Just Friends                                                                                       04 November 2021

For the past week, ending 04 November, Dubai Land Department recorded a total of 1,966 real estate and properties transactions, with a gross value of US$ 1.31 billion. It confirmed that 1,328 villas/apartments were sold for US$ 670 million, and 174 plots for US$ 272 million over the week. The top three transfers for apartments and villas were a Marsa Dubai apartment selling for US$ 89 million, followed by an apartment in Burj Khalifa, worth US$ 71 million, and a villa in Al Hebiah Fourth for US$ 55 million. The top two land transactions were for a plot of land in Island 2, worth US$ 19 million, and the other in  Hadaeq Sheikh Mohammed Bin Rashid for US$ 8 million. The three most popular locations in terms of volume were Al Hebiah Fourth, (67 transactions valued at US$ 91 million), Al Hebiah Third, (20 – US$ 16 million) and Al Yufrah 3 (18 – US$ 8 million). Mortgaged properties for the week totalled US$ 283 million, with the highest being a plot in Al Qusais Industrial Fifth, mortgaged for US$ 15 million. 91 properties were granted between first-degree relatives worth US$ 80 million.

ASGC has been appointed main contractor by Majid Al Futtaim Communities, for the first phase of its three-part Harmony at Tilal Al Ghaf project.; the US$ 297 million contract, comprising 755 villas, is the largest contract ever awarded by the MAF subsidiary. Buyers will be able to customise their villa layouts and create space that complements their personal needs.

In June, HH Sheikh Mohammed bin Rashid issued directives to raise the emirate’s role as a key player in the global investment landscape and to streamline processes, related to conducting business. This week, the Executive Council reviewed what progress had been made, in the ensuing four months, to enhance the Dubai’s economic environment and attract quality inward investments. Dubai’s Crown Prince, Sheikh Hamden bin Mohammed, noted that the government will work to accelerate the full completion of its business enhancement initiatives, focused on creating promising new opportunities for investors by Q1 2021. To date, targets have been exceeded and there have been reductions in both government procedures for doing business, by 95%, and in licensing requirements through the Invest in Dubai platform; it was also estimated that 11k requirements have been eliminated to enhance ease of doing business in Dubai. There is no doubt that the emirate will become a more attractive and more competitive investment environment for global entrepreneurs and investors, many of whom will move to Dubai with their families – another fillip for the local economy and real estate sector.

From Monday, retail fuel prices nudged higher for the month of November. Special 95 will be 8.0% (US$ 0.0545) higher at US$ 0.763 per litre, as diesel sees an increase of US$ 0.0874 (7.7%) to US$ 0.766.

According to OAG’s latest rankings, Dubai International has reclaimed its number one position as the world’s busiest international airport, The rankings were compared to October2019 figures and was based on airlines’ international seat capacity and flight frequency; Dubai claimed 2.7 million seats overtaking Amsterdam Schiphol, (2.5 million), into the second position, followed by Frankfurt, (2.2 million), London Heathrow, (2.2 million) and Istanbul (2.1 million).

In a thirty-year deal, with an estimated value of US$ 7.5 billion, DP World and Indonesia’s sovereign wealth fund signed an agreement to develop the SE Asian country’s logistics and seaports; this will include capacity building and integrated seaport management. The agreement, the first of a series of bilateral investment and business deals, was agreed as its President, Joko Widodo, visited the UAE earlier in the week. Earlier in the year, the UAE invested US$ 10 billion with the Indonesia Investment Authority to spend on projects in sectors such as road and port infrastructure, tourism and agriculture. Also in March, DP World and Canada’s Caisse de dépôt et placement du Québec (CDPQ) signed a long-term agreement with the Indonesian conglomerate Maspion Group to build a port and industrial logistics park in East Java. Other recent deals include a preliminary agreement between Abu Dhabi National Oil Company and Indonesia’s Pertamina and Chandra Asri to explore the possibility of developing a crude-to-petrochemicals complex in Indonesia, whilst Masdar signed a power-purchase agreement with Indonesia’s state electricity company, Perusahaan Listrik Negara, to develop the country’s first floating solar photovoltaic plant.

