Auf Wiedersehen Pet!                                                     17 January 2025

An Emirates NBD Research study noted that units priced between US$ 272k and US$ 545k (AED 1 million to AED 2 million) grew by 71% year on year driven by both increases in demand and in supply. It also indicated that of the 168k residential transactions, 114k (68.1%), under construction units were sold last year – up from a 54% share in 2023. A total of 142k units were launched last year. It also estimated that over the past four years, average apartment prices were up 65%, whilst villa/townhouse average rates per sq ft have more than doubled. In Q4, total sales transaction values jumped 31.1% to US$ 3.17 billion, with transaction volumes surging at 46.9k, a 51.8% uptick.

Meanwhile, Springfield Properties’ Q4 2024 Dubai Real Estate Market Report indicated that the recent surge in the Dubai realty sector had been driven by the surge in the growth in the off-plan market, accounting for 50%, (equating to 30.4k), of the total transaction value, in addition to the booming luxury property segment. Established communities like Palm Jumeirah, Downtown Dubai, and Dubai Marina remain dominant forces in the sector. Its CEO, Farooq Syed, noted, “Dubai’s real estate market continues to demonstrate remarkable strength and global appeal, underpinned by strategic planning, visionary developments, and investor confidence”. Hubs, such as Dubai South and Jumeirah Village Circle, continue as growth areas for mid-income buyers, while the luxury off-plan developments in Palm Jumeirah and Dubai Hills Estate still attract robust demand; the former posted the highest average sales price at US$ 1.23k per sq ft.

Meydan has awarded a US$ 144 million contract to Bhatia General Contracting Co for the construction of Naya at District One. The project, located in the Mohammed Bin Rashid Al Maktoum City, will encompass three green-roof residential towers, Tower 1 – G+20, Tower 2 – G+12, and Tower 3 – G+16, and will four hundred and fifty-six one-, two, three-, and four-bedroom apartments and lagoon villas. Bhatia General Contracting an independent contracting and construction company with more than four decades of experience in the region, will undertake the construction. The project, scheduled to be completed by Q3 2027, comes with many amenities such as a state-of-the-art gym, sports courts, sprawling green spaces and a rooftop lounge. There will also be dedicated children’s play areas and pools, with access to the thirty-five – hectare Crystal Lagoon, along with fourteen km of shoreline living, redefining modern indoor-outdoor lifestyles.

To support the growing community of blockchain, decentralised finance (DeFi) and Web3 companies, DMCC and REIT Development have unveiled plans for a seventeen-storey project – the Crypto Tower. Located at Jumeirah Lakes Towers, this project, with 150k sq ft of leasable space, will reinforce Dubai’s position as a global tech hub, and will have dedicated areas for crypto startups, blockchain incubators, VC firms, and AI innovation, powered by Chatoshi.ai. In addition, the building will feature cutting-edge facilities, including an indoor event space, outdoor area for crypto events, and a 30k sq ft crypto club. It will also host some unique features including a vault storage area, featuring 5k sq ft of secure space for valuables, a gold bullion shop, an NFT art gallery and an exotic car dealership along with a vault storage area, featuring 5k sq ft of secure space for valuables including gold, cash and cold wallets. Completion is slated by Q1 2027.

Last year Dubai International Airport was ranked as the busiest international airport in the world, by global aviation consultancy OAG, with 60.24 million seats (of airlines), marking an annual 7.0% increase – and a 12.0% hike on numbers, compared to pre-Covid 2019. The main driver behind these impressive returns continue to be the contributions of Emirates and flydubai who between them fly to more than two hundred and sixty-five destinations. London Heathrow and Seoul International came in behind DXB, with 48.36 million and 41.63 million, followed by Singapore Changi, Amsterdam, Istanbul, Paris Charles de Gaulle, Frankfurt International and Hong Kong International. Meanwhile Atlanta Hartsfield-Jackson International Airport was the busiest global airport in 2024 with 62.7 million seats, with DXB second, followed by Tokyo International, London Heathrow, Dallas/Fort Worth International, Denver International, Guangzhou Baiyun, Istanbul, Shanghai Pudong International and Chicago O’Hare International.

