This Is How We Do It!                                         02 August 2024

Latest data from ValuStrat indicates that Dubai is estimated to register a handover of 38.2k housing units this year, as the market continues to surge, even after three years of upward momentum; H1 saw an estimated 6.9k apartments and 2.2k villas completed, equating to nearly 24% of preliminary estimates for the whole of 2024. The consultancy noted that about 91.8k apartments and 28.4k villas are currently under construction in Dubai, with promised handovers by 2028: three locations responsible for 25% of the total are – Jumeirah Village Circle (10%), Business Bay (10%), and Jumeirah Lakes Towers (5%). Q2 saw apartment completions in Creek Views 1 and 2, (six hundred and thirty-four and five hundred and eighty-seven), and villa completions in Murroj Al Furjan West (one hundred and sixty-one) and Silver Springs 3 in Damac Hills (two hundred and fifty-eight). Capital values for villas rose 33.4%, on an annual basis, and 7.3%, on the quarter, whilst apartment values came in 23.4% and 5.4% on the quarter. For villas, the top annual performers were Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate and Emirates Hills, and for apartments – Discovery Gardens, The Greens, Palm Jumeirah, The Views, Al Quoz Fourth, Town Square and Dubailand Residence Complex.

In Q2, the Dubai real estate market witnessed 7.9k mortgage transactions, (equating to US$ 7.03 billion), across all asset classes, compared with 13.8k cash transactions (US$ 9.46 billion) of ready properties. Off plan registrations grew by an annual 61.4% and quarterly 19.1%, equivalent to investments worth US$ 16.32 billion, according to ValuStrat estimates. Top off-plan locations were in Jumeirah Village Circle, Business Bay and Meydan One. In the secondary home transaction sector, Q2 witnessed a 1.7% quarterly dip, but up 4.8%, on the year, at US$ 7.98 billion. 37% of all ready home sales were priced less than US$ 272k, compared with 40.8% a year earlier There were fifty-five sales of homes worth over US$ 8.17 million (AED Dh30 million), compared to sixty-three in H1 2023. The most transacted locations for ready properties were Jumeirah Village Circle, Business Bay and Dubai Marina. The consultancy noted that residential rental values grew by 2.7% quarterly and 10.8% annually, with villa rents up 1.1% and 3.5%, (quarterly and annually), to US$ 111k, and apartments, 3.8% and 16.9% higher, to US$ 24k. The average asking rents per annum for apartments were studios at US$ 16k, 1-bed at Dh23,000, 2-beds at US$ 34k and 3-beds were US$ 53k.  For 3 B/R, 4 B/R and 5 B/R villas, average annual rents were US$ 87k, US$ 109k and US$ 137k. Residential occupancy in Dubai was estimated at 87.7%.

A partnership between lifestyle hospitality company Ennismore and Evolutions, a real estate intelligence hub, along with developer, City View Real Estate Development LLC, has launched Hyde Residences Dubai Hills – the only lifestyle-branded residence in Dubai Hills Estate. It will encompass two hundred and forty-six apartments, comprising 1 B/R, 2 B/R and 3 B/R along with a three-bedroom duplex. Facilities will include a summer house, pool area, listening room, screening room, playroom, gym, library, pickleball court, and an outdoor cinema with a sunken lounge; the project will also feature a RIKAS-operated restaurant on the ground floor.

Hyde Residences Dubai Hills, in collaboration with Ennismore Evolutions, features a diverse portfolio of successful ventures, such as SLS Residences at Palm Jumeirah – an Ennismore brand – by Roya Lifestyle Developments, Azura Residences by IGO on Dubai Islands, Ayana Gardens by Tuscany Real Estate Development in Meydan Avenue, and developments in Jumeirah Village Circle, including Roma Residences by JRP, Sapphire 32 Residences by DAK Real Estate, and Rise Residences by S&S Developments. Hyde Residences is an extension of the Hyde Hotel brand, which includes Hyde Hotel Dubai in Business Bay and properties in Ibiza, Miami, and Bodrum. Hyde has a series of exciting new additions to open soon, including in London and Perth.

