Tradin’ War Stories!                                                        31 January 2025

Property Monitor indicated that, in 2024, Omniyat Properties consolidated its leading ranking in the position of selling the most apartments, valued at over US$ 10 million, with forty-six transactions, with a total sales value of US$ 801 million. It also dominated ultra-luxury real estate transactions in the key districts of Business Bay/Downtown, and Palm Jumeirah, with a record-breaking total of US$ 801 million in sales across forty-six transactions. The top five developers, (with their share of the market) accounting for 73.9% of the total, were:

Omniyat                      36.8%            

Meraas             12.9%

Select Group               9.7%

AHS Properties           9.4%

Nakheel                       5.1% 

2024 witnessed another record year for the Dubai property market, consolidating its position as a leading global hub for international investors. During the year, it achieved exceptional milestones, registering 217k investments, valued at US$ 143.32 billion, with credible growth rates of 38% and 27% in number and value respectively. In addition, there was a marked 55% jump in new investors to 110k – a clear indicator of the growing popularity of Dubai realty on the world stage. Marwan Ahmed bin Ghalita, DG of Dubai Land Department, noted, “These indicators serve as tangible evidence of the resilience of Dubai’s real estate market, its ability to adapt to global changes, and its success in attracting high-quality investments. The results achieved in 2024 reflect the emirate’s ambitious vision and ongoing efforts to enhance its investment attractiveness under the guidance of our wise leadership, in line with the Dubai Economic Agenda D33, which aims to position the emirate among the top three urban economies.”

Damac Properties has launched its Riverside Views project, its sixth master development, located at Dubai Investment Park, which will carry two unique features – a floating opera and hydroponic farms. There will be eight uniquely themed clusters – Teal, Azure, Marine, Indigo, Royal, Capri, Sun and Pacific.  Prices for the one- and two-bedroom apartments start at US$ 242k and US$ 387k, with a 70/30 plan available for uptake. Handover is slated for Q2 2028.

2024 was a record year for the Dubai developer, with two major launches – Sun City and Damac Islands. Damac – like other developers – continue to benefit from the unique environment that Dubai realty has offered over the past four years. Damac has confirmed that it will continue to keep the momentum going and will launch further new projects this year.

Meraas, part of Dubai Holding Real Estate, has signed a US$ 272 million contract with China State Construction Engineering Corporation (ME) for its Bluewaters Bay project. The project comprises two residential towers connected by a dynamic podium, offering six hundred and seventy-eight one to four-bedroom apartments and penthouses; completion is slated for Q4 2027. It will host retail and dining outlets, as well as top-tier amenities, like a landscaped promenade, outdoor pool, children’s play area, and barbecue facilities.

This year started, as it ended 2024, with the ultra-market sector in buoyant mood, as an Emirates Hills palace fetching US$ 116 million – the sector’s first high price deal of 2025, as The Marble Palace in Emirates Hills went under the hammer for US$ 116 million – the second highest ever price for a residence in Dubai, after the 2023 Como Residences penthouse sale for US$ 125 million. The Versailles-inspired mansion, that took nearly twelve years to build, was originally listed for US$ 204 million. Encompassing 60k sq ft of interior space, on a 70k sq ft plot, the property has five bedrooms, an indoor and outdoor swimming pool, two domes, a 70k-litre coral reef aquarium, a private substation for power supply, and fortified emergency rooms, along with a garage capable of housing fifteen luxury vehicles. Over US$ 27 million was expensed on Italian stonework alone, with its interiors featuring 70k gold-leaf sheets and an array of rare artifacts.

This week,  Expo City Dubai launched its next off plan project, (consisting of two hundred and eighty one  two bedroom apartments and lofts), ‘remodelling Expo 2020’s country pavilions to create unique homes’ These will form part of the ‘Al Waha’ collection, with prices starting at US$ 466k for the one bedroom apartment and US$ 1.08 million for the two-bedroom lofts; first units will be handed over by the end of 2026. Investors also have the option to purchase entire buildings of ten-twelve homes. The Expo City masterplan, launched in October 2024, estimated that the 3.5 sq km site will house 35k residents and 40k professionals working there. Construction has already started on other residential developments such as the Mangrove, Sky and Sidr Residences.

