Don’t Ask Me Why

greece-nazi-germansHH Sheikh Mohammed bin Rashid Al Maktoum made a visit to Nakheel offices this week and was updated on their future developments. Over the next three years, the company expects to spend US$ 3.8 billion on various projects, including the massive 9 million sq ft Deira Boulevard, which will have 3k retail outlets, 2.5k apartments, hotels and a 500 mt long glass dome. The developer anticipates to hand over 1.2k villas this year with a 32.1% increase in the value of new construction contracts to US$ 1.91 billion.

Currently home to three hotels, Dubai Investment Park announced that another eight properties will be added over the next five years in the run-up to Expo 2020. Three of these will include a Premier Inn (303 rooms), Armada Hotel (252) and Courtyard by Marriott (165), as the number of total rooms will increase by 2k. Estimates are that Dubai will require a further 45k rooms, with a US$ 7 billion investment, to meet the Expo demand.

Nshama has launched Zahra apartments with a starting price of just US$ 95k. Phase 1 will see 306 apartments being built on the 750 acre site close to Town Square, near to Al Barsha, which itself will house 18k apartments.

The UAE has become the latest country to join the Asian Infrastructure Investment Bank as one of the 35 founding members. The new financial institution, instigated by China as a potential rival to the World Bank, has a US$ 50 billion capital. Initially, the bank will fund infrastructure projects in Asia and will foster regional and international collaboration to support developing countries.

It is reported that HH Sheikh Mohammed bin Rashid Al Maktoum is planning to build a US$ 30 million car park, adjacent to the Battersea heliport in London.

Later in the month, the DIFC Wills and Probate Registry will become reality. This will allow expats, with assets in Dubai, to register their wills, in English, which will ensure that their final wishes are carried out, thus finally creating legal certainty. Initially, the charges for this new service will be in the region of US$ 2.7k.

Damac has opened two more properties in Downtown – Damac Maison The Vogue and NAIA Breeze – adding 500 rooms to their portfolio in this location. The company has a further 10k hotel rooms and serviced hotel apartments under development.

Habtoor Leighton won a US$ 608 million Qatar contract to build five reservoirs and pumping stations as part of a mega project. This was the 7th project awarded to the Dubai-based company by that country’s Electricity and Water Authority. HLG is 55% owned by the Al Habtoor Group and 45% by the Australian Leighton Contractors (which has just sold its John Holland Group to China Communications Construction Group for a reported US$ 879 million).

Speculation seems to be mounting over the future of Mohamed Alabbar’s position with Emaar Misr, an offshoot of Emaar Properties. He has run the Dubai property developer since its 1997 inception but his other commitments include being a founding member of Capital City Partners who have just won a US$ 45 billion contract to help in building a new city in Cairo.

Recently, there have been major local staff changes at Standard Chartered with the latest being the surprise resignations of its MD, Bejan Roohi, and UAE chief executive, Mohsin Nathani, along with several senior staff. The bank upset many of its SME clients last October by unilaterally closing thousands of company accounts, with little notice.

The UAE has become the latest country to join the Asian Infrastructure Investment Bank as one of the 35 founding members. The new financial institution, instigated by China as a potential rival to the World Bank, has a US$ 50 billion capital. Initially, the bank will fund infrastructure projects in Asia and will foster regional and international collaboration to support developing countries.

Despite the savage cuts in oil prices, the UAE economy continues to show robust signs of growth as March’s HSBC Purchasing Managers Index maintains a level of 56.3 – a score above 50 indicates a net expansion in economic activity. Although the IMF has cut its growth forecast for the country to 3.5%, the dirham – being pegged to the greenback – has risen some 20% over a basket of major global currencies. Furthermore as inflation slows, costs have gone down.

Dubai-based Pacific Control Systems has taken out a six-year US$ 272 million loan facility to finance further expansion activities.

Having gained 6.1% the previous week, the DFMI started the week trading on Sunday at 3615 and jumped a further 4.0% to close at 3761 on Wednesday, and only 0.03% lower than its January opening of 3774. Bellwether stocks, Emaar Properties and Arabtec, were both up – by US$ 0.04 – to US$ 1.96 and US$ 0.70 respectively.

Two years after UPS pulled out of a US$ 5.8 billion bid for TNT, rival logistics firm FedEx is scheduled to bid US$ 4.4 billion for the Dutch outfit, valuing it at a premium of 33% of its share price of US$ 8.80. Last year TNT reported a loss of US$ 215 million, as its revenue fell 3.2% to US$ 7.2 billion.

Samsung recorded a Q1 revenue of US$ 43.3 billion and a profit of US$ 5.44 billion – 30% down on the corresponding 2014 period. The Korean conglomerate has been struggling to compete with Apple and other Chinese rivals.

Inflation is getting worse in Russia as March data indicates a 16.9% rate, as growth may contract by around 4% this year. Last month, the Central Bank cut rates by 1% to 14.0%, with the rouble strengthening to around the 56 mark to the US$.

Corruption charges against former President Mahinda Rajapaksa continue unabated. The latest involves the 95% government-owned Sri Lankan Airlines, where an enquiry has alleged irregularities in the US$ 2.3  billion purchase of ten aircraft with the former chairman, Nishantha Wickramasinghe, being accused of a “gross abuse of power”; he is the ex-president’s brother-in-law.

A KPMG study has estimated that five banks – Barclays, HSBC, Lloyds, RBS and Standard Chartered – have incurred penalties equivalent to 60% of their total profits over the past three years! This equates to almost US$ 58.0 billion paid out in fines and remedying customer complaints.

Following the near collapse of its banking sector in March 2013, Cyprus became the only eurozone country to introduce capital controls, which have now been lifted. At the time, the country received bailout funds of US$ 11 billion. The divided island lost US$ 4.8 billion – or 25% of its GDP – because of its exposure to Greek government bonds.

In another twist in the on-going row between the Greeks and Germans, the Syriza government is claiming US$ 303 billion, in compensation for wartime occupation and looting by the Nazis during WW2. With no hope that the Merkel administration agreeing to these demands, it seems that Prime Minister Alexis Tsipras will have to explore other avenues to settle his country’s US$ 407 billion outstanding debt.

Following the near collapse of its banking sector in March 2013, Cyprus became the only eurozone country to introduce capital controls, which have now been lifted. At the time, the country received bailout funds of US$ 11 billion. The divided island lost US$ 4.8 billion – or 25% of its GDP – because of its exposure to Greek government bonds.

The UK has introduced the Diverted Profits Tax aimed at companies, like Amazon, Apple, Facebook and Google, who have used ingenious methods to reduce their tax liability. In 2013, these four companies paid a combined UK tax of US$ 48 million on revenue of US$ 25.2 billion. The new levy will see a 25% charge on profits seen to be siphoned off overseas.

In the late 1960s, the then president of Ford, Lee Iacocca, was responsible for the fast tracking of its Pinto model that was known to have safety design problems. The end result was that between 1971 – 1978, there were several fatal accidents that could have been avoided if the required petrol tank modification had been carried out. In 1978, Iacocca was ousted from Ford and joined Chrysler. Nearly 40 years later, the family of a 4 year old boy has been awarded US$ 150 million following his death in a Chrysler Jeep following the rupture of its rear fuel tank. The jury indicted the company for not warning its customers that the tank’s position increased the chance of a fire risk. History should have taught the automaker a lesson but it apparently did not – Don’t Ask Me Why.

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