Toothless People!                                                                          27 October 2023

The 1,761 real estate and properties transactions totalled US$ 6.37 billion, during the week ending 27 October 2023. The sum of transactions was 265 plots, sold for US$ 774 million, and 1,496 apartments and villas, selling for US$ 1.01 billion. The top three transactions were all for plots of land, one in Al Yufrah 1, sold for US$ 20 million, the second in Al Hebiah Fourth for US$ 18 million and the third in Al Goze Second for US$ 17 million. Al Hebiah Fifth recorded the most transactions, with fifty-six sales, worth US$ 76 million, followed by fifty-one sales, in Madinat Hind 4, for US$ 28 million, and thirty-eight sales in Palm Jabal Ali, valued at US$ 244 million. The top three transfers for apartments and villas were for a villa in Marsa Dubai, sold for US$ 36 million, and two apartments in Palm Jumeirah for US$ 22 million and US$ 15 million. The mortgaged properties for the week reached US$ 4.43 billion, with the highest being for land in Jabal Ali Industrial First for US$ 3.76 billion; one hundred and four properties were granted between first-degree relatives worth US$ 154 million.

Another record for the Dubai real estate sector which posted its highest quarterly capital gains in a decade, attributable to ongoing higher property demand. The Q3 ValuStrat Price Index rose 6.1% in the quarter, with villas, once again, rising faster than apartments with returns of 7.6% and 4.8%; on an annual basis, the VPI was up 15.1% with villa and apartment prices up by 19.8% and 11.0%. In the villa segment, in the quarter, Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate and Mudon recorded the highest capital gains, whilst Discovery Gardens, The Greens, The Palm and Dubailand Residence Complex led the field for apartments. Prime property valuations rose by 16.5% annually and 6.6% on the quarter. The VPI for prime villas reached a new ten-year high, with capital gains of 20.2%, year on year, and 8.5% quarterly, as prime apartments rose by 13.6% and 5.2%.

In Q3, transactions were 17.7% higher, compared to a year earlier, at 11.3k, with a value of US$ 7.19 billion, with the average ticket size of ready-to-move-in properties dipping 1.4% to US$ 639k, while 41.5% of all ready home sales were priced less than US$ 272k. ValuStrat also noted that there were fifty-two homes sold for more than US$ 8.17 million, (AED 30 million); this was down on the sixty seven units sold in Q3 2022 – a sign perhaps of a supply shortage. In Q3, the average transacted price for ready units was US$ 3,836 per sq mt (US$ 356 per sq ft), 7.8% higher on the year. Jumeirah Village, Dubai Marina, Business Bay, Downtown Dubai and International City were the top five locations. The average ticket size for off-plan homes rose by 13.0% annually to US$ 681k, with average the transacted price for off-plan properties was at US$ 5,459 per sq mt. Most transactions of ready units took place in Jumeirah Village, Dubai Marina, Business Bay, Downtown Dubai and International City. Off-plan registrations rose 19.1% annually, equating to just over US$ 1 billion.

There will be no surprise to see that Q3 rentals continued to skyrocket – 27.2% higher on the year, with villa and apartment rents increasing by 38.7% and 19.1% on an annual basis. Total project completion in the nine months to 30 September was 21.5k apartments and 2.1k villas, well down on an earlier figure, based on developer completion schedule, of 53.7k for the whole year.

Office sales transactions grew by 9%, year on year, to 631. The median transacted price stood at US$ 3,035 a sq mt, up 28.4% annually, according to the report. Volume-wise, Business Bay and Jumeirah Lakes Tower accounted for 77.5% of sales volume at 44.5% and 33.0% respectively.

It is reported that this week, a penthouse on the Dubai Water Canal has been sold for US$ 50 million to a family office of a European billionaire. The penthouse is part of the ultra-luxury residential building One Canal, which has a development value of US$ 450 million. The 30k plus sq ft penthouse stands as a sky mansion, merging four rooftop units. The Fendi-branded project includes amenities like a dedicated gym, steam room, sauna, an exclusive rooftop garden accompanied by a pool, two additional private pools, high ceilings, and dual parking spaces. Interior design was carried out by Hirsch Bedner Associates, with the architecture executed by Shaun Killa, who had previously worked on the stunning Museum of the Future.

