A Rush Of Blood To The Head!                                                  01 November 2024

This week, The Dubai Real Estate Sector Strategy 2033 was launched, outlining a focused roadmap to elevate the sector’s economic impact on the emirate by significantly increasing transaction volumes and reinforcing its appeal as a premier destination for international investors. In the first nine months of 2024, the real estate sector posted over 163k transactions, valued at US$ 148.23 billion. It is noted that there is always concern that when records continue to be broken, the sector may become overheated, and speculation takes over. This time, the market is at a mature stage, so that growth is being managed and controlled and kept within set limits.

The newly-released Dubai Real Estate Sector Strategy 2033 contains the following KPIs:

• doubling the real estate sector’s contribution to Dubai’s GDP to approximately US$ 19.89 billion
• increasing home ownership rates to 33%
• growing real estate transactions by 70%
• raising the market value to US$ 272.48 billion
• expanding the value of Dubai’s real estate portfolios twenty times to US$ 5.45 billion

The strategy aims to inspire a transformative shift in Dubai’s real estate sector by fostering sustainability and solidifying Dubai’s role as a regional and global leader in real estate. Investing in Dubai extends beyond property acquisition – it offers a high-quality lifestyle, further enhancing market appeal and attracting long-term investment.

As posted in a recent blog, CBRE noted that there were more than 125k residential transactions in the nine months to September 2024 – 36% higher, compared to the same period a year earlier, driven by a 50%+ annual growth rate in the number of off-plan transactions, with no obvious slowdown for the immediate future. More than half of Dubai’s real estate sales are now off-plan, attracting investors, for quick handover, with 22.6k off-plan unit launches occurring in Q3; in that quarter, Allsopp & Allsopp estimated that off-plan sales accounted for 56.5% of market activity in Dubai, fuelled by unprecedented demand and a lack of supply of readily available property. Other property players opine that many end-users, who initially bought off-plan units intending to reside in them, are also choosing to sell, driven by the substantial returns such assets yield, noting that the majority of off-plan resales these days are for properties that are within twelve months of completion. However, it appears the days of flipping are well and truly over because the Dubai realty sector is now a more mature marketplace, with the days of some 100% mortgages, along with generous long-term payment terms, consigned to history books.  Furthermore, the markets are well aware that what was experienced in the mid-2000s are long gone, thanks to more informed investors and self-regulating controls by developers, with many of them – including Emaar Properties, Nakheel, Dubai Properties, Meraas and Dubai Holding – owned, or majority-owned, by the emirate’s government. In addition, some developers have imposed more stringent payment conditions, such as 50% of the total property payment must be made before any subsequent transactions are permitted. There is also no doubt that strings are being pulled by the regulators, as well as developers themselves, controlling and better managing the supply side of the equation which reduces the chance of a property bubble forming, as had been the case in the past when the supply tap was switched on willy-nilly.

Despite regional instability and geopolitical conflicts in Palestine, the Lebanon and the Red Sea, Dubai’s property sector has shown its resilience, attributable to demand from local and international investors and several progressive visa reforms that have provided stability. This week, S&P came out with (some may think questionable) findings that the market will maintain its stability, at least until H2 2026, which could be followed by a marked stabilisation of prices because of the increased supply of new housing units. The fear is that if the expected number of units, some 182k, which the agency expects to be handed over in the next two years, it could saturate the unfulfilled demand, and lead to lower prices and rents; this figure is more than double the average annual supply of the preceding five years. The study noted that the pace of new launches will decrease over the next twelve – twenty-four months, as the market absorbs the supply so far but that this does not seem sustainable over the long run. Some analysts will consider that S&P have been far too conservative in their approach, and this is one observer who thinks that this particular cycle has at least thirty months before it runs out of steam. Even then, the market will not crash, as has been the case in the past.

According to Property Monitor’s September report, new off-plan development project launches remained at record highs, with just over 13.5k off-plan units added to the market for sale, with an anticipated combined gross sales value of US$ 7.87 billion. During the first nine months, new project launches reached slightly less than 100k units and US$ 66.13 billion, in aggregate sales value. This surpasses the volume of units launched in 2023, however, falls short by US$ 8.17 billion in sales value by comparison.

