1984!                                                                         30 August 2024

According to a Cushman and Wakefield Core report, Q4 saw a 14.0% annual hike in tenants renewing residential leases for the fourteenth consecutive quarter. In relation to rents, apartments were well ahead at an annual 22% to 13% ratio. One major problem, that will not go way, is the current economic environment that sees rising rents well ahead of household incomes, with a bigger percentage going on housing. In line with unit sales, rents in the mid-market segment -including Discovery Gardens, Dubai Sports City and Dubailand – are only going one way, upwards, whilst in more expensive property sector, they are slowing. Residential sales prices increased, by 21%, for the sixteenth consecutive quarter, with a 21% annual rise. However, it said prime districts saw a relative moderation in sales price increases, while mainstream and affordable districts were witnessing steep increases that are impacting their affordability. The ultra-prime market remains robust, increasing by 12%, with three hundred and five residences, each selling for more than US$ 5.45 million (AED 20 million) in Q2. However, there has been a marked slowdown in off-plan transactions, over the last two quarters, mainly because the pipeline is low. Official figures indicate that in H1, 13.7k units were delivered, with a further 24.3k anticipated in H2. It is interesting to note that while secondary market transactions recorded a moderate 5% growth, off-plan transactions surged 61%., and in Q2, off-plan transactions accounted for more than double the number of secondary market transactions.

Nearly seven hundred villas have been sold on Palm Jebel Ali since sales their launch late last year. On Monday, Nakheel awarded a two-year, US$ 220 million contract to Belgium’s Jan De Nul Dredging, (dredging, land reclamation, beach profiling and sand placement); on completion, this will not only finalise the marine works, but directly support the construction of villas across all fronds at the project The main road connecting the man-made island to Sheikh Zayed Road, is also under way. On completion, it will be double the size of Palm Jumeirah and will comprise sixteen fronds, along with other multiple islands, as well as spanning 13.4k km, with 91.0 km of beach front. Each villa is being sold at a price range between US$ 5.4 million and US$ 13.6 million. Prices have been rising steadily since launch days, with posting 31 December 2023 US$ 702.45 per sq ft, rising 5.39% on the quarter to US$ 740.32 by 31 March and by 2.83% to US$ 761.31 at the end of Q2. During H1, Palm Jebel Ali Palm accounted for 7.4%, (fourteen units), of the one hundred and ninety Dubai home sales of over US$ 10.0 million; it was second behind Palm Jumeirah’s sixty units.

The first eight fronds of the Palm Jebel Ali project are expected to be site-ready by Q1 2025, and once completed, this will allow for the commencement of villa building. On full completion, it is expected that Palm Jebel Ali will house 35k families and have more than eighty hotels.

In its latest Executive Nomad Index, Savills confirmed that Dubai has retained its top place out of twenty-five global cities surveyed, with Abu Dhabi moving two places higher to fourth. It considers the likes of internet speed, quality of life, climate, favourable tax regime, lifestyle, education, healthcare offerings, security business opportunities, global connectivity and prime rents It added that Dubai had ranked highly for connectivity because of its two major airports – DBX and DWC – and two airlines – Emirates and flydubai. Notwithstanding the prime rents and climate categories, Dubai scored well and will benefit in the future from launches of exciting real estate projects, residential and commercial, and government policies conducive to growth. Rounding off the top ten are Malaga, Miami, Lisbon, Barcelona, Palma, Barbados, Algarve and Saint Lucia.

By the end of 2023, UAE national carriers posted a 3.4% increase in the number of destinations served to six hundred and six, including joint and cargo routes, with Emirates and flydubai accounting for 44.4%, (Emirates – one hundred and forty-four destinations and flydubai, one hundred and twenty-five). Next month, EK is upgrading its Boeing 777 aircraft to Zurich and Riyadh and will add the same aircraft to its operations in Geneva and Brussels. The carrier is in the throes of investing US$ 3.0 billion in modernising eighty more planes. flydubai, with a current fleet of eighty-eight Boeing 737s, flies to fifty-eight countries, including a European network of twenty-nine destinations, including Budapest, Catania, Krakow, Milan-Bergamo, Prague, Salzburg and Zagreb.

Salik Company announced the valuations of the two new toll gates at Business Bay and Al Safa South – at US$ 617 million and US$ 128 million – for a combined value of US$ 745 million; they are expected to be in operation by this November and will bring the total toll gates to ten. Their introduction will further ease Dubai’s traffic congestion and optimise traffic flow. As per the Concession Agreement with RTA, Salik has the exclusive rights to construct, operate, and maintain the toll gates until the end of June 2071. The differences between the valuation by Salik, and the valuation by the RTA did not exceed the 5%. Accordingly, and as per the terms of the concession agreement, the average of the two valuations was adopted as the final value for the two new gates. Salik has agreed a six-year repayment schedule for the gates’ valuation, starting this November, with an annual instalment of US$ 124 million, paid bi-annually. Obviously, Salik is expecting to see the two new tollgates generate more revenue, with revenue-generating trips anow expected to increase in the range of 7% – 8 % in 2024 versus previous guidance of 4% – 6%, with a robust EBITDA margin of 67% – 68%, versus the previous guidance of 65% -66%.

It seems that there will soon be changes to the way Salik’s toll gate system collects its monies. Its CEO Ibrahim Al Haddad has indicated his thoughts that the current US$ 1.09 (AED 4.00) rate may have lost momentum and impact on traffic, and that there is a need to apply dynamic pricing, which will see the rate vary according to the time of the day – this may include some toll gates charging more and maybe all not charging anything at certain times of the day. Once a report, including financials, forecasts and details, is finalised, it will then be forwarded to the Dubai Executive Council for approval.

