It’s Getting Serious!                                                                       07 March 2025

With many experts pointing to a slight decline in the Dubai property market, it will come as a shock for them to see February data. The month saw a total of 16.1k transactions, (35.5% higher on the year) and a breakdown reveals those sales for:

              Villas                       3,679              99.7% higher      US$ 5.12 billion     

                   Apartments          11,364             21.3% higher       US$ 5.83 billion     

                    Plots                          608                74.7% higher       US$ 2.62 billion

                    Commercial                                   40.1% higher       US$ 0.33 billion  (US$ 423 per sq ft)

fäm Properties estimates that over the past five years, Dubai’s February property sales have moved 449% higher in value, to US$ 13.92 billion in 2025; and up 31.2% on the year. The most expensive property sold, at US$ 38 million, last month was a luxury villa in Hadaeq Sheikh Mohammed Bin Rashid, with an apartment sale in The Rings – 1 at Jumeirah Second selling for US$ 32 million. Prime sales accounted for 66% of total transactions and 62% by value. Properties below the US$ 277k threshold accounted for 25% of the market total, with those between US$ 272k-US$ 545k – 31% and above the US$ 1.36 million. Reports show that month-on month rental renewals posted a 30% drop in February – a probable indicator that there is a potential shift in the Dubai property landscape. It seems an increasing number of tenants are opting to own – and not continue to rent – their homes, more so because of the recent very high rental rates and the fact that demand is outpacing supply. There is no doubt that there is a shift to people making a longer-term commitment to stay in the emirate for longer.

Randy Fink, Asteco’s CEO, noted that, driven by positive market sentiment and strong demand, the UAE rental market recorded sustained growth throughout 2024. One of the consequences was that there was increased rental growth and activity in the lower and mid-end segments.  This in turn benefitted “affordable communities in Dubai and Abu Dhabi, along with the Northern Emirates, which attract tenants with their competitive rents, expanding supply of quality developments, improved infrastructure and enhanced accessibility. The flexibility of hybrid working arrangements has further supported this migration.”

According toSavills’ Andrew Cummings, “Dubai continues to be a standout destination for prime residential property, with capital values increasing 6.8% and rents growing by a record-breaking 23.5% in 2024. Population growth and an influx of high-net-worth individuals and family offices to the UAE are underpinning strong demand for residential property, particularly in the prime markets.” Over recent years, the emirate has become the leading global destination, eclipsing the likes of New York and Singapore, for ultra luxury homes (those valued at over US$ 10.0 million).  Last year, the population grew by 170k (4.65%) and in the first two month of 2025 by a similar 28k growth trend, (0.73%), to 3.853 million. Savills also noted that the average Dubai prime property is valued at US$ 930 per sq ft – much lower than other global city hotpots such as Hong Kong’s US$ 3,860, US$ 2,590 in New York, US$ 2,550 in Geneva, US$ 2,120 in Tokyo, and US$ 2,000 in Shanghai. Dubai is also in front when it comes to both capital value appreciation, (expected to almost reach 10.0% in 2025) and prime rental value which last year topped 23.5%, surpassing its 2016 market peak. Demand has strengthened by the advent of more ultra-high-net-worth individuals and high-net-worth individuals, “choosing Dubai because there are world-class schools and healthcare facilities, along with world class facilities and infrastructure in a safe and secure environment In addition, security and safety for the uber-rich is increasingly prominent.” Other demand sources include the traditional “big buyers” – the Indians – and  marked upticks from the UK, France, Spain, Italy and the Netherlands, and “we are seeing a real influx on the European side at the moment, particularly due to short flight times, ease of access, ability to spend more time here, and running their businesses back home from Dubai.”

Cavendish Maxwell posted that rents in Dubai South and communities along Sheikh Mohammed bin Zayed Road saw the emirate’s highest increases in 2024, rising by up to 30.0%. Overall, in the apartment sector, the three leaders were Dubai South, Al Furjan and Dubai Production City, moving 30%, 27% and 24% higher respectively. At the other end of the spectrum, but still in positive territory, were Palm Jumeirah, Al Habtoor City and Bluewaters Island, up by 5%, 3% and 1%. Not surprisingly, there were bigger increases noted in the villa sector including Palm Jumeirah, Al Furjan and Dubai Investments Park with rises of 52%, 39% and 38%. (Such impressive movements only occur when demand easily outpaces supply in an expanding market).

Asteco also noted that marked changes in rents happened when there is in a limited supply of units in established developments, an uptick in premium projects within average communities, and renovations or upgrades to existing properties. On the other side of the coin, communities with larger available inventories recorded no growth or marginal downward adjustments.  Cavendish Maxwell data indicated that average 2024 yields for apartments and villas came in on 7.4% and 5.1%, with the four leaders being Dubai Investments Park, International City, Dubai Production City and Downtown Jebel Ali at 10.3%, 9.4%, 8.6% and 8.6%.

Knight Frank estimated that, last year, the number of Dubai homes, available for sale, fell 30%, with a 52% prime reduction in home listings, as more end-users bought properties in the emirate to beat rising rentals. The agency added that “we have noted a rise in genuine end users, rather than speculative purchasers that have defined previous cycles”.