Last year, Prestige One developments launched a record 1.5k commercial and residential units across Dubai, including premium projects on Palm Jumeirah, Dubai Islands and Mohammed Bin Rashid City. The local real estate developer has plans to nearly double the number of its projects, including Palm Jumeirah, Business Bay, JVC and Dubai Islands, to eleven this year; 2025 will also see the completion and handover of two projects – Vista in Dubai Sports City and The Residence in Jumeirah Village Circle. To date, it has already developed more than three million sq ft of area across Dubai. By the end of the year, it will have a total of twenty-five residential and commercial projects (completed and under development). As it is also expanding into new areas in the GCC and West Africa, it requires extra staff, mainly front-office such as in-house sales, marketing, and customer relations roles, to support its growth.

Betterhomes reported slower rent increases last year, compared to 2023, as an indicator that the sector is stabilising after a whirlwind period post Covid. The agency also noted that following completions of just 27k in 2024, it expects the market to absorb a staggering 163k new housing units this year and next, of which 2025’s total is expected to be around 72.4k –  this is more than the total delivered over the previous four years. Of the units delivered in 2024, the split between apartments, villas and townhouses was 77:6:17. Betterhomes sees rent increases being impacted by an abundant supply of new properties and the implementation of the smart rental index. Most of 2024 completions were seen in areas such as Jumeirah Village Circle, Mohammed Bin Rashid City and Business Bay, with all three standing out as high-demand hubs for investors and end-users.

The Dubai real estate market is expected to stabilise in 2025, with rent increases slowing down. Industry executives attribute this to an abundant supply of new properties and the implementation of the smart rental index. With more properties than ever entering the market, it is inevitable the increased portfolio will dampen rapid rents. Other brokerages, such as Haus and Haus, see the sector maintaining its demand this year, supported by ambitious infrastructure projects and sustained foreign investment. Of the 9k properties due for handover in Q1, it is estimated that Sobha Hartland, Arjan, and JVC will account for 41% of the total.

The world’s highest residence has been listed for sale at US$ 51 million. The 21k sq ft penthouse, on the one hundred and eighth floor of the Burj Khalifa, is being offered as a shell property, allowing the buyerto customise the interior. The “Sky Palace,” is bound to attract global attention from high-net-worth investors keen to make a mark in Dubai.

In 2024, Dubai’s commercial real estate market registered a record year, with 9.0k transactions, (24% higher on the year), valued at US$ 24.52 billion, 11% higher on the year.

Prior to the expected launch of a commercial rental index, by the Dubai Land Department, reports indicate that landlords in Dubai are increasing rents of commercial properties in prime locations, whilst many tenants of commercial properties are relocating to more affordable areas, with others renegotiating as well as renewing leases early, downsizing office spaces,  shifting to co-working setups, upgrading/modernising properties and securing long-term agreements to lock in current rates.

There is no doubt that there is a marked shortage of prime premium office space driven by a surge in new company registrations and growth in many existing companies. For several years, it has not been unusual to see occupancy rates of 95% or higher – and this despite surging rental rises. Even though there is a planned nine million sq ft of office space to be added in this sector – including Tecom’s Innovation Hub Phase 2, One Za’abeel Tower, DMCC’s Uptown Tower Phase 2, Al Wasl Tower, and DIFC 2.0 – it is highly likely that occupancy levels remain at current highs. An indicator of the robust health of the commercial market can be exemplified by a Business Bay office, (6.35k sq ft), that was rented out last year at US$ 150k, has now seen a mega 81.1% increase this year to US$ 272k.

There are reports that as from 01 February, anyone wanting a bank mortgage will have to pay the 4% DLD fee and the brokers’ 2% fee as part of the total mortgage; Inthe past, this 6% extra was added to the mortgage. It seems that this could be a move to put Dubai in alignment with international standards because the likes of the US and the UK banks do not finance such fees. It is expected that this move will benefit the primary sector because buyers need more money in order to buy secondary market property, especially if they are taking a mortgage; most developers have long-term plans, with added attractive options, in place. This move, orchestrated by the government, could also be seen as a way to turn the heat marginally lower and maintain prices at steadier levels.

According to Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid, the emirate’s 2024 record real estate returns was driven by the emirate’s dynamic economy, robust infrastructure, progressive policies, and a world-class investment ecosystem. Last year, the sector posted a record 2.78 million procedures, (up 17% on the year), with transactions topping 226k, valued at US$ 207.36 billion – up 36% and 20% respectively. He noted that “the emirate’s position as an international hub for investment, trade, and innovation, and enhanced its global appeal as a lifestyle and investment destination, all of which have catalysed the real estate market.”