Zimaya Properties has unveiled Belle Reve, their latest US$ 59 million residential project, a five-floor residential tower, in the District 15 of Jumeirah Village Circle (JVC). The project comprises one hundred and eighty-seven premium apartments, with a range of studio, 1, 2 and 3-bedroom units. Work has already started, with delivery due in 2026. Amenities include a semi-sized Olympic pool, children’s play area, fully-equipped gym, organic greenhouse, walking track, outdoor cinema, table tennis court, EV chargers, and a clubhouse.

Damac has announced that it has launched a project where an entire building will be dedicated exclusively for the Emirati brokers to sell. Damac Lagoon Views is the first project for Emirati brokers to sell as part of a collaboration with the Dubai Land Department to support and recognise the contributions of Emirati realty brokers. Special incentives to Emirati brokers, and special offers for Emirati customers, have been designed to encourage this initiative. Damac confirmed that UAE nationals will get a 10% discount when buying Damac Lagoon Views, with UAE national licensed brokers earning a 6% flat commission when selling the project. Prices for the Damac Lagoon Views start from US$ 311k for a one-bedroom and go up to US$ 572k for 2-bedroom apartments. According to VVS Estate, 2024 is set to see the issuance of approximately 10k new real estate broker licenses in Dubai, a significant increase from the 5,000 licenses issued in 2018.

Sheikh Hamdan bin Mohammed bin Rashid has posted news that Dubai received a record 9.31 million international overnight visitors in H1 – 9.0% higher on the year. A break-up of the number sees Western Europe, South Asia, CIS and Eastern Europe, GCC and the MENA region accounting for 1.89 million, 1.62 million, 1.37 million, 1.27 million and 1.09 million visitors. He added “with a relentless focus on excellence, Dubai continues to create memorable experiences for global travellers and set new standards in the international tourism industry”.

The Dubai-based private aviation operator Air Chateau has ordered ten electric flying cars from European mobility solution provider Crisalion Mobility to operate as air taxi services in the UAE in 2030; this order brings Crisalion’s conditional pre-order book to one hundred and twenty-five aircraft in less than a year. The vehicle, still under development, will carry six, including the pilot, and be used for urban/intercity passenger and cargo transport; it will have a speed of 180 kph and a range of 130 km. Samir Mohamed, chairman of Air Chateau, said the launch of air taxis will alleviate the burden on legacy ground infrastructure, complement existing transportation networks, reduce congestion and build a sustainable future. The UAE is rapidly expanding into air mobility, with Joby and Archer Aviation planning to introduce their flying vehicles in 2025.

The US District Court for the District of Columbia has decided to enforce a US$ 200 million award against the Government of Djibouti, in a case brought by DP World last year. The Dubai-based port operator had won a third partial award, issued by the London Court of International Arbitration, over the concession for the Doraleh Container Terminal. Built and operated by DP World, the 1.2 million TEU DCT was seized arbitrarily by the local authorities in February 2018, after they claimed the agreement they had signed, unfairly favoured DP World. Those claims were dismissed by judges and arbitrators both in the High Court in England, and before the LCIA. Damages already awarded for lost dividends, breaches of exclusivity and management fees now amount to nearly US$ 700 million. DP World has vowed never to stop its ongoing legal battle, until the return of its port concession in Djibouti or it receives full compensation for its lost investment. 

Eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee. In March 2021, prices were amended to reflect the movement of the market once again. After two months of price declines, August sees retail prices across the board nudging around 2% higher. The breakdown in fuel price per litre for August is as follows:

• Super 98: US$ 0.831, from US$ 0.815 in July (up by 2.0%)      up 8.2% YTD from US$ 0.768

• Special 95: US$ 0.798, from US$ 0.785 in July (up by 1.7%)    up 8.1%  YTD from US$ 0.738

• Diesel: US$ 0.804, from US$ 0.787 in July (up by 2.1%)     down 1.6% YTD from US$ 0.817

• E-plus 91: US$ 0.779, from US$ 0.763 in July (up by 2.1%)      up 8.3% YTD from US$ 0.719

A new regulation sees that the maximum fine for UAE motorists will be set at an annual US$ 2.72k (AED 10k) per vehicle for Salik-related violations. Under the new conditions, no Salik account balance or part of the balance will be refunded to the user or transferred to another Salik account, with only claims over the previous thirteen months valid.