It is estimated that DMCC is home to more than 45% of the 1.5k US businesses, (around 0.7k) in the country, and is now looking at reinforcing that position to maintain the UAE’s status as home to the largest US foreign direct investment stock in the ME. A DMCC delegation recently made its second US trip this year, to San Francisco, California, and Denver, to extol US businesses on the myriad of benefits of establishing a presence in the emirate. Last year, bilateral trade was at a record US$ 31.4 billion – and growing – with the DMCC increasing its share by 4% to 15% of the emirate’s FDI of US$ 39.26 billion and 7.0% of Dubai’s GDP of US$ 430.0 billion.

A recent session, organised by Dubai Chambers in alliance with Dubai Future Foundation, hosted a workshop investigating new opportunities and growth prospects for the gaming sector. It was focussed on strategies for the Dubai Programme for Gaming 2033, with a target to place Dubai as one of the top ten global gaming hubs; it also envisions the sector to contribute over US$ 1.0 billion to the emirate’s GDP and, at the same time, create 30k new jobs, and provide opportunities for businesses and experts within the sector. Attendees at the session included key players in the gaming industry, such as developers, hardware experts and specialists in AI, sales and marketing. The upcoming Expand North Star will take place at Dubai Harbour from 13 – 16 October.

The Federal Tax Authority posted that the number of H1 transactions, processed through the digital Value Added Tax (VAT) refund system for tourists, rose 5.9% to 2.7 million; the figures are based on the number of refunds “Tax free Tag” issued by retail stores electronically linked to the system. The FTA revealed that a total of 19.67 million digital tax refund requests from tourists have been processed between the system’s initial launch and the end of H1, up 35.3% to the same period in 2023. According to Khalid Ali Al Bustani, Director-General of the FTA, “the significant increase in tax refund requests from tourists can be attributed to the substantial tourism boom the UAE is currently enjoying”. He also noted that the “the system is the most advanced of its kind in the world and offers 100% digital procedures to process digital invoices issued from retail outlets registered in the system, replacing traditional paper invoices, using an advanced electronic link between these outlets and the system.” By the end of H1, 16.9k stores were electronically linked to the Tax Refund for Tourists Scheme – up 8.1% on the year.

As part of the development process, a thorough assessment was conducted by globally recognised ESG which examined international and regional regulatory landscapes and reporting frameworks to identify critical factors in determining an organisation’s ESG maturity. All entities, that have been established for at least two years, are eligible to apply. Companies that are successful will benefit from alignment with ESG best practices, enhanced brand image/reputation, and added value for potential investors. 

e& has invested US$ 60 million to acquire the Turkish-based digital firm GlassHouse, which will boost its portfolio and see it enter three new markets in Turkey, Qatar and South Africa, bringing its operational presence to thirty-four markets, in which, the company provides the latest cloud and its associated managed services in key sectors, such as banking and finance backed by German software company SAP. Salvador Anglada, chief executive of e& enterprise, noted that “this acquisition is another bold step in our journey to becoming a regional leader in end-to-end digital transformation.” GlassHouse is a major player in Turkey’s cloud services sector, with more than 2k companies in multiple nations, including nine of the top ten banks in Turkey. Revenue in MEA transformation market is projected to surge almost sixfold, over the next six years, to US$ 217 billion by 2030 – a compound annual rate of 28.4%.

Jebel Ali Port reported that, in July, it handled 1.4 million twenty-foot equivalent units – its largest volume of containers handled in a month since 2015, as the benefits of recent Comprehensive Economic Partnership Agreements, with various nations, have begun to take hold, leading to a surge in non-oil foreign trade. DP World noted that H1 volumes were 2.9% higher, on the year. This follows a strong performance in H1, handling 7.3 million TEUs, driven by “strong inbound cargo movement, particularly from key Asian markets including China, Japan and the Republic of Korea.” In H1, UAE’s non-oil trade reached a record US$ 676 billion – up 11.2% on an annual basis, assisted by a 25% surge in non-oil exports from the new CEPAs; non-oil experts to its top ten trading partners rose by 28.7% and to the rest – 12.6%. To date, CEPAs have been signed with India, Turkey, Israel, Indonesia, Cambodia, Georgia, South Korea, Chile and Mauritius, with further discussions ongoing with Serbia, Vietnam, Philippines, New Zealand and Ecuador. The goal is to bring the number of CEPAs to twenty-six, in the coming months, and it is hoped that by 2030, they will add about 2.6% to the UAE’s GDP.

Next month, Dubai will host several major events including:

07-08 Sep       the second edition of the Binos Classic Bodybuilding Championship, with seven hundred athletes       

11-12 Sep       the inaugural edition of the Dubai AI & Web3 Festival – one hundred exhibitors and over 5k participants including industry leaders, policymakers and global innovators, who will lead discussions on the future of AI and Web3.

16-20 Sep       the thirtieth edition of the World Congress on Intelligent Transport Systems (ITS World Congress), with an expected turnout of 20k participants and eight hundred speakers. The congress will focus on key themes such as innovations in intelligent transport, sustainable mobility, smart city integration, data-driven decision-making, autonomous vehicles and enhancing international cooperation in this field

23-25 Sep       the tenth edition of the World Free Zones Organisation’s ninth Annual International Conference and Exhibition, with representatives from over one hundred countries and more than 2k global and regional business leaders and free zone officials

In H1, the Dubai Financial Services Authority authorised sixty-one new firms – a 22% annualised increase – bringing the total number of regulated entities to eight hundred and thirty-seven entities; the wealth management sector posted a 62% rise. The DFSA contributed to facilitating the growth of the capital markets in the DIFC, which remains the world’s largest ESG sukuk market and the second largest listed sukuk market after Dublin, with a value of US$ 16.6 billion and US$ 90.9 billion respectively. It also hosts one hundred and ninety-nine securities on its official list, valued at US$ 166.3 billion, including forty-three ESG securities – valued at US$ 28.6 billion – listed on Nasdaq Dubai. During the period, it issued six consultation papers, including on crypto regulation, the audit regime, crowdfunding, and credit funds. The Authority took one enforcement action and issued nine public alerts to consumers and the financial community about common and more sophisticated forms of scams, and published four key reports on firm disclosures, brokerage, private banking, and liquidity coverage ratios, providing valuable insights for the industry.