By this April, Dubai will be home to another major retail hub, with the opening of Nad Al Sheba Mall – with the 500k sq ft mixed-use retail destination being the latest addition to Dubai Holding Asset Management’s extensive retail portfolio. It will have one hundred stores and will feature a rooftop gym, swimming pool, padel courts, and more than nine hundred parking spaces. Key tenants include:

• F&B concepts such as Home Bakery, Parkers, and SALT
• supermarkets like Spinneys and Union Coop
• sports and fitness outlets including Go Sport and Fit N Glam
• children’s entertainment venues like Fun City and Orange Wheels

According to the data gathering portal Statista, UAE retail sales are projected to grow 28.7% over the next four years to an estimated total of US$ 139.1 billion by 2028, driven by favourable demographics, improving macroeconomic conditions, and the rise of omnichannel retailing.

Last year, Dubai Municipality planted a 17% increase in new tress to 216.5k and saw Dubai’s green spaces grow by 3.9 million sq mt, 57%, on the year, to 52 million sq ft, as part of Dubai’s ‘Quality of Life Strategy 2033’. Numbers continue with 5.3 million seedlings planted in the year, 45.0 million seasonal flowers planted, and one hundred and sixty-five beautification projects were completed under the Dubai Green Project, covering residential areas, roads, parks and public spaces. Key greening projects in the year included major intersections and bridges along Sheikh Zayed Road, Al Jamayel Street, Al Khawaneej Street, Al Khail Road, Sheikh Mohammed Bin Zayed Road and Latifa Bint Hamdan Street.

Because of the “lack of security and stability”, in Lebanon, Khalaf Al Habtoor has announced that the Habtoor Group would sell all his properties and investments and cancel all investment projects there. As of January 2024, Al-Habtoor Group’s investments in Lebanon were reported to be in the region of US$ 1 billion. Last year, the Group submitted a dispute against Lebanon for reportedly breaching a bilateral treaty with the UAE, resulting in losses exceeding US$ 1.4 billion. The billionaire businessman also recently said he planned on renovating Habtoor Land, an amusement park, and Habtoor Mall, which have been closed since 2000 and 2019, respectively. His latest announcement comes less than a week after he expressed intentions to invest in a “large project” after a government is formed. As to the continuing crisis in the country, he asked “Who bears responsibility for this disaster?… We thought that the state had begun to regain its role and prestige, but the painful reality tells us otherwise.” This week, he reportedly said the “illegal measures continue to this day,” prompting the conglomerate’s international legal team to file to legal action before international courts in London and New York.

2024 passenger numbers at Dubai International jumped 6.1% to a record 91.9 million and exceeded its pre-Covid record of 89.1 million in 2018. At this rate it will easily reach the one hundred million mark by 2026, and were 2025 growth to come in at 8.8%, that feat will be done this year. HH Sheikh Mohammed bin Rashid commented that “Dubai is the airport of the world … and a new world in the aviation sector.”  He also noted thatduring the year, DXB posted 300k flight movements, served one hundred and six airline customers and operated flights to two hundred and seventy-two cities in one hundred and seven countries in 2024. The Dubai Ruler added that Dubai Airports over the next ten years will invest US$ 34.88 billion to “restructure the global aviation landscape with Emirati standards”. There was a 20.5% hike in terms of air freight, with DXB handling 2.2 million tonnes of cargo last year

To accommodate future growth in passenger traffic, Dubai is also expanding its second hub, Al Maktoum International Airport (DWC), with a US$ 35.0 billion terminal that will have an annual capacity to handle two hundred and sixty million passengers a year once completed. It currently has capacity of 32.5 million passengers − but handles mainly cargo and some low-cost airlines. Once fully operational, it is fairly likely that DXB will be closed probably in 2032.

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, February retail prices have risen, between 4.9% and 5.2%, compared to January prices. The breakdown of fuel prices for a litre for February is as follows:

Super 98      US$ 0.747 from US$ 0.711     in Feb                up 5.0% YTD US$ 0.768     

Special 95   US$ 0.717 from US$ 0.694      in Feb                up 5.2% YTD US$ 0.023        

E-plus 91     US$ 0.695 from US$ 0.662      in Feb               up 5.2% YTD   US$ 0.033

Diesel           US$ 0.768 from US$ 0.730      in Feb               up 4.9% YTD US$ 0..038

In the first six years since its January 2018 introduction, UAE nationals, constructing new residences, have been able to recoup VAT for expenses incurred in the budling process. This week, the Federal Tax Authority posted that over the six-year period, it had approved 34.9k applications by UAE nationals, equating to a total value of US$ 790 million. Last year there were 7.52k applications, with a total value of US$ 192 million.