Reports indicate that all but two of the twenty-four uber-luxury villas to be built on Amali Island, located on the World Island, have been sold. It is estimated that twelve of the villas were priced around US$ 13.6 million, (AED 50 million), nine at US$ 20.4 million, (AED 75 million), two at US$ 27.2 million, (AED 100 million) and one at US$ 54.5 million, (AED 200 million).  The three most expensive villas were sold in one deal. If someone wants to live on “the Maldives in Dubai”, the last two villas are available – one at US$ 13.6 million and the other at US$ 20.4 million. Amira Sajwani, COO and co-founder of Amali Properties, noted that“the diversity of nationality that we have on the island is incredible. We have a real mix of buyers. There is an increase in British buyers. Then there are Indians, Pakistanis, Lebanese and Cypriots,” adding that “across the buyers, we do have some special newsworthy names. We have an international footballer who purchased a villa matching his jersey number.”  Answers on a postcard.

As part of its vision to double its project portfolio to over US$ 27.25 billion in the next eighteen months, Binghatti Developers has launched ‘Binghatti Skyrise’; it is reported that 50% of the development sold out in the first twenty-four hours. The project, located in Business Bay, will comprise 3,333 residential units, including two thousand, two hundred and fifty-six studios, nine hundred and ninety-six one-bedroom units, twenty-four two-bedroom units, twenty-six three-bedroom units, and thirty-one retail spaces. Future residents will be able to enjoy over fifteen high-end amenities, including luxury swimming pools, a private golf course, tennis courts, a fully equipped gym, kids’ water park, and dedicated yoga and relaxation areas. With the addition of Binghatti Skyrise, Binghatti’s portfolio now exceeds US$ 10.90 billion.

A US$ 190 million Roads and Transport Authority contract has been awarded to construct five bridges, spanning a total of 5k metres for its Trade Centre Roundabout Development Project; it will also convert the existing roundabout into a surface intersection to improve the flow of traffic inbound from Sheikh Zayed Road to 2nd December Street and the southbound traffic from Al Mustaqbal Street to Sheikh Zayed Road. Mattar Al Tayer, Chairman of the Board of Executive Directors stated, “The Trade Centre Roundabout Development Project is part of a broader development plan that also includes the Al Mustaqbal Street Development Project, which will be awarded this November. This project will double the intersection’s capacity, cut the delay time from 12 minutes to 90 seconds, and shorten the travel time from Sheikh Zayed Road to Sheikh Khalifa bin Zayed Street from six minutes to just one minute.” The DWTC Roundabout Development Project is being undertaken concurrently with another road development project in the area. RTA has recently awarded the contract for the Oud Metha and Al Asayel Streets Development Project, which includes upgrading four major intersections and constructing bridges, spanning 4.3k mt, along with roads extending 14 km.

In his capacity as the Ruler of Dubai, HH Sheikh Mohammed issued Decree No. (62) of 2024 on the Board of Directors of the Dubai Electronic Security Center, chaired by Awad Hader Al Muhairi. Accordingly, Tamim Mohammed Al Muhairi will serve as Vice Chairman, with other Board members including Hamad Obaid Al Mansoori, Tariq Mohammed Al Muhairi, Saeed Al Muhairi, Ayesha AlWari, along with the CEO of the Center. This Decree is effective from the date of its issuance and will be published in the Official Gazette.

Tuesday saw the twenty-fifth anniversary of Dubai Internet City which was unveiled to the business/IT world by HH Sheikh Mohammed bin Rashid on 29 October 1999. At the time, it was a revolutionary move, but it has evolved into a vibrant hub for multinational corporations, start-ups, and Fortune 500 companies. It is now home to over 4k mainly IT businesses, employing some 31k professionals, and has become a leading global hub for innovators. It has been a launchpad for tech pioneers and a leader in the regional digital economy, with its MD, Ammar Al Malik, noting that “for twenty-five years, we’ve enabled impactful innovation and contributed significantly to digital transformation, particularly in AI and advanced technologies.”