Knight Frank noted that the number of ultra-luxury homes, (those priced over US$ 10 million)available for sale declined 39.5% to 2.49k, over the last twelve months. The number of homes, available in the US$ 25 million-plus bracket, was down 75.3% to just eighty-six. The main driver is the influx of millionaires and ultra-high net worth individuals to the emirate, with the end result being a jump in per sq ft value to US$ 1,806 because of a massive decrease in inventory not able to meet the growing demand for luxury homes.  Last year, Dubai topped the global listing for sales of US$ 10 million plus homes with four hundred and thirty-five deals, of which a record one hundred and fifty-three were registered in Q4.

Aldar Properties’ third project in Dubai, (in partnership with Dubai Holdings), ‘The Wilds’, has seen phase 1 sold out, generating US$ 1.36 billion, through a series of local and international sales events. Phase 1 – including 3 B/R, 4 B/R and 5 B/R homes – comprised seven hundred and thirty-four villas, with 92% sold to expatriate residents and overseas buyers, with the three top nationalities being from India, China and the UK; of the total buyers, 52% were under the age of forty-five. The next phase will see a range of luxurious five- and six-bedroom mansions, designed by the renowned Lebanese architect Nabil Gholam, as well as one-to-three-bedroom apartments.

In its first year of operations, DHG Properties has already reached US$ 272 million in Gross Development Value, as it launches its second residential project in Dubai. After the success of Helvetia Residences in JVC last year, the Swiss developer has launched its yet-named US$ 82 million new project in Meydan, which comprises one hundred and ten apartments. It has also acquired a US$ 71 million prime plot on Dubai Islands for its third residential project in Dubai. Over the past thirty years, the company has completed more than three hundred projects in Europe, focussing on Switzerland and Serbia.

Cavendish Maxwell data indicates that there were 145k new off-plan unit launches in 2024, which averages out to almost four hundred units every day. The obvious main drivers have been the inflow of overseas developers and unprecedented local demand. The consultancy noted that “these impressive figures are not just the result of the recovery from the pandemic. They reflect a strong, stable property market that has seen consistent growth since 2022, driven by continued international demand from India, China and other ME countries in particular.” Emaar, Binghatti and Damac continue to lead the charge for the new launch market in terms of both units released and sales value in the off-plan segment. Mohammed Bin Rashid City saw the highest number of units delivered in 2024, with 5.3k new homes, followed by Jumeirah Village Circle (4.8k), Business Bay (2.8k), Al Furjan (2.6k) and Rukan, Dubailand (1.5k).

Cavendish Maxwell also posted that there are 243k new units, (roughly split 80;20, apartments:villas) in the pipeline, with that number probably enough to add stability to the sector and eventually end up with reduced price/rental increases. It expects that these units will all be delivered over the next three years. That is a lot of units considering that an estimated 46k were handed over last year. It notes that the five leading “supply locations” were Jumeirah Village Circle, Business Bay, Azizi Venice, Damac Lagoons and Arjan with 25.0k, 16.0k, 13.5k, 11.1k and 9.0k units to be delivered. Many other locations – including Palm Jumeirah, Dubai Hills, Dubai Marina, Jumeirah Village Circle and Triangle, Al Furjan, Dubai Silicon Oasis, Town Square, and Studio City – are expected to receive at least 2k units.

Last month, it was reported that there had been a 30% decline in month-on-month rental renewals, with rates for both apartments and villas up 3.0% in Q4. There is a feeling that there is a definite move away from rentals to ownership due to a surge in rental rates as the population growth nears an annual 5.0%.

According to Knight Frank, the total number of homes under construction now stands at 303k units, equating to 60.6k per annum. Of these, 80% will be apartments, with the remainder being villas and branded residences. (According to Cavendish Maxwell, 243k new units were in the pipeline for delivery until the end of 2027, equating to 81k per annum with Jumeirah Village Circle leading the chart;). If 10% of launches fail and there is a 20% lag, the number of new units over the next three years will be 51k. (60.6k + 81.0k = 141.6k/2 = 70.8k*.9= 63.72k*.8= 51k). The past five years have never seen a figure over 45k.

According to UAE-based Elite Merit Real Estates, investments by Chinese and Russian nationals in Dubai’s luxury real estate market grew by 15% and 20% last year. The increase reflects the BRICS factor influencing foreign capital inflows, with Dubai’s tax policies, infrastructure, and geopolitical stability attracting investors.

Sotheby’s International Realty claim that a six-bedroom Jumeirah Bay Island sold for US$ 90 million is the most expensive residence on what is known as ‘Billionaire Island’; this easily surpasses the previous record of US$ 66 million.  Encompassing a 26.9k sq ft plot, it is one of just three plots on the tip of the island, but the only one that has uninterrupted views of the Burj Khalifa and Downtown skyline. The villa is encased in full-height glass walls and boasts 13 mt-high ceilings, with the home built with exquisite materials, including Taj Mahal Quartzite, Patagonian marble, and walnut wood veneer. Other features include a beachfront infinity pool and a private stretch of white-sand beach. Jumeirah Bay Island, with just one hundred and twenty-eight plots, remains one of the most coveted addresses in Dubai. Meanwhile an Emirates Hills villa has just sold for US$ 116 million, with a super-luxury home in Jumeirah Bay Island selling for US$ 90 million and beating the previous record of US$ 66 million for that location.