Last Friday, Al Ramz Capital LLC was handed a Decision Notice by the Dubai Financial Services Authority, citing it had failed to report suspicious transactions; the DFSA registered member was issued a US$ 25k financial penalty, involving ‘wash trades’ executed via Al Ramz’s online trading platform, where there was no change in the ultimate beneficial ownership. It was claimed that in one trade, there was a 27% temporary spike in share prices on the final day of trading. It appeared that Nasdaq Dubai had flagged the transactions as suspected wash trades to Al Ramz, but the firm did not report the activity to the DFSA, as required under Recognition Rule 3.4.5(1).  The firm has subsequently disputed the findings and has appealed to the Financial Markets Tribunal.

The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 4.40%; this move is in line with the US Fed that decided to maintain its Interest Rate on Reserve Balances unchanged. The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 bps above the Base Rate for all standing credit facilities.

Nasdaq Dubai welcomed Mena’s first corporate Blue Bond listing of US$ 100 million by DP World, issued under its US$ 10 billion Global Medium-Term Note Programme; The five-year bond carries a 5.25% coupon rate and matures in 2029, with the issuance achieving a spread of 99.6 bps above US Treasuries – the tightest spread ever achieved by DP World in both the bond and Sukuk markets. The bourse Environmental, Social and Governance offerings also include Green Bonds, Sustainability Bonds and Sustainability-Linked Bonds. The total value of debt listings on Nasdaq Dubai currently stands at US$ 137 billion, of which US$ 29 billion consists of ESG-linked issuances.

Since announcing a five-year turnaround plan in April 2023, Union Properties has managed to raise US$ 354 million from the sale of plots – a big boost for its cash position. CEO Amer Khansaheb noted that “this milestone (of bringing in AED 1.3 billion) also reflects our growing financial strength and enhanced liquidity position.” Following earlier mismanagement by the then senior management, the company has come a long way from its then precarious position. It also hopes to raise more funding from its recent Motor City project launch, its first off-plan launch for some years, which will also boost cash flow and help to reduce its debt burden.

Mashreq Bank reported a 12.0% jump in net profit before tax of US$ 2.70 billion for 2024, attributable to robust revenue growth, digital expansion, and strategic international plays; after tax profit grew to US$ 2.45 billion – 78% higher on the quarter and 4% on the year.

Total operating income rose 24% to US$ 3.65 billion, driven by a 9% rise in net interest income and a 63% jump in non-interest income, which hit US$ 1.36 billion. The bank registered a Non-Performing Loan ratio of just 1.35%, among the lowest, with net releases in impairment allowances totalled US$ 45 million, as the capital adequacy ratio strengthened to 17.5%. Customer deposits grew 10% to US$ 44 billion, with low-cost CASA deposits accounting for 66%of the mix, as loans/advances jumped 18% helping push total assets up 11% on the year to US$ 72.75 billion.

Emirates NBD reported a 15.0% increase in 2024 net profit to a record US$ 7.38 billion profit before tax in 2024, with profit after tax 7.0% higher at US$ 6.27 billion, as income climbed to over US$ 12.0 billion; the Board has proposed a dividend of US$ 0.27 a share. It posted a 10% loan growth in 2024, with US$ 24.00 billion of new corporate lending on optimisation of regional network and a 30% increase in retail lending as Priority and Private banking franchise grows rapidly. Deposit mix grew by US$ 22.34 billion, including a US$ 13.08 billion increase in Current and Savings Accounts. The Board has proposed a dividend of US$ 0.27 a share.

Last year, Emirates Islamic registered a 46% rise in profit before tax to a record US$ 845 million, with net profit after tax 32% higher at US$ 763 million, driven by a positive trend in both funded and non-funded income. Total income increased 13.0% to US$ 1.47 billion as assets grew 27.0% to US$ 30.25 billion, as both customer financing and customer deposits both showed healthy increases of 31% to US$ 19.35 billion and 25.0`% to US$ 20.98 billion.