The United Arab Emirates announced two further Comprehensive Economic Partnership Agreements, with Morocco and Chile. Both agreements will facilitate the free flow of goods and services by reducing or removing tariffs, eliminating unnecessary barriers to trade, improving market access for services, enhancing customs harmonisation and establishing flexible rules of origin for goods. They will also establish platforms for investment and private-sector collaboration in priority sectors such as renewable energy, tourism, infrastructure, mining, food security, transport, and logistics.

2023 UAE/Morocco-oil trade stood at US$ 1.3 billion, (30.0% higher on the year and 83% up on pre-pandemic 2019 numbers) in non-oil trade. The UAE is the largest Arab investor in Morocco, the sixth largest African economy, with more than US$ 15 billion invested in a variety of strategic projects. In 2023, Morocco’s GDP was US$ 152.4 billion and is expected to grow by a further 3.5% this year. Although agriculture remains the largest employer, the two largest sectors are services and industrial and services accounting for 54% and 23%. Morocco is the latest African nation to conclude CEPA terms with the UAE, following Mauritius, Kenya and Congo-Brazzaville.

The UAE’s President His Highness Sheikh Mohamed bin Zayed and his Chilean counterpart, Gabriel Boric Font, witnessed the signing of the agreement in Abu Dhabi on Monday. The President noted that the UAE will continue its steadfast approach in building developmental partnerships around the world to serve mutual interests and provide opportunities for future generations, and that this CEPA supports mutual economic growth by providing opportunities for business communities and the private sector to expand on both sides. He added, “additionally, it establishes a vital trade and investment corridor with South America, which holds promising economic potential”.

The General Commercial Gaming Regulatory Authority, the federal entity overseeing commercial gaming activities in the UAE, announced the award of a license to operate the UAE’s first authorised lottery operation – The Game LLC.  The agency aims to establish a well-regulated commercial gaming sector in the UAE, built on the principles of transparency, accountability, consumer protection and responsible gaming practices. The company set to run ‘UAE Lottery’ is a commercial gaming operator, specialising in game development, lottery operations, and gaming-related content; it will introduce a diverse range of lottery games and other games designed to cater to players’ variety of interests and financial preferences. Jim Murren, the Chairman of the GCGRA, said “The launch of the UAE Lottery is a pivotal event that not only marks the establishment of a disciplined world-class regulatory framework for lottery activities but also underscores our commitment to nurturing a secure and enriched commercial gaming environment in the UAE.”

In H2, the Dubai International Financial Centre witnessed a 24.3% hike in the number of active registered companies to 6.15k, with the total workforce 11.9% higher at 43.8k. The number of firms in the FinTech and Innovation sector was 33.3% higher at 1.08k. Sheikh Maktoum bin Mohammed bin Rashid, President of DIFC, said “by fostering a robust financial ecosystem, attracting top-tier talent and institutions, and establishing strong networks of global cooperation, DIFC has opened new growth avenues, positioning Dubai as a key focal point for international finance and commerce”. Occupancy levels for DIFC owned and managed properties remained high at 99.6%, with third-party commercial office space occupancy standing at 89%. fDI Intelligence data rated DIFC as the global number one free zone for greenfield FDI projects, which totalled one hundred and sixteen and were valued at US$ 481 million in 2023. Some impressive figures show marked increases in: 

• Assets Under Management                                                    57.7%   US$ 700.0 billion
• the number of funds being marketed in or from DIFC    31.3%   10.03k
• the insurance and reinsurance sector                                      13.6%  125 companies
• Gross Written Premiums for the insurance sector              23.6%  US$ 2.6 billion

Pursuant to Article 22 (2) of the Board of Directors Resolution No. 15 of 2013 Concerning Insurance Brokerage Regulations, The Central Bank of the UAE has revoked the licence of Galaxy Insurance Broker (Galaxy).  The insurance broker was also struck off the Register. The bank confirmed that the administrative sanction came about as a result of the findings of an examination, conducted by the CBUAE, which revealed that Galaxy had a weak compliance framework and failed to comply with its regulatory obligations.

For breaching the UAE laws on anti-money laundering and counter-terrorism financing, the UAE Central Bank has fined an unnamed financial institution US$ 1.6 million. An investigation by the regulator found that the lender had deficiencies in its AML/CFT policies and procedures, pursuant to Article 14 of the Federal Decree Law No (20) of 2018.