Peter Georgiou, an ex-private banker, working for his former employer, Mirabaud (Middle East) Limited has been fined US$ 980k, (for misleading conduct and his involvement in the violations of his former employer, Mirabaud (Middle East) Limited. Apart from the fine, he has also been banned from holding any office or working for a DFSA-authorised firm and is restricted from providing financial services in the Dubai International Financial Centre. The court noted the defendant lacked integrity and was unfit to work in the DIFC’s financial sector. Specifically, the authority discovered that the former banker:

• deliberately misled MMEL’s compliance team and withheld crucial information to bypass MMEL’s anti-money laundering (AML) systems and controls
• sent a forged, deceptive email to a client
• provided false information to the DFSA during an interview

In July 2023, MMEL was fined US$ 3 million for having inadequate AML systems and controls., with its employee found to have played a role in MMEL’s failure to:

• conduct proper due diligence on existing customers, especially when there were doubts about their documents or suspicions of money laundering
• assess clients’ financial markets experience adequately when classifying them as Professional Clients

Majid Al Futtaim reported a 6% decrease in H1 revenue to US$ 4.55 billion, EBITDA down 2% to US$ 572 million and a US$ 436 million profit; it noted that figures had been impacted by macroeconomic headwinds from geopolitical instability and regional currency devaluations. Retail registered an 11% annual decline in revenue to US$ 3.16 billion and a 47% year-on-year decline in EBITDA to US$ 76 million. Its property division registered a 9.0% increase in revenue to US$ 1.0 billion, primarily driven by the highly successful Tilal al Ghaf residential real estate development; (in June, it recently launched Ghaf Woods which saw its first phase of 1k units sell out). The group said it continued to drive sales across its residential community portfolio, booking US$ 1.61 billion. The cinemas portfolio registered a 3% year-on-year increase in admissions, contributing towards a strong EBITDA growth of 103%, as the lifestyle business reported an increase in revenue by 23% to US$ 159 million. Shopping malls registered an annual revenue growth of 8% and recorded 96% occupancy. Hotels reported an increase in revenue per available room (RevPAR) of 18% year-on-year, while average occupancy was down by 2%.  In March 2024, the group sold a number of non-core assets from its hospitality portfolio. Net borrowings decreased to US$ 3.98 billion, with most of its debt maturing post 2027.

Dubai Aerospace Enterprise has signed agreements with several parties to acquire a total of twenty-three planes, valued at US$ 1.1 billion; 90% of the order are for narrow-bodied planes. The Dubai-based company confirmed that the aircraft portfolio had a weighted average age of 3.4 years, an average lease term of 8.8 years and is on lease to thirteen airlines in nine countries. The deal will be financed by internal means. Because of this purchase, DAE has been able to add a further six new airline customers to its portfolio. In H1, profit came in 5.5% higher on the year to US$ 149 million, whilst total revenue nudged up 1.4% to US$ 679 million. Its available liquidity was 19.5% higher at US$ 4.9 billion, with a liquidity coverage ratio of 241% at 30 June, compared to 290%, six months earlier.

Equitativa (Dubai) Limited registered a 16% hike in H1 net property income to US$ 34 million for Emirates REIT, attributable to rising occupancy levels and continued improvement in lease rates, resulted in an annual 12% growth in total H1 property income to US$ 40 million. Continued cost rationalisation helped reduce property operating expenses by 3% to US$ 6 million, resulting in a 19% surge in operating profit to US$ 25 million. The manager of Emirates REIT PLC is still being impacted by high finance costs that resulted in negative funds from operations of US$ 1.5 million in H1 – an improvement from 2023’s negative US$ 3.6 million. As valuations continued to head north in the period, its fair value of investment properties jumped 18% to US$ 991 million, which then saw the financing to assets value decline to 40% as of 30 June 2024 – its lowest level since 2016. The H1 30% unrealised gain on revaluation of investment properties amounted to US$ 65 million.

Latest data shows that Q2 net profits for Dubai-listed companies rose 30.9% on the year to US$ 6.7 billion – a much better result than the aggregate 5.7% net profit posted by listed corporates across the GCC. Dubai’s results only lagged those on the Bahrain bourse because of accounting adjustments and restructuring implemented by DSI. Three of DFM’s sectors – banking, capital goods and telecoms – accounted for 83.1% of the total earnings. DFM trades are divided into thirteen sectors with seven ending the quarter in the black whilst six, including the insurance and diversified financial sectors, reported declines.

Over H1, annualised net profits increased by 20.0% to US$ 12.1 billion, with total Q2 net profits for the banking sector 12.0% higher to US$ 3.3 billion, up from $2.9 billion in Q2 2023, and in H1 by 13.9% to US$ 6.5 billion. Emirates NBD posted a record H1 profit, 13.6% higher to US$ 3.76 billion, whilst Q2 profits reached US$ 1.9 billion, driven by increased lending across the bank’s regional network, coupled with substantial impaired loan recoveries during the period.