The UAE has signed its latest Comprehensive Economic Partnership Agreement with Vietnam, which will open new avenues for economic cooperation for both countries. As with the other CEPAs, already signed, the agreement features a tariff reduction and elimination of up to 96% across customs tariff lines. The UAE Minister of State for Foreign Affairs, Dr Thani Al Zeyoudi, noted that the initiative comes in light of the significant potential to increase non-oil trade between the two nations, and that the agreement will contribute to launching a new era of bilateral cooperation and stimulating sustainable growth of the economies of both countries. Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, indicated that “by removing trade barriers and improving market access, this agreement will not only boost bilateral trade but also create new investment opportunities, supporting growth, diversification, and solidifying our position as a global hub for trade and investment.” Vietnam is recognised as a strategic partner and a leading economic power in Asia. With Vietnam’s 2025 GDP expected to increase by 6.0% higher to almost US$ 500 billion, the country offers significant potential for UAE exporters and investors which will be helped by this CEPA.

Dubai’s 2025-2027 budget was approved this week by HH Sheikh Mohammed bin Rashid which he announced on his X account:

“Today, we approved Dubai Government’s budget for 2025-2027, with revenues of AED 302 billion, (US$ 82.29 billion) and expenses of AED 272 billion, (US$ 74.11 billion), marking it as the largest budget in the emirate’s history. A substantial 46% of next year’s budget is allocated to major infrastructure projects, including roads, bridges, energy, and water drainage networks, alongside the construction of a new airport. A 30% of the budget is dedicated to health, education, social development, housing and other essential community services”

“Next year’s budget will achieve an operating surplus of 21% of total revenues for the first time, aiming to establish long-term financial sustainability for the Government of Dubai” 

“This year, we also launched a AED 40 billion, (US$ 10.90 billion), portfolio for public-private partnerships. Our goal is to preserve and safeguard our financial surpluses for future generations. Maktoum bin Mohammed is leading this dossier with competence, and we reaffirm our confidence in him and his team. Dubai moves confidently toward the future, with solid, resilient, and sophisticated financial sustainability. The next phase promises even greater progress, and the best is yet to come”

With expenditure for the fiscal year 2025 at US$ 23.50 billion, and revenue of US$ 26.61 billion, the budget shows a US$ 3.11 billion surplus. The budget also includes a general reserve of US$ 1.36 billion in revenues, underscoring the emirate’s commitment to supporting development projects, stimulating the overall economy, and achieving the ambitious goals of the Dubai Plan 2030, the Dubai Economic Agenda D33, and the Quality-of-Life Strategy 2033.

More than 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 2020. The controls were removed in March 2021 to reflect the movement of the market once again. Today, retail prices saw slight increases, after average 8.6% October reductions. The breakdown of fuel prices for a litre for November is as follows:

• Super 98      US$ 0.749   from US$ 0.725   in Nov (up by 3.0%)        down 2.5% YTD  US$ 0.768     
• Special 95    US$ 0.717   from US$ 0.692   in Nov (up by 3.5%)        down 2.8% YTD  US$ 0.738         
• E-plus 91     US$ 0.695   from US$ 0.673    in Nov (up by 3.3%)        down 3.3% YTD   US$ 0.719
• Diesel           US$ 0.727   from US$ 0.7.08    in Nov (up by 2.7%)       down 11.0% YTD US$ 0.817

Dubai Aerospace Enterprise Ltd is to invest US$ 500 million to acquire ten narrow-body, next-generation aircraft on lease to four airlines in four countries. Furthermore, DAE has initiated and managed the purchase and sale of equity interests in thirty-six managed aircraft from existing investors to new investors, managed for institutional investors by its own Aircraft Investor Services division, that also supports a global investor base in managing over one hundred aircraft across various investment strategies. Firoz Tarapore, CEO of DAE, commented, “we look forward to welcoming a new airline customer to our lessee base, as well as further deepening our relationship with another three airline customers” and that “we are continuing to expand our footprint, managing a diverse pool of assets for multiple investors”. All aircraft are expected to close by the end of 2024.  It also posted financials for the nine months to 30 September – with total revenue 2.8% higher, at US$ 1.02 billion, with operating profit, (before exceptional items), up 10.2% to US$ 512 million and profit before tax an impressive 57.4% higher at US$ 327 million. At the end of the period, total assets had risen by 4.1% to US$ 12.771 billion.