Dubai Aerospace Enterprise posted its H1 results, showing a revenue increase to US$ 679 million, with profit before tax, 22.7% higher, at US$ 154 million, giving return on equity of 11.0%.  It has recently seen upgrades to its long-term credit ratings from both Moody’s Investors Service and Fitch Ratings, partly due to its exceptional liquidity of some US$ 4.9 billion. Its CEO, Firoz Tarapore noted that “the continued strength of demand for both leased aircraft and airframe maintenance can be seen in both the growth of our top line revenue and profitability and in improvements to our margins and returns”.

Al Ansari Financial Services confirmed its 100% acquisition of Bahrain-based BFC Group in a US$ 200 million deal; this sees the Dubai-based company becoming the largest remittances and exchange service provider in the GCC region by branch network, with more than four hundred and ten outlets branches – a 60% increase on its current network, across the UAE, Bahrain, Kuwait and India, with a 25% hike in staff numbers to 6k. Acquisition funding is under customary market terms. Rashed Ali Al Ansari, Group CEO of Al Ansari Financial Services, noted that “this move not only enhances our regional presence but also aligns with our broader strategy of diversification and expansion into new markets”.

Earlier in the year, Drake & Scull finally completed its six-year-long debt restructuring. Having posted a loss of US$ 45 million a year earlier, the contractor posted a H1 profit of US$ 8 million but this excludes the profit from the write-back of liabilities under its approved restructuring settlement plan of US$ 1.02 billion. DSI chairman Shafiq Abdelhamid noted that the “exceptional” positive performance comes despite the company “suffering from catastrophic financial, legal and operational conditions inside and outside the UAE … [however,] we had the courage and transparency in disclosing previous accumulated losses of US$ 1.50 billion that almost led to the bankruptcy of the company”.

TECOM Group posted a 24.0% hike in H1 net profit to US$ 164 million, with revenue and EBITDA, both 9.0% higher, at US$ 300 million and US$ 244 million. Occupancy rates in both commercial/industrial properties and land holdings moved higher – to 92% and 96%. All Q2 figures were in the black, with revenue, net profit and EBITDA reaching US$ 159 million, US$ 85 million and US$ 125 million. A US$ 109 million dividend was announced for H1, with a total annual dividend commitment of US$ 218 million through September 2025.

Mashreq posted a 14.0% annal increase in net profit to US$ 1.09 billion, driven by a 17.0% surge in net interest income and a 26.0% hike in non-interest income to US$ 518 million. The net profit before tax grew by 24.0% to an impressive US$ 1.23 billion, as operating profit rose 21.0% to US$ 1.22 billion.

Dubai Financial Market posted a massive 74% surge in annual H1 profits to US$ 53 million, with revenue 40.2% higher at US$ 83 million. Operating revenue was up 1.5% at US$ 42 million, with total expenses, (excluding tax), 4.1% higher at US$ 30 million.

H2 trading activity on the local bourse was 22% higher at 1.07 million, valued at 4% higher to US$ 13.08 billion; the DFM General Index declined marginally by 0.73%.
In H1, the DFM attracted 72.6k new investors, with 85% of the total emanating from overseas; institutional investors accounted for 66% of the trading value, with net purchases by foreign investors totalling US$ 327 million. Market cap, at 30 June, was at US$ 185.01 billion, with the segmentation of Financials (42%), Utilities (20%), Real Estate (18%), Industrials (13%), and Communication Services (4%).The bourse hosted its annual roadshow in London in June this year, which featured fourteen leading issuers with a combined market capitalisation of US$ 88.83 billion. DFM achieved remarkable success in H1 2024, with its IPO listings, During the period, the exchange saw two major IPOs – Parkin and Spinneys, with the former surging over 30% on its first day of trading, having been one hundred and sixty-five times oversubscribe – a record for the exchange. May saw the premium grocery retail operator’s IPO sixty-four times oversubscribed.  Also in May, the DFM introduced ARENA to facilitate growth opportunities for both companies and investors, helping a wide range of private companies to access capital through diverse assets, including equity and debt, with plans to introduce additional asset classes. It also introduced the enhanced iVestor App, meant to help investors with cutting-edge digital tools for financial management, making it more accessible, efficient, and engaging for retail investors.