Aggregate profits for the capital goods sector jumped nearly eleven times during Q2 2024 to reach US$ 1.2 billion, driven by Drake & Scull’s US$ 1.0 billion profit in Q2, compared to a US$ 12 million loss a year earlier. On the other hand, National Central Cooling and Dubai Investment Company posted 4.5% and 8.7% in net earnings at US$ 43 million and US$ 79 million, respectively.

Total Q2 net earnings for listed real estate stocks in Dubai increased by 29% on the year to US$1.1 billion after all the companies in the sector reported y-o-y growth. H1 net earnings for the sector were up 11.9% to US$ 2.4 billion. There was no surprise to see Emaar Properties being the main driver, with Q2 profits 39% higher at US$ 659 million and for H1 up 8.0% to US$ 1.5 billion.

It is reported that, in Q4, Delivery Hero, the German-based food delivery platform, is to list a share of its UAE subsidiary Talabat on the DFM; no details were available about the size of the float or how the funding raised is to be utilised. In a filing yesterday, the company noted that “a listing may be pursued through a secondary sale of shares by Delivery Hero which would retain the majority interest in the local listing entity after an IPO.” The IPO is still subject to regulatory approvals and market conditions.

Over the past three years, Dubai companies have raised US$ 9.40 billion, through IPOs, with aggregate investor demand for those listings reaching more than US$ 274.48 billion. Last year, the DFM was the fifth best global performer. In November 2021, Dubai said it would list ten state-owned companies and establish a US$ 545 million market maker fund to encourage listings from private companies in sectors such as energy, logistics and retail. It aims to expand the size of the emirate’s financial market to US$ 817 billion, with six state-owned enterprises having been listed on the bourse since 2022.

The DFM opened the week, on Monday 26 August, ninety eight points (2.3%) higher the previous fortnight and gained thirty-three points (0.7%), to close the trading week on 4,325 by Friday 30 August 2024. Emaar Properties, US$ 0.05 higher the previous week, gained US$ 0.03, closing on US$ 2.30 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.66, US$ 5.38, US$ 1.66 and US$ 0.34 and closed on US$ 0.65, US$ 5.37, US$ 1.68 and US$ 0.35. On 30 August, trading was at one hundred and fifty-one million shares, with a value of US$ 135 million, compared to one hundred and thirty-one million shares, with a value of US$ 72 million on 23 August.  

The bourse had opened the year on 4,063 and, having closed on 30 August at 4,325 was 262 points (6.4%) higher. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, to close YTD at US$ 2.30. 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$ 5.37, US$ 1.68 and US$ 0.35. 

By Friday, 30 August 2024, Brent, US$ 0.75 lower (1.0%) the previous week, shed US$ 0.19 (0.2%) to close on US$ 78.83. Gold, US$ 77 (4.7%) higher the previous fortnight, shed US$ 44 (1.7%) to end the week’s trading at US$ 2,502 on 30 August 2024.

Brent started the year on US$ 77.23 and gained US$ 1.60 (2.1%), to close 30 August 2024 on US$ 78.83. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 428 (20.6%) to close YTD on US$ 2,502.

IATA data show ongoing robust annual demand growth for global air cargo markets in July – up 13.6% when measured in cargo tonne-kilometres, and at levels not seen since the record highs of 2021. It was the eighth consecutive month of double-digit annual growth. Capacity, as measured by available capacity tonne-kilometres, rose 8.3%, mainly down to growth in international belly capacity, which increased 12.8% on the strength of passenger markets, (with the increase the lowest in forty months), offsetting the 6.9% increase in international freighter capacity.  Willie Walsh, IATA’s Director General, noted, “air cargo demand hit record highs year-to-date in July with strong growth across all regions. The air cargo business continues to benefit from growth in global trade, booming e-commerce and capacity constraints on maritime shipping. With the peak season still to come, it is shaping to be a very strong year for air cargo.”

In June, on its maiden manned flight to the International Space Station, Boeing’s Starliner was supposed to take Butch Wilmore and Suni Williams there for an eight-day trip and then return them to earth. However – and probably no surprise following their catalogue of recent disasters – the craft also suffered several failures of its thrusters, as well as leaking helium, and NASA has indicated that the safest decision is for the two to return as part of SpaceX’s Dragon Crew-9 mission in February 2025. Another humiliating episode in the Boeing serial of ‘how not to do things right’ and a huge embarrassment that the rescue craft is to be Elon Musk’s upstart rival SpaceX, whilst what was a manned space craft will return with no crew on board.

Last week ended badly for Boeing when it was reported that a US campaign group has accused the plane maker of concealing information about electrical problems on the Ethiopian plane that crashed in 2019, with a number of issues including an “uncommanded roll” at low altitude. It estimated that more than 1k planes currently flying could potentially be at risk of electrical failures as a result of production problems. Both crashes were primarily attributed to a poorly designed flight control system, which activated at the wrong time due to a sensor failure. The organisation has published a number of documents on its website, which it says are build records for the aircraft involved in the Ethiopian accident, leaked by Boeing employees, that set out problems encountered during the construction process.

There is no surprise when Michael O’Leary posted that Ryanair had witnessed a “notable rise” in trouble caused by drunken and drugged behaviour, noting that it has to deal with assault cases on a weekly basis. Europe’s largest airline noted that Ryanair is not the only carrier to experience this behaviour and it seems that flights to beach resorts, such as Ibiza, (“by far and away the worst destination for it”), and the Greek islands are prime locations for such behaviour, adding that flights from Edinburgh, Glasgow, Liverpool and Manchester are “notably bad”, and that there were problems on flights to and from Ireland and Germany.  Interestingly, the culprits are often the people “you least expect” and fit no particular profile. As an aside, the supremo commented that after two years of increases – around the 20% level – he expects them to dip by up to 5% and that, by Q3 2025, prices will be in line with those of 2023.