Azizi Developments has announced that its Pearl development, launched last February and completely sold out, is now 50% complete. Located in Al Furjan, Pearl will encompass one hundred and ninety-two studios and fifty-four 1 B/R apartments. Handover is slated for Q1 2024. Azizi currently has around 40k units under construction, located in several Dubai areas, that are projected to be delivered by 2027.

A report by Savills ranks Dubai seventh of fifty-two markets monitored when it comes to warehousing costs – an indicator that the emirate is increasing its importance and presence on the global logistics industry. Driven by strong demand for warehousing, amid limited supply, costs have skyrocketed so, that by 30 June, Dubai’s prime warehousing rents stood at US$ 20.48 per sq ft. Savills noted that growth in this sector benefits the Dubai economy by attracting investment, generating employment, and enhancing and diversifying its economic and international standing. In 2022, average, warehouse lease rates continued to escalate across Dubai, specifically Grade A rents in Al Quoz which increased by 57% during 2022, with all industrial submarkets in Dubai showing strong rent rises last year. Across the markets monitored, total costs­ – comprising rents, service charges, and taxes – for prime warehousing space grew 10.1% in the twelve months to June 2023. An earlier report noted that the demand for industrial and logistical space in Dubai saw its strongest-ever performance on record. The top six in this report were London (at US$ 42 per sq ft), LA (US$ 27), Sydney, Hong Kong, Northern New Jersey, and Tokyo.

Ahead of next year’s Arabian Travel Market, latest figures from Statista estimates that revenue in the global travel and tourism market will touch US$ 854.7 billion and, with a 4.42% CAGR, should top US$ 1.0 trillion by 2027. The 31st edition of ATM will take place at Dubai World Trade Centre, from 06 to 09 May 2024. Meanwhile, Allied Market Research valued the global business travel market at US$ 689.7 billion in 2021, predicting the segment to grow to US$ 2.1 trillion by 2031, with the global luxury travel market on course to pass US$ 440 billion by the end of this decade. The latest Economic Impact Assessment Annual Report also analysed the MICE segment which continues to benefit GCC countries such as the UAE; it did estimate that the DWTC’ generated a total economic output – across sixty-three large-scale events – exceeded US$ 3.5 billion last year.

International Container Logistics, a US$ 10 million, 49:51 JV between DP World and Russia’s nuclear agency Rosatom, is intended to develop container shipping through the Arctic, as part of an initiative heavily promoted by President Vladimir Putin, for what is known as the Northern Sea Route. He appears keen to progress with the Arctic corridor partly because of international sanctions cutting off trade links to the west. Thanks to global warming, and the subsequent melting of Arctic Sea, a route has opened up between Murmansk, near Russia’s border with Norway, to the Bering Strait near Alaska. The main aim of the project is to develop an additional trade route for maritime container transportation through the Northern Sea Route, starting with the design of infrastructure facilities and specifying the volume of investment needed.

A thirty-year concession agreement with the Tanzania Ports Authority sees DP World operating and modernising the multi-purpose Dar es Salaam Port and enhancing Tanzania’s connectivity with a much wider regional/global market. Its main aim is to optimise the Port’s operations by improving transport and logistics services throughout the country and its hinterland. The first phase of a multi-phase investment plan will see the Dubai port operator investing over US$ 250 million to upgrade the port, with the total spend eventually being around the US$ 1.0 billion mark. The initial benefits from this investment will see more Tanzanians having jobs and increased access to products and services. The Port will connect to the hinterland of sub-Saharan Africa through a network of roads, highways, railways and dedicated freight corridors and ports. Other investments will result in modernising the Port, and the introduction of temperature-controlled storage, (to enhance Tanzania’s agricultural sector), as well as greater connections to rail-linked logistics. Increased investment and enhanced efficiency will allow faster cargo clearing and improved cargo planning – strengthening Dar es Salaam’s critical role as the maritime gateway for green energy metals from the copper belt in Southern-Central Africa.