Etisalat Group posted a year-on-year growth as its Q3 revenue and consolidated net profit (after Federal Royalty) came in 2.0% higher at US$ 3.62 billion and 1.0% to US$ 654 million respectively; over that period, its aggregate subscriber base expanded 4.0% to 155.4 million and topped twelve million in the UAE. It noted that its consolidated earnings before interest, taxes, depreciation and amortisation amounted to US$ 1.83 billion – a 51.0% EBITDA margin. Etisalat, which was named the world’s fastest mobile network by Ookla, for the second consecutive year, also agreed with G42 to establish the country’s largest data centre provider. It also increased its effective ownership in Maroc Telecom Group by 4.6% to own a 53.0% shareholding.

The Dubai Financial Services Authority has fined former Abraaj managing partner Mustafa Abdel-Wadood US$ 1.9 million for breaching its rules and deceiving investors, as well as banning him from conducting business in the DIFC. The disgraced financier is currently out on US$ 10 million bail, as he awaits sentencing in New York. DFSA also noted that “Abdel-Wadood was involved in the misuse of investor funds, the withholding of sale proceeds and reports from investors, providing false explanations to investors and the cover [up] of a US$ 200 million shortfall in a fund at its financial reporting date.” Abdel-Wadood could be sentenced to 125 years in a New York prison if all the terms for each of his charges are served consecutively.

His sentencing has been postponed pending the outcome of a request for the extradition of the company’s founder, Arif Naqvi, who is on US$ 20 million bail in London. Abraaj was said to have managed US$ 14 billion of assets and was seen as the ME’s biggest private equity firm and one of the world’s most active emerging market investors. It went into liquidation in 2018 after an alleged mismanagement of money in its US$ 1 billion healthcare fund and that investigation resulted in further enquiries into other areas of misappropriation of funds secured from US investors.

In April 2020, NMC Healthcare went into administration, after a US$ 4.4 billion fraud was discovered, as the company had been inflating its assets and understating its debt, following which it went into administration. This week, its UAE and Oman business reported a 12.1% hike in gross revenue to US$ 915 million. YTD patient visits across the group medical facilities were 81.1% higher, on the year, at 6.7 million. Having secured approval for its restructuring proposal from 95% of its creditors, owed more than US$ 6.4 billion by NMC Healthcare, it is now working on securing the final approvals for the completion of the restructuring and the group’s exit from administration by 16 December; this would result in US$ 4 billion of its debts being ‘cleared’ in return for equity instruments under the Doca process. Once the group companies exit administration, they will be owned by its creditors.

Dubai Investments PJSC posted a 9.0% hike in nine-month profit of US$ 124 million on the back of a 37% rise in revenue to 30 September of US$ 708 million. Its CEO, Khalid Bin Kalban, noted that “after careful evaluation and in line with the market trends, the Group is channelising resources towards strengthening its foothold in the real estate market, especially with the improved sentiment and demand within the sector from both local and international markets.” Last month, it announced a US$ 272 million beachfront and residential investment in Ras Al Khaimah.

HH Sheikh Maktoum bin Mohammed bin Rashid has announced the appointment of the new board of directors of the Dubai Financial Market (DFM), to be chaired by Helal Saeed Al Marri. He also thanked the outgoing chairman, noting “Essa Kazim contributed to the establishment and management of the Dubai Financial Market for many years, and his efforts will always be appreciated.” The five appointed board members include Abdulqader Obaid Ali, Yuvraj Narayan, Wesam Lootah, Abdulwahid Alulama, Moaza Al Marri and Mohammed Humaid Al Mari. Sheikh Maktoum – recently appointed by his father HH Sheikh Mohammed to supervise the financial markets and stock exchanges in Dubai and oversee the comprehensive development of the financial markets – also directed the board to spur growth and double the size of Dubai’s financial markets to US$ 817 billion, (AED 3 trillion) in the near future.

This week, during the first meeting of the Securities and Exchange Higher Committee, he announced that the Dubai Electricity and Water Authority (DEWA) will be listed on the DFM in the coming months; this is the first of ten Dubai public enterprises that will soon debut on the local bourses, with the aim of raising their competitiveness. The move is part of accelerating new listings in various sectors including energy, logistics and retail. Sheikh Maktoum also announced the formation of a Dubai Markets Supervisory Committee and specialised courts for capital markets in Dubai. The Committee approved the establishment of a market-making fund worth up to US$ 545 million (AED 2 billion) to increase liquidity in the markets. It will also launch a US$ 272 million (AED 1 billion) fund to support tech company IPOs and encourage innovative financial products and solutions.