In an effort to improve service quality and to adapt to global developments, The Ministry of Energy and Infrastructure has announced a marked reduction in bureaucracy, by eliminating over 745k government procedures across twenty-one services, resulting in a 75% decrease in service delivery time. On top of these amendments, it is estimated that twenty-one million hours have been saved by customers and visits to the Ministry cut by 75%.

With consolidated revenue, profit and EBITDA, all heading north in the nine months to 30 September, by 9.0% to US$ 11.63 billion, by 9.0% to US$ 817 million and to US$ 5.29 billion, e&’s telecom footprint was extended to twenty countries, bringing its overall reach to thirty-eight markets.  In Q3, revenue, net profit and EBITDA came in 10.0% higher on the year, at US$ 3.92 billion, US$ 817 million and US$ 1.77 billion. Earnings per share for the period and Q3 were US$ 0.264 and US$ 0.093.  Its total subscriber base rose 6.0% to 177.3 million, with a 5.0% increase in the total number of e& UAE subscribers to 14.7 million.Over the period, the telecom completed the acquisition of a controlling stake in PPF Telecom Group, (its first foray into Central and Eastern Europe), further expanding its global horizon, impacting the lives of over one billion people across the MEA, Asia, and now parts of Europe.

Emirates Integrated Telecommunications Company PJSC (du) announced its Q3 financial results, with growth recorded across the board – revenue by 9.1% to US$ 981 million, EBITDA by 16.9% to US$ 463 million, (with a record 48.3% EBITDA margin), and net profit by an impressive 42.7% to US$ 191 million, (its highest quarterly profit in more than three years). This growth, coupled with solid performances in both local and international markets, drove consolidated net profit to reach US$ 2.32 billion, up 10.0%, during the first nine months. Furthermore, consolidated EBITDA reached US$ 5.29 billion, resulting in an EBITDA margin of 45%.

In the nine months to 30 September, Mashreq posted a pre-tax, 9.0% annual increase in net profit of US$ 1.77 billion – and this despite a US$ 136 million increase in corporate income tax; however, a 13.0% surge in net interest income, allied with a 21.0% year-on-year increase in non-interest income, helped the cause. The three main drivers were strong business growth, with healthy margins, the benign interest rate environment, and relative low risk costs. In Q3, there were increases noted for both customer deposits, (7.0%) and lending (12.0%).

The DFM opened the week, on Monday 28 October, seventy-three points (1.8%) higher the previous three weeks, gained a further 142 points (3.2%), to close the trading week on 4,621 points by Friday 01 November 2024. Emaar Properties, US$ 0.03 higher the previous week, gained US$ 0.09, closing on US$ 2.41 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 5.20, US$ 1.66 and US$ 0.34 and closed on US$ 0.68, US$ 5.27, US$ 1.71 and US$ 0.34. On 01 November, trading was at one hundred and twelve million shares, with a value of US$ 75 million, compared to ninety-six million shares, with a value of US$ 59 million, on 24 October.  

The bourse had opened the year on 4,063 and, having closed on 31 October at 4,591 was 528 points (13.0%) higher YTD. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, and has gained US$ 0.21, to close YTD at US$ 2.37. 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$ 0.68, US$ 5.18, US$ 1.70 and US$ 0.35.

By Friday, 01 November 2024, Brent, US$ 2.41 higher (3.3%) the previous week, shed US$ 2.66 (3.5%) to close on US$ 73.30. Gold, US$ 92 (3.4%) higher the previous three weeks, shed US$ 7 (0.3%) to end the week’s trading at a record US$ 2,746 on 01 November 2024. 

Brent started the year on US$ 77.23 and shed US$ 4.42 (5.7%), to close 31 October 2024 on US$ 72.81. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 676 (32.6%) to close YTD on US$ 2,750.

Monday saw oil global crude benchmark Brent prices tank more than 4.3% after Israel’s strikes on Iran – and this despite avoiding Tehran’s energy infrastructure; Iran said the strikes caused “limited damage”. Iran accounts for up to 4.0% of global oil supplies and if its oilfields had been hit, then oil prices would have moved north very quickly.

