Second-Hand News!                                                         27 December 2024

Union Properties has broken ground on its latest Motor City US$ 545 million project – the Takaya – which overlooks the Dubai Autodrome; home prices will be in the mid-to-high range. This development comes after UP has been notably absent from off plan launches, as it had been recovering from previous losses, following dubious management action. Including a five-hundred-meter-long shopping boulevard, the project will encompass three residential towers, with seven hundred and eighty-eight units. There are listings for an in-development studio unit at Motor City for US$ 155k, while one-bedroom prices are from US$ 245k, with rentals for one-bedroom and two-bedroom apartments at US$ 23k and US$ 37k.

With just over 40k residential units entering the market this year, demand remains tight. Over recent years, this has resulted in a mini exodus to other northern emirates which has seen the daily commute traffic worsen, so much so that up to two-hour, one-way drives have become the norm. This, in turn, has resulted in property prices, north of the border, rising but with an expected softening in 2025 rentals/prices in certain Dubai tier-2 areas like Arjan, Jumeirah Village Circle and Sports City, the price differential between the emirates will lessen; this could see many returning to Dubai. Add in to the mix, the actual cost of commuting, plus the stress factor of queuing in traffic four hours a day, and a move back to Dubai becomes a reasonable option. According to Asteco’s Q3 data, a studio costs US$ 5.45k per annum in International City, compared to US$ 4.90k in Sharjah’s high-end areas bordering Dubai and US$ 4.63k in Ajman.

After almost two years of remedial work, Ain Dubai, the world’s tallest observation wheel, resumed with a soft opening on Christmas Day. Closed since March 2022, the attraction is now fully operational; prices range from US$ 39 to US$ 343.

The government-owned EV charging network has announced that there will be new tariffs, to be introduced on 01 January 2025, which will see DC chargers, costing US$ 0.33 plus VAT per kWh, and AC Chargers at US$ 0.19. In the eight months, since May, when tariffs were first introduced until the end of the year, EV charging services have remained free. UAEV is to introduce an app to provide features such as finding the next charging station, live status updates, and simple payment options, as well as launching a dedicated 24/7 call centre to provide instant support and assistance. Sharif al Olama, Chairman of UAEV, noted that “by expanding our network and aligning with the UAE’s Net Zero 2050 Strategy, we are driving a cleaner, greener future for all.” Within six years, UAEV’s network will include 1k chargers, strategically located across urban hubs, highways and transit points within the country.

Starting from 02 January, the federal Ministry of Economy on Tuesday announced a minimum time period of six months, between two consecutive increases in prices of nine basic commodities, without prior approval, in order to protect consumers and enhance competition; they are cooking oil, eggs, dairy products, rice, sugar, poultry, legumes, bread and wheat. Under the new policy, retail stores are required to display unit prices to promote transparency, with the Ministry given supervisory powers to ensure that all parties comply with the decisions.

In the nine months to 30 September, the five leading countries, in the list of non-Emirati entities applying to join the Dubai Chamber of Commerce, were from India, Pakistan, Egypt, Syria and the UK with numbers of 12.14k, 6.06k 3.61k, 2.06k and 1.89k. Other countries, with more than 1k joiners, were Bangladesh, Iraq, China, Jordan and Sudan. The sector-wise split saw trade/services, real estate/business services, construction and transport/storage/communications, accounting for 41.0%, 33.3%, 10.4% and 8.6% of the total.

HH Sheikh Mohammed bin Rashid has issued Decree No. (48) of 2024 establishing the Dubai Resilience Centre. The main aim of the Decree is to make Dubai the world’s most agile city in dealing with various risks, in times of emergencies, crises, and disasters, and ensuring it has the ability to take measures to prevent and address such events and ensure rapid recovery if they occur. The new entity will operate under Dubai’s Supreme Committee of Crisis and Disaster Management, the legal authority and capacity to implement actions and transactions necessary to fulfil its mandate.