The DFM opened on Sunday, 31 October, 85 points (3.1%) higher the previous fortnight, gained a further 247 points (8.6%) to close the week at 3,108. Emaar Properties, US$ 0.02 higher the previous week, closed US$ 0.21 higher at US$ 1.30. Emirates NBD and Damac started the previous week on US$ 3.80 and US$ 0.34 and closed on US$ 3.83 and US$ 0.38. On Thursday, 04 November, 821 million shares changed hands, with a value of US$ 251 million, compared to 135 million shares, with a value of US$ 49 million, on 28 October.

For the month of October, the bourse had opened on 2,845 and, having closed the month on 2,864 was 19 points (0.7%) higher. Emaar traded flat from its 01 October 2021 opening figure of US$ 1.11 to close October on the same figure US$ 1.11. Two other bellwether stocks, Emirates NBD and Damac, started the month on US$ 3.87 and US$ 0.34 and closed on 31 October on US$ 3.75 and US$ 0.38 respectively. YTD, the bourse had opened the year on 2,492 and gained 372 points (14.9%) to close the ten months on 2,864. NBD and Damac started the year on US$ 3.33 and US$ 0.35 and closed 31 October at US$ 3.75 and US$ 0.38.

By Thursday, 28 October, Brent, US$ 0.49 (0.6%) lower the previous week, shed US$ 2.39 (2.8%), to close on US$ 81.80. Gold, US$ 9 (0.5%) lower the previous week, lost US$ 7 (0.3%) to close Thursday 04 November on US$ 1,792. 

Brent started October on US$ 78.17 and gained US$ 5.47 (7.0%) during the month, to close on US$ 83.64. YTD, it started the year trading at US$ 51.80 and has gained US$ 31.84 (61.5%) to close on US$ 83.64 during the first ten months of the year. Meanwhile, the yellow metal opened October trading at US$ 1,757 and gained US$ 28 (1.6%), during the month, to close on US$ 1,785. Over the year it has lost US$ 110 (5.8%) from its opening year balance of US$ 1,895.

Last Friday, shares in Volvo jumped 22.6%, on its Stockholm stock exchange IPO, valuing the company at more than US$ 22 billion; this comes after the car company, majority-owned by Chinese firm Geely, offered up part of the company’s shares to the public. Money raised will be used to help Volvo meet its goal to be fully electric by 2030. Geely, which bought the Swedish company from Ford for US$ 1.8 billion in 2010, remains the largest single shareholder.

Australian prosecutors have abandoned a long-running criminal cartel case, (also involving Deutsche Bank, JP Morgan and Citigroup), against ANZ and one of its senior executives, Rick Moscati, after the Federal Court described the matter as a “complete shemozzle”. Despite the Commonwealth Director of Public Prosecutions (CDPP) being ordered to refile its indictment, for a third time, because it was “deficient and defective”, it has been decided to continue with the criminal prosecution. Instead of trying again, the CDPP decided to abandon its case against ANZ and Mr Moscati but is pressing ahead with its prosecution of Deutsche and Citi for being “knowingly concerned in alleged cartel conduct”. This case arose from ANZ’s decision to raise extra cash from institutional investors, by issuing US$ 1.8 billion worth of new shares in August 2015. It seems that the three banks – and JP Morgan, through some of their most senior executives – allegedly came to an understanding on what to do with the US$ 585 million worth of shares that were unable to be sold. JP Morgan is not facing charges because it blew the whistle and was granted immunity.

If you are a fan of the new hit Korean Netflix show Squid Game, and if you invested in the new cryptocurrency on the block, on Tuesday 26 October, you will be a happy gamer. On that day, shares in the new cryptocurrency Squid were trading at US$ 0.01 and exploded to be trading at US$ 2.34 three days later on 29 October, with a market cap of US$ 184 million. The game, which cost just US$ 21 million to make, is a story of a group of people forced to play deadly children’s games for money – in this case, Squid which is known as a “play-to-earn” cryptocurrency, where people buy tokens to play in online games where they can earn more tokens, which can then be exchanged for other cryptocurrencies or fiat money. In the case of Squid Game, gamers play an online game in which the developers will take 10% of the “purse” and the 90% to the game’s winner. Individuals have to pay to enter with a round 1 fee of 456 Squid. Within a week of opening, the “currency” had topped US$ 2.856 but then tanked to just US$ 0.01 in probably one of the boldest scams in history. Known as a rug-pull, this scam occurs when the promoter of a digital token draws in buyers, stops trading activity and makes off with the money raised from sales.