The latest survey from AirlineRatings.com places Emirates a joint third spot on the 2025 list of the world’s safest full-service airlines. EK shared the position with Qatar Airways and Cathay Pacific, with the three carriers behind Air New Zealand and Qantas but ahead of Virgin Australia and Etihad. The leading three low-cost airlines were Hong Kong Express, Jetstar Group and Ryanair, with flydubai coming in eleventh. The airline safety and product rating website monitors a total of three hundred and eighty-five full-service and budget carriers. The firm uses several measures when polling that include, including serious incidents over the past two years, fleet age and size, incident rates, fatalities, profitability, IOSA certification, ICAO audit compliance, and pilot training.

This week, Suhail bin Mohammed Al Mazrouei, Minister of Energy and Infrastructure, reiterated that the country will continue to advance ambitious renewable energy projects, in tandem with both the UAE Energy Strategy 2050 and the National Hydrogen Strategy 2050. He noted the UAE’s leading position in clean and renewable energy, emphasising its crucial role in stabilising global energy markets and driving sustainable development through significant domestic energy investments. He also indicated that electric vehicle infrastructure will be expanded, including the implementation of a national policy to encourage the adoption of electric and hybrid vehicles; this will include fast and regular charging services and investing in the necessary infrastructure.

To date, the CEPA programme, which was launched in September 2021, has concluded agreements with countries in the ME, Africa, SE Asia, South America, and Eastern Europe, securing improved trade relations and access to markets encompassing nearly 25% of the world’s population. (The UAE’s CEPA programme is a key pillar of the nation’s growth strategy, which targets US$ 1 trillion in total trade value and aims to double the size of the wider economy to surpass US$ 800 billion by 2031). This week, there were three Comprehensive Economic Partnership Agreements signed, with the UAE, by Kenya, New Zealand and Malaysia. All three agreements are aimed to deepen trade and investment ties, strengthen supply chains, and enhance market access. In the first nine months of 2024, bilateral trade, with the three nations, topped US$ 3.1 billion, (up 29.1% on the year), US$ 642 million, (8.0% higher) and US$ 4.0 billion.

Malaysia, SE Asia’s fourth-largest economy, is already one of the UAE’s top trading partners in the ASEAN region, with non-oil bilateral trade reaching US$ 4.9 billion in 2023 and US$ 4 billion in the first nine months of 2024. The UAE is also Malaysia’s second-largest trade partner in the Arab world, accounting for 32% of Malaysia’s trade with Arab nations. Kenya’s economy posted real GDP growth of 5.6% in 2023, with estimates it will average 5.2% between 2024 to 2026; its services sector accounts for 53.6% of its GDP, and agriculture sector 25%. New Zealand will provide 100% duty-free access to UAE imports, while the UAE will grant duty-free access to 98.5% of New Zealand products. Bilateral trade is expected to more than triple to US$ 5.0 billion, compared to the 2019 – 2023 average of US$ 1.5 billion.

With investments from both the public and private sectors – and in tandem with the “Operation 300 Billion” initiative – the move to raise US$ 81.74 billion (AED 300 billion) is gaining traction. In the nine months to 30 September 2024, banks operating in the UAE injected US$ 1.50 billion, (AED5.53 billion), in funding for the manufacturing sector bringing the total loans to the sector to a historic peak of US$ 25.84 billion, (AED94.85 billion) – equating to 31.61% of the ambitious target. Funding is being used to build a diversified and resilient national economy, characterised by sustainability, innovation, and long-term economic prosperity.

Last Sunday saw the opening of a 300 mt bridge providing a direct route to the Mall of the Emirates, in a collaboration between the Roads and Transport Authority and Majid Al Futtaim Holding; this development is part of a wider US$ 45 million project aimed at improving traffic flow and upgrading the road infrastructure around MAF’s MOE. It will see travelling time almost halved to eight minutes for drivers travelling west from Umm Suqeim Street to Sheikh Zayed Road Southbound and will also reduce travel times for motorists coming from Jebel Ali or Abu Dhabi.