September IATA figures show that ME carriers posted a 4.4% year-on-year increase in demand, whilst the capacity of the regional carriers rose by 4.6%; load factors dipped 0.1% on the year to 81.4%. A regional breakup sees:

Asia-Pacific           plus 18.5% demand              plus 17.7% capacity         plus 0.5% to 82.6% load factor

Europe                     plus 7.6%                             plus 7.4%                                  plus 0.2% to 85.0%

N America              plus 0.5%                               plus 1.9%                                  minus 1.1% to 84.4%

Latin American    plus 12.4%                            plus 13.9%.                              minus 1.1% to 84.3%

Africa                       plus 11.9%                            plus 6.6%                                 plus 3.6% to 76.0%

In September, total demand, international demand and capacity, measured in revenue passenger kilometres was up 7.1%, 9.2% and 3.7% on the year compared to a year earlier. Total capacity, measured in available seat kilometres was up 5.8%, 9.2% and 3.7% on the year, with load factor, up 1.0%, at 83.6%, 0.1% at 83.8% and 2.4% at 83.3%.

In a bid to strengthen its finances –  and to preserve its investment-grade credit rating – embattled Boeing launched a stock offering that could raise up to US$ 24.3 billion; it was offering 112.5 million shares in common stock, and US$ 5.0 billion in mandatory convertible securities, after their finances continue to suffer greatly from the ongoing strike which has halted production of models including its cash-cow 737 MAX aircraft. The plane maker said it had priced its stock offering at US$ 143 per share, a 7.75% discount to its close on Friday, before the deal was announced. Boeing shares closed 2.8% lower at $150.69 on Monday. Boeing has never fallen below the investment-grade rating – you never know what can happen to this company that has tripped from one crisis to another! Last week, the company reported a US$ 6 billion Q3 loss and said it would burn cash next year, as the strike is costing Boeing at least US$ 1.0 billion every month.

It has taken BHP and Vale nine years to agree to a US$ 30 billion settlement with the Brazilian government for the 2015 Mariana dam collapse that caused the country’s worst environmental disaster; the dam was owned by Samarco, a JV between Vale and BHP. With its collapse, toxic waste and mud flooded nearby towns, rivers and forests which killed nineteen and left hundreds of others homeless and poisoned the river. During the intervening period, a foundation was established to compensate people; it has already carried out billions of dollars’ worth of repairs, including building a new town to replace one of the towns that was destroyed. However, not everyone has been satisfied with the response and there are other legal proceedings in Brazil, and more than 620k people had taken BHP to court in the UK, where BHP was headquartered at the time, seeking about US$ 47.0 billion in damages in the civil trial that started last week; about 70k complainants are also taking Vale to court in The Netherlands.

As part of its major overhaul of its stores, M&S will introduce larger self-service conveyor belt checkouts in some of the food halls, as well as adding self-checkouts to its changing rooms across one hundred and eighty clothing stores; it expects to have them installed in more than one hundred stores by early 2028. The retailer noted that “we’d like customers to be able to walk straight into the fitting room, with no queue, try on what they’ve chosen, then pay there and just walk out.” Coincidentally, these moves came at the same time its chairman, Archie Norman, noted that theft among middle-class customers was “creeping in” because of faulty self-checkouts.

Following a one year of it having launched its anti-subsidy probe, the EC will set out extra tariffs ranging from 7.8% for Tesla to 35.3% for China’s SAIC, on top of the EU’s standard 10.0% car import duty; they took effect on Wednesday, 30 October. This move has not only irked Beijing to consider retaliatory measures but has split the European car making nations; Germany, the EU’s biggest economy and major car producer, opposed tariffs in a vote this month in which ten EU members backed them, five voted against and twelve abstained. The argument for tariffs is that they will counter what it says are unfair subsidies, including preferential financing and grants as well as land, batteries and raw materials at below market rates. It also notes that China’s annual spare production capacity of three million EVs is twice the size of the EU market. China has a choice to either target the US and Canadian markets, where they have to already pay 100% tariffs or target the “cheaper” European market. The China Chamber of Commerce is not well pleased of the “protectionist” and “arbitrary” EU measures as well as being dismayed by the lack of substantial progress in negotiations. As a riposte, Chinese regulators, in the first nine months of 2024, China’s EV exports to the EU were 7.0% lower on the year, but did surge by more than a third in August and September, ahead of the tariffs. Beijing launched its own probes this year into imports of EU brandy, dairy and pork products in apparent retaliation, and has also raised the issue with the WTO. It is estimated that a Chinese vehicle is on average 20% lower than its European counterpart and that their market share has risen from 1% in 2019 to its current level of 8% and could touch 15% next year.