In order to avoid any harm to their reputation or financial position while a dispute is being considered, as well as to ensure the continuity of family businesses, a special committee has been established in Dubai. Sheikh Maktoum bin Mohammed bin Rashid has issued a resolution for the formation of a ‘Family Business and Family Ownership Disputes Settlement Committee’, which will also have financial experts, sitting with judges, to provide specialised judicial expertise. The Dubai government is keen to maintain the role of family businesses, as partners in the emirate’s economy, and to ensure that family disputes are speedily settled, whilst finding a balance between prompt justice and the preservation of the economic interests of these companies.

At last week’s GITEX Global, the Federal Tax Authority launched a new app – Tourist Refund – that makes claiming VAT refunds a lot easier, with all transactions now done digitally. Zahra Al Dahmani, director of the Taxpayer Services Department at FTA, commented that “tourists can download the app through FTA services provider firm Planet. When a tourist buys any item from the UAE store, the merchant scans the invoice and it will be recorded in the app. The newly launched application will have information on each transaction that was bought as well the amount of VAT the tourist can claim upon exiting the country.” On leaving, at the airport, the tourist will only have to show the invoices in the app to claim a refund by cash or credit card transfer. This will be welcome news for many of Dubai’s international visitors, of which there were 8.55 million in H1, and should add a boost for the emirate’s retail sector.

In data released by Abdulla bin Touq Al Marri, UAE’s Minister of Economy, 88% of the UAE’s imports come from and 94% of its non-oil exports go to Belt and Road countries. The H1 non-oil trade between the UAE and other partnering countries of China’s Belt and Road Initiative  totalled US$ 305 billion, accounting for 90% of the UAE’s non-oil trade during this period – a growth rate of 13%. In 2022, the trade volume between the UAE and Asia, Africa, and Europe amounted to about US$ 560 billion – 20% higher on the year. The Minister noted that China, India, Saudi Arabia, Iraq, Turkey, Japan, Oman, Kuwait, and Hong Kong are among the UAE’s top 10 trading partners. He also stressed that the country has been an active partner in BRI, since its 2013 launch, and has invested US$ 10 billion in the China-UAE investment fund to support the initiative’s projects in East Africa; it has also signed thirteen MoUs with China in 2018 to invest in various sectors in the UAE. According to the Minister there are “more than 4k Chinese companies operating in key sectors such as trade, logistics services, transport, financial and insurance activities, real estate, energy, and renewable energy.”

According to Kearney’s Global Cities Index, Dubai, ranking twenty-third, continues to hold its top spot in the MENA region. The GCI measures the capacity of a city to draw in, maintain, and produce global streams of capital, individuals, and ideas. The evaluation is based on five essential factors – Human Capital, Information Exchange, Cultural Experience, Political Engagement and Business Activity.

Dubai Silicon Oasis has received four awards from Financial Times’ fDi Magazine Global Free Zones of the Year Awards – Global Free Zone of the Year for SMEs, the Middle East Free Zone of the Year for SMEs, ranked fifth in the Top 10 Global Free Zones of the Year 2023, and an honourable mention for Catalysing R&D. The first accolade is an indicator of the free zone’s efforts to support and enable the success of its business community, with its Director-General noting that “this notable acknowledgement speaks volumes of our consistent efforts to build a thriving ecosystem for start-ups, SMEs, and multinational companies.”

The Central Bank posted that, in August, investments of banks operating in the UAE hit an all-time high, topping US$ 158.04 billion, as investments increased by 19.5% on the year from  US$ 133.46 billion in August 2022.  Bonds held until maturity accounted for the largest share of investments at 47% reaching US$ 75.20 billion, up 3.4% compared to July 2023. Banks’ investments in debt bonds accounted for 42.1%, totalling US$ 67.17 billion at the end of July 2023.

