four of which are in Dubai. Three more are currently under construction on the Metropolitan site on SZR.

The RTA has announced the arrival of the first batch of eleven coaches for use on the upcoming Sufouh Tram System – with the official opening due late next year. 27k passengers are expected on a daily basis, with each coach having a capacity of three hundred users.

Designed to handle 7k passengers at any one time, Mina Rashid has been voted the best cruise port in the world for the sixth consecutive year. The DP World facility, covering an area of 24k sq mt, has recently been upgraded.

Majid Al Futtaim Group (MAF) has announced a US$ 5 billion investment programme as it launched a single branding for its numerous entities, including Mall of the Emirates, Carrefour, Ski Dubai and VOX cinemas. The conglomerate is planning to double its size within the next five years, to an asset size of US$ 20 billion. Part of the plan includes several ski slopes in the MENA region, similar to those of the eight-year old Ski Dubai, and Ski Egypt, which is due to open in 2016.

Following their 2010 release of a US$ 500 million convertible bond, Emaar Properties has issued 18.7 million new shares at a reduced price of US$ 1.29. This is because bondholders wanted to cash in with the share value having now reached a 5-year high of US$ 2.00.

Arabtec Holdings have refuted claims that it was considering purchasing Drake & Scull – this despite the two companies working together on several local projects, including the Louvre in Abu Dhabi.

It does seem surprising that the UAE is the 11th largest importer of clothes with a value in excess of US$ 4 billion (or 0.89% of the global total). With the retail sector set to increase to US$ 41.1 billion by 2015, it seems inevitable that the clothing industry will continue to grow in tandem.

A sign that Dubai is getting more of a profile as a hub centre was news that Hino Motors Limited has opened its new parts facility in Dubai World Central. The bus and truck manufacturer will use the 5.4k sq mt facility to import directly from Japan to expedite deliveries with the GCC and surrounding region.

It has to be Dubai when a bra, costing US$ 10 million, goes on display in the Dubai Mall. Loaded with 4,200 gems, and a 52-carat ruby, the garment was designed by Mouawad, the Swiss-based jeweller.

The Dubai Investments subsidiary, Glass LLC, estimates that it has seen a marked improvement in business and has picked up at least US$ 38 million of new business in Q4.

There is no doubt that the local auto sector is thriving and set to hit record high sales by the end of the year. This expansion is set to continue into 2014 and, as a result, Arabian Automobiles, the Nissan, Infiniti and Renault exclusive dealer, has announced that it will be taking on an extra 250 staff to meet the increasing demand.

Thirteen years ago, fast food chain ChicKing did not exist. Now the Dubai-based fast food chain has 100 outlets in thirty countries and has plans to increase this number tenfold by 2020; it has just signed an MoU with Malaysia’s Dual Super Food to set up stores in that country and others in SE Asia.

Dubai Health Authority have indicated that all companies, with more than 1,000 employees, will have to introduce mandatory staff health insurance before October 2014 with smaller companies (100 – 999 employees) having to follow suit by July 2015, with another year’s grace given to entities below that size.

There was a welcome bonus this week for many in the Dubai public sector with salary increases of between 30% and 100%, paid retrospectively from June. It is reported that some doctors and financial controllers will see their pay packets double!

With his recent decree, HH Sheikh Mohammed bin Rashid Al Maktoum has laid down his three-year plan to make Dubai the centre of a potential US$ 6.7 trillion Islamic global economy. The Dubai Islamic Economy Development Centre will be set up with the specific aim of making this a reality.

The Dubai Financial Market General Index continues to flourish and is up 109.1% YTD. It started the week on 3158 points and moved 2.7% higher to close at 3243.

The Institute of International Finance have estimated that Expo 2020 will add an annual 1.5% to Dubai’s GDP for the next six years whilst official figures estimate a spend of US$ 24 billion which will inevitably add to the emirate’s debt. The end result seems to indicate an 18.7% jump in debt to US$ 168.5 billion. However with an estimated 5.5% annual growth, Dubai’s debt to GDP ratio will actually fall from its 106% level last year to 70% in 2020. Funding will be from a variety of sources including internal (profit and sale of assets), local (federal and Abu Dhabi assistance) and global capital markets.

It is reported that Istithmar World, Part of Dubai World, has sold its 50% share in the celebrated Fontainebleau Hotel in Miami which it acquired for US$ 375 in the halcyon days of 2008. (In 1976, Muhammad Ali stayed at the hotel, when filming ‘The Greatest’). The amount paid by the Florida property developer is unknown but should bring in a profit for the Dubai GRE.

European golf received a major boost with Emirates announcing that it would sponsor another nine tournaments, making nineteen in all, as well as becoming the tour’s official airline. The airline’s agreement is for the next four years, running until 2017.

Good news and bad news for Ireland as the country formally exited its 3-year US$ 115 billion bailout programme but it will still face  several years of painful austerity programmes, as it battles an unemployment rate of 12.8% and depressed market conditions. Fellow eurozone strugglers – Cyprus, Greece and Portugal – are still under the control of the troika (IMF, EU and ECB) and will continue to have reduced input into their own finance policy.

In recession for six years, Greece has been relying on bailout funds for over three years and again this week, Prime Minister Antonis Samaras was requesting a further write-off of his country’s debt. This will be dependent on whether the troika consider that Greece has fulfilled the terms of its bailout deal.

There is no doubt that the Chinese economy is undergoing problems as growth levels, although still high on an international comparison, are expected to fall below a two-decade low of 7.5%. The world’s second largest market is set for a bumpy 2014 and this, in turn, will be depressing news for the global economy, with many countries still reeling from the effects of the GFC.

On the back of a slowing China, the Australian economy is going into a tailspin, as it faces a possible US$ 42 billion deficit this financial year, unless immediate action is taken. A major driver in this turnaround in fortunes is a softening in resource investment along with a weakening economy. The sorry state of the national airline, Qantas, increasing unemployment levels and a collapsing auto industry are further indicators that the lucky country is facing turbulent times.

As expected, the US Federal Reserve has announced the scaling back of its quantitative easing policy by US$ 10 billion a month, with the taper being equally split between mortgage-backed securities and treasury bonds which will both fall  by US$ 5 billion in the first month to US$ 35 billion and US$ 40 billion respectively. As the markets have become addicted to so much cheap money (US$ 85 billion a month), it comes as a relief to some that the days of easy money have ended. It’s All Over Now.

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