When Irish Eyes Are Smiling!

In a bid to “shape the UAE’s ever-evolving skyline”, Aldar and Emaar have established a US$ 30 billion JV to target a range of local and international projects, with the initial focus on two developments – Emaar Beachfront in Dubai and Al Saadiyat Island in Aldar’s home market, Abu Dhabi. HH Sheikh Mohammad bin Rashid Al Maktoum indicated that the “partnership aims to create new opportunities for investment growth” and has reiterated that “we want our companies to collaborate with each other to explore creative ideas for strengthening the UAE’s leadership, and enhancing the happiness and quality of life of our people.” On the day, Emaar’s share value was up 1.7%, with Aldar 6.5% higher.

The Dubai Ruler broke ground on phase 4 of the US$ 3.9 billion Mohammed bin Rashid Al Maktoum Solar Park. Not only featuring the world’s tallest solar tower (at 260 mt), and the world’s largest thermal storage capacity, the project will generate 700 MW of clean energy at a single site. By 2030, it will generate 5k MW and will be producing the world’s lowest cost of electricity at US$ 0.073 kWh.

It was announced that a JV, between Roberts Constructions and Italy’s Impressa Pizzarotti & C, will build Omniyat’s Dorchester Collection project in Marasi, Dubai Canal. Due for a 2020 completion, the project will comprise two towers, housing a 5-star hotel and exclusive residences, upmarket  food and retail outlets and mixed use precinct  adjacent to a marina.

It seems that every week, Azizi Developments announces the unveiling of a new project and this week is no exception.  The developer has initially launched Azizi Mirage 1 in Studio City – an 8-floor building with 186 1-3 B/R apartments and two swimming pools; the second tower will come later.

It has also awarded a US$ 259 million contract to Prestige Constructions for the construction of phase 3 of Azizi Riviera. The contract covers thirteen mid–rise buildings (all between 8-10 storeys), with completion expected by Q3 next year. There is no doubt that the Trump economy is on the up, with the only nagging factor being the possibility of mini trade wars breaking out in the near future. (Consequently, the UAE lifted the repo rate by the same amount but to 2.0%).

The US$ 49 million “The Gate” in DIFC, a mixed use office and retail space as well as the emirate’s virtual exchange, Nasdaq Dubai, opened this week. Located in Gate Village, it covers an area of 147k sq ft, of which 22.4% will be used by retail.

A TopHotelProjects report anticipates that there will be an additional 239k rooms added to the region’s hotel portfolio over the next five years, overtaking Europe, with a 215k room pipeline. Dubai is the most active regional location where there are 222 projects, encompassing 126.6k rooms due to be added.

It was no surprise to see that, according to Knights Frank’s latest report, Dubai has witnessed the sharpest rise in the supply of hotel rooms over the past decade, among global hubs. The emirate has 29.9 keys per 1k of population, with Paris in second place way back at 17.6 keys. Furthermore, with an average overnight spend of US$ 2k, Dubai remained on top compared to the likes of Hong Kong, London, New York, Paris, Singapore, Shanghai and Sydney. Over the past decade, the tourism sector has seen its contribution to the emirate’s GDP grow by 138% to US$ 40.9 billion, with employment numbers 119% higher.

It is reported that DP World has a 70% stake (and the Democratic Republic of Congo’s government the balance) in the port at Banana. The Dubai operator will build and manage a deep water port – a major boost for a country with only a 50km Atlantic coastline and often relying on neighboring Congo Republic to handle its international trade.

Dubai’s Department of Finance has finalised a US$ 2.45 billion long-term finance package to fund the 15 km Metro’s Red Line extension, in time for Expo 2020. The funding was in two tranches – a US$ 1.45 billion 17-year loan, backed by the French and Spanish credit agencies and the balance a 10-year conventional facility amortising over six years and commencing in 2022.

DEWA is to add a further four 400/132kV substations, at a cost of US$ 349 million, to bring its total to 25, as the demand for Dubai power generation continues to expand. All four will be in operation by the end of 2020 and will be built by four different parties – Grid Solutions SAS (Canal Garden), Siemens (Dubai South), Al Fanar (Dubai North) and ABB (Shams).

There was disappointing news for Emirates that could cost the airline money, as an EU ruling refused it permission to appeal in a case involving passenger compensation for missed connections, occurring outside the bloc. The end game seems to point to the airline having to amend its current policies and procedures and pay old claims that it had previously rejected.