A four-bedroom luxury villa, with two garages and several luxurious amenities, including a show kitchen, a grease kitchen, two living rooms, a dining room and a dedicated office space, has been listed for an annual US$ 2.0 million rent. Located on Palm Jumeirah and encompassing a 15k sq ft plot, the Signature Villa also includes two staff rooms. The Palm Jumeirah villa boasts a sleek contemporary design, with Fendi furnishings, premium finishes, and top-tier appliances. Residents enjoy luxury amenities, including a private gym, home theatre, jacuzzi, sauna, infinity pool, and cold plunge pool. The property is listed on Penthouse.ae – an online platform powered by Metropolitan and the luxury division of Metropolitan Premium Properties – in collaboration with Savills. The agency adds that “The Signature Villa is an ideal offering for UHNWIs seeking a once-in-a-lifetime rental opportunity in one of the world’s most sought-after locations. This villa is a true masterpiece, designed to cater to the most discerning clientele who expect nothing less than perfection in every aspect of their lifestyle.” This current offering easily beats the US$ 1.09 million for a penthouse in Downtown Dubai and the US$ 1.0 million rental for a five-bedroom townhouse in Jumeirah Bay Island’s Villa Amalfi community.

A first-of-its kind UAE platform is expected to utilise a bidding system to transform the way high-end luxury properties are rented. In simple terms, Bidbayt will offer a range of properties including houses, offices, and warehouses in high-demand areas, with the highest bidder securing the property. Khaled Yaser Mir Abdullah Amiri, the CEO and co-founder of the app, noted that “there are a lot of premium properties that people are ready to pay above the market price for,” and that “we have created a place for such rentals to be auctioned off to the highest bidder in a convenient and easy format.” The new entity estimates that this app could boost rental income by up to 20% and reduce the time to lease a property by 30%, compared to traditional methods. Supported by the Mohammed Bin Rashid Establishment for SME Development (Dubai SME), the app was recently recognised as one of the top ten proptech companies by the Dubai Land Department. It has been approached by several government agencies and is in discussions to explore how to replace in-person auctions with Bidbayt’s app auctions. There is a nominal US$ 81 charge per listing and a 0.5% commission fee on finalised rental terms.

An agreement between Dubai’s Roads & Transport Authority and Uber introduces Uber School to the emirate. Designed for schoolchildren, over the age of eight, and their families, it aims to offer an innovative, affordable transportation solution. Integrated into the Uber Teens accounts, this service offers enhanced safety features like real-time tracking, driver verification, and PIN authentication, along with safety, convenience, and cost savings. Real-Time Trip Tracking: Parents can monitor rides in real-time, receiving live updates, along with audio recordings to ensure peace of mind. Families can save up to 35% when booking a weekly trip package of ten or more rides.

In an agreement signed this week between the Roads and Transport Authority and Dubai Holding, US$ 1.63 billion will be invested for major upgrades to improve access to five Dubai Holding developments – Jumeirah Village Circle, Dubai Production City, Business Bay, Palm Jumeirah and International City. Bridges – both pedestrian and vehicle – will be developed and new roads built as part of the deal to improve access. Communities and projects also having infrastructure work carried out are:

• Dubai Islands
• Jumeirah Village Triangle
• Palm Gateway
• Al Furjan
• Jumeirah Park
• Arjan, Majan
• Liwan (Phase 1)
• Nad Al Hamar
• Villanova
• Serena

This investment is one of many in Dubai aiming to improve infrastructure. Last November, HH Sheikh Mohammed bin Rashid approved a five-year plan to transform the emirate’s road network; the twenty-one projects will encompass twelve residential, commercial and industrial areas, with six hundred and thirty-four km of new roads, costing US$ 1.0 billion. It will improve traffic flow to nineteen residential areas, including Al Barsha and Jumeirah; travel time is expected to be cut by 40%. A month earlier, it was announced that US$ 194 million would be spent to enhance traffic flow around the Trade Centre, with five main roads connecting it with SZR. It will include five bridges, spanning 5k mt in total, and turn it into a bridged intersection. Last month, Dubai’s Railbus project was announced at the World Governments Summit, with this new project complementing the existing metro and tram networks.

With the aim of supporting student-led solutions with global potential, GEMS Education, in partnership with Play Tech Centre, has introduced the ‘Next Billion Innovation’ US$ 1 million fund, initially only open to students at GEMS School of Research and Innovation, which opens its doors the next scholastic year in August. The chosen students will have access to incubator programmes and global startup ecosystems.

The Dubai International Financial Centre is planning to retrofit a building dedicated primarily to hedge fund startups looking to expand into the city. Set to open by the end of next month, the DIFC Hedge Funds Centre, with a 10k sq ft capacity, will cater to firms looking for short-term, plug-and-play offices, as they pilot their operations before scaling up.  It expects that up to thirty contracts will be signed by year-end. The two main source markets appear to be the US and the UK, with others from Singapore, Hong Kong and India. Housed in the former court building, tenants will have access to communal areas for networking, facility management and an environment already set up with desks, receptionists and trading capabilities. The majority of the seventy-five hedge funds in the DIFC manage more than US$ 1.0 billion in assets, so this move to smaller spinouts and independent launches is a strategic shift.