The main driver behind a surging rise in school enrolments, (at up to 20% in some schools), is the influx of new families to the emirate. GEMS, which operates thirteen schools in Dubai and Abu Dhabi, has seen enrolments in its premium schools up 4.0% last year and expects that by the new scholastic year, in September, it will register a 6.5% rise.; fees range from US$ 10k to US$ 33k. Certain GEMS schools report that their enrolment have increased by almost 35%, with students in the queue for admissions. Taaleem, with twelve premium schools, posted a 14.8% annual jump in revenue and indicated that “enrolment in premium schools also rose by 18.7% over the same period. Its chairman, Khalid Al Tayer noted that, “we have successfully completed two major acquisitions, extending our reach into both established and new curricula — an achievement that has boosted our premium school capacity by 28.0% on the year to 21.6k seats, and raised our total capacity by 32.7% to 54,.1k seats across Taaleem’s segments.” It expects to add a further 6k places over the next two years.

During a visit to Mexico, Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade met with senior officials to discuss boosting bilateral trade and investment relations, with a focus on fostering partnerships between their private sectors. One of the main items on the agenda was ways to further increase bilateral non-oil trade, which had grown, in 2023, by 20.8% to US$ 2.60 billion. The Minister also indicated the need for deeper economic integration, with a focus on strengthening private-sector partnerships and enhancing supply chains, whilst identifyng sectors of mutual interest, such as agriculture, infrastructure and tourism.

Last Wednesday, the Dubai Court of Cassation awarded Drake and Scull International a ruling that its former CEO, Khaldoun Rashid Tabari, (along with its former CEO, Saleh Muraweij), had to pay the company US$ 41 million as “compensation for the material and moral damages”. Furthermore, there will be 5% legal interest from the date the judgment becomes final until full payment is made. The decision is final, and no appeals can be made. DSI shares rose 1.38% on the day at the opening of the markets on Wednesday, trading at US$ 0.099 per share and becoming the most active stock in the early trade.

There are reports that Emaar Properties are in discussions with “a few groups” in India, including Adani Group, to sell a stake of its Indian business. The developer commented that the valuation and other terms of a potential deal were not finalised, without adding further details. The Dubai property giant started its Indian operations two decades ago, in 2005, and has a portfolio of residential and commercial properties in Gurugram, Mohali, Lucknow, Jaipur and Indore.

The DFM opened the week, on Monday 13 January, three hundred and ninety-eight points (8.2%) higher the previous four weeks, shed twenty-six points (0.5%), to close the trading week on 5,212 points by Friday 17 January 2025. Emaar Properties, US$ 0.09 higher the previous three weeks, shed US$ 0.05, closing on US$ 3.49 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.77, US$ 5.87 US$ 1.98 and US$ 0.43 and closed on US$ 0.72, US$ 6.06, US$ 1.99 and US$ 0.42. On 17 January, trading was at two hundred and fourteen million shares, with a value of US$ one hundred and twenty-one million dollars, compared to two hundred and three million shares, with a value of US$ one hundred and forty-three million dollars, on 10 January.

By Friday, 17 January 2025, Brent, US$ 6.65 higher (9.1%) the previous three weeks, gained US$ 1.30 (1.6%) to close on US$ 80.89. Gold, US$ 34 (1.3%) higher the previous week, gained US$ 68 (2.5%) to end the week’s trading at US$ 2,687 on 17 January 2025.

BP has announced it is shedding 4.7k global jobs, as well as cutting 3.0k contractor roles, as part of its plan to slash costs by at least US$ 2.0 billion over the next two years; its current workforce stands at 90k. The plan is also aimed at enhancing its share value which has slipped some 20% since the beginning of Q2 2024. The energy giant employs some 14k in the UK, of which 6k of these are based in petrol and service stations and will not be affected by the cuts.

Driven by rising fuel costs and inflationary pressure and, stronger global demand, online travel agency Musafir expects airfares to rise between 2% and 14% globally in 2025. Global aviation consultancy OAG said average airfares are unlikely to fall this year, despite the price of oil falling to one of its lowest levels since September 2018, attributable to other factors such as shortage of planes, rising operational costs, and a strong US dollar. The International Air Transport Association has noted that annual aircraft deliveries have fallen sharply, by 30.4% from the 2018 peak of 1.81k aircraft in 2018, .to 1.25k last year. The world body also posted that the backlog of new aircraft stands at a record high 17k – a number that would take fourteen years to clear.

