Boeing seem to be having continuous problems with its new 787 Dreamliner – the latest being hairline cracks in the wings, manufactured by Mitsubishi. Another minor problem is that Emirates apparently have yet to sign off on their US$ 76 billion order for 150 777X aircraft. It seems that further negotiations have to take place, on items such as technical support, performance guarantees and warranties, before the final contract is signed.
Although better known for its electronics retail operations, Jumbo Group has ambitious plans for both its engineering and B2B divisions which they expect to become increasingly important parts of their future strategy. Not forgetting their core business, they are also looking at expanding in markets such as India, Iran and the GCC.
Staggering news from Arabtec was the awarding of a US$ 40.23 billion contract to build one million houses for the Egyptian army! Expected to be completed within six years, the development will spread across thirteen sites and cover an area of 160 million sq mt.
Damac Properties have been quick off the block announcing the launch of Celestia, which will be located at the EXPO 2020 site. The development will comprise eight floors of luxury serviced hotel apartments with the usual amenities such as restaurants, retail outlets and a health club.
Dubai Silicon Oasis announced a US$ 300 million smart city project, comprising 100k sq mt, which will have areas for commercial, residential, a 115-room business hotel, retail and restaurants. The unique feature of this development is that it will be only serviced by electric cars.
Following a favourable response to its first sale of units in Mulberry at Park Heights, Emaar is going ahead with a further one for 330 apartments in its Dubai Hills Estate. Located in the new Mohammed bin Rashid City, this huge development is a JV with Meraas Holding. The sale will take place this week on-line and in various locations – Dubai, Abu Dhabi, Baku and Hong Kong.
Al Futtaim Carillion is set to build The Avenue Phase 2 City Walk, having been awarded the US$ 208 million contract by Meraas. Phase 1 was finished last year whilst this stage – including entertainment and retail – is set to complete by mid-2015.
Since the June 2013 launch of its Dubai Design District, TECOM has received more than 500 enquiries from entities wanting a presence in this new area. Some licence applications are well under way despite the first phase, of what is known as d3, not being ready for another year. Located adjacent to Dubai Mall, the total project cost is estimated at US$ 1 billion.
Two GCC companies are planning to invest in Dubai. This week, Saudi’s Al Hokair Group opened its eighth Sparky’s leisure centre, at a cost of US$ 8.2 million, and will invest a further US$ 41 million in the country over the next two years. Kuwait’s IFA Hotels and Resorts is going to build an eight-storey mixed use development, including 300 units. The project, known as The 8, is estimated to cost US$ 272 million and will be located on Palm Jumeirah and should be finished by 2016.
The RTA is going ahead with enhancing the road infrastructure in Barsha. The US$ 27.2 million contract is part of the US$ 272 million Phase II of the 2012-2016 road network plans. It is estimated that the RTA has been responsible for the construction of over 500 km of roads since 2011.
Further to the issue last May of a US$ 500 million bond, Commercial Bank of Dubai has obtained shareholders’ approval for a US$ 2 billion bond. Last year, the funds raised were used for general corporate purposes but there is no information on CBD’s latest foray into the bond market.
Turnover has almost halved on some days to around US$ 170 million as investors turn their back on the DFM. After sixteen weeks of continuous growth, the bourse disappointed for a second straight week falling 4.2% from its Sunday opening of 4154 points to close on Thursday at 3981. Bellwether stocks, Emaar and Arabtec, were trading at US$ 2.36 and US$ 1.31 respectively.
The emirate’s 2013 non-oil trade witnessed a 7.1% rise to US$ 359.7 billion, reflecting the current boom in Dubai’s economy. India, China and US were the top three in total trade at US$ 37.3 billion, 36.8 billion and 23.4 billion respectively. Imports were up 10.0% to US$ 221 billion whilst exports and reexports rose by 4.0% to US$ 14.1 billion.
Acting on behalf of 38 failed banks, , the US Federal Deposit Insurance Corporation is suing sixteen major financial institutions, including Bank of America, JP Morgan Chase, HSBC and Barclays, for allegedly manipulating Libor. The sums involved are massive and estimated to be above US$ 300 trillion with the banks facing possible penalties of up to US$ 40 billion.
A further Chinese slowdown is almost inevitable following the February trade figures as exports dropped 18.1% year on year, imports rose 10.1% and the trade balance fell into negative territory, from a January surplus of US$ 32.0 billion to a deficit of US$ 23.0 billion. One slither of good news was the fact that China has overtaken the US as the in relation to the trading of physical goods which totalled US$ 4.16 trillion last year.
Japanese economic data is more than disappointing as weak numbers continue such as a marginal Q4 growth of 0.2% and a huge 30.3% annual surge in imports. This may be a good indicator that Abenomics is not working for the world’s third biggest economy. However, with a sales tax increase from 5% to 8% due in April, consumer spending has rocketed.
The ‘Is’ have it! A quick look at four countries – Ireland, Italy, India and Indonesia – will demonstrate how precarious is the state of the global economy.
With several pharmaceutical patents expiring last year, there was a knock on effect on Ireland’s net exports, which fell 10.9%. The Gaelic economy sank 2.3% from Q3 to Q4, with the problem being further exacerbated by a 5.8% increase in imports a brain drain of its young talent and a slight 1.1% fall in personal consumption. A 0.3% contraction in 2013 GDP shows that the country is still technically in recession.
The fact that the Italian economy in 2013 is smaller than it was in 2000 is an indicator on the massive challenges facing the new prime minister, Matteo Renzi. A few of the problems facing Europe’s third biggest economy include a government debt equivalent to 130% of GDP, unemployment at 12.7%, youth unemployment at 56%, a 2013 contraction of 1.3% and a record number of businesses going bankrupt or closing. No wonder even the EU has downgraded its outlook for the economy. Just to add to Italian woes, UniCredit, the country’s biggest bank, has just announced a record 2013 loss of over US$ 19 billion, most of which is attributable to the write off of bad loans.
Indian growth forecast has been further reduced to 4.5% this year – down from the government’s estimate of 4.9%. As the RBI is keen to maintain rates high for the immediate future – with the aim of keeping a lid on inflation – some sectors, such as manufacturing and agriculture, will continue posting disappointing returns.
Latest data from Indonesia show a January trade balance deficit of US$ 430 million. An appreciating rupiah, up over 7% this year, and inflation at 7.75%, do little to help the country’s competitiveness. Furthermore global uncertainty may result in capital outflows from Jakarta which will have a further damaging impact.
Whilst on the letter ‘I’, it is inevitable that interest rates will start rising earlier than many expect. That being the case, those who have overextended and taken on too much debt could find themselves in financial trouble. This applies to governments, companies and individuals.
A week after its disappearance from the skies, the whereabouts of the Boeing 777 of Malaysian Airlines is still unknown. It does seem strange that, in this day and age, such a big aircraft can disappear from sight without anyone knowing what has happened. Just like American Airlines flight 77, a Boeing 757, which crashed into the Pentagon, the aircraft manufacturer is involved in another mystery. How Bizarre!