Although Tesla sold more EVs than its Chinese rival in Q3, BYD’s actual revenue surpassed that of the US company’s for the first time ever; its US$ 28.2 billion revenue stream was 11.9% higher than Tesla’s US$ 25.2 billion return. The 24% annual revenue increase came on the back of the government subsidies to encourage consumers to trade their petrol-powered cars for EVs or hybrids. Latest figures show that 1.57 million applications had been submitted for a national subsidy of US$ 2.8k per each older vehicle traded in for a greener one.

There was inevitability that Reaction Engines, the British hypersonic aviation pioneer, would crash into administration, after weeks of talks with potential backers failed to result in a rescue deal. Several weeks ago, hopes were that US$ 26 million funding would be sourced from the UAE’s Strategic Development Fund, but with main shareholders, BAE Systems and Rolls-Royce Holdings, unwilling to provide enough capital to bail the company out, the UAE link soon lost interest. Thirty-five of Reaction’s staff have been retained temporarily at its Oxfordshire base “to complete a number of existing orders and support in winding down operations,” with one hundred and seventy-three being made redundant yesterday, 31 October.

Shell posted higher than expected Q3 profits of US$ 6.03 billion, (but 3.0% lower, when compared to the same period in 2023), with LNG sales, 13.0% higher, a drop in debt and strong cash flow, offsetting a 70% slump in oil refining. The company said it would buy back a further US$ 3.5 billion of its shares, before the end of January 2025, at a similar rate to the previous quarter. Its dividend was unchanged at US$ 0.34 per share. Net debt dropped to its lowest in nine years at US$ 35 billion, while its debt-to-market capitalisation ratio declined 1.6% to 15.7% from 17.3% a year earlier. Shell shares were up 1.1% in early London trading. Meanwhile TotalEnergies’ Q3 profits were at a three-year low of US$ 4.1 billion, attributable to collapsing refining margins and upstream outages, The same outcome befell BP which posted a 30% decline in Q3 profits to US$ 2.3 billion – its lowest in almost four years.

The Albanese government has brought to an end a fifty-year business of live sheep exports to ME markets, such as Kuwait, which will permanently stop by the end of 2028. The ME importers are duly concerned about the economic damage that this move will have on their business, including the Kuwait Livestock Transport and Trading Company which says local demand for processed meat does not match live sheep; consequently, it will continue to import live animals from other countries.  The state-backed KLTT is the main importer of sheep, mainly from WA, and is responsible for sending them across the region. Its acting chief executive, Ahmed Ayoub, noted that the ban would have a huge impact in the ME, and that “we are really not very happy with this decision that Australia made,” adding “it’s very disturbing for us to end the business like that … after fifty years of working with Australia.” It is not only the ME players who are upset with this move, but it also impacts Australian sheep farmers; the federal government has set up a US$ 92 million support package for affected farmers. 2023 bilateral trade between the countries reached US$ 330 million, according to the Department of Foreign Affairs and Trade, with Australia exporting not only sheep, but also barley, dairy and fruit, and importing petroleum products and fertiliser. The federal government said the export frozen boxed meat would take the place of the live trade, but Mr Al Majed said it was not what consumers wanted, or a practical choice for the region, with “the majority of the people, they don’t prefer to have frozen or chilled meat … they want fresh meat.”

With its deal to acquire Premier Investment’s clothing division Apparel Brands, Myer now has ownership brands such as Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E, which will give the major Australian department store seven hundred and eighty stores across Australia and New Zealand, with 17.3k employees. Premier will retain its Smiggle stationery brand and sleepwear label Peter Alexander. The deal will see Myer issue new shares to Premier, which it will distribute to its investors, equating to more than 51% of its shareholding.