Mashreq posted a massive 89.3% hike in Q3 net profit to US$ 612 million, attributable to higher net interest income, which rose 60.0% on the year to US$ 545 million, and fees, commission and income from Islamic financing. Its nine-month net profit climbed 122%, year-on-year, to US$ 1.58 billion, as net interest income and income from Islamic financing rose 82% to more than US$ 1.52 billion; operating expenses rose 15% to US$ 627 million. Customer deposits during the nine-month period surged 21.4% on the year to US$ 36.18 billion, while loans and advances grew 8.7% to US$ 27.03 billion. The total assets of the bank increased 16.4% to US$ 59.48 billion. Dubai’s third largest bank is not the only financial institution to benefit, as the country’s banking sector continues to be well capitalised, with more than adequate liquidity buffers, along with UAE’s robust economy. Lenders in the UAE are also beneficiaries of higher interest rates amid relatively lower inflation in the region.

Emirates NBD posted a 38% rise in Q3 net profit, (attributable to equity holders), to US$ 1.42 billion, as net income 25% higher at US$ 1.74 billion, helped by a 48% boost in Islamic financing and investment products to US$ 354 million. Profit was further enhanced by a 59.6% decline in impairments to US$ 151 million. Dubai’s biggest bank by assets posted a nine-month profit increase of 92%, at US$ 4.77 billion, with impairments falling 54% to US$ 409 million. YTD, the bank saw gross loans 8.0% higher at US$ 134.60 billion, with both total assets and customer deposits heading north, rising by 16.0% to US$ 227.79 billion and US$ 155.31 billion respectively. As part of its strategy to increase its digital services through FinTech companies, it made an equity investment in Geneva-based digital trade finance platform Komgo.

Emirates Islamic posted its highest ever nine-month profit – up 56% to US$ 45 million – driven by higher funded and non-funded income. Q3 income grew 46% on the year to US$ 327 million which helped drive profit 23% higher to US$ 119 million reflecting the buoyant regional economy. Total assets increased to US$ 23.43 billion, with customer deposits 7.0% higher at US$ 16.62 billion, increasing 7.0% on the year. Q3 expenses increased 35%, year on year, as the bank invested for future growth.

DEWA announced a US4 845 million H1 dividend, equating to US$ 0.017 per share that was paid out yesterday via Dubai CSD. Saeed Mohammed Al Tayer, MD and CEO of DEWA, noted that, “we intend to continue to deliver on our growth trajectory, delivering robust cash generation, a strong balance sheet and exceptional returns to shareholders. “For our shareholders, this means that DEWA’s strategy is focused on ensuring consistency of returns, durability of growth, and compounding our growth value over time”.

The DFM opened on Monday, 23 October 2023, 413 points lower the previous fortnight, lost a further 178 points (4.5%) to close the trading week on 3,787, by Friday 27 October 2023. Emaar Properties, US$ 0.45 lower the previous three weeks, shed US$ 0.02 to close on US$ 1.72 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 4.51, US$ 1.44, and US$ 0.35 and closed on US$ 0.64, US$ 4.48, US$ 1.42 and US$ 0.35. On 27 October, trading was at 158 million shares, with a value of US$ 76 million, compared to 160 million shares, with a value of US$ 126 million, on 20 October 2023.

By Friday, 27 October 2023, Brent, US$ 7.78 higher (7.7%) the previous fortnight, shed US$ 2.17 (2.4%) to close on US$ 90.06. Gold, US$ 114 (6.2%) higher the previous week, gained US$ 25 (1.3%) to US$ 2,016 by 27 October 2023.  

What seems to be a surprise, it is reported that Akbar Al Baker, the long-standing Qatar Airways CEO is to step down effective 05 November. The announcement made by the airline’s Chairman Saad al Kaabi also confirmed that Badr Al Meer will be the company’s new CEO; his current position is as COO of Doha’s Hamad international airport. Al Baker, who became CEO in 1997, also lost his position as Qatar’s top tourism official; no reason was given for the decision.