In July 2023, following some shareholder dissatisfaction at its recent performance, Hein Schumacher was appointed as CEO of Unilever. Almost immediately, it announced that it would demerge its vast ice cream division, which owns Magnum, Wall’s and Ben & Jerry’s. A year later, there are reports that it is trying to slim its portfolio of personal care brands by putting two of them up for sale – Kate Somerville, (an upscale skincare product, acquired in 2015), and another skincare brand, REN.

Alarm bells started ringing at the world’s largest sports retailer when in late June it reported an expected sale drop in early 2025 resulting in its market cap shedding US$ 28.0 billion overnight. Nike still remains the largest sports retailer in the world, with the biggest slice of market share, but the problems probably started four years ago, with the appointment of eBay’s John Donahoe as CEO, with the immediate aim to grow Nike’s online operation and to bring in more digital revenue. With the arrival of Covid, the retailer saw a marked increase in digital sales, and away from its brick-and-mortar revenue stream. During the lockdown, consumers could not go to work – and there was no need to dress smart – and they could not go physical shopping and were forced online whether they liked it or not. So, the new guy got off to an unbelievable start and Nike’s profits surged past projections and the CEO accelerated the digital strategy and before long, he had severed a third of its relationships with ‘bricks and mortar’ sales partners, commenting that “the consumer today is digitally grounded and simply will not revert back.” With a smack of ignorance and arrogance, Nike believed they were the ones best able to deliver their vision straight to consumers, and they did not need retailers like FootLocker and JD Sports diluting that as middlemen. However, the tide turned, and as global lockdowns ended, shoppers returned to stores and online sales slowed, and the decisions that had been made started to be questioned. Nike’s rivals – including Asics, Deckers Outdoor’s HOKA and Roger Federer-backed On – were now filling the spaces that Nike used to dominate in pre-Covid days. Furthermore, they were biting into Nike’s market share, particularly in performance running, as well as introducing new ideas and new products. There is no doubt that Nike had become a laggard in the sports lifestyle scene, with the likes of Adidas’s Samba and Gazelle lines, and New Balance’s 990s, growing in popularity.

Even though on Wednesday, Nvidia posted record Q2 revenue of US$ 30.0 billion, 122% higher on the year, its shares fell 6.0% in after-hours trading; earlier in the year, the tech company saw its market cap top US$ 3.0 billion on the New York bourse, but the market cap is still a very impressive 150% higher, YTD. Of all major tech companies, Nvidia has benefitted most from the AI boom, and even though these figures are “spectacular”, they do point to a slowdown in the rate of growth. Its chief executive, Jensen Huang, remains upbeat, commenting that “generative AI will revolutionise every industry.” One of the reasons has been that the next generation Blackwell chip has faced some production delays and if it fails to deliver, its valuation could be impacted, with investors, having already financed billions, pulling out. Although the Nasdaq was impacted, the Dow hit a record high of 41,335, 0.59% higher on the day, following robust economic data indicating that Q2 GDP grew by 3.0%, attributable to enhanced consumer spending and an uptick in business investment.

The Indian watchdog has provisionally approved a US$ 8.5 billion JV between Disney and Reliance Industries, with the latter having majority stake status. The new entity, which will have broadcasting rights for a majority of Indian sports events, will be the country’s biggest entertainment player, competing with Sony, Netflix and Amazon.  Over three years, the two companies have invested US$ 9.5 billion on TV and streaming rights for the Indian Premier League, T20 World Cups and matches held by the International Cricket Council. With the merger, the two companies will also have Indian broadcast rights for Wimbledon, MotoGP and the English Premier League.

The week started with news that Oasis was planning a major reunion tour and by yesterday, details had been released with seventeen concerts from 04 July to 17 August 2035. The first two concerts will be at the Cardiff’ Principality Stadium, followed by five at Manchester’s Heaton Park, five more at Wembley Stadium, two at Edinburgh’s Murrayfield Stadium and closing with the final two concerts at Dublin’s Croke Park. Ticket prices range hover around US$ 98, (GBP 75), for seated tickets and US$ 198, (GBP 150), for standing tickets. Recent tickets for Taylor Swift’s Eras Tour were averaging around US$ 78 (GBP 59) and US$ 145 (GBP 110) for standing tickets., and for Bruce Springsteen US$ 86 (GBP 65) and US$ 158 (GBP 120). A quick estimate sees a revenue stream of some US$ 1.496 billion (seventeen concerts, with an average 80k attendance and an average ticket price of US$ 110).

The Dutch Data Protection Authority has smacked Uber with a US$ 324 million fine for transferring the personal data of European drivers to US servers, in violation of EU rules; the watchdog noted that the transfers were a “serious violation” of the EU’s General Data Protection Regulation, as they failed to appropriately protect driver information, alleging that it sent information – including ID documents, taxi licences and location data, (“and in some cases even criminal and medical data of drivers”) –  to its US headquarters over a two-year period. The riding hailing app said it would appeal the fine, which it called “unjustified”, adding that “Uber’s cross-border data transfer process was compliant with GDPR during a three-year period of immense uncertainty between the EU and US.” It is the DPA’s third fine against Uber following fines of US$ 670k in 2018 and US$ 11.2 million last year. The investigation was initially started after more than one hundred and seventy French drivers complained to a French human rights group, which then filed a complaint to France’s data protection watchdog; EU regulations indicate, that in such an event, the case must be brought by the nation in which the company has its headquarters – , Uber’s HQ is in Amsterdam.