In 2024, Dubai Financial Market Company posted a 24.2% hike in pre-tax profit to US$ 112 million, driven by robust trading volumes, strong capital inflows, a surge in both retail and institutional investor activity and sustained market performance in addition to investment returns performance. Revenue, including operating income and investment/other income at US$ 96 million and US$ 76 million, was 15.5% higher at US$ 172 million. Overall expenses, excluding tax, were 2.3% higher, on the year, at US$ 61 million During the year, the DFM General Index surged by 27.1%, closing at 5,158.67 on 31 December 2024 – its highest level since September 2014 and the fourth consecutive year of expansion. Its market cap jumped 31.8% to US$ 247.14 billion and the DFM was the best performing bourse in the region for the second year in a row. 2024 also saw DFM’s market capitalisation grow to US$ 247.14 billion, a 31.8% rise from 2023. Average Daily Trading Value increased by 5.0%, reaching US$ 115 million, while total traded value grew by 5.5 percent to US$ 29 .15 billion. The Board proposed a cash dividend of US$ 70 million, representing 3.2% of the capital and 96.8% of the total retained earnings available for distribution.

The DFM opened the week, on Monday 27 January twenty-six points, (0.3%), higher the previous week, shed forty-six points (0.9%), to close the trading week on 5,180 points by Friday 31 January 2025. Emaar Properties, US$ 0.13 higher the previous week, gained US$ 0.06, closing on US$ 3.68 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.71, US$ 6.10, US$ 2.05 and US$ 0.43 and closed on US$ 0.70, US$ 5.68, US$ 2.10 and US$ 0.40. On 31 January, trading was at one hundred and ninety-seven million shares, with a value of US$ one hundred and seventy-three million dollars, compared to two hundred and three million shares, with a value of US$ one hundred and thirty-five million dollars on 24 January.

In 2024, the bourse had opened the year on 4,063 points and, having closed on 31 December at 5,159 was 1,096 points (27.0%) higher in the twelve months. Emaar had started the year with a 01 January 2024 opening figure of US$ 2.16, and had gained US$ 1.34, to close the year at US$ 3.50. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started 2024 on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed 2024 at US$ 0.77, US$ 5.84, US$ 1.93 and US$ 0.41.

On 01 January the bourse opened on 5,159 points and ended the month 21 points higher, (0.4%) at on 5,180. Emaar had started the year with a 01 January 2025 opening figure of US$ 3.50, and had gained US$ 0.18, to close the month at US$ 3.68. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started 2025 on US$ 0.77, US$ 5.84, US$ 1.93 and US$ 0.41 and closed 2024 at US$ 0.70, US$ 5.68, US$ 2.10 and US$ 0.40.

By Friday, 31 January 2025, Brent, US$ 2.34 lower (10.9%) the previous week, shed US$ 1.72 (2.2%) to close on US$ 76.83. Gold, US$ 196 (7.6%) higher the previous three weeks, gained US$ 51 (1.8%) to end the week’s trading at US$ 2,832 on 31 January 2025.

Brent started last year on US$ 77.23 and shed US$ 2.42 (3.1%), to close 31 December 2024 on US$ 74.81. By the end of January, the yellow metal was trading at US$ 2,832 – US$ 208 (7.9%) higher YTD. The yellow metal opened 2024 trading at US$ 2,074 and gained US$ 550 (26.5%) to close last year on US$ 2,624.

Boeing, ending a miserable year, posted a 2024 loss of US$ 11.8 billion, attributable to a raft of factors including safety concerns, quality control issues and a damaging seven-week strike by 33k of its workforce, which cost the aerospace giant US$ 3.8 billion. Towards the end of the yea, it shed 10% of its workforce and started to raise more than US$ 20 billion through a combination of share sales and borrowing in order to protect its credit rating.  It also delayed the entry into service of the 777X. A new version of the long-haul workhorse, it was already years late but had been expected to start operating in 2025. It will not now carry passengers until 2026.  Last year, it delivered three hundred and forty-eight commercial planes – less than half of the total delivered by its main rival Airbus’s seven hundred and sixty-six. On top of the multiple problems facing its commercial division, there were concerns raised affecting a number of defence programmes, with the unit losing more than US$ 5 billion, driven by soaring costs on fixed price military contracts.

In Q4, Ryanair posted an almost tenfold increase in its net profit, at US$ 156 million, driven by more passengers, (9% higher to forty-five million)), and higher fares attributable to pricier tickets, (up 1.0%), with customers booking closer to departure time. It was only last August that chief executive Michael O’Leary said estimated fares would drop a further 5% coming into winter, after a Q2 7.0% decline. However, going forward it expects fewer passengers, (down four million to two hundred and six million), because of the ordered Boeing planes not arriving because of supply problems, but if achieved it will be 3.0% higher on 2024.