The DFM opened the week on Monday 29 July, 302 points (7.6%) higher the previous eight weeks, shed 43 points (1.0%) to close the trading week on 4,237 by Friday 02 August 2024. Emaar Properties, US$ 0.40 higher the previous seven weeks, shed US$ 0.09, closing on US$ 2.29 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.64, US$ 5.03, US$ 1.61 and US$ 0.35 and closed on US$ 0.65, US$ 5.19, US$ 1.61 and US$ 0.35. On 02 August, trading was at two hundred and forty million shares, with a value of US$ 108 million, compared to three hundred and twenty-nine million shares, with a value of US$ 135 million, on 26 July.  

The bourse had opened the year on 4,063 and, having closed on 31 July at 4,268 was 224 points (5.0%) higher. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, to close YTD at US$ 2.36. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.65, US$ 5.23, US$ 1.59 and US$ 0.35. 

By Friday, 02 August 2024, Brent, US$ 5.34 lower (6.2%) the previous three weeks, shed a further US$ 4.15 (5.1%) to close on US$ 77.05. Gold, US$ 29 (1.2%) lower the previous fortnight, gained  US$ 90 (3.8%) to end the week’s trading at US$ 2,476 on 02 August 2024.

Brent started the year on US$ 77.23 and gained US$ 3.00 (3.9%), to close 31 July 2024 on US$ 80.23. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 399 (19.2%) to close YTD on US$ 2,473.

Although there were weak refining returns, (due to lower diesel demand and a higher level of refinery maintenance), BP managed to post a record Q2 profit of almost US$ 2.80 billion, (compared to US$ 2.7 billion and US$ 2.6 billion the previous quarter and for Q2 2023), driven by higher oil and gas prices and a lower-than-expected tax rate. It also increased its dividend – by 10% to US$ 0.08 – and extended its share repurchasing programme, by confirming its commitment to buying a total of US$ 14 billion of shares this year and next. BP is working to exceed its target to reduce annual costs by US$ 2 billion by the end of 2026 and will maintain capex at US$ 16 billion per year in 2024 and 2025. Its debt-to-equity ratio dipped 0.4% to 21.6%, with net debt falling 5.9% to US$ 22.6 billion on the quarter. The petro-giant has announced that it plans the development of the Kaskida oilfield in the US Gulf of Mexico, ready to start pumping 80k bpd from 2029, as well as going ahead with the development of a low-carbon hydrogen project at its Castellon refinery in Spain. The new supremo, Murray Auchincloss, who replaced the disgraced Bernard Looney in January has a different agenda than his predecessor, who was heading away from fossil fuel to expand into renewables.

It seems that it is not only Boeing having problems but so is its main rival Airbus, with its CEO, Guillaume Faury, admitting there are “bottlenecks” in the supply chain, and that “we have more demand than the ability to supply;” as a result, it is falling behind on its orders. It is important for the UK economy that the French plane maker sells jets because every Airbus plane flies on wings, designed by 4k engineers at Filton, near Bristol, with it also designing and testing landing gear and fuel systems, and manufacturing some wing components, before sending them to Broughton where another 6k work for Airbus. Furthermore, there are thousands of small firms and sub-contractors that rely on Airbus work. Last week’s Farnborough International Airshow was a big event for the global industry, and it is interesting to note that at the same event in pre-pandemic 2018, there were four hundred and thirty-one firm orders and commitments. This year, that figure is just one hundred and thirty-nine. Last year, the Airbus made and delivered seven hundred and thirty-five planes – it has a backlog of 8.6k. To add to their concerns, it faces huge supply problems which has slowed production levels.

A double whammy of increased charges in its Space Systems business, (at US$ 1.07 billion), and investing in higher jetliner production, Airbus posted an adjusted operating profit of US$ 880 million – over 50% lower – with revenue nudging higher to US$ 17.25 billion. These latest charges bring the amount written off the company’s balance sheet, over the past five months, to US$ 1.84 billion. Much of the damage is down to the OneSat satellite project and EGNOS, a system designed to improve accuracy of existing navigation signals. The plane maker is working on a review of space activities, as it discusses potential alliances with France’s Thales and Italy’s Leonardo, with the latter confirming talks with its existing partner Thales and with Airbus over possible alliances in the space sector.