Although revenue moved 13.0% higher, Q3 saw Boeing posting a US$ 1.6 billion net loss, driven by  higher costs at its defence unit, fewer deliveries of its best-selling 737 aircraft, due to supplier problems, and  a US$ 482 million loss on its Air Force One programme; this was an improvement on its US$ 3.3 billion deficit reported in Q3 2022 but it was Boeing’s  ninth consecutive money-losing quarter. However, it was still confident of its goal of US$ 3 billion to US$ 5 billion in free cash flow this year. Because of production quality problems at its biggest supplier Spirit AeroSystems, which makes fuselages for the highly sought narrow-body jets, it had to cut its 737 delivery target for this year, and now expects to deliver up to four hundred 737s by the end of 2023 – down from its initial estimate of four hundred and fifty; within two years, it hopes to push production levels up to just under sixty a month. By the end of this year, it expects to deliver up to eighty of its 787 Dreamliner. In Q3, it delivered one hundred and five planes – only seven lower compared to the same period a year earlier – whilst revenue rose 25% to US$ 7.9 billion, driven by higher 787 deliveries. The plane maker confirmed that it secured three hundred and ninety-eight net orders during the quarter, including one hundred and fifty 737 Max-10 planes for Ryanair, fifty 787 aircraft for United Airlines, and thirty-nine 787s for Saudia; its 5.1k plane backlog is valued at US$ 392 billion.

International Airline Group posted a record Q3 operating profit of US$ 1.79 billion, (and up 43% on the year), courtesy of a bumper summer of travel on its BA, Air Lingus and Iberian networks; the three of which saw revenue hikes of 20%, 16% and 19%. After tax profit came in on US$ 1.30 billion – 44% higher compared to Q3 2022. Over the period, IAG saw a 12.2% decrease in its gross debt to US$ 4.69 billion. There are some concerns that future demand may dip, as the rising cost of borrowing and continuing high interest rates may start to impact consumer spending on the likes of air travel.

Amazon posted that its Q3 net income increased by over 341% to US$ 9.9 billion, or US$ 0.94 a share, compared with US$ 2.9 billion, or US$ 0.28 a share; the figure was boosted by a pre-tax valuation gain of US$ 1.2 billion included in non-operating income from the common stock investment in electric vehicle maker Rivian Automotive. Revenue was 13% higher at US$ 143.1 billion – the twelfth consecutive quarter with more than US$ 100 billion in sales. Operating income more than quadrupled from US$ 2.5 billion to US$ 11.2 billion. Segment-wise, North America and ‘international’ contributed US$ 87.8 billion and US$ 32.1 billion, with increases of 11.4% and 16.0%.

Although its head of toymaker, Ynon Kreiz, has been calling for Mattel to invest in films and television shows – as a way to re-ignite growth which has been lacklustre across the industry – it is only now that the company can see what its first foray into films has done to its profits.

In Q3, Barbie billings jumped 16% on the year, driven by the success of the first ever film starring the doll, with Mattel indicating it had made inroads against its competitors and improving its profit margins; it expects that the net result of the film will have added US$ 125 million to its coffers. Despite the film’s box office success, with ticket sales in excess of US$ 1.4 billion – and its positive impact on profits – the company expects Q4 sales to be hit by reduced consumer spending and the waning impact of Barbie.

Arguing that although its hybrid cars produce far less pollution that petrol cars, it does not receive commensurate policy treatment, Toyota is lobbying the Modi government to cut taxes on such vehicles by as much as 20%. The problem for the world’s largest car maker is that the Indian administration seems hell bent on pushing sales of electric vehicles, offering companies millions of dollars in incentives to build EVs and batteries. It also taxes EVs at 5% while the levy on hybrids is as high as 43%, just below the 48% imposed on petrol cars; the Japanese company commented that the 5% differential does not truly reflect the reduced emissions and better fuel consumption hybrids offer. It argues that the tax differential over petrol cars should be as much as 11% for hybrids, to 37%, and 14%, to 34%, for flex-hybrids.