Embattled Boeing posted its worst ever plane deliveries in 2024 – at only three hundred and forty-eight planes – while the aerospace giant has a backlog of 5.6k, which would take seventeen years to clear, based on last year’s returns. Meanwhile, its biggest rival turned out more than double that number, with seven hundred and sixty-six jets. Boeing continue to sing from the same hymn sheet adding that there was “work underway” to improve its culture, and to “restore trust and deliver for our customers”. 2024 was the year that started with a panel, fitted over an unused emergency exit door, falling off a brand new 737 Max, shortly after take-off, serious quality control issues, (both internally and externally), the government capping its 737-production quota and a damaging strike at its Washington factory. A FAA enquiry found “multiple instances” where both companies had failed to meet required standards.

Hino Motors has been banned from exporting its diesel engines to the US for the next five years and has been fined US$ 1.6 billion for deceiving US regulators about the amount of emissions produced by its diesel engines. The Toyota subsidiary had been charged with fraud for selling 105k illegal engines in the US between 2010 and 2022. FBI Director, Christopher Wray, commented that it had been “in a years-long scheme to alter and fabricate emissions data in order to get a leg up over its competitors and boost their bottom-line,” and “to further this fraudulent scheme, Hino violated laws and regulations intended to protect American’s health and the environment.” Hino is not the only car manufacturer to get caught by dieselgate – one being VW, (including Audi, Porsche, Seat and Skoda) that has spent more almost US$ 31.0 billion) in fines, issuing recalls and compensating its customers.

Meta’s Mark Zuckerberg, the owner of Facebook, Instagram and WhatsApp, has sent a warning memo to the 72k staff that the firm will cut about 5% of its global workforce, as the company looks to drop “low performers faster”. Those, working in the US and who are being retrenched, will know their destiny on 10 February, (others later), with Zuckerberg adding that the company would “backfill” the roles later in 2025. He also commented that “I’ve decided to raise the bar on performance management and move out low performers faster.”

An announcement by the US Food and Drug Administration sees the banning of the use of a synthetic dye, (known as red dye 3), typically added to foods and beverages to give them a bright, cherry-red hue. This comes after studies showed that it could be linked to cancer – and the US law stipulates that a ban is required if this happens. The dye is used primarily in candy, cakes, cookies, frozen desserts and frosting as well as some medicines.

In its updated World Economic Outlook, released today, the IMF forecast steady global growth and continuing disinflation, with the Managing Director, Kristalina Georgieva, noting that the US economy was doing “quite a bit better” than expected, although there was high uncertainty around the trade policies of the administration of President-elect Donald Trump that was adding to headwinds facing the global economy and driving long-term interest rates higher.

A warning from the World Bank that the global economy is set to flatline this year, concerned about the impact  of Trump’s  tariffs  having a negative impact on trade; it expects growth to be at 2.7% which would its weakest return since 2019. According to the bank, the rate is enough for people to “live with” but not enough to enhance living standards in both richer and poorer countries. It is estimated that the world’s largest importer receives about US$ 1.28 trillion, (or 40% of US imports of US$ 3.20 trillion), from three countries – China, Mexico and Canada. The implementation of tariffs, which the new president will use to grow the US economy, protect jobs and raise tax revenues, could have dire global consequences and will slow economic growth. Apart from subsequent escalating trade tensions, the World Bank considers the double whammy of interest rates being kept higher for longer, and increased policy uncertainty, will dent business/consumer confidence and investment. It has calculated that the introduction of a 10% US tariff on all imports to the country would result in a 0.2% reduction in global economic growth – only if countries did not retaliate; if they did, the global economy could be hit harder. More worryingly, it added that “when you look over a longer time period, we think growth numbers will come down. That worries us.” Different countries have different strategies to boost their economic growth in a global economic slowdown. UK is looking at AI, US – to cut taxes and regulation, India – to expand manufacturing, and China – to increase consumer spending.

