There will be another distinct building along the Dubai Canal, with the announcement by RKM Durar Properties of its new twin-tower development – J One. The curved towers (one 19-storey and the other 18), in a ‘U’ shape will house 347 apartments (ranging from studio – 4 B/R), six villas and nine retail outlets. Studio prices start at US$ 225k, with 2 B/R units selling at US$ 600k.
Nakheel has announced that it is mulling over five proposals for the construction of its US$ 245 million Dragon Tower. Located in Dragon City, the twin-tower project encompasses 1.5k residential units and is slated for completion by 2020.
Emaar is planning to build its eleventh tower – 17 Aykon B Tower – that will house ten luxury residential units. Work will start next year with completion by H2 2020.
Piling work has started on Bloom Properties Jumeirah Village Circle development with completion expected byQ4 2020. The three-building project, Bloom Towers, is set to house 944 residential units, including 689 studio/1 B/R apartments.
Seven Tides, that already owns four hotels in Dubai and one in London, is set to add a fifth to its local portfolio. The property developer is to construct a three tower project in JLT that will include a 4-star hotel, along with two residential buildings. It is also developing one of its ten islands in The World archipelago – a 60-villa luxury resort.
In H1, the emirate’s real estate brokers collected US$ 223 million in commission, according to figures released by the Dubai Land Department. At this rate, the sector is expected to surpass its annual 2016 total of US$ 409 million.
Emirates has renewed its deal with the European Tour until 2021 to be the official airline and to become an official partner of The 2018 Ryder Cup. Under the agreement, the airline will continue to sponsor nine European Tour events, including the DP World Tour Championship,
It is reported that Al Futtaim is in discussions with Marks & Spencer for the purchase and franchising of the retail giant’s business in Macau and Hong Kong. The UK company has had a presence in the former British colony since 1988 and has 27 outlets there.
Flydubai posted a 9.9% increase in H1 revenue to US$ 681 million but saw losses climb 58.5% to US$ 39 million, compared to the same period in 2016. As is the case with most regional airlines, yields are under pressure and margins tightening. The airline has not been helped by on-going regional conflicts and having to cut fares on the back of higher regional capacity. Although fuel costs rose from 23.5% of total costs to 24.8%, it would seem that the airline could return to profitability come the H2 results in February next year.
Norwegian Air is set to start flights from Dubai to Stockholm in October, using the new Boeing 737-Max, with fares as little as US$ 270. The airline, the fastest growing in the world, is looking at other regional routes as it continues its ambitious international expansion. In Europe, it offers one way trips to New York from only US$ 65!
Overseas-AST has been awarded Enoc’s third and final contract for its US$ 1 billion Jebel Ali refinery expansion programme that will result in a 50% capacity increase to 210k bpd. The contract covers the construction of various interconnecting pipelines between the refinery’s processing units, the storage tanks and the berth facilities. The two other contracts were awarded earlier – to Technip Italy for the design and construction of the refinery’s new ancillary units and to Rotary Engineering Fujairah to construct twelve new storage tanks.
Emirates Glass has recently won a number of orders, totalling US$ 27 million, for projects not only locally but also in various countries including Kuwait, Saudi Arabia and other Asian countries. In May, the Dubai Investments’ subsidiary indicated that it would be setting up a new factory in the GCC.
Petrol prices are set to rise again in September with Special 95 retailing 6.7% higher at US$ 0.547, with diesel climbing 5.4% to US$ 0.545 per litre.
The new unified motor policy, with the resulting rate increases in vehicle insurance, and the compulsory introduction of medical insurance are the main drivers behind the H1 growth in the country’s insurance sector impressive H1 results. The total net profit for all 30 listed insurance companies jumped 26.8% to US$ 209 million, whilst gross premiums increased 16.2% to US$ 3.3 billion, compared to H1 2016.
July’s Emirates NBD UAE Purchasing Managers’ Index indicated that the country’s non-oil private sector is holding up well with marked improvements in both output and new work. Despite new export orders falling at a record rate, the index nudged 0.2 higher to 56.0 as inventories rose markedly on the back of future market demand strengthening.