Alphabet, Google’s parent company, posted a 7.0% hike in Q3 net profit, to US$ 19.7 billion, driven by an increase in Search, YouTube and advertising divisions, as revenue climbed 11.0% to an impressive US$ 75.9 billion. Total revenue from the cloud business grew an annual 22.4% to over US$ 8.4 billion. Region-wise, the US and EMEA accounted for 76%, (US$ 59.0 billion), of the total revenue. YouTube added more than US$ 7.9 billion to Alphabet’s revenue – 12.4% higher on the year. However, the markets were none too happy, with its share value declining up to 6.0% in Monday’s after-hours trading to US$ 131 – investors were disappointed by the relatively weak performance at its Google cloud platform, with operating income of US$ 266 million.

Dozens of US states have taken Meta to court accusing the parent company of Facebook and Instagram of misleading the public. The company has been accused of using addictive features to “ensnare” users, while concealing the “substantial dangers” of its platforms, and that it had broken consumer protection laws by engaging in “deceptive” conduct. The New York Attorney General Letitia James, one of thirty-three attorneys general who signed the lawsuit, noted that “social media companies, including Meta, have contributed to a national youth mental health crisis and they must be held accountable,” Meta, and other social media companies, already face hundreds of lawsuits in the US filed by families, young people and school districts over the impact on mental health. Whilst some studies do suggest that Facebook’s growth is not linked to psychological harm, there are others that have found spending long periods of time on social media can have a detrimental impact on young peoples’ mental health. The states are seeking financial damages and a halt to Meta’s alleged harmful practices.

There are reports that Chinese authorities have initiated an investigation into Taiwan-based iPhone-maker Foxconn, (the biggest maker of iPhones), in two provinces – Henan and Hubei. Foxconn’s founder Terry Gou is running as an independent candidate in Taiwan’s January 2024 presidential election which is expected to have a significant influence on Taiwan’s relationship with China, given tensions between them have ratcheted up in the past year. The jury is out, with some analysts opining that Foxconn is being investigated because Mr Gou is running for the presidency, whilst China’s Global Times, unsurprisingly, said the investigation “is normal and legitimate, as any company goes through tax inspections”. Although he has positioned himself, as an alternative to the incumbent Democratic Progressive Party, which is seen as hostile to Beijing, he has resigned his seat on the Foxconn last month, but still retains a 12.5% stake in the company.

This week, Turkey’s central bank raised interest rates by a further 5.0% to 35.0% in what could be a belated bid to try and curb inflation that is fast approaching 70%, from its current 62% level; in June, interest rates stood at 8.5%. The Monetary Policy Committee stated that “monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in inflation outlook is achieved”; it also pointed to that its monetary transmission mechanism would be strengthened through “additional steps to increase the share of Turkish lira deposits”.

With UK interest rates currently at 5.25%, their highest rate in fifteen years, with the subsequent rise in mortgage rates – for example, an average two-year fixed rate is 6.24% – that impacted many of 70% of home-owners, who have mortgages. Over the past twelve months, house prices have started to decline with Halifax forecasting a 4.7% annual fall this year, and by 2.4% in 2024, before moving higher in 2025. Despite the falling prices, they are still US$ 48.5k higher than at the peak of the pandemic. According to the UK House Price Index, the average UK property price, based on completed transactions, is almost the same as in August 2022, at US$ 353k.

There was a marked 0.9% decline in September’s euro area annual inflation rate to 4.3% – more than a half less than the 9.9% posted this time last year. The EU annual inflation fared even better down 1.0% on the month and 6.0% lower on the year to 4.9%. The lowest annual rates were registered in the Netherlands (-0.3%), Denmark (0.6%) and Belgium (0.7%), with the highest seen in Hungary (12.2%), Romania (9.2%) and Slovakia (9.0%). On the month, September annual inflation fell in twenty-one Member States, remained stable in one and rose in five. The highest contribution to the annual euro area inflation rate came from services (+2.05%), followed by food, alcohol & tobacco (+1.78%), non-energy industrial goods (+1.06%) and energy.

