Fortune Favours The Brave! 21 November 2025
According to Firas Al Msaddi, CEO of fäm Properties, although there was a 10.4% jump in resale deals, to 53k, and a 20% hike in off-plan transactions, in the first nine months of the year, new residential launches posted a 7.3% decline to 120k. He noted that supply has tightened – largely to soaring land costs which “have jumped 200–300% since 2020” – as demand continues to head north; some areas have risen, at a much quicker rate, such as Dubai’s Al Wasl area, where there has been a sevenfold surge to US$ 954 per sq ft. Basic economics teach that such an imbalance leads to higher prices in asset values and rental income until supply catches up. For example, Jumeriah Village has up to 27k new residential units hitting the market whilst Jebel Ali has 29k units planned. It is easy to guess which location will be first to experience some sort of price correction in the future. Al Msaddi is hopeful that rental prices, for now, will remain firm across most communities, adding that “we’re not seeing signs of a broad correction”, though selective adjustments are likely in saturated pockets.
A recent report from Property Finder focuses on the more affordable communities in Dubai where one-bedroom homes are still within reach, along with those offering newer buildings at more reasonable prices. It noted that although premium districts – including the likes of Palm Jumeirah and Downtown Dubai – continue with double-digit price hikes, there are several locations that remain attractive for those in the rental market. The following communities appeal to residents looking for new amenities, good layouts and easier access to major roads:
Jumeirah Village Circle rents start at US$ 10.8k inc many one B/R units
Dubai South (DWC) rents start at US$ 10.9k and averaging US$ 16.3k
Bur Dubai rents start at US$ 11.4k and averaging US$ 20.4k
Al Barsha rents start at US$ 13.1k and averaging US$ 20.4k
There are other developing areas becoming increasingly popular with renters because of new buildings, better value and improving community facilities. These areas continue to grow as new schools, retail and transport options open:
Arjan newer units with one B/R rents starting at US$ 13.6k while luxury units push the top tier much higher
Meydan starting prices at US$ 14.2k and, averaging at US$ 21.8k, for people wanting central access and modern mid-priced buildings
Dubai Creek Harbour starting prices at US$ 20.4k, and averaging at US$ 30.0k, for people wanting waterfront living at a lower price than Downtown or Marina areas
Sharafi Development’s latest luxury residential launch, ‘Marea Residences’, a G+2+12 project, is to be located on Dubai Islands. It will comprise one and two-bedroom residences and a limited collection of penthouses. Amenities include an infinity pool, private gardens, spa and wellness spaces, a fully equipped gym, and dedicated concierge services. The developer has appointed Metropolitan Premium Properties as the exclusive sales partner for ‘Marea Residences’. Prices start from US$ 708k for one-bedroom residences, with flexible 40/30/30 payment plans and post-handover benefits including two years of free property management and one year of free maintenance.
HRE Development has launched ‘Sakura Gardens’, a low-rise residential community in Falcon City of Wonders. In a shift to moving away from dense tower districts and towards quieter, green neighbourhoods in Dubailand, the project, inspired by Japanese culture, will be a mix of apartments and town homes designed around courtyards, shaded walkways and a central park. It spans 49k sq mt of land and 127.5k sq mt of built-up area, offering studio to three-bedroom units and town homes. 50% of the land is landscaping, space, with cars parked underground, making the community car free. The project is structured around six development pillars covering wellness, active living, social spaces, leisure amenities, nature-based design and sustainable building features.
Last Saturday, the world’s tallest tower hotel, at three hundred and seventy-seven mt, opened for business. Ciel Dubai Marina, Vignette Collection by IHG, with eighty-two floors. With one thousand and four rooms and suites, the hotel includes a sky-high infinity pool and multiple dining options. Opening prices start at US$ 286k.
On Sunday, HH Sheikh Mohammed bin Rashid had welcomed delegates to the Dubai Airshow, ahead of its biggest edition to date. The Dubai Ruler also said that the country was proud to host the largest edition of the event, emphasising the nation’s status as a “key international hub and platform in the world of aviation.” He also noted that this year’s event would welcome delegations from one hundred and fifteen countries, alongside four hundred and ninety civilian and military representatives and an estimated 150k visitors. To top it all, more than two hundred state-of-the-art aircraft will be on display, spanning commercial fleets, private jets, military aircraft and next-generation unmanned systems. A dedicated space technology exhibition and conference will also run on the sidelines, reflecting the UAE’s growing role in the global space sector.