With Abdullah bin Touq Al Marri, Minister of Economy, attributing some of its success to the impact of the effectiveness of the UAE’s economic diversification strategies, there was a 3.8% growth in real GDP, to US$ 360.22 billion, (AED 1.322 trillion), in the first nine months of 2024. With a 4.5% hike, the non-oil sectors now contribute US$ 268.94 billion, (or 74.66%) to the country’s GDP. In a bid to raise its GDP to US$ 817.44 billion, (AED 3.00 trillion), over the next seven years to 2033, the UAE is aiming to become the leading global hub for the new economy, focussing on innovation and global partnerships.

The Ministry of Investment posted that, in 2023, the total new and announced capital inflows of foundational Foreign Direct Investment reached US$ 16.0 billion – an indicator on UAE’s position, as a preferred destination for international investors. Meanwhile, there was a 35% surge of FDI inflows, to US$ 30.68 billion in 2023. The Minister of Economy noted that the UAE is committed to providing a competitive legislative environment for new economy sectors. The primary sectors driving foundational investment growth in the UAE include business services, software, and IT services, which have generated numerous job opportunities and attracted substantial capital inflows. The growth has resulted in a 7.5% increase in total jobs, created a 31% rise in announced projects, and a 37% surge in total announced foundational foreign direct investment inflows.

The new state-of-the-art South Container Terminal at Jeddah Islamic Port has been unveiled this week, as part of a US$ 800 million expansion by DP World and Saudi Ports Authority (Mawani). This expansion, under a thirty-year Build-Operate-Transfer (BOT) agreement, will eventually result in a development, with a future capacity of five million TEUs, with additional ship-to-shore equipment to be deployed as demand grows. (The current expansion will see capacity more than double from 1.8 million TEUs to 4.0 million TEUs). This was DP World’s first concession outside the UAE and since 1999, the Jeddah terminal has played a crucial role in regional trade. This latest expansion cements Jeddah’s status as a trade gateway and supports Saudi Arabia’s Vision 2030 goals of boosting trade.

2024 proved another record year for DP World, as it handled 1.3 million vehicles across its terminals – 53.6% higher on the year. 96% of the total were in Jebel Ali port, with the remainder to be found at Mina Al Hamriyah and Mina Rashid. China was the top trading partner, responsible for 25% of total volumes, followed by Japan, Korea and India. The Jebel Ali Free Zone Authority is home to almost a thousand automotive and spare parts companies. Jebel Ali Port has developed the world’s largest and most advanced car market, spanning twenty million sq ft, with a capacity of one million car equivalent units.  Last year, the country issued two hundred thousand new trade licences and can now boast that over 1.1 million companies and economic institutions are operating in its markets.

Both the UAE President HH Sheikh Mohamed bin Zayed Al Nahyan and his counterpart Faustin-Archange Touadéra, witnessed the UAE and the Central African Republic signing a Comprehensive Economic Partnership Agreement (CEPA), aimed at enhancing trade and investment opportunities. This pact is expected to increase market access for locally produced goods in both countries by reducing or eliminating tariffs, removing trade barriers, and boosting investment in key sectors, including agriculture, infrastructure and technology. It also highlights the country’s growing trade network and its commitment to strengthening economic ties with African nations. Last year saw a 75% annual increase in bilateral trade to US$ 252 million. Over the past two years, the UAE has signed well over twenty CEPAs, all of which will help the country’s goal to boost non-oil trade to US$ 1.1 trillion by 2031.

A treble of higher profit margins, higher orders and higher pricing has seen the PMI data from S&P Global rising to its highest level in nine months. In contrast, the private sector witnessed costs move higher for the first time in seven months – perhaps a cautionary warning to the sector of what may happen for the rest of the year. Backlogged orders rose, as businesses were keen to source new work, but because of continuing intense competition, price increases have been capped, whilst business confidence going forward has been muted. As has been the case in recent months, the construction sector continues to stand out as the most active, with many new projects getting off the ground. Although some firms have increased their payroll, overall employment levels have remained flat, so that job creation continues to be subdued. Non-payments continue not only to be a nuisance but also a negative impact on many players’ cashflows in the private sector.

Airbus is looking to manufacture components for the A400M, a military transport aircraft, in the UAE, along with a training centre, with dedicated maintenance, repair, and overhaul facilities. According to Gabriel Sémelas, the President of Airbus in Africa and the ME, these developments are projected to solidify the UAE’s standing as a premier regional hub for aviation excellence, and this latest initiative will facilitate deeper integration of UAE-based entities, including EPI and Strata, into the global aerospace supply chain. Sémelas also added that job creation and skills development were cornerstones of Airbus’s industry localisation strategy, and that Airbus will implement robust targeted training and technical support initiatives.