Jaguar Land Rover is to invest US$ 81 million to expand its bespoke paint services, in expectation of a doubling in demand from its wealthy customer base. that it expects to more than double its bespoke paint operation. The UK’s largest luxury car maker, which is owned by India’s Tata Group, is planning new paint facilities in Castle Bromwich, UK and Nitra, Slovakia. This move to “tart up” some new Range Rovers follows an earlier Rolls Royce initiative to invest US$ 373 million to build more highly customised versions of its cars for super-rich customers.

Samsung Electronics Co registered its Q4 net income which rose more than 20% on the year despite the waning global demand for memory chips, beating market expectations. Its Q4 net income totalled US$ 5.33 billion up 22.2% on the year. Operating profit soared 129.9% to US$ 4.47 billion, while sales were 11.8% higher at US$ 52.19 billion won; the average estimate of net profit by analysts stood at US$ 3.92 billion. The company’s flagship semiconductor business posted US$ 2.00 billion in operating profit on US$ 20.73 billion in sales.. For the entire 2024, its annual net profit surged 122.5% to US$ 23.73 billion, and its operating income expanded nearly fivefold to US$ 22.54 billion won from US$ 4.53 billion. Annual revenue rose 16.2%to US$ 207.23 billion, marking the second-highest yearly figure after the record high set in 2022.

Customers at JD Wetherspoon have seen a 2.2% rise in the average price of a meal to US$ 8.50, as prices of alcoholic drinks and meal deals increasing by US$ 0.187 and US$ 0.374. The pub giant’s boss Tim Martin has previously called on the Starmer administration to cut VAT on pub food – in line with VAT on supermarket food. He continued that “the VAT distortions that exist today will inevitably create more supermarkets and less pubs. Wetherspoon therefore calls upon Sir Keir Starmer to redress this imbalance, thereby striking a blow for tax equality and ending discrimination in favour of dull dinner parties.”

Two hundred and thirty years since it opened its first shop in 1795, WH Smith is in secret talks to sell its entire high street business in the UK, comprising almost five hundred stores and 5k staff. Its high street division, which largely sells greeting cards, books and stationery, posted flat operating profit of US$ 40 million last year, while the travel arm, which is part of the same group, and operates from airports, stations and hospitals, has a wider offering of food and drink, and technology products. On the LSE, WH Smith has a market cap of around US$ 1.90 billion. The new strategy is to divest its high street arm and reposition the company as a pure-play travel retail company, more so as this unit, with 1.2k stores across thirty-two countries, accounts for 75% of revenue and 85% of profits, reflecting its higher margins. Meanwhile, the company has reported a 6.0% decline in its high street sales over the previous twenty-one weeks.

Days after their shares were delisted on the LSE, it is reported that Quiz Clothing will appoint an administrator to see whether it should file for insolvency. The Ramzan family, founders of the fashion business, may allow the family take control of a restructured business, with a marked reduction in employee and store numbers, currently at 1.5k staff and sixty standalone stores. Over the past fortnight, there seems to have been nothing but bad news for the retail sector, still reeling from the Chancellor’s triple whammy of employers NI contribution being raised 1.2% to 15.0%, moving the minimum wage higher and mmm. Poundland’s parent has hired advisers to assess options for the leading discount chain; kitchenware retailer, Lakeland, has been put up for sale, The Original Factory Shop is likely to be sold to family office Baaj Capital, and WH Smith is in talks to sell its entire high street chain, numbering five hundred stores and about 5k employees.

In early December 2024, Fairlane Yachts, one of the UK’s biggest luxury boat manufacturers was sold Hanover Investors to Arrowbolt Propulsion Systems. Less than two months later, it has entered into administration, following its main creditor triggered the insolvency process. Alvarez & Marsal, having been appointed as administrators, commented that “the business is continuing to trade as usual. We are thankful for the support and understanding of staff and there are no redundancies at this time. We are actively pursuing a sale of the business and are confident of a substantial amount of interest given the recognised brand and strong heritage.

The company employs some two hundred and fifty people, with no redundancies being triggered by the insolvency. Over the past two years there have been two major industry sales – Princess Yachts was sold to investor KPS Capital Partners and Sunseeker, acquired by international investors Lionheart Capital and Orienta Capital Partners.