A major US$ 129 million, 25 km highway extension opened yesterday that will be a major route for Expo 2020 visitors. The road will have four lanes either way and is one of many RTA projects that is trying to keep up with Dubai’s rapid expansion and increased vehicle population.

Dubai’s year on year February inflation rate was 2.33% higher driven by major increases in the prices of tobacco products (74.6%), restaurant prices (12.6%), transportation (9.3%), clothing (6.6%), communications (5.5%) and food & beverage (5.0%); most of these increases are attributable to the introductions of Excise Duty in October and VAT at the beginning of the year.

Dubai’s 2017 non-oil trade was 2.0% higher, at US$ 355 billion, with direct trade – at US$ 226 billion – and free zone trade at US$ 118 billion accounting for the bulk of the balance. Imports, reexports and exports attained totals of US$ 228 billion, US$ 98 billion and US$ 39 billion respectively. Of the total trade, air accounted for 45.6%, followed by sea and land at 35.9% and 23.5%. As last year, the three biggest trading countries were China (13.6%), India (7.6%) and the US (6.5%), with the highest traded products being mobile phones, gold and diamonds at US$ 47.4 billion, US$ 43.3 billion and US$ 28.6 billion.

A JV, between DP World and India’s National Investment and Infrastructure Fund, has acquired 90% in the logistics company, Continental Warehousing Corporation Ltd. Hindustan Infralog Private Limited did not give any financial details but indicated that it was less than 5% of DP World’s net asset value and that the Reddy family, founders of CWCNSL, would retain a 10% stake and continue to be involved with the business.

The port operator has also paid US$ 316 million for a 50% stake in Cosmos Agencia Maritima, Peru’s second largest container terminal. DP World also operates in the country’s Port Callao, as well as several other ports in South America. Only last week, it announced a credible 14.9% hike in 2017 profit to US$ 322 million.

Emaar Industries & Investments has bought a stake in Gutmann Systems Middle East – both financial details and the size of the investment were nor readily available. The architectural aluminium glazing systems company has been involved in many Dubai and regional projects and expects to expand its business interest because of the local influence of EII.

It seems that Aabar Investments has sold its 5.55% stake in Egypt’s Palm Hills Development to UPP Capital Investment for US$ 30 million, bringing its total shareholding to 16.51%; the sale involved 128 million shares, valued at US$ 0.23.

With its latest US$ 1.25 billion Sukuk listing, the Islamic Development Bank now has nine issues, totalling US$ 11.5 billion, with Nasdaq Dubai. The Dubai bourse, with a total of US$ 57.7 billion, is rated as the world’s leading centre for Sukuk listings by value.

Dubai Investments’ subsidiary, Masharie, has sold its 50% stake in Dubai International Driving Centre (Drive Dubai) for a reported US$ 10 million.

Dubai Investments, itself a subsidiary of Dubai Holdings, has an 11.54% stake and  is leading a group of investors to establish a US$ 100 Islamic financial institution – Arkan Bank – on Nasdaq Dubai, within the next twelve months. The bank, to be located in the DIFC, will have a paid up and authorised share capital of US$ 100 million and US$ 500 million respectively.

The DFM opened on Sunday (18 March), at 3197, and having gained 40 points last week, fell 47 points this week to close 1.5% lower at 3150 by Thursday, 22 March. Emaar Properties traded US$ 0.02 down at US$ 1.60, with Arabtec flat at US$ 0.63. Volumes traded lower at 173 million shares on Thursday, valued at US$ 98 million (compared to 173 million shares worth US$ 98 million the previous Thursday – 15 March).

By Thursday, Brent Crude had traded northwards over the week, gaining US$ 1.51 (2.4%) to US$ 65.12, with gold heading the other direction – down US$ 3 (0.2%) at US$ 1,318 by 22 March 2018.  One reason for the recent uplift in oil prices is a marked decline in US crude oil inventories which fell this week by 2.6 million barrels to 428 million barrels

This week, the world’s third largest miner Glencore acquired two Queensland coal operations from Rio Tinto for US$ 1.7 billion – the 15-year old Hail Creek open cast mine and Valeria. This comes at a time when many energy companies are in the throes of divesting their coal divisions, with Rio already having sold all its thermal coal assets – and now selling all its coking coal assets – with Anglo American ridding itself of its South African thermal coal properties. However, Glencore has bucked the trend and sees a future for quality “clean” coal assets, including Japan who seem to have turned their back on nuclear power, following the 2011 Fukushima plant disaster.