The DRC is responsible for measuring performance indicators, (and the rate of progress in implementing approved plans and programmes), and submitting regular reports to the Supreme Committee. This decree obliges all government and non-government entities in Dubai to fully cooperate with the Centre, provide the necessary support, data, information, documents, statistics, and studies it requests to carry out its tasks. HH, the Chairman of the Supreme Committee of Crisis and Disaster Management, will issue the decisions necessary to implement the provisions of this Decree. The provisions of any other legislation that conflicts with the Decree will be annulled.

Drydocks World has opened its massive 75k sq mt multi-million-dollar expansion facility in Dubai, with the new South Yard enhancing its fabrication capabilities by 40% and yard capacity by 25%; this will help the ship repair and maintenance company carry out multiple large-scale projects simultaneously. It will also feature the MEA’s biggest load-out jetty, capable of handling structures weighing up to 37k tonnes, and will ensure the facility’s ability to meet ‘growing demand for energy transition projects and deliver innovative offshore solutions worldwide’. The addition of a 5k tonne Sheerleg Floating Crane, expected to be operational by 2026, will further expand the facility’s ability to handle large and complex projects on a global stage. The South Yard will operate entirely on clean energy, sourced from the Sheikh Mohammed bin Rashid Al Maktoum Solar Park.

Dubai-listed Takaful Emarat – Insurance PJSC, has completed its capital increase to US$ 57.4 million, by raising US$ 50.4 million, via a rights issue offered to existing investors, at an issuance price of US$ 0.272 per new share.  Times have improved for the insurer, as it has managed to turn a Q3 2023 loss of US$ 232k to a US$ 2.40 million profit in Q3 2024. Earlier, this year, the Board wrote-off of accumulated losses, as part of a broader initiative, and introduced other enhancements such as improved transparency, and the delivery of cutting-edge products and services. It ended the week with a share price of US$ 0.37.

The DFM opened the week, on Monday 23 December, two hundred and twenty-seven points (4.7%) higher the previous week, gained seven-three points (1.4%), to close the trading week on 5,130 points by Friday 27 December 2024. Emaar Properties, US$ 0.90 higher the previous week, shed US$ 0.02, closing on US$ 3.49 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.74, US$ 5.56 US$ 1.91 and US$ 0.40 and closed on US$ 0.76, US$ 5.83, US$ 1.92 and US$ 0.41. On 27 December, trading was at two hundred and thirty-seven million shares, with a value of US$ ninety-one million, compared to three hundred and sixty-five million shares, with a value of US$ 329 million, on 20 December.  

By Friday, 27 December 2024, Brent, US$ 1.47 lower (2.0%) the previous week, gained US$ 1.23 (1.7%) to close on US$ 74.17. Gold, US$ 49 (1.9%) lower the previous week, gained US$ 27 (1.0%) to end the week’s trading at US$ 2,654 on 27 December 2024.

Having allegedly putting some one hundred and sixty workers in a “degrading” environment and having their passports and salaries withheld by a building company, Brazilian authorities have taken immediate action by halting the construction of a US$ 482 million factory for BYD; the Chinese EV giant has subsequently stated that it had cut links with the builder and remained committed to “full compliance with Brazilian legislation”. The factory, slated for handover next March, was set to be BYD’s first EV plant outside of Asia; in 2015, it had opened a factory in São Paulo, producing chassis for electric buses. Brazil is the company’s largest overseas market.

Reports indicate that Toyota is planning to build an EV factory in Shanghai, for its luxury Lexus brand, despite several foreign automakers struggling to make headwind in China. Ready by 2027, the factory will be the first Japanese vehicle factory of its kind in China, and will be running solo, without a local partner. Toyota is banking on the new plant will help it catch up in the Chinese market; China overtook Japan as the biggest vehicle exporter last year. The planned Shanghai factory would mainly produce Lexus models, since Toyota mostly sells Japanese-made Lexus vehicles in China.