It is reported that a major crypto exchange, Bitget, has plans to make Dubai a hub for its next phase of global expansion. As part of the process, it has applied for a licence from Dubai’s Virtual Assets Regulatory Authority.

The 14 February Don’t Worry, Be Happy blog detailed Salik’s impressive 2024 financials. This week, the toll-gate company has approved a US$ 0.042 share dividend, equating to a cumulative US$ 316 million payout. The firm’s current policy is to pay 100% of its net profit to dividends – in 2023, the dividend came in at just under US$ 281 million. Salik closed last year with two more tollgates in Dubai, bringing its total to ten. Ending the year with 25% more gates, a probable 5.0% 2025 hike in population, (and thus more cars  – and fines – on Dubai roads), extending revenue streams including barrier-free parking payment solutions at malls, the introduction of new variable usage rates, profits could easily rise to at least another 10% – and hence a potential 10% plus rise in dividend payments; revenue could come in over 25% higher on the year.

The DFM opened the week, on Monday 03 March, forty-four points lower, (0.8%), the previous fortnight, shed eighty-one points (1.8%), to close the trading week on 5,223 points by Friday 07 March 2025. Emaar Properties, US$ 0.23 lower the previous week, gained US$ 0.10, closing on US$ 3.75 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.72, US$ 6.02 US$ 2.09 and US$ 0.39 and closed on US$ 0.69, US$ 5.65 US$ 2.06 and US$ 0.32. On 07 March, trading was at two hundred and thirty-seven million shares, with a value of US$ one hundred and fifty-three million dollars, compared to three hundred and sixty-five million shares, with a value of US$ five hundred and ninety million dollars on 28 February.

By Friday, 07 March 2025, Brent, US$ 1.79 lower (2.4%) the previous fortnight, shed US$ 2.60 (3.6%) to close on US$ 70.39. Gold, US$ 94 (3.2%) lower the previous week, gained US$ 62 (2.2%) to end the week’s trading at US$ 2,907 on 07 March 2025.

Even with Trump pressure to lower oil prices, OPEC+ will proceed with plans to revive halted oil production, after repeated delays, by increasing production by 138k bpd next month. This will be the first in a series of monthly hikes to add 2.2 million bpd by next year, following two years of postponements.  On the news, earlier in the week, Brent crude dropped 2.1% to US$ 71.63 and ended the week on US$ 70.39, struggling under the US$ 70 threshold. No surprise to see the Trump impact on prices. There is no doubt that Saudi – and other producing nations – wanted a price hike and it seems that Crown Prince Mohammed bin Salman has compromised by pledging to invest US$ 600 billion in the US in a bid to strengthen the kingdom’s ties. Additionally, Washington’s ‘maximum pressure’ on Iranian exports could create a gap for other OPEC+ nations to fill, whilst sanctioned Russia may see more favourable conditions to ship barrels thanks to warmer relations with Trump.

Ahead of a meeting with crypto executives, Donald Trump signed an executive order on Thursday to establish a strategic bitcoin reserve. The bitcoin used to finance this scheme is owned by the federal government which had been part of criminal or civil asset forfeiture proceedings, as confirmed by the administration’s crypto czar, billionaire David Sacks. Bitcoin will be the primary asset used but the reserve will also include four other coins – ether, XRP, solana and cardano. Sacks has confirmed that the strategy is to maximise the value of its holdings, without offering details, but that no such bitcoin will not be sold. Part of the President’s executive order was to develop “budget-neutral strategies” for acquiring additional bitcoin that have no “incremental costs” on taxpayers. By 4pm UK time today, it was trading at US$ 88.5k.

After Nasdaq-listed VinFast had agreed funding of around US$ 1.0 billion from UAE’s Emirates Driving Co, and other investors, it is expecting to sign a similar deal with a Qatari investment firm. This latest move, with JTA Investment Qatar, could result in a ‘potential equity investment’, as well as a ‘strategic partnership’ to support VinFast’s global expansion and technological development. On top of that, it is interested in another Vingroup entity – its portfolio of hotels and resorts, amusement parks and entertainment clusters. JTA Investment Qatar offers financing solutions in sectors such as energy, technology, infrastructure and tourism. The Vietnamese EV maker currently has two cars in the UAE – the VF8 Plus and the VF8 Eco – with prices starting at US$ 47.5k; 97k vehicles have been sold to date. The new funding will obviously help VinFast bolster its financial position and move into new regional markets. Vingroup noted that any ‘collaboration will unlock significant opportunities for Vingroup and its subsidiaries to drive technological, infrastructural, and sustainable economic advancement in Vietnam, while establishing a foundation for international expansion.

There were red faces at Citibank last April when it was reported that the bank had mistakenly credited US$ 81 trillion to a customer’s account, when the actual amount should have been US$ 280. The error was reversed hours later after the transfer was missed by two employees and detected by a third employee ninety minutes after it was posted. The bank confirmed that no funds had left the bank, and it was disclosed as a “near miss” to the Federal Reserve and Office of the Comptroller of the Currency. Surprisingly, a total of ten near misses of US$ 1 billion or more occurred at Citi last year, according to the FT – down from thirteen registered in 2023.