Having trialled its own second-hand online marketplace successfully in Oslo and Madrid, Ikea plans to take on the likes of eBay, and is set to roll out the site globally by December. The app, Ikea Preowned, will allow visitors to sell to each other, rather than relying on other buy-and-sell websites. Research indicates that there is a steadily growing market for second-hand furniture, clothes and equipment. Furthermore, it could improve Ikea’s margins, with the Swedish company making more profit from the resale of its own goods, whilst taking business away from the likes of eBay, Gumtree, Craiglist, Shpock and Facebook Marketplace.

Featurespace, (backed by the late Mike Lynch, via his investment firm, Invoke Capital), is negotiating a possible US$ 920 million sale to Visa, the US payments giant. The UK company, founded in 2008, specialises in fraud detection and counts HSBC, NatWest Group and Worldpay among its customers.  Invoke owns a small stake in Featurespace, while he served as a non-executive director of the company for eleven years, and it is thought that he reduced its interest in recent years to help finance his legal case which ultimately saw him acquitted of fraud over the US$ 11 billion sale of Autonomy to HP. On its website, Featurespace noted that it was “devastated by the loss of Mike Lynch”, and that “it is a high statistical probability that Featurespace wouldn’t be a thriving technology company without Mike,” and that “Mike was a true champion of the UK technology sector, including the need for greater diversity, and advocated for many female leaders – including our CEO Martina King.” Mr Lynch also played a key role in setting up Darktrace, the cybersecurity company which recently agreed to be taken over by Thoma Bravo, the private equity firm, in a US$ 5.61 billion deal.

Staff at retailer Next have finally won a six-year legal battle for equal pay, after an employment tribunal said store staff, who are predominantly female, should not have been paid at lower rates than employees in warehouses, where just over half the staff are male. Next is going to appeal the decision but if it fails, it will cost US$ 40 million in back-pay to some 3.5k staff. According to the tribunal’s ruling, between 2012 and 2023, 77.5% of Next’s retail consultants were female, while 52.75% of warehouse operators were male. It accepted that the difference in pay rates between the jobs was not down to “direct discrimination”, including the “conscious or subconscious influence of gender” on pay decisions, but was caused by efforts to “reduce cost and enhance profit”. Workers at five of the UK’s largest supermarkets, Asda, Tesco, Morrisons, Sainsbury’s and the Co-op, are also pursuing equal pay cases, with the firms using the same arguments as Next around market pay rates to counter them, whilst the same judgment could prompt further cases, for example in the care sector, hospitality or construction.

A deal has evolved that will result in Authentic, re-establishing an online presence for the vanquished Ted Baker; very recently, the retailer had permanently closed its thirty-one remaining UK shops, with the loss of some five hundred jobs, with a further fifteen outlets and two hundred retrenchments having been closed by NODL’s administrator, Teneo, earlier in the year. The US company, (which is already Authentic’s operating partner for Ted Baker in the US and Canada), has owned Ted Baker since 2022, has struck a deal with United Legwear and Apparel Co, to operate an e-commerce presence for the brand in Britain and mainline Europe. A week earlier, discussions with Mike Ashley’s Fraser Group had broken down.

Last month, the Royal Australian Mint announced the successful launch of AUD 1 ‘Bluey’ coins to celebrate the global success of the TV cartoon; they were being sold for AUD 20, (US$ 13.58), with on-line sites now asking in the region of AUD 600, (US$ 407.38). Now the Royal Mint is getting in on the act again by releasing the Gruffalo’s Child which will appear on a new commemorative 50p, coin, (US$ 0.66) to mark twenty years since the story was first published; (the Gruffalo first appeared on similar coins in 2019). The new coins will not enter general circulation but will be available to buy in precious metal finishes, starting at £12, (US$ 15.79) – and a gold one for US$ 99, (US$ 130.28). In the past, it has minted similar coins for the likes of Paddington, The Snowman, and Beatrix Potter favourites, many of which have seen attractive price rises.

Not for the first time in recent times, Qantas finds itself in the news for all the wrong reasons. Last week, about three hundred people thought they had beaten the system when the Australian carrier put up first-class prices at 15% of market prices. Qantas soon recognised their blunder and will refund or downgrade hundreds of passengers who were sold cheap first-class flights because of a coding error. However, it did confirm that it will switch passengers, who bought the bargain tickets, into business class – “at no additional cost” – or give a full refund.

When John Minns was appointed by the NSW government in November 2021 as the state’s Strata and Property Services Commissioner, he confirmed publicly that he had “sold his interest in Independent Property Group in mid-2021”. Now it has been discovered that his family trust continued to hold shares in the company worth more than U$$ 780k and it appears that the man responsible for overseeing strata governance and assisting in the regulation of the state’s property sector — has failed to publicly disclose more than 558k shares in a major real estate and strata services company. On ABC’s Four Corners, he was asked whether his family trust “continues to own more than 500k shares” in the company, and he replied, “that is correct”. Recently, it appeared that he admitted that while this was not disclosed to the public, the NSW government was fully aware of his shareholding. Following the recent publicity, it seems that IPG has called for an EGM, to discuss the buyback of Minns’ remaining shares. Evidently, IPG’s most recent financial statement, obtained by Four Corners, showed the company had earned more than US$ 5 million from strata and facilities management work across 2022 and 2023. No wonder that the Minister for Fair Trading, Anoulack Chanthivong, has asked for an urgent review of the matter.