Another iconic Australian fashion entity, Mosaic Brands, with 3k employees and seven hundred stores, including Rivers, Katies, Millers and Noni B, has entered voluntary administration. In September, Mosaic posted that it would shut down five of its brands – Rockmans, Autograph, Crossroads, W.Lane and BeMe – adding that this could “capitalise on and invest in” these brands, as part of a broader operational restructure. However, this move was thrown out of the window on Monday when it said voluntary administration was the “most appropriate way to restructure” after failing to secure the support of “a small number of parties” during discussions over “the past few weeks”. The company said it would continue to trade despite being in administration and would focus on “the key Christmas and holiday trading period”. In the four years to February 2024, Mosaic Brands’ share price slumped 87.0%, from US$ 1.51 to US$ 0.13, and prior to its shares being suspended in August was trading at has been steadily declining since the beginning of January 2020, when it was trading at $2.30. Prior to its suspension from trade on the ASX in August, its shares last traded at US$ 0.024 — giving the company a total market cap of US$ 4.2 million.

The former Australian federal minister of transport, and now the country’s PM, Anthony Albanese has been accused of asking for free personal flight upgrades directly from the former, and now disgraced, CEO of national carrier Qantas. A new book by Joe Aston alleged that he requested, and received, upgrades on twenty-two flights, taken between 2009 and 2019. The PM has retorted “in my time in public life, I have acted with integrity, I have acted in a way that is entirely appropriate and I have declared in accordance with the rules,”  and that he had been  “completely transparent” with his disclosures. Last year, the Albanese government faced questions for denying a request by Qatar Airways to increase flights to Australia – a move that aviation analysts said favoured Qantas. Criticism over that decision has now resurfaced as some opposition leaders have been questioning Albanese’s personal relationship with Joyce.

A week before the presidential election, there was some good economic news for the Democrats that the country grew at an annual rate of 2.8%; although marginally down on the previous quarter’s 3.0%, indicators are that it is on track for one of the strongest economic performances of any major economy in 2024. In normal times, this should prove positive for the Harris campaign, but economic sentiment remains downbeat, mainly attributable to the fact that, over the past four post pandemic years, there has been a 21% jump in prices. In a recent poll, 62% of Americans viewed the economy overall as “bad”, whilst 61% of Democrats thought the economy was good, compared with just 13% of Republicans and 28% of independents. However, Q3 witnessed mainly positive news – including lower energy prices, higher wages, rebound in job growth rising faster than prices, stabilising supermarket prices, dipping inflation rates and increasing and growing optimism about future business prospects and income. However, the share of people worried about an economic recession also fell to the lowest level since the organisation started asking the question in July 2022. This Thursday will see the conundrum solved.

Probably the October hurricanes and strikes in the US were the main drivers behind jobs growth slowing last month; the number was a surprisingly low 12k, compared to the 223k number in September, with the unemployment rate held steady at 4.1%. The Labor Department noted that healthcare and government roles continued their rising trend last month, but fewer new manufacturing jobs were added due to strike activity.

In the UK, the Office for National Statistics Rent considers that paying anything more than 30% of income on rent is considered unaffordable. That being the case, then ever since records began in 2015, the typical private sector renter, on a typical wage in England, has always paid a figure deemed to be unaffordable. Latest figures indicate that renters on a median income – the midpoint between the highest and lowest – paying to live in a median-priced rented home in England spent more than 34.2% of their income on rent, with those living in London paying nearly 40%. The latest regions joining the rent unaffordability ranks are the SE and NW, where rents are now costing people more than 30% of incomes – at 31.9% and 31.6% of incomes respectively. Wales, on the other hand, has always had affordable rent, with the latest figures showing 27.2% of median income spent on median rent. The most affordable area to rent was in N Lincolnshire (with 18.8% of median income going on the media rent), while the least affordable was Kensington and Chelsea (at 52.2% of median income).

Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election. She announced tax rises worth US$ 51.91 billion to fund the NHS and other public services. The OBR calculated that budget policies will increase UK borrowing by US$ 25.44 billion this year and by an average of US$ 41.92 billion over the next five years. The budget also included US$ 15.31 billion allocated to compensate victims of the infected blood scandal with, and not before time, US$ 2.34 billion set aside for wrongly prosecuted Post Office sub-postmasters.