Rolls Royce’s H1 underlying operating profit was 73.9% higher at US$ 1.47billion, with statutory operating profit 106% higher at US$ 2.09 billion, due to exchange rate changes and improved valuations for its assets. Operating margin came in 4.4% higher at 14.0%, with the best performing sector being the civil aerospace unit which delivered an operating profit margin of 18%. Last October, Rolls-Royce slashed 2.5k jobs from its 42.0k global payroll and this week forecast that underlying operating profit could be US$ 382 million higher, than its previous prediction in February, in the range of US$ 2.70 billion – US$ 2.95 billion. The company, which makes engines for aircraft, ships and submarines but also makes power generation systems, confirmed it would restart its dividend after a four-year gap; the dividend will start at a 30% pay-out ratio of underlying profit after tax. In early trading, shares in the company jumped 11% to an all-time high of US$ 638.50.

The US Consumer Product Safety Commission has ruled that Amazon is responsible for handling recalls of unsafe products sold on its site and must improve its process. In the event of a recall, Amazon said it currently removes products from its site and notifies customers and will be appealing the decision. The agency claimed Amazon’s alerts were not sufficient to convince its customers to stop using such products and ordered the company to submit a new plan for how it will respond. In 2021, the agency had sued the tech giant for distributing more than 400k hazardous items, including faulty carbon monoxide detectors.

Bill Hwang was convicted in a New York court for securities and market manipulation fraud in a scheme that prosecutors said cost global investment banks billions of dollars. The founder of hedge fund Archegos Capital, that collapsed in 2021, was found guilty on ten criminal counts and six charges of market manipulation. It was alleged that he, and his co-conspirators, artificially inflated the values of nearly a dozen stocks before the investments collapsed. Margin calls in late March 2021 wiped out more than US$ 100 billion in market value in just days, with nearly a dozen companies as well as banks and prime brokers duped by Archegos lost billions as a result. It was also claimed that Hwang lied to banks to get billions of dollars to grow his New York investment firm, whose portfolio grew from US$ 10 billion to US$ 160 billion.

Intel’s finances are struggling mainly because of two factors – a noticeable decline in consumer spending on traditional data centre semi-conductors and the fact that it lags behind its rivals in the burgeoning AI sector. Consequently, it has cut back on its initial Q3 revenue figures, slashed 15% of its payroll numbers, (17.5k employees) and suspended dividend payments as from Q4. CEO Pat Geisinger noted that “I need less people at headquarters, more people in the field, supporting customers”. Shares slumped 20% in extended trade, as US$ 24 billion was wiped off its market cap. The results hardly impacted the broader chip industry with the likes of AI powerhouse Nvidia, and smaller rival AMD, ticking up after hours, underscoring how well-positioned they were to take advantage of the AI boom.

Last week, private equity firm Apollo Global Management bought Evri for US$ 3.46 billion, and this week the delivery giant announced it was looking at recruiting 9k personnel – 8k couriers and 1k warehouse and other supporting roles; this will see the company, formerly known as Hermes, having some 28k self-employed couriers, delivering up to four million parcels daily – now higher than pre-pandemic levels. Evri and rival Yodel were ranked the worst performing out of the UK’s major delivery companies, with complaints over its level of service, including delayed and missing deliveries. Having invested millions in improvements, Evri now claims 99% of deliveries are now made on time.

Yodel, the parcel delivery group, has been given a US$ 109 million lifeline, via new financing arrangements from Paypoint, the London-listed company, and specialist lender Independent Growth Finance. The parcel delivery group, formerly owned by the Barclay family, was on the brink of collapse earlier in the year but this should put the company on a sustainable footing. At that time, it was reported that it had struck a deal with a newly formed company called YDLGP, but yesterday, a spokesman for Yodel confirmed that, after a strategic review assessing its compatibility for a merger with the Shift Group and Tuffnells, it would instead operate as a standalone entity. Last year, it generated US$ 717 million in revenue, adding clients including eBay and Boden, and made more than one hundred and ninety million deliveries.

