So This Is Christmas

Nativity-SceneWith the aim of synchronising and integrating all the emirate’s different public services, HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, has established the Dubai Open Data Committee. RTA’s Abdulla Al Madani will chair the agency which will include high-powered representatives from the likes of Dubai Police, Department of Economic Development, Dubai Tourism and Dubai Municipality.

One of the emirate’s success stories, Dubai Duty Free, celebrated its 31st anniversary with a three-day discount across a wide range of its products. Coinciding with the airport’s busiest ever traffic day – with 80k passengers – it was little wonder that the US$ 51.5 million revenue was 21.8% higher than last year’s comparative figures. Earlier in the week, the company donated US$ 54 million towards the building of the new Dubai Autism Centre.

In its first month, Global Village has already welcomed more than 1 million visitors. Now in its 19th season, and its 10th in Dubailand, the 3 million sq ft family and entertainment park expects to have record attendances of over 5 million, before it closes in early April.

It seems that Nakheel is serious in its bid to become the prime retail operator in the emirate, as it plans to launch several new projects, valued in the region of US$ 2 billion.  Early next year, the developer will issue a tender for the construction of the 2.85 million sq ft, US$ 463 million Deira Islands Mall. The planned extension of an additional 640k sq ft to its Ibn Batuta Mall will see the facility covering almost 2 million sq ft. Then it already has retail projects in the pipeline on Palm Jumeirah and some of its residential locations (including The Circle Mall – with Waitrose as the anchor store – at JVC and a mall in neighbouring Jumeirah Village Triangle) as well as the expansion of Dragon Mart.

Danube Properties will go ahead with its US$ 82 million, 300-apartment project in Q1. Located in Dubai Silicon Oasis, phase 1 of the sale of the twin-tower Glitz launched this week, with the release of 146 units. Completion date is slated for mid-2017.

Despite being the most expensive office market location in the ME, Dubai’s prices – at US$ 92.6 per sq ft – are still much lower than London’s US$ 274 and other locations. Indeed Dubai comes in 23rd in the recently released CBRE’s Global Prime Office Occupancy Costs.  With regard to the residential sector, and notwithstanding a flat Q3, Dubai still shows the highest annual rental increase in the world, with a 12.4% hike, ahead of the global 2.1% average.

DP World runs four port facilities in Australia and has been locked in bitter disputes with trade unions over pay and working conditions. The Dubai-based operator is hoping that negotiations, with the Maritime Union of Australia, due to take place in January, will bring some sort of resolution – but a speedy conclusion seems some way off.

Emirates REIT has informed Nasdaq Dubai that it intends to propose a US$ 12 million dividend, equating to US$ 0.04 per share. The Shariah-compliant real estate investment trust, which only went public in April 2014, intends to distribute dividends twice a year.

DEWA released its 2015 budget which saw an 11.1% annual increase to US$ 6.2 billion, with capital expenditure up 17.3% to US$ 2.3 billion. Currently, the utility’s installed power capacity stands at 9,656MW – which includes a buffer of 2,423MW – and water capacity of 470 MIGD, with a reserve margin of 154 MIGD. (In an effort to cut energy consumption by 30% by 2030, Dubai plans to invest US$ 13.6 billion, mainly on new energy strategies including solar).

The Federal Customs Authority released H1 trade figures indicating that non-oil trade reached US$143.0 billion. Of this total, imports accounted for US$ 92.7 billion (64.8%), reexports US$ 33.1 billion (23.1%) and exports US$ 17.2 billion (12.1%).

For a market that has seen major falls (October – 9.9%, November – 9.8% and opening on Sunday 20.0% down on the month of December), this week saw some sort of seasonal goodwill. The DFMI had a recovery week surging 11.9% from Sunday’s opening of 3427 to close on Wednesday at 3834. Bellwether stocks, Emaar Properties and Arabtec, were up 11.9% and 10.7%, trading at US$ 2.07 and US$ 0.83 respectively.

As usual, corporate misdemeanours seem to occur on a weekly basis. French engineering company Alstom has accepted to pay a US$ 772 million fine imposed by the US Department of Justice. This – the largest such fine to be levied by the DoJ – was in connection with government-related bribery charges in markets such as Indonesia and Egypt. A preliminary hearing to other charges, brought by the UK’s Serious Fraud Squad, is due to be heard in London next month.