Noting that some of the world’s mega-wealthy are paying little or no tax, the EU Tax Observatory has posted that billionaires should face a minimum tax rate, suggested at a minimum 2%, which would raise US$ 250 billion every year. Some of 2.5k global billionaires, with a combined wealth of US$ 13.0 trillion, use complex business structures for avoidance.

The report noted that the automatic sharing of the wealthy’s account information across more than one hundred countries had significantly reduced offshore tax evasion, but how billionaires were able to get away with paying tax rates equal to 0% or 0.5% of their wealth “due to the frequent use of shell companies to avoid income taxation”. The report commended a 2021 agreement between one hundred and forty countries to ensure companies pay at least 15% in corporation tax but noted the plan had been “dramatically weakened” since then by a “growing list of loopholes”. An example of the unfairness – and perhaps stupidity – was Warren Buffet commenting that after a series of tax changes in 2013, he conceded that even though his tax rate had risen he was still paying a lower percentage than his secretary. Elon Musk, owner of X, formerly Twitter and co-founder and leader of Tesla and SpaceX, is currently the world’s richest man, according to Forbes, with a fortune of US$ 225 billion.

On an official four-day visit to the US, Australian Prime Minister, Anthony Albanese has not only met President Joe Biden but also Microsoft supremo, Brad Smith. Whilst in Washington, he announced a mega US$ 3.2 billion investment by the tech giant which will work with Australia’s online security agency on the cyber-shield project. The plan involves work with the Australian Signals Directorate — the national agency responsible for cybersecurity and online warfare — to build the cyber shield, dubbed MACS; it will involve expanding infrastructure and skills, with a focus on cloud technology and AI. Microsoft said it would have a focus on “defending against sophisticated nation-state cyber threats”, with Albanese noting that the plan was “aimed at strengthening Australia”, and it would make it “the world’s most cyber-secure nation” by 2030. Microsoft will also build nine new data centre sites – to add to the existing twenty – in Sydney, Canberra and Melbourne, as it prepares for demand for cloud services to almost double by 2026. The company has also promised a new “Datacentre Academy” with TAFE NSW to train two hundred people by the end of 2025 and to support other programs to deliver digital skills training to three hundred thousand Australians. In Q4, the US tech giant posted 8.3% and 20.0% increases in revenue and profit to US$ 56.19 billion and US$ 20.08 billion – perhaps a gentle reminder to Australians that Microsoft is a successful business and there is no such thing as a free lunch!

First introduced in 2014, when the UK was part of the EU, the cap on bankers’ bonuses will be lifted as from 31 October. It had been designed to curb excessive risk-taking in the financial services industry in the wake of the 2008 GFC, by limiting how much extra variable pay employees of banks, building societies and investment firms could receive: the maximum was twice their basic salary. Since its introduction, banks have compensated for lower bonuses by increasing basic salaries, to make sure they could still compete with other financial centres, such as New York and Singapore, in attracting the top talent. After a four-month consultation between the Prudential Regulation Authority and the Financial Conduct Authority noted that the policy had had “unintended consequences”, and there was also less room to vary employee pay due to “material poor performance or misconduct”. The new regulations will be able to claw back any bonuses when bankers have been found to have taken undue risk.

Having seen many recent global bank profits skyrocket this year, there are many analysts that would say that much of the “icing on the cake” comes from them posting higher profits due to rising interest rates, as customers pay more to borrow cash for mortgages, loans and credit cards. It seems that, in many cases, banks are raising borrowing rates much faster than they are its savings rates, particularly for easy access accounts, now paying an average 3.21%. To some, it looks a case of banks are “filling their boots” for their staff bonuses and shareholders’ dividends at the expense of their customers. In July, the UK Financial Conduct Authority introduced new measures warned that banks would face “robust action” for offering unjustifiably low savings rates to customers at a time when borrowing rates hasd risen sharply. To date, it seems that the banking watchdog has yet to bear its teeth.. Toothless People!