Potential UK buyers will be unhappy to hear that Spain is planning to impose a tax of up to 100% on the value of properties bought by non-resident, non-EU foreigners-residents from countries outside the EU, with PM Pedro Sanchez, noting that the “unprecedented” measure was necessary to meet the country’s housing emergency. (In Spain, people are classed as non-residents if they live in the country for less than one hundred and eighty-three days in a single year). This comes after 27k non-EU buyers bought properties, with Sanchez claiming that they bought “not to live in” but “to make money from them”. The new law would prioritise available homes for residents, and includes, “the tax burden that they will have to pay in case of purchase will be increased up to 100% of the value of the property, in line with countries such as Denmark and Canada.” Data reveals that, in 2023, the total number of sales to foreigners, including people from inside the EU, makes up around 15% of the Spanish housing market – or 87k out of 583k sales. The government has already abolished the “golden visa” scheme and also looking at tighter regulation and higher taxed for holiday flats.

With 90% of cars sold in Norway, being electric, last year, it is undoubtedly the world leader when it comes to the take up of EVs. The country has adopted the move away from fossil fuel vehicles faster than any other country and will inevitably be the first to phase out the sale of new fossil fuel cars. In 2023, 82.4% of vehicles sold were electric, rising to 88.9% in 2024, during which, for the first time, the number of electric cars outnumbered those powered by petrol; if diesel vehicles are included, electric cars account for almost 33% of all on Norwegian roads. The UK and US trail far behind boasting 20.0% and 8.0% of new 2024 registrations being electric. By comparison, the EU plans to ban sales of new fossil-fuel cars by 2035. Sometime this year, Norway aims for all new cars sold to be “zero emission”. The country has prepared well over the past three decades, with government action, not directly penalising fuel fossil vehicles, but scrapping, VAT and import duties for low-emission cars, along with a string of perks, like free parking, discounted road tolls and access to bus lanes. Unlike the US and EU, Norway has not imposed tariffs on Chinese EV imports.

Over recent weeks, the Indian rupee has plunged to record lows, touching 23.689 per dirham or 85.97 to the US dollar, and there are some who see the currency deteriorating to as low to 90.0 in H2. There are rumours that the RBI may well start loosening its tight grip on the currency, under its new Governor Sanjay Malhotra, following a period where the currency was effectively fixed to a crawling peg against the dollar. The decline has been driven by many factors, apart from an intransient governor; and they include persistent foreign institutional investor outflows, robust dollar demand, a surge in energy prices and rising US Treasury yields. The Indian economy is reliant on imports and obviously the weaker the currency the more expensive imports become; Dubai Indian expatriates will be happy to see their remittances provides more rupees, and it also presents an opportunity for exporters.  The central bank has a problem when it comes to interest rates – if they are lowered too quickly, it may have a negative impact on the currency going even lower. It has also seen foreign exchange reserves fall around 10% in Q4 to US$ 704.89 billion, as the RBI tried to suppress currency volatility by controlling the rupee’s exchange rate with the dollar.

Latest US jobs growth figures continue to surprise the market, with December job gains totalling 256k, when the market was expecting the figure to be in the region of 160k – an indicator that the economy is stronger than excepted- with the unemployment dipping 0.1%, on the month, to 4.1%. Although the 2024 new job figures total of 2.2 million jobs was lower than the previous year, it is still a robust return, considering the state of the global economy. December hourly pay was 3.9% higher on the year – a figure that sits comfortably with many analysts and that does not point to any sudden rises in prices. The figures also indicate that there may not be too many rate cuts, as initially thought, with signs of weakness in the jobs market being eroded. Indeed, the market has been pointing to a slowdown in the expectation of rates moving lower, as progress on stabilising prices was stalling. But come the arrival of Donald Trump next week, anything can happen! There is also the knock-on impact on global rates, as higher US borrowing costs also mean higher global rates too; the Starmer administration will not be too happy to see UK gilts continuing to head north.

It is safe to say that Tulip Siddiq was in deep political trouble, but it seemed that she – and her North London neighbour Keir Starmer – did not think so. The anti-corruption minister had done her best to distance herself from her aunt, deposed Bangladeshi PM Sheikh Hasina, claiming they never spoke about politics. However, she had been on record, boasting how close they were politically and published photos of them together, and wrote: in 2009, “I was fortunate enough to travel with Sheikh Hasina in her car during election day”. By Tuesday, the lady in charge of ethics for the UK  government had departed.