In the biggest share sale on the Hong Kong bourse for more than four years, BYD Co raised US$ 5.6 billion, selling 129.8 million shares at US$ 43.12 each – a 7.8% discount on Monday’s closing price; the sale was several times over-subscribed. The company plans to use the fresh capital to expand its overseas business, invest in R&D, supplement its working capital and spend on general corporate purposes,  It is reported that Dubai’s Al-Futtaim Family Office participated as a strategic investor and it seems that the two firms plan to build on their successful collaboration and transition into a strategic partnership, focusing on areas including new EVs. Long-only investors and sovereign-wealth funds also bought shares in the deal. Last month, BYD sold 161% more on the year, at 318k pure electric and hybrid passenger vehicle, as it hit a record 67.0k in overseas sales. Interestingly, YTD its shares have jumped 46%, compared to Tesla declining 29%.

Last year, Seven & i, which operates some 85k global outlets, has once again had to fend off a take-over bid. Last year, it was a failed US$ 40 billion bid by Canada’s Alimentation Couche-Tard; this time, the Japanese owner of 7-Eleven is facing another takeover by its Canadian rival and has announced a package including a US$ 13.2-billion share buyback, and an IPO of its US SEI unit that operate its North American convenience store business. It also confirmed plans to buy back US$ 13.2 billion of its own shares using funds generated by the announced IPO and other restructuring measures. The company also announced the sale of its non-convenience-store business – comprising supermarkets, restaurants and other assets – to US private investment firm Bain Capital. It is reported that ACT has raised its offer to US$ 47.0 billion but this has already been rejected. A successful bid would merge the 7-Eleven, Circle K and other franchises to create a global convenience store behemoth.

Last Friday, a US court ruled that Riju Ravindran, a top official of Indian tech firm Byju, and the brother of the company’s founder, Byju Raveendran, had violated his fiduciary duty to lenders by wrongly hiding US$ 533 million. It is alleged that he had fraudulently transferred at least part of the money to a small hedge fund based in Miami to keep it out of lenders’ hands from them. The case was brought by creditors on a defaulted US$ 1.2 billion loan, with the judge siding with the creditors, entitling them to a financial damages award from Byju, with the amount to be determined in a separate hearing. The Indian firm is in deep trouble, fighting bankruptcy proceedings both in its home country and the US. It is not clear how much the firm is worth in India, with the US lenders hoping to liquidate several domestic education software companies that Byju’s purchased for US$ 820 million a few years ago and recoup outstanding balances.

With US$ 383 million owing, and requiring payment by year-end, as part of a multibillion-dollar loan package, India’s Oyo Hotels is speeding up plans for an initial public offering which could be valued at around US$ 5.0 billion. Creditors, including Mizuho Financial Group Inc., insist that founder Ritesh Agarwal pay off the dues, if the startup does not have an IPO by October. It seems that the thirty-one-year-old Indian borrowed US$ 2.2 billion in 2019, with a guarantee from backer SoftBank Group Corp.’s boss Masayoshi Son, to increase his stake in Oyo and gain more strategic control over a company he built in his teens. Three years later, the loan was restructured but Agarwal has yet to pay back the first tranche. SoftBank is its largest shareholder, with a stake of more than 40%, with Agarwal’s having more than 30%. It has fully recovered from the Covid impact and posted a small profit for the year ending 31 March 2024, as sales recovered. Late last year, Agarwal injected about US$ 95 million into Oyo, via his Singapore-based investment firm.

On Monday, Mixue Ice Cream and Tea went public on the Hong Kong bourse, having raised US$ 444 million in its IPO – their biggest listing of the year; on its début day, the Chinese bubble tea chain, with 45k outlets across China and in eleven other countries, and more outlets than McDonald’s 43k+ and Starbucks’ 40.6k, saw its shares soar more than 40%. The company, founded in 1997, sells ice creams and drinks for an average of US$ 0.82 and US$ 0.65. Unlike Starbucks, which operates more than half of its stores directly, almost all of Mixue’s outlets are run by franchisees. Recent bubble tea chains, including its smaller rival, Guming, and Chabaidao, that have gone public, have seen their market caps decline in first day trading.

Boots is going private, and will no longer be traded on New York’s Nasdaq, as it is being bought for US$ 24 million, by Sycamore Partners, a private equity firm, from Walgreens Boots Alliance; the retailer has been listed on a stock exchange for at least one hundred years. It is expected that shareholders will receive US$ 11.45 per share, with the possibility of a further US$ 3.00, if other business sale conditions are met. In 2022, a sell-off of the Boots arm of the business from the Walgreens Boots Alliance was abandoned, and the following year, it announced the closure of three hundred outlets. Boots was acquired by Walgreens in 2014, and since 2015 it has lost 90% of its market cap.

Poland-based Pepco Group confirmed it was considering the sale of  Poundland, the discount retail chain, with the owner noting that it faces an “increasingly challenging” retail landscape in the UK, and that it was examining all options for the eight hundred and twenty-five-strong chain, including a sale. Although its revenue stream came in at over US$ 2.0 billion, Pepco revealed a US$ 828 million charge to Poundland, with problems being exacerbated by the government’s hikes to employer national insurance contributions from April. Its chief executive, Stephan Borchert, confirmed, “there are definitely interested parties for this business.”