Earlier in the year, Minns was overseeing an investigation into a high-profile strata management company, Netstrata which was found to have been charging exorbitant insurance fees as well as taking kickbacks. Although the company operated primarily in the ACT; (a typical brokerage fee is about 20% of an insurance policy’s base premium, whilst Netstrata’s insurance arm was charging in excess of 60%, without disclosing that fee to owners). It held a NSW real estate licence until June last year, with several of its employees continuing to operate in NSW and hold NSW licences.

There is no doubt that there would be a conflict of interest whenever a person charged with a public duty of growing good public policy in the public interest for those living in the strata space but also has a commercial interest in the trading of apartments. The fact that the Commissioner had failed to publicly disclose his shareholding is self-evident that a conflict of interest had occurred. It seems that Minns confirmed that his published pledge, relating to the 2021 sale of shares had been mirrored by a formal pecuniary declaration to the government, with him saying “I’ve made it very, very clear at all stages with the NSW government, and it was accepted by the secretary [of the department] at the time.”; the secretary was Emma Hogan. In July 2022, with a restructure of his department, his role as Property Commissioner was terminated, eight months into a two-year contract. Three weeks later, Ms Hogan reinstated Mr Minns to his position, with an annual remuneration package of US$ 271k. Last October, his remit was expanded to also take responsibility for overseeing the strata industry.

Australia has become one of the first developed countries to introduce a law that does not ban employers from contacting workers after hours but gives staff the right not to reply unless their refusal is deemed unreasonable. If any dispute cannot be settled amicably, then its Fair Work Commission can step in; the employer may be ordered to stop contacting the employee after hours, or on the other hand, it can find an employee’s refusal to respond unreasonable and order them to reply. Failure to comply with FWC orders can result in fines of up to US$ 13k for an employee or up to US$ 64k for a company.

This week, Canadian Prime Minister Justin Trudeau announced that the country will impose a 100% tariff on imports of Chinese EVs, (on 01 October), following on similar decisions by the US and the EU; all parties have accused China of subsidising its EV industry, giving its car makers an unfair advantage. Furthermore, it also plans to impose a 25% duty on Chinese steel and aluminium, as from 15 October. China has reacted posting that the move is “trade protectionism” which “violates World Trade Organisation rules”, and that Canada’s actions “seriously undermine the global economic system, and economic and trade rules”. China is Canada’s second-largest trading partner, behind the US. One problem with the decision involves Tesla which manufactures EVs in Shanghai; Elon Musk has already received reductions from the EU and would hope for something similar from Canadian regulators. The country is Tesla’s sixth largest market.

For the week ending 24 August, the number of Americans filing new applications for jobless benefits dipped 2k, to a seasonally adjusted 231k, whilst re-employment opportunities for laid-off workers are becoming more scarce –  an indicator that the August unemployment rate still remains on the high side. The latest figures point to a steadily cooling labour market, which should help to allay fears of a rapid deterioration. The Labor Department’s Bureau of Labor Statistics last week estimated that employment growth was overstated by 68k jobs per month in the twelve months through March.  Last Friday, Fed supremo Jerome Powell noted that concerns over the labour market is a reason to start cutting interest rates. There was a 13k increase in the number of people receiving benefits after an initial week of aid, a proxy for hiring to a seasonally adjusted 1.868 million during the week ending 17 August. The figures, almost at post pandemic rates of late 2021, indicate longer spells of unemployment. It is expected that the August unemployment level – which has risen for the past four months – could remain at a three-year high of 4.3%.

Following the usual annual Jackson Hole symposium’s speech by the Chairman of the Federal Reserve, energy prices moved higher. There, its Chair, Jerome Powell, indicated that interest rates would soon be cut, as geopolitical tensions were easing a little, with demand growing. Factors such as a weakening Chinese economy, growing recession risks, and signs that a ceasefire between Israel and Hamas could be on the cards, all impact on the Fed’s decision. The Chair also noted that he thinks inflation had eased enough to allow for an interest rate cut next month, and further cooling in the job market would be unwelcome. Furthermore, he expressed confidence that inflation was within reach of the US central bank’s 2.0% target, whilst noting that “the upside risks to inflation have diminished. And the downside risks to employment have increased.” Brent has lost about 12.5% of its value after breaching the US$ 90 a barrel mark in April.

The British Retail Commission posted that August shop prices fell 0.3% – their first annual fall since October 2021 – because of retailers trying to clear stock, (particularly fashion and household goods), with summer sales after wet weather and ongoing cost of living pressures had impacted sales. Food prices continued to rise, albeit at a slower pace, whilst fresh food inflation, such as fruit, meat and fish, had seen the biggest monthly decrease since December 2020 – thanks to falling costs from suppliers. Non-food goods were 1.5% lower in August, on the year, with food prices 2.0% higher on the year but down 0.3%, on the month. The most recent official inflation figures – which indicate how fast prices are rising overall – showed the rate rose to 2.2% in July, the first increase this year; the BoE has predicted the inflation rate will rise to about 2.75% in the coming months, before falling below 2.0% in 2025.

According to the Office for National Statistics, the average price of takeaway fish and chips, at the end of last month, was 52.5% higher at US$ 13.03 than it was five years earlier in July 2019; this was the biggest price increase when compared to several other of the UK’s most popular takeaways. They include kebabs, chicken & chips, pizza, Indian (main course) and Chinese (main dish) US$ 6.92 – up 44%, US$ 6.24 – 42%, US$ 10.63 – 30%, US$ 9.92 – 29% and US$ 7.28 – 29%. Chip shop owners have been hit by a triple whammy of 35% tariffs on Russian seafood imports, surging energy costs and the recent potato harvest being impacted by extreme weather.