Citing “dramatic changes in the environment surrounding both companies and the automotive industry”, Honda and Nissan, number two and three carmakers in Japan, confirmed their plan to list a holding company in August 2026. The aim of the exercise is to strengthen their position on EVs and self-driving tech, which has been impacted by weak consumer spending and tough competition in several markets, including Europe.

It will take Lamborghini another five years before it launches its first electric model; long-term rival, Ferrari expects to have its first EV on the road by the end of 2025. It seems obvious that the car maker is in no hurry to rush into the EV sector, but it does have an entire hybrid three-model line-up, with the new version of Urus SE SUV, the Revuelto sports car and the new Temerario sports car – the latter priced at over US$ 315k, excluding VAT. The Italian motor company also reconfirmed that there were no plans for a Lamborghini spin-off from the Volkswagen group, adding that Lamborghini cars would always be produced in Italy.

Last Friday, Novo Nordisk saw its market cap lose US$ 125 billion, (up to 27%), on the back of disappointing results in a late-stage trial for its experimental next-generation obesity drug CagriSema; this was supposed to be a follow up to its highly successful Wegovy weight-loss drug, that is more powerful than Eli Lilly’s rival Zepbound, also known as Mounjaro. The CagriSema trial showed the drug helped patients cut their weight by 22.7%, below the 25%-mark Novo Nordisk had expected, but it noted that if all people adhered to treatment with CagriSema, patients overall achieved weight loss of 22.7% after sixty-eight weeks, with 40.4% losing 25% or more.

Following a US$ 4.30 billion offer declined last month, Aviva has finally succeeded in acquiring rival company Direct Line for US$ 4.82 billion. Aviva will pay US$ 1.69 in cash, and US$ 0.37 of its own shares, for each Direct Line share as part of the takeover, along with a US$ 0.065 in dividend payments per share to Direct Line shareholders. Aviva shareholders will own 87.5% of the new company and Direct Line shareholders the balance. This will see the expanded entity cover more than 20% of the UK market.

It was not a happy Christmas for Cadbury, after discovering that it no longer holds its royal warrant, granted by Queen Victoria, one hundred and seventy years ago. The action by King Charles came after he was urged by the campaign group B4Ukraine to take warrants from companies “still operating in Russia”, after the invasion of Ukraine. The chocolate maker noted that it was “disappointed” to lose its warrants which are granted as a special mark of recognition to people or companies who have regularly supplied goods or services to the royal household. Unilever, which owns consumer brands Dove and Lipton, was also stripped of its warrant. However, Bacardi and Samsung, that were also named in the B4Ukraine list, have not been stripped of their royal warrants, indicating the decision is not linked to Russia’s invasion.

Finance Minister Anton Siluanov confirmed what most already knew – that Russian companies have begun using bitcoin and other digital currencies in international payments in order to counter Western sanctions. Russia has had past problems with two of its major partners – China and Turkey – as local banks are extremely cautious with Russian-related transactions to avoid scrutiny from Western regulators. In 2024, the government also made it legal to mine cryptocurrencies, including bitcoin.

In Kuwait, the Council of Ministers has approved the “Multinational Entities Group Tax Law”, which will see a 15% tax on multinational entities starting on 01 January 2025; it will apply to companies operating across multiple countries or jurisdictions. This move aligns with international tax standards and is designed to curb tax evasion and prevent the leakage of tax revenues to other countries – and follows a similar move here in the UAE.

Starting on 01 January 2026, China approved a VAT law that brings into one document previous regulations that have included exempting items from the tax. It is estimated that this tax is the country’s largest tax category, accounting for 38% of national tax revenue in 2023. This latest draft included exemptions for some agricultural products, imported instruments and equipment for scientific research and teaching, as well as some imported goods for the disabled and services provided by welfare institutions such as nursery, kindergarten and nursing institution for the elderly. With the economy slowing, YTD VAT revenue dipped 4.7% on the year to US$ 840 billion, but rose 1.36% in November; that month, the government unveiled tax incentives on home and land transactions to support the crisis-hit property market, with VAT exemptions allowed for residents when homes were sold after at least two years post purchase.