Auditors PwC and their client Tesco’s will have a nervous start to 2015 as the UK’s Financial Reporting Council is set to check the company’s accounts for the past three years. The watchdog’s enquiry follows the supermarket’s surprise September announcement that it had misstated half year profits by over US$ 400 million.

Chinese authorities came calling for Avon, as the cosmetic direct seller was hit with a US$ 135 million fine for bribery charges. The US company admitted that it had paid off Chinese officials in return for business benefits, that included the lifting of the ban on direct selling and obtaining a direct selling licence.

The Hong Kong Kwok brothers, said to be worth over US$ 14 billion, were in court this week on corruption charges. Although Raymond was cleared of all charges, Thomas was sentenced to five years in jail for bribing a government official US$ 1.2 million for confidential information on land sales.

It could take another two years for the RBS Shareholder Action Group to take the beleaguered Royal Bank of Scotland to court over a US$ 18.5 billion 2008 rights issue. The irate investor group – including the likes of Standard Life and M&G, as well as thousands of private stakeholders – is seeking US$ 6 billion in damages over alleged false claims made on the bank’s viability at the time. Shortly after, the bank was on the verge of collapse before the government came in with a US$ 70 billion rescue package.

Trust Bank is the first of probably many financial Russian institutions to hit the rails as a result of the meltdown in the country’s economy. The Central Bank has placed the bank under supervision and has paid in bailout funds of US$ 530 million, so that bankruptcy is avoided. There is no doubt that the sanctions imposed over the Ukraine crisis will push the country into recession next year and could see government debt downgraded to junk status.

South Korea is Asia’s 4th largest economy and becomes the latest to cut its growth forecast, now amended to 3.4%, with 2015 at 3.8%. The government expects a boost in domestic consumption as a result of falling oil prices and increasing investment.

Latest employment data from Australia indicates a weakening in the labour market with unemployment levels set to increase 0.2% to 6.4% in 2015. The currency continues in free-fall reaching 81 cents to the US$ 1 – way down on May government budget estimates of 93 cents. With 2.5% and 3.0% growth forecasts for the next two years, the currency will have to fall a further 8% to have any impact on shortening the country’s dole queues. At that level, tourism and manufacturing will become more competitive on the world stage.

Luxembourg’s PM, Xavier Bettel, has caved in to EU demands that his country release details of the many companies with which it has favourable tax deals. It saves some embarrassment for the newly elected EC president, Jean-Claude Juncker, who was that country’s leader for 18 years, until 2013. During that time, he must have been involved in deals that oversaw tax arrangements, with at least 400 multinationals, some of which reportedly got way with tax rates of 1%! Amazon, for example, pays their tax bill for UK purchases in the duchy which has the highest GDP in the EU.

Even the relatively high flying UK economy was off the pace this week, with Q3 returns showing a 2.6% hike, down on the 3.0% estimate. As a result, the economy is now only 2.9% bigger than it was before the GFC. The country is not being helped by the problems in the eurozone which is deteriorating by the month. The latest UK current account deficit of 6% to GDP continues to be of concern in a country that, according to some analysts, has total debts of a staggering 500% of GDP!

Following the release of better than expected economic data, showing that the rate of Q3 growth at 5% is the fastest in 11 years, the two main US bourses continued their upward momentum on Tuesday. The S&P 500 surged to a record high of 2085 (and up over 16% this year) whilst the Dow topped 18,000. Since March 2009, both exchanges have shown remarkable growth – over 300% and 175% respectively. How long can this 5-year bear run continue?

At the end of the year, there are still wars and major conflicts on many fronts including Syria, Afghanistan, IS, Ukraine, Libya and South Sudan. Not only is the world in economic turmoil, it has major social problems, that have a direct impact on the population when it is estimated that:

·        every year one million die from malaria, of which 90% are in Africa

·        2.6 billion people lack basic sanitation

·        more than 359 million live on less than US$ 1 per day

·        150k have died in the on-going Mexican drugs war

·        earlier in this century 3.8 million died in the 2nd Congo War

·        10.6 million Britons (23.2% of the population) live in relative poverty

As usual, it is the children who suffer most as:

·        22k children die each day due to poverty

·        28% of all children in the developing world are underweight.

·        72 million children of primary school age do not receive an education

·        1.8 million children die from diarrhoea each year

Then what is happening to them in Palestine, Pakistan, Nigeria and Syria, because of a mix of terrorism, political strife and intransigence, beggars belief. It is a disgrace that in 2014 many must be wondering So This Is Christmas! 

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