Life On Mars

mars-banFollowing Emirates’ announcement earlier in the month, confirming its order for 150 Boeing 777X aircraft, the airline has signed a 12-year, US$ 13 billion maintenance and repair agreement with GE for the 300 GE9X engines that it ordered last November, at a list price of US$ 15 billion. (The GP7200 engines, used on the entire Emirates 380 fleet, are made by Engine Alliance, owned by GE and Pratt & Whitney).

The week it received its 50th Airbus 380, and with a further 140 on order, Emirates intimated that it could be in the market for another 80 if the manufacturer could be convinced to overhaul the existing model by 2020. Any revamp would include using the more fuel efficient Rolls Royce engines and other modifications which could slash operating costs by more than 8%.

DP World is the latest GRE to make use of the improved debt market conditions by signing a 5-year US$ 3 billion loan. It is reported that the global port operator has agreed to a US$ 2.39 billion conventional loan, at 150bps over Libor, with the balance being a Sharia compliant instrument.

To ensure a continuing reliable supply of water, and improve operating efficiency, DEWA has invested US$ 18 million in a two-year project that will see the introduction of surge protection devices in its pumping stations.

The fact that Dubai’s inflation rate in H1 rose over 71% to 2.74%, compared to the same period in 2013, comes as no surprise when residential rent and utilities account for 44% of total consumer expenses. Three major price rises in H1 were gas (11.89%), rents (5.03%) and education (4.43%).

Shuaa Capital posted Q2 profit figures of US$ 1.7 million, up US$ 1.3 million on a year earlier, as Revenue jumped 19.8% to US$ 14.2 million. Although the investment bank’s figures are up on the same 2013 period, they are slightly down on Q1 Revenue and Profit of US$ 17.5 million and US$ 2.2 million.

There is some indication that Aabar Investments is interested in acquiring more shares in Arabtec from its former CEO, Hasan Ismaik, so as to bring its holding to around 30%. The Abu Dhabi government-owned investment company is currently Arabtec’s second largest shareholder with a 18.94% stake. Belatedly, the authorities have taken some positive action and suspended trading in the company’s shares at the start of Thursday’s business, whilst it awaited further clarification from the main stakeholders.

The Dubai Financial Market had a stellar Q2 with Profit up 363% from US$ 18.9 million to US$ 68.8 million whilst the value of securities traded in the quarter rose by 234% to US$ 34.6 billion.

The bourse, opening on Sunday at 4575 points, had another mega week to close Thursday up 7.2%, or 328 points, at 4903. Emaar and Arabtec ended the week on US$ 2.70 and US$ 1.35 respectively. The DFM alsobconfirmed that it had approved a move by Drake & Scull to issue a US$ 15 million convertible bond to an unnamed investor, keen to buy into the company.

According to a recent Thomson Reuters’ report, H1 debt capital market activity in the ME fell some US$ 4 billion to US$ 22 billion. Over US$ 12.1 billion of this business originated in the UAE with Saudi being a distant second with US$ 6.2 billion.

The Brics group – which represents over 40% of the global population – now has its own development bank with the principle aim of financing infrastructure projects in the five member nations – Brazil, Russia, India, China and South Africa – without having to rely on the Western banking system. All countries will each pay in US$ 10 billion capital for the new financial institution which will be headquartered in Shanghai. Furthermore, there will be a US$ 100 billion Contingent Reserve Arrangement to reduce any economic fall-out as US continues tapering its QE policy, which started the year at a monthly US$ 85 billion and is expected to be finally closed down by November.

HH the President Sheikh Khalifa announced the creation of a UAE Space Agency, as the country enters the space race to send an unmanned craft to study Mars. This project will be the main driver of the agency but it will also be tasked with developing Emirati talent in the space and aeronautical sector as well as making the country a space technology centre. Only eight other countries have plans to explore this planet that will involve a 60 million km journey over a nine month period.

The launch date, 2021, coincides with the country’s 50th anniversary of its formation and UAE will be the first Arab nation to explore outer space. There are no costs available but the UAE has already spent US$ 5.5 billion on its satellite and space development programme – and this will cost a lot more. HH Sheikh Mohammed bin Rashid Al Maktoum is quoted as saying: “We chose the epic challenge of reaching Mars because epic challenges inspire us and motivate us. The moment we stop taking on such challenges is the moment we stop moving forward.” One wonders what Dubai could do to the red planet if its probe did find Life On Mars.

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