The Reserve Bank of Australia has been cautioned by the IMF that it should consider tighter monetary policy if progress on lowering inflation stalls, because of government spending heading higher and an increasing tighter than expected jobs market. As the RBA is working towards inflation heading down towards its 2.0% – 3.0% target, the IMF is concerned that efforts will stall, as it considers that the government’s fiscal policy is working against the RBA’s restrictive monetary policy, in a manner that contradicts the disinflation objective. Furthermore, there are worries about the country’s job markets that have yet to peak at 4.5%, (per the Treasury and RBA’s unemployment forecast), still hovering around the 3.9% rate.

Claiming that “the fees being charged by Panama are ridiculous, highly unfair,” and charging “exorbitant prices” to American shipping and naval vessels, Donald Trump, has demanded Panama reduce fees on the Panama Canal or return it to US control. Panama’s President, José Raúl Mulino, added that Panama’s sovereignty and independence were non-negotiable, and quickly retorted that “every square metre” of the eighty-two km canal and surrounding area belong to his country. Built in the early 1900s, the US maintained control over the canal zone until 1977, when treaties gradually ceded the land back to Panama. After a period of joint control, Panama took sole control in 1999.The US reserved the right to use military force in defence of the canal against any threat to its neutrality – a threat which now appears to be coming from the US itself. Some 75% of the cargo passing through the waterway in the latest fiscal year was either destined for or originated from the US, according to the Panama Canal Authority.

Leading UK retail giants are expected to unite in a new year campaign to again warn Rachel Reeves that her plans to hike business rates on larger shops will put jobs and stores under threat. It seems that the likes of Asda, Marks & Spencer, Primark, J Sainsbury, Morrisons, Kingfisher-owned B&Q and Tesco will be involved, having agreed to revive a group called the Retail Jobs Alliance. It will argue that a wave of tax rises and regulatory changes will threaten investment by major retailers in economically deprived areas of the country. In total, the RJA’s members employ more than a million people across the country and account for a significant proportion of the stores, with rateable values in excess of the proposed threshold.

The Confederation of British Industry, joining the list of dissatisfied stakeholders, commented that the UK economy is “headed for the worst of all worlds”, as businesses expect activity to fall at the start of next year. Its latest survey points to private sector firms expecting to cut down on hiring, and to reduce output, as well as for prices to rise in Q1; the main driver continues to be Rachel Reeves’ decision to raise US$ 31.33 billion by increasing employers’ national insurance contributions by 1.2% to 15.0%. The CBI added that firms are looking for the government “to boost confidence and to give them a reason to invest” in 2025, “whether that’s long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates”.

It is estimated that more than US$ 2.55 billion was spent on second-hand gifts this Christmas, boosted by the current cost of living crisis and, to a lesser extent, a move to sustainable buying and sustainable consumption. Vinted, an online marketplace for buying and selling pre-owned items, made its first annual net profit last year of US$ 19 million, as annual revenue climbed 61%, driven by a rise in demand for second-hand goods.A report by Vinted and Retail Economics found that second-hand shopping will account for just over 10% of all gift spending. A study estimated that more than 80% also said they might spend some of their budget on pre-loved gifts this year. Furthermore, shoppers are also selling their own belongings to fund Christmas gifts, with 43% selling online. However, HM Revenue and Customs’ regulations indicate that if someone sells above a certain threshold, Vinted must ask the seller for their national insurance number and share it with HMRC. The company noted that it “is obligated to collect the national insurance number for any seller who sold more than thirty items or more than US$ 2.13k worth of product in the previous twelve months”; “but here’s the really important thing, the obligation to give your national insurance number does not mean there is any obligation to actually pay tax… there is no tax to pay on the private sale of second-hand items.” It would be interesting to see how the local market fares in this sector, with this observer indicating that it is on the rise. and it is no longer Second-Hand News!