A sure indicator that Rachel Reeves is skating on thin ice – and hanging on to her job as Chancellor of the Exchequer – is that PM Keir Starmer has said he has “full confidence” in her, as she faces criticism over the falling pound and rising government borrowing costs. Sterling fell to a fourteen-month low to US$ 1.21 on Monday, whilst government borrowing costs  hit its highest level since 2008. Rising borrowing costs point to the government having to spend more on interest costs to finance the surging public debt, with the trade-off being a combination of higher taxes, as well as less to spend on public services and investment. The yield on the ten-year gilt – the interest rate at which the government pays back a decade-long loan to investors – rose to 4.86% on Monday, its highest level for seventeen years, with the thirty-year gilt yield jumping to 5.42%, its highest since 1998.

At last, the Starmer government has received some good news, and that being UK inflation unexpectedly dipping in December, by 0.1%, on the month, to 2.5%, but still above the BoE 2.0% target; the decline was down to hotel prices falling and smaller than normal rises in airfares. Prices for tobacco products, which include cigarettes, pouches, vape refills and cigars, also increased at a slower pace, whilst the cost of fuel and second-hand cars, headed north. The chance of a February rate cut, from its current 4.75%, has risen with the news. Debt costs in the UK then fell further after figures in the US revealed core inflation had fallen more than expected, though the headline US inflation figure rose  On average, prices in December were up 0.2%, on the month, to 2.9%. It is unlikely that there will be any change by The Fed next month, with interest rates remaining at 4.3%.

The London Stock Exchange is in dire need of seeing more companies joining the bourse, having lost several big hitters moving from London to New York, where there is more liquidity and bigger companies. It could now find itself in a quandary and may lose the chance of hooking the Chinese fast-fashion retailer Shein. Liam Byrne, chair of the Business and Trade Committee, wrote to the bourse’s CEO, Julia Hoggett, asking if the stock market had tests in place to “authenticate statements” by firms seeking to list, “with particular regard to their safeguards against the use of forced labour in their products”; he also relayed the MP’s concern “at the lack of candid and open answers”. There are reports that Shein has filed initial paperwork to list in the UK, which could value it at US$ 66 billion – which would boost LSE’s profile and finances, as well as attracting potential new listed companies to London.

With sterling weak, most shares of international FTSE 100 companies have become cheaper and this has helped the London bourse to attain a record intraday trading high today, 17 January. Almost all ninety of the index constituents traded higher, with shares in gambling giant Entain, the owner of Coral and Ladbrokes, up 4.60%, and British aerospace multinational Smiths Group, up 4.31%. It closed the week at a record high of 8,505.

If people thought that the UK was in an economic mess, they should look over The Channel and see the problems facing Germany. For the past two years, its economy has contracted by 0.3%, in 2023 and 0.2% last year. Latest estimates from its Federal Statistics Office indicate that in Q4, the economy contracted, with most economists having expected a modest expansion. If these figures turn out to be correct, the country would be suffering its worst bout of economic stagnation since World War II. The news could not come at a worse time for Chancellor Olaf Scholz, with an election just six weeks away. The bad news is that the economy will not get any better after the election, whoever wins, as it has been badly impacted by global factors for some years. Its manufacturing sector has been hit disproportionately by the surge in energy prices since the start of the Ukraine war. On top of that the big three carmakers – Volkswagen, Mercedes-Benz and BMW – were already facing high capital costs because of the move to EVs, further exacerbated by the heavily subsidised Chinese EV makers being able to undercut them on price – both in their home market and overseas. Manufacturing has yet to fully recover from the pandemic lockdown and has been beset by high costs which has seen the country’s November 2024 industrial production 15% lower than the record high achieved in 2017. Furthermore, weak consumer spending has not helped the economy.

The canary in the German coal mine is what will happen after next Monday when Donald Trump enters the White House for his second term as US president. Germany will be in his sights, and an obvious target when it comes to tariffs, especially when he sees that YTD November 2024, its trade surplus with the US was at a record US$ 66.85 billion. Any tariffs will harm the fragile German economy, and all indicators point to a third consecutive year of recession. Even the bullish and over optimistic Bundesbank has amended its 2025 forecast from 1.1% to 0.2%. In the current economic doldrums, it seems that German voters will either move to the right Alternative fur Deutschland or to the left’s Alliance Sahra Wagenknecht. Whichever way they go, it is the end of the road for the Current German Chancellor Olas Scholz – Auf Wiedersehen Pet!