BMW headquarters has been raided by German prosecutors, as they continue investigations into the car-maker’s suspected usage of emissions cheating software. It is thought that if there is any fraud found, it will not be nearly as large as that found in VW and could cover the use of a test bench-related defeat device involving 11.4k vehicles of its 750d and M550d luxury models.

In what must be the biggest pay deal in the world, Tesla shareholders have agreed to pay its Chief Executive a staggering US$ 2.6 billion on condition he reached predetermined sales and share price targets. Elon Musk owns 20% of the company that is still making losses but one of the targets is for the market cap to leap from US$ 55 billion to US$ 650 billion before full payment is made.

Worryingly, of the US$ 328 million that UK individuals and businesses lost to fraudsters, involving 43.9k cases of authorised push payment (APP) scams, 74% of the duped money was unable to be returned to victims. This is because, as they had agreed to make transfers, they have no legal right to seek bank reimbursement; this is in contrast to those scammed using credit or debit cards that usually have a reclaim recourse. 88% of victims were retail customers who lost on average US$ 4k, whilst companies made up the balance, losing on average US$ 34k. Meanwhile, 2017 fraud figures, relating to payment cards, remote banking and cheques, were 5% lower at just over US$ 1 billion.

The UK retail sector is going through sorry times with profit warnings this week from menswear business Moss Bros, as well as the owner of the DIY chain B&Q (Kingfisher) reporting a slump in sales. Furthermore, Mothercare is in discussions to secure new funding, as it struggles through troubled times. Then there is Carpetright, that employs 2.7k, which is seeking a Company Voluntary Arrangement which could involve closing at least 100 of its 409 shops. It is reported that the retailer has secured funding of US$ 17 million from a major investor.

Australian billionaire, 50-year old James Packer, (worth an estimated US$ 3.2 billion), has resigned as a director of his casino empire Crown Resorts and is “suffering from mental health issues”; in 2015, he had stepped down as chairman and director for the Group and only re-joined as director last August. He still retains a 47% stake in the company despite selling US$ 76 million worth of Crown shares earlier in the month. Late last year, it was reported that he told Israeli investigators that he had given the embattled Prime Minister, Benjamin Netanyahu, and his wife Sonia, gifts.

Having acquired Hewlett Packard Enterprise’s software business for US$ 9.5 billion (which included troubled British computer firm Autonomy) and subsequent problems with integrating issues, Micro Focus has seen its revenue fall. UK’s biggest tech firm, which specialises in upgrading old IT systems, has now issued a profits warning which then saw its share value sink to US$ 11.88, as well as the resignation of its COO, Chris Hsu.

Another tech company in trouble this week was Facebook, whose share value dropped by 8.1% on Monday to US$ 170 – its biggest intraday fall since August 2015 and wiping out all its 2018 gains in one hit. It lost another 2% on Tuesday, losing over US$ 60 billion in market value over the two days. Now regulators on both sides of the Pond are demanding answers as to how UK’s Cambridge Analytical was able to harvest the personal information from of its customers. The knock-on effect was felt by other social media companies including Twitter which shed more than10% in value.

At last, the UK inflation rate is steadily heading south, falling to 2.7% last month. With wage growth edging higher to 2.6%, it is hoped that real wage expansion will follow by Q3 and that the days of rising inflation and stagnant wage growth are finally over. It has to be remembered that wage growth before the GFC used to be higher than 4%.The decline in consumer price inflation was driven by petrol prices falling by US$ 0.028 on the month and food prices being only 0.1% higher, compared to 0.8% a year earlier. The news could see a May interest hike of 0.25%.

Following news that the UK and the EU have agreed on the terms of a transition period, sterling rose 1.0% to reach US$ 1.409 and was 0.8% higher against the euro. It seems that there will be a 21-month change-over period starting next March and ending on 31 December 2020, during which there will be little change in bilateral trading conditions. It was also announced that there had been progress made on the broader withdrawal treaty.

Last Saturday, the Irish rugby team won the Triple Crown by beating England at Twickenham, on St Patrick’s Day. It was not only on the sports field that the country is proceeding well but its economy has performed better than expected, being the fastest growing in the eurozone for the fourth consecutive year; last year, it grew by 7.8%, compared to 5.2% in 2016, driven by a surge in the IT sector being more than triple the eurozone average. The country has made great strides and massive progress from the 14.8% contraction, posted just eight years ago. The unemployment rate has halved to 6.1% since the GFC, even though the population has grown by more than 10% since 2009. The ‘Celtic Tiger’ is roaring again – When Irish Eyes Are Smiling!

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