It appears that UK insurance unicorn, Marshmallow, is in the throes of finalising a new capital injection valuing it at more than US$ 1.87billion, despite the current downturn in funding for many technology companies. It is reported that advanced talks are to secure tens of millions of pounds in its first major equity fundraising in more than three years. It was founded in 2015 by identical twins Oliver and Alexander Kent-Braham and David Goaté, with the aim helping customers who are typically underserved by the insurance market, including immigrants and expats. It is reported that Marshmallow’s 2023 revenues soared 75%, now employs more than 300 people, and had secured a US$ 18.69 billion debt facility from Triple Point, a provider of private credit, in May 2023.

In a bid to get the UK’s sluggish economy moving again, and as expected, Chancellor Rachel Reeves has backed a third runway at London’s Heathrow Airport, as well as expansions at Luton and Gatwick airports, along with a “growth corridor” between Oxford and Cambridge, which she claimed could be “Europe’s Silicon Valley” she claimed that it will include  new reservoirs to address water shortages in the area and investment in high tech industries, would add up to US$ 97.23 billion to the UK economy by 2035. Other projects announced included a major redevelopment of Old Trafford, the area around a new stadium for Manchester United, and a plan to bring Doncaster/Sheffield airport back into use and boost industry at East Midlands airport. In her Oxford speech this week, she insisted that insisted the government had “begun to turn things round” and was determined to go “further and faster” to boost growth, whilst describing the UK as a country of “huge potential” which had been “held back” for “too long” because politicians lacked the “courage” to challenge the status quo. Reeves she has been “genuinely shocked” at how slow the planning system is – and claims new powers in the Planning and Infrastructure Bill would cut years off the lengthy periods it has taken to get major infrastructure projects off the ground. Furthermore, the Chancellor is looking to ease restrictions on big pension funds to encourage them to invest more in UK businesses.

Last September, Brian Niccol left Chipotle Mexican Grill Inc to become the new CEO at Starbucks and, by the end of the year, was the recipient of a US$ 96 million remuneration package. About 94% of Niccol’s pay came from stock awards, with most of them tied to performance and the rest being time-based, vesting over a three-year period. On top of all that, he did receive a US$ 5 million “signing-on fee”, after his one-month anniversary with the company, and the company allowed him not to move to Seattle, (where Starbucks is based), but gave him use of a private jet so he could travel 1.2k miles from his Newport Beach home!

He also received than US$ 143k in housing expenses and also spent about $72k flying between his home and workplace. At the time he started with Starbucks, last September, Bloomberg estimated his annual remuneration at US$ 113 million, with a large part tied to equity to replace awards from his prior employer that he had to relinquish.

Myer and Premier Investments have reached agreement that will see the leading Australian retailer acquire five of PI’s fashion chains – Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E – which will give Myer a retail footprint of more than seven hundred and eighty retail stores, across Australia and New Zealand. Premier retains ownership of its Smiggle stationery brand and sleepwear label Peter Alexander. Myer considers this as “one of the most significant” deals in the department store’s one hundred and twenty-four-year history. There is no doubt that there was need for it to expand in an environment whereby the higher cost of living was impacting shoppers and the retail sector. It is estimated that the combined group would create a “leading retail platform”, in Australia and New Zealand, which recorded more than US$ 2.53 billion worth of sales in the last fiscal year. However, there are some shareholders unhappy with the merger, referring to Premier’s fashion chains as “B-grade brands at best”. For several years, Myers’ performance on the Australian Stock Exchange has been disappointing and actually fell sharply, when the latest trading update was released.  This merger was one of inevitability and sees Premier’s billionaire chairman Solomon Lew fulfil a long-held dream by taking the reins at Myer; Premier was already Myers biggest shareholder, with a 33% stake, and following the merger, Lew is now its largest shareholder. Whether the new set up will be successful remains to be seen and whether Myers will ever return to its former glory is debateable.

Australia’s Rex airline was placed into voluntary administration in mid-2024, after the failure of its expansion into capital city routes, and now the Albanese  government has stepped in to rescue it, after acquiring US$ 32 million in debt from its largest creditor, PAGAC Regulus Holdings Limited; this arrangement makes the government the principal secured creditor and it will now work with administrators on the next steps to protect regional connectivity.  If successful, this will prevent a potential collapse that would have left much of rural Australia with no air links, as Rex had provided transport for passengers, freight, and medical needs to regional centres across Australia. Last year, there were estimates that the carrier was US$ 316 million in debt, to 4.8k creditors including former staff, suppliers, and investors. The government has since loaned the company US$ 51 million to maintain services, and over US$ 4 million in entitlements paid to former Rex staff and ticket sale guarantees. The government seems confident that it will recoup its debt and will continue to work with administrators to find a buyer for the embattled regional airline that tried to take on the big boys, Qantas and Virgin, and crashed to the ground.