Ether, riding the wave of the latest bitcoin rally and rising interest of a wider blockchain adoption, reached an all-time high of US$ 4,642 on Wednesday. The world’s second-largest      cryptocurrency, which underpins the ethereum blockchain network, has witnessed a six-fold increase YTD, compared to Bitcoin’s 117%. Analysts see a longer-term bull market for the sector and that ethereum, (along with BTC and other “currencies”), will continue to play a major role in the NFT and metaverse ecosystem build out. CryptoCompare reports a 45.5% jump in assets under management (AUM) in digital investment products in October to a record high of US$ 74.7 billion, with bitcoin-based products 52.2% higher at US$ 55.2 billion, and ethereum-based funds up 30% to US$ 15.9 billion – both record highs. A sign of the times is that the Commonwealth Bank of Australia, the country’s largest financial institution, becomes the first bank there to offer retail clients crypto services.

Following Apple posting fiscal Q4 – and calendar Q3 – revenues and profits at US$ 83.4 billion and US$ 1.24 per share, it calculated that the global supply chain problems, along with pandemic-related manufacturing disruptions in SE Asia, had cost the tech giant US$ 6.0 billion in Q3 lost sales, with Tim Cook noting that the impact will be even worse during this current holiday sales quarter. iPhone sales were at US$ 38.9 billion, US$ 2.6 billion short of market expectations. The estimate for Q4 is 7.4% growth in revenue to US$ 119.7 billion, as the tech giant strives to source more chips, but the chief executive is “predicting that we’re going to be short of demand by larger than US$ 6 billion.” At the end of last week, its shares dipped 3.4% on the news.

In a bid to break into the games subscription market, Netflix has launched its first games worldwide, rolling out updates to its Netflix app on Android smartphones, showing what games are available for download. Initially five mobile games, (Stranger Things 1984, Stranger Things 3: The Game, Card Blast, Teeter Up and Shooting Hoops), will be available to Netflix subscribers – with no adverts in the game and no in-app purchases. These releases are only available on Android phones and tablets but “in the coming months”, would be available for iOS devices.

The EC has announced that it is has opened a competition investigation into Nvidia’s US$ 40 billion acquisition of British chip-design company Arm. Despite Nvidia promising it will maintain Arm’s open-licensing model, their concern is that the US “predator” could use the move to restrict access to Arm’s technology, which powers the vast majority of the world’s smartphones. But despite the US tech giant, the world’s largest graphic and artificial-intelligence chipmaker, offering concessions in an attempt to address its concerns, the EC still had “serious doubts” about the deal, which it believes could result in less choice, reduced innovation and higher prices for consumers – and they may be right for a change.

The nineteen-bloc eurozone saw annual October inflation equal its all-time 2008 high of 4.1%, as economic growth beat expectations in Q3 to approach pre-pandemic levels. ECB President Christine Lagarde reiterated her stance that supply disruptions would last longer than she previously anticipated which, in turn, will keep consumer prices nudging north for a longer time span and putting pressure on wage hikes to compensate for the reduction in available consumer spending. With the eurozone economy expanding by 2.2% in Q3, it is now only 0.5% lower than pre-pandemic levels and should reach that point by the end of the year, and this despite drag factors including climbing energy prices, supply chain disruptions, slowing global demand and labour shortages in some major sectors.

This week’s G20 meeting in Rome approved a global agreement that will see the profits of large businesses taxed at least 15%, in a bid to thwart MNCs rerouting profits through lower tax jurisdictions; it is scheduled to be enforced by 2023.The bloc comprises nineteen countries and the EU and this was the first in-person meeting since the onset of Covid. US Treasury Secretary Janet Yellen noted that this was a “critical moment” for the global economy and will “end the damaging race to the bottom on corporate taxation”; she added that although some US-based mega-companies would have to pay more tax, US businesses and workers would benefit from the agreement.