November saw the UK experiencing a shortage of Guinness; this month it is the shortage of bananas, down to bad weather conditions in supply countries such as Columbia, Costa Rica and Ecuador. Shoppers have been left disappointed after several Tesco stores ran out of bananas, one of their best-selling items. One interesting fact is that consumers buy over five million bananas a year of which 28%, 1.4 million, are wasted.

Barclays’ latest IT outages in the UK will cost the banker up to US$ 13 million in compensation payments to its customers for “inconvenience or distress”, caused by several days of disruption; this is expected to be the largest amount of compensation of any bank in the past two years.  The glitch occurred towards the end of January. The crisis happened to coincide with payday for many and the deadline for self-assessment tax returns. The Treasury Committee of MPs was told that the problem was caused by “severe degradation” in the performance of their mainframe computer, which resulted in the failure of the bank’s online payments. The committee had approached the top nine banks and building societies for their comments and outage details. It was found that, over the previous two years, there had been one hundred and fifty-eight individual IT failures, leading to eight hundred and three hours of unplanned outages. NatWest and HSBC recorded the longest outages, at one hundred and ninety-four hours and one hundred and seventy-six hours of failure.

At the week-long National People’s Congress, President Xi Jinping set a 2025 economic target growth of “around 5%”, whilst also pledging to pump billions of dollars into its ailing economy, with further weakness inevitable on the back of Trump tariffs. The Chinese administration has been impacted by a quadruple whammy of low consumption, an ongoing, (but not going away) property crisis, sticky unemployment and a further 10% Trump tariff, following a similar levy last month. Almost immediately, Chinese retaliation saw 10%-15% tariffs on certain agricultural imports from the US, and it is estimated that continuing tariffs would result in Chinese exports – which had accounted for  a nearly one trillion dollar trade surplus – declining by up to a third; it will also see it difficult for China to post a 5% growth in 2025,  (having hit that number over the past two years) and may have to drive up domestic spending to get anywhere near the target figure.

At the Congress, Chinese Premier Li Qiang said consumption has been sluggish and pledged to “vigorously boost” household demand, noting that “domestically, the foundation for China’s sustained economic recovery and growth is not strong enough.” Beijing has already rolled out schemes to encourage its people to spend more, including allowing them to trade in and replace consumer goods like kitchen appliances, cars, phones and electronic devices. It will also see the government enriching the ordinary Chinese people’s pockets, with the aim of cutting the country’s reliance on exports and investment. It will also create more than twelve million jobs in cities, setting a target for urban unemployment at around 5.5% for 2025. It also plans to issue US$ 179 billion worth of T-Bonds, to help fund its stimulus measures, and allow local governments a 12.8% hike  to US$ 605.8 billion in the amount they can borrow. Even after trying to keep its fiscal deficit – the difference between the government’s spending and revenue – at below 3.0%, it raised this by 1.0% to 4.0% of GDP, the highest level in decades.

Donald Trump may be happy to hear that a subsidiary of Hong Kong-based CK Hutchison Holding company has agreed to sell most of its stake in two key ports, located at either end of the eighty-two km Panama Canal, to a group led by US investment firm BlackRock, and including Switzerland’s Terminal Investment Limited; the sum involved is in the region of US$ 22.8 billion. The deal includes a total of forty-three ports in twenty-three countries around the world, including the two canal terminals. Over recent weeks, Trump has made several arguments for retaking control of the canal and the surrounding area, including Chinese influence being a national security threat, the fact that US investment in the initial building of the canal justifies taking back control, and that US ships are being charged too much for using the waterway. Earlier in the year, the US President had complained that the major shipping route was under Chinese control and that his country should take control of it. Although not directly owned by the Chinese government, it operates under Chinese financial laws.

Because of his relationship with that scumbag, Jeffrey Epstein, former Barclays boss Jes Staley has begun a legal bid to overturn a 2023 Financial Conduct Authority ban from the UK’s financial services industry, along with a US$ 2.3 million fine; it had concluded that Staley had made misleading statements about his relationship with the disgraced financier in correspondence with the watchdog. (He also missed out on pay and bonus awards of US$ 23 million, after he left Barclays under a cloud). The banker claims that he had a “close professional relationship” with Epstein but denies they were friends. Their association dates back to a time when Epstein was a client of JPMorgan Chase’s private bank, which Staley headed before taking the role at Barclays in 2015.; two years earlier, he had left J.P. Morgan after more than thirty years. The ban by the FCA was based on two misleading statements over their relationship, namely over how close they were and that Mr Staley’s last contact with Epstein was “well before he joined Barclays in 2015”. The FCA’s ruling related to the contents of a letter sent by the then Barclays chairman in 2019, but reviewed by him, which summarised the depth of the two men’s ties in response to a request for “assurance” from the regulator. The FCA’s case includes more than 1k emails between the pair, some provided by JPMorgan and others from Epstein’s estate, in which Staley was said to have described their friendship as “profound” and referred to Epstein as “family”. Today, JPMorgan Chase & Co. told British regulators it believed Jes Staley might have been involved in Jeffrey Epstein’s crimes, shortly before the watchdog opened a formal investigation into the former Barclays Plc boss in 2019.