Rex, Australia’s third-largest airline, has gone into voluntary administration and cancelled flights on some of its routes. The carrier, established in 2002 after the collapse of Ansett, specialised in flying to fifty-six smaller regional towns and cities across the country – many of which are not serviced by larger rivals Qantas and Virgin Australia.  Ernst & Young Australia has been appointed as administrator. It has a fleet of sixty-six aircraft – mostly thirty-four-seater Saab 340 planes, as well as nine Boeing 737-800s; the latter were utilised on more lucrative routs – Melbourne, Sydney and Brisbane. Passengers who hold bookings on these routes will not get refunds but can change their flight to travel with Virgin Australia free of charge whereas the other routes will continue operating. Shares in Rex have roughly halved in the past twelve months, with the company owning a 50% stake in another aviation business used to fly workers in and out of remote worksites such as mines.

With two hundred and fourteen data centres spread across the country, Australia is one of the top five data centre hubs in the world, with demand expected to explode over the next decade, as the industry moves inexorably towards AI; one interesting fact is that one large data centre can consume the same amount of energy required to power 50k homes. The problem is that data centres, already estimated to use 5.0% (1,050 MW) of the country’s electricity supply, will probably account for up to 15% of electricity generated by 2030. Latest estimates point to overall electricity consumption from the grid to nearly double by 2050, driven by other factors such as the move to EVs and a household move away from gas appliances. Even the director of the Victoria Energy Policy Centre, Bruce Mountain, said Australia was not well placed to cope with that increasing demand. Australia may face difficulties in the energy transition period, as it seems to be lacking other clean energy, biomass or decent amounts of hydro or nuclear, as it enters a period of having to build new capacity to meet rising demand. As basic economics teach if there is an imbalance when supply cannot satisfy demand then prices head north.

Italian Prime Minister Giorgia Meloni and China’s Premier, Li Qiang signed a three-year action plan vowed to “relaunch” cooperation between the two countries. Italy had exited China’s Belt and Road infrastructure investment scheme last year, and this meeting aims to once again return to their former position and to boost Italy’s flagging economy. She said that an industrial cooperation memorandum signed by Italy and China includes strategic industrial sectors such as electric mobility and renewables. Li added “China and Italy should adopt a win-win mentality and increase trade and investment cooperation, making cooperation even more dynamic and sustainable”.

The Confederation of British Industry posted that retailers had suffered another bad month in July, as retail sales balance sank to -43 from June’s reading of -24; further weakness is expected this month, (with a forecast index of -32), as poor weather and generally weak trading conditions will continue to hamper demand.. The retail sector was not helped by adverse weather conditions and the ongoing market uncertainty. There is some hope that the market may spring back this month on the back of a post-election honeymoon period. Data also shows that sales volumes dropped by 1.2% in June from their level in May, hampered by unseasonably cool weather, with overall sales volumes still below pre-pandemic levels.

Despite Germany’s continuing weak performance, (contracting 0.1%), the eurozone Q2 economy grew faster than expected at 0.3%, the same increase as posted in the previous quarter; this improvement comes after H2 2023 saw zero growth. Indicators are that there could be a mini bounce-back in H2, but there are concerns after latest July figures show that business activity in the eurozone slowed further, with persistent weakness in the manufacturing sector.  Whilst the German economy continues to struggle, both France, (helped by foreign trade and a recovery in corporate investment), and Spain, (driven by exports and robust household spending), posted positive numbers – with Q2 growth of 0.3% and 0.8%. Italy and Portugal recorded expansion of 0.2% and 0.1%. Based on recent data, it would seem that the ECB will not be in such a rush to lift the twenty-country single currency zone’s rates again, having moved them 0.25% higher in June.

A study by Nationwide has shown that first-time buyers are spending about 37% of their take-home pay on mortgage payments; this figure is 7% higher than the long-term 30% average and that increase is making it tougher for this sector to get on the housing ladder. It is estimated that prices increased by 2.1% over the year, the fastest pace since December 2022.