With the Eid Al Hada holiday starting today, 31 August, the local hotels are bracing themselves for an influx of visitors and a four-day bonanza. With occupancy levels set to jump by up to 10%, most hotels will be full to capacity.
On Sunday, the long-awaited VAT legislation was enacted by The President, HH Sheikh Khalifa bin Zayed Al Nayahan. Federal Law No 8 of 2017 will see the introduction of the 5% tax as from 01 January 2018, to be imposed on the buying and selling of most supplies of goods and services at each stage of production and distribution. There will be exceptions that will see certain entities exempted from VAT and others being charged at zero rate.
The DFM opened Sunday (27 August) at 3624 and nudged 14 points (0.4%) higher to close on Wednesday, 30 August, at 3638. Volumes declined closing the shortened week (because of the Eid Al Adha holiday) on 116 million shares, valued at US$ 59 million, (cf 177 million shares for US$ 77 million, on Thursday, 24 August). Emaar Properties was flat at US$ 2.32, with Arabtec down US$ 0.02 to US$ 0.89. For the month of August, Emaar was 3.1% higher at US$ 2.32 (from US$ 2.25), whilst the revamped Arabtec was trading at US$ 0.89 (from US$ 0.94).
By Thursday, Brent Crude was US$ 0.73 (1.4%) higher on the week, closing at US$ 52.86, with gold up US$ 31 to US$ 1,323 by 31 August 2017. Brent started August trading at US$ 52.52 and gained a further US$ 0.34, (0.6%) to close the month at US$ 52.86. Meanwhile, gold raced ahead, gaining 4.3% in August to close at US$ 1,323.
Hurricane Harvey has had a devastating effect on Texas and the Gulf of Mexico with damage estimates to date topping US$ 100 billion, not to mention the human cost, including the loss of some 60 lives. The hurricane also hit the heart of the country’s energy sector resulting in 20% of US oil production cut, refineries closed and major pipelines shut down. The overall impact on the economy could see a 0.5% fall in Q3 GDP growth but this could be offset later when infrastructure repair spending takes hold. In the short-term it would seem that any chance of a rate hike will be put on hold.
Following its June fine of US$ 2.8 billion by the EU courts, Google has submitted proposals of plans to stop favouring its shopping service and to end its anti-competitive behaviour. The US tech conglomerate had been found guilty of abusing its dominance in the EU by giving undue prominence in searches of its own comparison shopping site at the expense of others.
Last year, Wells Fargo admitted that it had created 2.1 million “fake” accounts that had been opened without their customers’ knowledge. Following the revelation, the bank agreed to pay out over US$ 150 million, retrenched 5k lower-level staff and saw the early resignation of the chief executive, John Stumpf. This week it revealed that a further 1.4 million accounts had been created, again without permission, and to add to their woes, the bank is experiencing troubles with its online payment system.
The chief executive of Expedia, Dara Khosrowshahi, has been appointed the new CEO of Uber and has the unenviable task of mending the tarnished image of the car-riding service that has not made a profit over the past seven years. He also has to face disgruntled shareholders, who have witnessed the ongoing boardroom squabbles, and reengage staff whose morale has been sapped by several unsavoury incidents.
There has been a distinct fall in the number and value of mergers and acquisitions in the MENA region, according to a recent EY report. In H1 the number fell 23.2% to 192, allied with an 18.0% decline in value to US$ 31.9 billion. Of this total, the 61 outbound transactions accounted for 61.4% (US$ 19.6 billion) of the total H1 business with the oil & gas sector responsible for US$ 11.5 billion (36.0%). Q2 proved even more disappointing with the number of deals down 40.7% to just 80 whilst the value slumped 36.8% to US$ 12.7 billion, compared to the same period in 2016. The main drag factors include low energy prices and regional conflicts.