To some observers, it seems that France has benefited more than most other members from its membership of the EU and now it is reported that Emmanuel Macron’s government is asking the central government “for Britain to be punished for leaving the EU”; and it seems ‘il avait vraiment les boules’ about the recently struck security pact with the United States and Australia. Both parties have a different interpretation on their attitude to their post-Brexit fishing row – London is maintaining that it had not shifted its position, as agreed in the original deal, with Paris insisting it was now up to the UK to resolve a dispute that could ultimately hurt trade. Boris Johnson commented that “I don’t believe that is compatible either with the spirit or the letter of the Withdrawal Agreement of the Trade and Cooperation Agreement and that’s probably all I’ll say about that.” Manu retaliated saying that “I don’t want to have to use retaliation measures, because that wouldn’t help our fishermen.” This largely political dispute will drag on but will probably be eventually patched up by the EU.

According to Nationwide, a typical UK home costs more than US$ 352k, (GBP 250k) for the first time after prices rose by 9.9% over the past twelve months, and 0.7% higher than in September. Since the onset of the pandemic, prices have risen by US$ 42k (GBP 30.7k). With stamp duty reimposed from last month, and rate hikes on the horizon, there is some inevitability that the pace of house price rises will slow but continue to head northwards for at least until the end of H1. The Office for Budget Responsibility estimates prices rises of 8.6% this year, followed by increases of 3.2%, 0.9%, 1.9%, 2.9% and 3.5% over the following five years.

The Monetary Policy Committee surprised the market by voting both to maintain the interest rate, at 0.1%, and sticking with its US$ 1.2 trillion, (GBP 895 billion), stimulus measures. No action was taken despite the risk of inflation rising above 5%, the highest forecast since 2011 and well above the lender’s long-standing target of 2%. The spike has been driven by global economies, reopening after the pandemic, as well as soaring energy costs and it appears that any monetary policy would have little impact at this time. The pound dipped 0.87% on the news to trade at US$ 1.3568. The BoE argued that “near-term uncertainties remain, especially around the outlook for the labour market, and the extent to which domestic cost and price pressures persist into the medium term”.

The UK has been “left behind” according to steel makers after the US agreed to end a trade war over items that also included whiskey, power boats and Harley-Davidsons. Tariffs on steel European steel imports were introduced by the previous Donald Trump administration, but these have been ended by President Joe Biden; however, the UK were not included. This move puts the UK industry at a massive competitive disadvantage, compared to its European rivals, bearing in mind that when the tariffs were introduced in 2018, it nearly halved UK exports to the US which had been their second biggest export market until then. UK’s International Trade Secretary Anne-Marie Trevelyan commented that the UK and US were in talks to remove “damaging tariffs” from British steel exports. It is hoped that this new pact will limit the amount of so-called “dirty” steel from countries such as China, which produces more than 50% of global steel and steel production accounts for as much as 20% of all CO2 emissions.

The G20 summit came ahead of the much-anticipated COP26 summit on climate change which began on Monday What happened in Rome set the tone for the summit, with sharp divisions remaining between countries on their commitments to tackling climate change. There was very little chance that Italy’s Prime Minister Mario Draghi’s imploring world leaders that “going it alone is simply not an option. We must do all we can to overcome our differences” – and so it proved. Even before the Glasgow conference opened, Boris Johnson had commented that climate change was “the biggest threat to humanity”, and that it posed a “risk to civilisation basically going backwards”. There is no doubt that if G20 leaders want to curb global warming, end vaccine inequity, and sort an economic recovery, they have to start thinking and acting more multilaterally, instead of worrying about their own agenda and getting re-elected. The last few years have seen many countries looking after themselves at the expense of poorer nations, whilst continuing to put economic growth ahead of fixing the climate crisis.

A court case in Miami, that started on Monday, could decide who is the true creator of Bitcoin—and who has the rights to Satoshi Nakamoto’s 1.1 million BTC wallet, equating to US$ 67.6 billion at today’s prices. The civil trial, between Ira Kleiman versus Craig Wright, is trying to discover who is (or was) Satoshi Nakamoto. Kleiman alleges that his late brother David collaborated with Wright, on the creation and early development of Bitcoin, making his heirs entitled to half of the wallet’s contents. There are some who do not think that Wright is actually Nakamato and if Kleiman wins, he will be unable to access the disputed Bitcoin. The court will have to decide whether the two protagonists were indeed business partners or Just Friends.