The budget covered many different aspects with some of the main ones for expats listed below:

• No change to the existing income tax, personal National Insurance contributions and VAT rates – the current thresholds will stay the same until 2028/29, when they will be unfrozen and will rise in accordance with inflation 
• Employers’ National Insurance contributions are going up – although most employees may not notice an immediate change in their pay, larger businesses will be impacted as they contribute more to fund public services, which employers will have to recover either from employees (loss of job and pay reductions) or consumers (increased prices) Companies to pay NI at 15% on salaries above US$ 6.5k from April, up from 13.8% on salaries above US$ 11.8k, raising an additional US$ 32.44 billion a year

• Basic rate capital gains tax on profits from selling shares to increase from 10% to 18%, with the higher rate rising from 20% to 24%
• Rates on profits from selling additional property unchanged
• Inheritance tax threshold freeze extended by further two years to 2030, with unspent pension pots also subject to the tax from 2027

• Employment allowance – which allows smaller companies to reduce their NI liability – to increase from US$ 6.5k to US$ 13.0
• Tax paid by private equity managers on share of profits from successful deals to rise from 28% to up to 32% from April
• Main rate of corporation tax, paid by businesses on taxable profits over US$ 324k, to stay at 25% until next election

• Air Passenger Duty to go up in 2026, by US$ 2.60 for short-haul economy flights and US$ 15.57 for long-haul ones, with rates for private jets to go up by 50%
• Vehicle Excise Duty paid by owners of all but the most efficient new petrol cars to double in their first year, to encourage shift to electric vehicles

• New tax of US$ 2.85 per 10 ml of vaping liquid introduced from October 2026
• Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
• Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
• Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%

• Companies to pay NI at 15% on salaries above US$ 6.5k from April, up from 13.8% on salaries above US$ 11.8k, raising an additional US$ 32.44 billion a year
• Employment allowance – which allows smaller companies to reduce their NI liability – to increase from US$ 6.5k to US$ 13.0k
• Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
• Main rate of corporation tax, paid by businesses on taxable profits over US$ 324k, to stay at 25% until next election

The Office for Budget Responsibility has indicated that Wednesday’s budget will only “temporarily boost” the economy, estimating that 2025 growth will be at 2.0%, before slipping to 1.5% in the following year. It also posted what most economists already knew – that in the short term the Budget would push up inflation and interest rates, with a knock-on impact on growth. (This could be an early blow for the Lady Chancellor who seems to have pinned her reputation – and that of the Starmer government – on delivering growth, arguing that a new approach to investment would underpin a better economic performance and “more pounds in people’s pockets”). The end result is that the size of the economy will be “largely unchanged in five years”, compared to its previous growth forecast. The OBR said in the longer-term, investment, planning reform and greater economic stability should help to boost growth, “in a sustainable way”, but not until 2032.

The Resolution Foundation has indicated that following the budget disposable income and wages will stagnate further over the next five years, adding that living standards, will be the worst under any Labour government since 1955 when inflation is factored in. It also opined that pay will stagnate in the middle of the parliament, as higher inflation lessens pay rises and growth is slowed in an already challenging economic environment. The think tank also estimated that, in 2028, pay adjusted for inflation – real wages – is forecast to have grown on average by just US$ 16.80 a week over the past twenty years. One consolation seems to be that households’ disposable income will grow more throughout the five-year parliamentary term than the last – by an expected 0.5% a year, compared to 0.3% under the Conservative government. The rise in NI will be a major factor in prices rising, as well as economic growth weakening.

The aftershocks, following the budget, saw the yield on UK ten-year bonds, known as gilts, (basically the rate that the exchequer has to pay on its repayments), head northwards, and despite some dips has been on an upward trend since then. Although an interest rate cut is still on the cards next Thursday, the likelihood of one has dropped 11% but it is still at a high 83%. Furthermore, sterling tumbled by 2.0%. Credit rating agency Moody’s said borrowing plans announced in the budget were an “additional challenge”, as the new government has just committed itself to far higher lending – about US$ 181 billion more borrowing in the coming years, while tax-raising measures will bring in an extra US$ 52 billion. In short, the markets have already turned hostile and Labour may soon rue the time they had a “Rush Of Blood To The Head”.