As widely expected, Kier Starmer finally confirmed that Labour’s first budget will be painful, and the government will have to make “big asks” of the public, and “accept short-term pain for long-term good”. In true Labour fashion, he reiterated that those with the “broadest shoulders should bear the heavier burden”. As he continued blaming the former Conservative government, saying that he had inherited “not just an economic black hole but a societal black hole”, the former incumbent, Rishi Sunak retorted that the speech was “the clearest indication of what Labour has been planning to do all along – raise your taxes”. However, the PM repeated his pledge, made during the election campaign, that the government would not raise National Insurance, income tax or VAT. His Chancellor, Rachel Reeves, has made similar promises but said some taxes will rise and has not ruled out an increase in inheritance tax, capital gains tax, or reforming tax relief on pensions. Whilst saying he was determined to “restore honest and integrity” to government, he had already given a No 10 pass to one Labour donor Lord Alli and appointed another donor, Ian Corfield, to a temporary job in the Treasury. Cronyism is alive and well.

This week, Mark Zuckerberg admitted that he had cowed to Biden administration pressure and now regrets that he took down some material – including humour and satire – on Facebook and Instagram in 2021. He also confirmed that his firm briefly “demoted” content relating to Joe Biden’s son, Hunter, ahead of the 2020 election, after the FBI warned of “a potential Russian disinformation” operation and admitted that this was not true and now says it should not have been temporarily taken down. (The Biden incident is centred on his laptop being abandoned at a Delaware repair shop, with the New York Post reporting that emails found on the computer suggested his business abroad had influenced US foreign policy, while his father was vice-president). During the pandemic, his apps removed posts for a myriad of business reasons, but that the “government pressure was wrong”, adding that “we made some choices that, with the benefit of hindsight and new information, we wouldn’t make today.”  He said he and Meta would be ready to “push back” if something similar happened in the future.

Having always insisted that his Telegram app should remain a “neutral platform” and not a “player in geopolitics”, its founder Pavel Durov, was arrested in Paris last Saturday, as part of a preliminary police investigation. It seems that French authorities will focus their enquiries into a lack of moderators on Telegram, which the police consider could be a platform allowing criminal activity to go on undeterred on the messaging app. The firm, which is now headquartered in Dubai, insists that its moderation tools meet industry standards and that the tech company abides by EU laws. The encrypted Telegram, with close to one billion users, is particularly influential in Russia, Ukraine and the republics of the former Soviet Union. It is ranked as one of the major social media platforms after Facebook, YouTube, WhatsApp, Instagram, TikTok and Wechat. He founded Telegram in 2013, but left Russia a year later when he refused government orders to shut down opposition communities on his VKontakte social media platform, which he sold. Since then, he has become a French citizen and has lived in Berlin, London, Singapore and San Francisco. Telegram came to the forefront after the Russian invasion of Ukraine and has become the main source of unfiltered news from both sides, despite Russia’s 2018 attempts to block the app, after a refusal to comply with a court order to grant state security services access to its users’ encrypted messages. Strangely, the Russian government, (the same administration that tried to ban the app in 2014 and 2018 – but lifted it in 2021) has accused France of acting as a dictatorship and called on Western non-governmental organisations to demand his release, it has also asked the Macron administration for further clarification. The app has always attracted scrutiny from several European nations because of security and data breach worries. Elon Musk noted that “it’s 2030 in Europe and you’re being executed for liking a meme,” whilst Robert F Kennedy commenting that the need to protect free speech, “has never been more urgent.”

By Wednesday, Pavel Durov had not been remanded in custody, but placed under judicial supervision, and ordered to pay a US$ 5.6 million deposit, as part of a probe into organised crime on the messaging app, Paris prosecutors say. Apart from being a passport holder in St Kitts & Nevis and the UAE, the Russian-born entrepreneur is a French national and has to show up at a French police station twice a week and is not allowed to leave French territory. He was put under formal investigation over alleged offences that included:

• complicity in the administration of an online platform to enable illicit transactions by an organised gang
• refusal to communicate with authorities
• complicity in organised criminal distribution of sexual images of children

The argument made by Telegram is that the app complies in every respect with European digital regulations, and it was “absurd” to suggest he could be involved “in criminal acts that don’t concern him either directly or indirectly”. The firm, which is now headquartered in Dubai, insists that its moderation tools meet industry standards. It seems ironic that Mr Durov, who also founded the popular Russian social media company VKontakte, left Russia in 2014 after refusing to comply with government demands to shut down opposition communities on the platform, and a decade later France pulls this one on him. This is the first occasion ever that the owner of a social media platform has been arrested because of the way in which that platform is being used; this has resulted in a fierce debate online about freedom of speech and accountability – and how Macron thinks that France was deeply committed to freedom of expression, and that the decision to hold Mr Durov was “in no way… political”. A quoi diable est-ce qu’il pense? Elon Musk has defended the Telegram supremo arguing that moderation is a “propaganda word” for censorship, whilst Chris Pavlovski, the founder of a controversial video-sharing app called Rumble, said he had fled Europe following Durov’s arrest. Even Russia has weighed into the argument warning Macron’s France not to turn this episode into a “political persecution”, having previously said that, without serious evidence, the charges could be construed as an act of “intimidation”, whilst another Russian legislator saying that Durov was a “hostage of the dictatorship of democracy of the collective West”. 

George Orwell introduced the word “doublethink”, (belief in contradictory ideas simultaneously) which was reflected in the Party’s slogans: “War is peace,” “Freedom is slavery,” and “Ignorance is strength.” The Party maintains control through the Thought Police and continual surveillance. It seems that in 2024, the political world is not going forward when it starts to ‘bottle’ free speech – and openly lies to hide the truth. In fact, it is going back forty years to 1984!