With the EPL summer transfer window closing today (31 August), the total spend by the league’s 20 teams is over US$ 1.8 billion (last year US$ 1.5 billion), with US$ 270 million changing hands on the last day, (US$ 200 million in 2016). Two of the bigger transfers were the US$ 97 million Manchester United paid Everton for Romelu Lukaku and the US$ 90 million Real Madrid received from Chelsea for Alvaro Morate. The figure could well have been higher if Liverpool had accepted Barcelona’s offer of US$ 147 million for Phillipe Couthino and Arsenal had sold Alexis Sanchez to Manchester City for US$ 71 million. (These figures pale into insignificance when one considers the US$ 258 million PSG paid for Barcelona’s Neymar and Barcelona’s US$ 175 million for Dortmund’s Ousmane Dembele – a player that, just twelve months ago, was sold to the German club by Rennes for only US$ 17 million).
The long standing friendship between the Guptas and South African president Jacob Zuma seems to be waning. The family has been accused of using their cordial relations with the president to wield undue influence (and supposed looting of state funds). There is no doubt that the once-dominant family, who moved to South Africa in the 1990s, is becoming increasingly isolated as damming allegations mount and their access to banking facilities dry up. Both parties refute these claims of sweetheart deals.
In Q2, the Indian economy grew at an annual rate of 5.7% (down from 6.1% a year earlier) – its slowest pace in three years. There were marked falls in manufacturing at 1.2% (down from 10.7%) and financial services falling 3.0% to 6.4%. It is obvious that last year’s cash ban and July’s introduction of GST are having a drag effect on growth.
Not before time, the new French President, Emmanuel Macron, has begun the overhaul of the country’s rigid and often archaic labour laws. The main aim of his efforts is to make it easier for companies to hire and fire employees. Currently, the unemployment rate of 9.5% is more than double that of some of its European allies and M Macron wants to reduce this to 7.0% within five years. Bonne chance!
The fact that Theresa May has backed down on her manifesto promise to cut back on fat cats’ remuneration packages comes as no surprise. Her efforts to shake up corporate UK has run into several obstacles and not made any easier by her weakened position, following the recent election and the fact that several large corporations are considering moving head offices to mainland Europe following Brexit. There is no escaping the injustice of the massive variance between the average paid UK worker and some top executives.
Meanwhile the Prime Minister is in Japan on a trip that is focused on bilateral trade post-Brexit. Latest figures, with exports at US$ 13.5 billion higher than imports of US$ 12.4 billion, show that the UK has a trade surplus with the world’s fourth largest economy. Interestingly, Japanese interests own about 1.1k companies in the UK that employ 140k and last year the UK benefitted by inward investment of some US$ 34.8 billion. Naturally, Prime Minister Abe is keen to see the business environment remain basically the same come the UK’s divorce from Europe.
In direct contrast, as the US economy grows at its quickest rate in over two years, on the back of increases in business investment and consumer spending, the UK is heading in the opposite direction. Growth has crawled as consumers spend less with inflation markedly higher than wage growth.
Thirty years following the last time the US tax code was updated, President Trump is trying to coax Congress to act on tax reform – by simplifying regulations and lowering rates. Among the changes he would like to see are a reduction in the federal rate from 35% to 15% and amendments to how firms (probably the likes of Amazon, DHL, Google, Starbucks etc) earn profits overseas. Whether the powerful lobby groups get their way, at the expense of at least some reform, remains to be seen!
Meanwhile the impasse between the US and North Korea is worsening with Tuesday’s news that the rogue state had fired a ballistic missile over Japan. Markets were rattled, with stocks retreating, gold reaching nine-month highs and the greenback softening. This problem is not going away as tensions simmer, with neither side wanting to be the first to blink.
The crisis with North Korea has seen the euro touch US$ 1.20 – its highest level since January 2015. This week’s missile launch over Japan has the markets more jittery and the resulting volatility has seen investors flee the riskier investment assets.
Dubai’s latest tourist attraction has been announced – Sky Walk. Located at the twin tower, The Address Sky View, visitors will be able to navigate the 85 mt long corridor – on the outside – linking the two structures. At 220 mt high, safety harnesses will be mandatory for all who choose to Walk on the Wild Side!