Defence companies have initially benefitted from the current Ukrainian debacle, as their market caps skyrocketed on the bourses of UK and Europe in Monday’s trading. The FTS 100 hit new record highs, as arms maker BAE Systems saw its share price rise as much as 17.5%, with its market cap climbing by US$ 7.53 billion; in comparison, Rolls Royce nudged up 6.0%.  Meanwhile, on the FTSE 250, there were marked increases, of 10.3% and 9.3%, in the share values of defence technology company QinetiQ and defence support business Babcock International. On the European bourses, shares of Germany’s largest defence company Rheinmetall jumped 18% while Italy’s Leonardo was up 15%. All this came after European leaders met in London a day earlier where UK Prime Minister Starmer announced a loan to Ukraine and a US$ 2.0 billion deal for a Belfast factory to supply missiles for the country’s fight against Russia; the UK had earlier announced it would increase military spending to 2.5% of GDP. On top of that, Chancellor Rachel Reeves had also announced an extra US$ 2.88 billion for the Ukrainian war effort, courtesy of Russian funds, frozen since the start of the full-scale war in February 2022.

In February, the US economy added 151k new jobs, with a marginal 0.1% uptick in unemployment to 4.1%. Donald Trump’s government cuts were the main driver for federal employment dipping 10k last month. Hiring was driven by healthcare and financial firms, with manufacturing sector adding 10k jobs. Although the numbers were largely in line with expectations, it does point that the labour market is indeed cooling. The buoyancy of the labour market to date, with a long running growth trend, surprised many analysts especially in an environment of price increases and high interest rates. Future months, with Donald Trump pulling the strings, will prove to be interesting reading, as he noted, “I think the labour market’s going to be fantastic but it’s going to have high-paying manufacturing jobs as opposed to government jobs.”

Citing that time has run out, on Monday Donald Trump confirmed that he was moving forward to levy 25%, starting the following day, 04 March on goods imported from Canada and Mexico; an additional 10% tariff on Chinese imports is also expected to come into force. All three countries have also said they will retaliate against the US tariffs, raising the prospect of a widening trade war. Canada plans to impose retaliatory tariffs against US imports of US$ 155 billion, with the first tranche of US$ 30 billion ready immediately to be levied on everyday goods like pasta, clothing and perfume. Beijing had already prepared countermeasures, announcing that it would slap fresh tariffs on a range of agricultural imports from the US. Furthermore, the Finance Ministry confirmed that “additional 15% tariffs will be imposed on chicken, wheat, corn and cotton,” and that “additional 10% tariffs will be imposed on sorghum, soybeans, pork, beef, aquatic products, fruits, vegetables and dairy products”. President Trump has also announced a 25% charge on all steel and aluminium imports, which is meant to come into effect on 12 March. In addition, he has threatened to impose custom “reciprocal” tariffs on individual countries, as well as 25% tariffs on the EU. For the time being the UK has avoided any tariffs. All three major US indexes fell on Monday – the Dow Jones Industrial Average ended the day down 1.4%, the S&P 500 1.75% and the Nasdaq 2.6%. No doubt global trade is in for a rocky ride!

If Trump’s tariffs aim is to rebuild and modernise US manufacturing, then it will take some time to see any positive results – capex items, such as new factories, could take years to build. Thus, in the short-term, the consequences will be higher consumer costs (someone has to bear the extra tariff costs), rising inflation, as prices move north, and lower economic activity, at a time when the US economy could already be in contraction. In recent weeks, high-frequency measures of activity have suggested the US economy is facing a very sharp slowdown. Indeed, the “GDPNow” Nowcast measure from the Atlanta Fed recently pointed to the US economy contracting at an annualised rate of 2.8% in Q1.

On 26 March, Rachel Reeves is set to release her spring statement and it seems that she will announce several billion pounds in spending cuts, including from the welfare budget; this move is almost inevitable so that the Chancellor can come within her borrowing limit that includes maintaining a US$ 12.90 billion (GBP 10.00 billion) headroom; the rise in borrowing costs, with inflation hitting a ten-month 3.0% high in January, has eroded this balance to almost nil. So as to maintain her self-imposed fiscal rules, she cannot borrow for day-to-day spending, leaving spending cuts as one of her only options. On Wednesday, Treasury advised the Office of Budget Responsibility of the proposed cuts, ahead of it providing a financial forecast on the same day as the spring statement. Accordingly, she will have to consider spending cuts and reports indicate that the Starmer administration will be looking at a four-point plan – welfare cuts, planning reforms, slashing red tape and reducing the number of Whitehall mandarins. To date, the Prime Minister has refused to say whether further tax rises, or spending cuts, would be imposed. The way the government finances are, the Chancellor has to reduce the amount the government borrows – but it appears that because she has already borrowed up to her limit, any further borrowing will be at the expense of having to cut benefits, not helped by worse growth than expected. Basically, for every billion of additional borrowing that the OBR thinks she is going to need, she will have to utilise spending cuts, almost certainly including welfare cuts. The fundamentals are not looking good, and now It’s Getting Serious!