The new Starmer government has announced a scheme offering Post Office scandal victims settlements of US$ 770k. The Horizon Convictions Redress Scheme, the fourth scheme of its kind, is set to assist those sub-postmasters whose convictions were not quashed by the courts but have now been automatically overturned by the Sunak’s government’s recent Post Office Offences Act. Those affected, numbering some nine hundred, have the choice of taking the cash offered or if they want to take further action undergo a detailed assessment of their case by the Department for Business and Trade, which will include a guaranteed minimum payout of US$ 578k. Furthermore, the Ministry of Justice has also committed to paying “all reasonable legal fees” for victims seeking advice on how to apply for a settlement. More than 2.8k sub-postmasters, including many who were not convicted of any crimes but were suspected of wrongdoing, have already received payouts, but there is the distinct possibility that many have yet to come forward. A total of US$ 1.28 billion has been set aside to fund compensation for victims of the scandal.

Housing Secretary, Angela Rayner, has confirmed that the government will restore mandatory housing targets for England; they had been scrapped by the previous Sunak administration, and that the annual target has been raised by 23.3% to 370k, with the target for London lowered by 20k to 80k. The rules will see 50% of new housing to be affordable “with a focus on social rent”. More than thirty home builders signed a statement supporting the reintroduction of mandatory housing targets and releasing of “grey belt” land. She also commented that brownfield development should be “the first port of call” and said they will promote higher density homebuilding in urban centres, and that some low-quality green belt land would be freed up for construction. Furthermore, all projects should have supporting infrastructure. She said there would be a “council house revolution”, with the “biggest boost to social and affordable housing in a generation” but said details will be revealed in the autumn budget on 30 October.

The latest Oxfam report claims that the richest 1% of the global population have seen their wealth increase by US$ 42.0 trillion over the past decade – nearly thirty-four times more than the entire bottom 50%. Over that period, the average wealth of the top 1% was nearly US$ 400k higher in real terms, compared to just $335 – an equivalent increase of less than US$ 0.09 a day – for a person in the bottom half. The five richest people in the world account for US$ 958 billion – Elon Musk (US$ 243 billion), Jeff Bezos (US$ 205 billion), Bernard Arnault (US$ 188 billion), Mark Zuckerberg (US$ 166 billion) and Bill Gates (US$ 156 billion). Last week, The Group of 20 finance chiefs pledged to continue “dialogue on fair and progressive taxation, including of ultra-high-net-worth individuals”, a reference to the 2.0% minimum tax on billionaires that Brazil President Luiz da Silva has made the centrepiece of his nation’s year on top of the group; not all members are happy. For the first time, finance leaders from every G20 country have agreed to tax the world’s billionaires.

In a close 5-4 vote, the BoE’s Monetary Policy Committee cut interest rates, for the first time in four years, by 0.25% to 5.0%. One of the main drivers behind this decision was that the consumer price index had dipped below the BoE’s 2.0% target, with its Governor, Andrew Bailey, noting that “inflationary pressures have eased enough that we’ve been able to cut interest rates today.  But we need to make sure inflation stays low and be careful not to cut interest rates too quickly or by too much”. However, there is every possibility that inflation will climb back to nearer 3.0% in the coming months that may see rates nudging higher again.  Interestingly, it upgraded its 2024 forecast for economic growth, from 0.5% to 1.5%, with Q2 and Q3 growth expected 0.7% and 0.4%.

It does seem that many politicians are prone to lying – and unable to answer questions directly – when it is convenient to do so. The UK parliament seems to be awash with such personnel. During the election campaign, the winning Labour Party repeatedly spoke that there would be no tax rises on “working people”; within two weeks of taking power, the Chancellor has come out to say that the government will likely raise some taxes in October’s Budget, noting “I think we will have to increase taxes in the Budget,” with Rachel Reeves responding to a question about raising money following her claim on Monday that the previous government left a US$ 28.30 billion “hole” in the public finances. Labour has already confirmed some tax rises and the chancellor has previously alluded to “difficult decisions” needing to be made. On Monday, she announced a windfall tax on oil and gas companies, in addition to the VAT on private school fees – both of which were manifesto commitments. The Hillsborough scandal, Infected Blood Scandal, Cash for Access/Honours, MPs’ Expenses, Covid, Greensill, Partygate, PPE, Election Betting  and the Post Office shenanigans are just a few examples that corruption and complicity are fast becoming the norm in British political life. This Is How We Do It!