No great surprises out of the European Central Bank this afternoon – it has cut all three of its main interest rates, as widely expected, by 0.25%, with the main deposit rate now standing at 2.75%. The ECB, which is the central bank for the European nations that sets monetary policy for the nations using the euro, was au fait with the current inflation being at 2.75%, and expects it to hit its 2.0% target later this year. Successive rate cuts have been made to boost the economy which has flatlined over the past two quarters, with early estimates pointing to Q4 zero growth; rates have been cut five times since last June. The bloc has been badly impacted by its two leading economies with Germany still in recession and France in contraction in Q4.

On Monday, shares in many tech giants – including AI chipmaker Nvidia, (down 16% by midday), Broadcom, (17.8% lower), Microsoft, (minus 3.7%), and Alphabet, (down 3.0%) – slumped after the Chinese DeepSeek app hit the market, only last week, to become the most downloaded free app in the US; this includes OpenAI’s ChatGPT. Reports indicate the app was developed for a fraction of the cost of its rivals, raising questions about the future of America’s AI dominance and the scale of investments US firms are planning. It was only last week that OpenAI joined a group of other firms who pledged to invest US$ 500 billion in building AI infrastructure in the US, which the US President, commented was the largest AI infrastructure project by far in history that would help keep “the future of technology” in the US. The irony is that the cost of DeepSeek, powered by the open source DeepSeek-V3 model, only cost US$ 6 million! The company says it already uses existing technology, as well as open-source code – software that can be used, modified or distributed by anybody free of charge. One benefit for the US is that the country is dominant when it comes to the supply of the advanced chip technology ,needed to power AI.

Driven by an increased number of strikes, bad weather including hurricanes and major fires, US economic growth slowed in Q4, 0.8% lower on the quarter, to 2.3% by the end of last year, as trade and investment declined; the slowdown was worse than analysts had expected. Donald Trump had already called for a shake up including tariffs, which have already started, along with major cuts to government spending. However, overall growth last year was “surprisingly strong”, with consumer spending – the biggest driver of the US economy – rising 4.2%, attributable to a jump in purchases of goods, including cars.; in addition, the resilient labour continues to be robust. There was a decline in both exports and imports of goods, as well as private investment dipping largely due to the strike at aerospace giant Boeing.

A sign of the economic stress faced by many UK businesses, big and small, is reflected in the latest Red Flag Alert report by Begbies Traynor, posting that there had been an “unprecedented” rise in the number of businesses on the brink of insolvency. It indicated that those companies, in critical financial distress, rose by 50%, on the quarter, in Q4, to 46.6k businesses and added that there were “notable” increases in financial stress across all but one of the twenty-two sectors surveyed. Some of the drivers behind these financial woes included soaring energy costs, budget tax measures, high interest rates and weak consumer demand. All five of the survey’s components, including the outlook for personal finances and the economy, had declined.

It is no surprise to see that relationship between President Trump and the Federal Reserve continue to be strained and he had been on social media after interest rates were left unchanged, in a range of 4.25% – 4.5%, with him calling for them to be cut. He accused the central bank, and specifically its chairman Jerome Powell, of mishandling the economy, saying they had “failed to stop the problem they created with Inflation”. Powell said the bank was not “in a hurry” to cut more, and he agrees with some leading economists who are critical of Trump’s stance of initiating sweeping tariffs, mass deporting of illegal immigrants, along with slashing taxes and regulations. Trump’s campaign promises included calls for lower interest rates, which would bring relief to borrowers.

Tomorrow, 01 February, will see Donald Trump following through with his threat to levy 25% import tariffs on goods with the probable exception of oil, from Mexico and Canada. (Around 40% of the crude that runs through US oil refineries is imported, and the vast majority of it comes from Canada). China will be hit by a 10% levy. The president confirmed the reasoning behind these charges were trade deficits, illegal migration and the trade in fentanyl. In his first term as president, he imposed tariffs on Chinese goods that resulted in imports flattening since 2018. In the coming weeks, it is inevitable that the world will learn more  of Trump’s Tradin’ War Stories!