Monday saw the opening of the nineteenth Dubai Airshow 2025, at a time when the UAE is cementing its position as a global hub for aerospace innovation and ME airlines scaling up faster than ever, ordering widebody fleets to meet surging demand. The day started with Emirates ordering sixty-five Boeing 777 that will ensure that the carrier will become the world’s largest operator of this Boeing model. It also ordered one hundred and thirty GE Aerospace’s GE9X engines that power the twin-engined planes. By the third day, a further eight Airbus A350-900 wide-body aircraft, valued at US$ 3.4 billion, went in the order book, boosting its A350-900 fleet to a total of seventy-three planes once all deliveries are completed; to date, it has taken delivery of thirteen A350 aircraft. Delivery of the latest batch, powered by Rolls-Royce Trent XWB84 engines, is expected during 2031. Sheikh Ahmed bin Saeed noted that the Emirates A350’s entry into service in November last year had given the world’s largest long-haul airline “welcome additional capacity”, adding that the carrier will work closely with Airbus on the delivery of the remaining aircraft.
The Emirates Chairman alsoconfirmed plans for the carrier to invest up to US$ 12 billion in its future facilities at the new Al Maktoum International Airport. He added the funding will support the development of Emirates’ dedicated infrastructure at the expanded airport. He added that he sees no issues in financing the transition of all operations from DXB to the new location by 2032. The first phase of project will handle up to one hundred and fifty million passengers annually, with capacity ultimately rising to two hundred and sixty million.
flydubai has had a busy week announcing three major orders – one hundred and fifty Airbus A320neos, valued at US$ 24.0 billion, and seventy-five (firm) orders for Boeing 737 MAXs, (with options for 75 more), valued at $13 billion, and sixty GEnx-1B engines from GE Aerospace, (to power the first thirty widebody fleet of 30 Boeing 787-9s), which also includes spare engines and a long-term services agreement to support the carrier’s launch of long-haul operations. With the second order above, it can be seen that the airline is now adding long-haul destinations to its growing network. Another plus for the carrier, with a network of more than one hundred and thirty-five destinations across fifty-seven countries, is its introduction of a three-class configuration – including premium economy – on its Dreamliners.
With a record quarterly traffic in Q3, of 24.2 million, (1.9% higher on the year), Dubai International (DXB) has seen nine-month numbers, 2.1% higher, at 70.1 million; the twelve-month rolling traffic reached a record 93.8 million guests. Aircraft numbers came in at 115k in Q3 and 336k over the September YTD, 2.7% higher on the year. The average number of passengers per aircraft at the end of September stood at two hundred and thirteen. The top five country markets, accounting for 35% of the total, (24.5 million), were India (8.8 million guests), Saudi Arabia (5.5 million), UK (4.6 million), Pakistan (3.2 million), and the US (2.4 million). Among city destinations, London leads with 2.8 million guests, followed by Riyadh (2.3 million), Mumbai (1.8 million), Jeddah (1.7 million), and New Delhi (1.6 million). Five locations showed traveller increases from Dubai – Malaysia (687k guests), Vietnam (493k), the Czech Republic (341k), Uzbekistan (312k), and Denmark (239k).
DXB performed well when it came to the baggage handling in the first nine months, it dealt with 63.8 million bags, (6.2% higher on the year), whilst noting that 90% of bags reached guests, within 45 minutes of the aircraft arriving on the stand, and that mishandled baggage accuracy remained high at 99.9%. In addition, Q3 saw 99.6% of departees clearing passport control in under ten minutes, with 99.8% of arriving guests having to wait less than fifteen minutes. Security screening times stayed below five minutes for 99.7% of travellers.
The first crewed electric vertical take-off and landing aerial taxi flight, between Margham and Al Maktoum International Airport, occurred this week; the successful flight was conducted by Dubai’s Roads and Transport Authority and Joby Aviation. The government agency also posted that the first aerial taxi vertiport near Dubai International Airport is 60% completed and that three others – in partnership with Emaar, Atlantis The Royal, and Wasl – were being developed in collaboration with Skyports Infrastructure, the UK-based specialist in advanced air mobility infrastructure. The Chairman of the RTA, Mattar Al Tayer, noted that they were steadily progressing towards the commercial launch of the aerial taxi service in 2026.
Commenting on Joby Aviation air taxi service, Ahmed Bahrozyan, CEO of the Public Transport Agency at the RTA, said that it aims to become a cost-effective alternative to traditional transport, with long-term fares expected to be comparable to ride-hailing services such as Uber or Careem. He noted that “people ask a lot about how much it will cost. We have not decided the price yet, but it will be cheaper than helicopters today in Dubai. The aim and the vision is for it to eventually, after a few years, be equivalent to almost an Uber or Careem trip in the city”. The service is part of Dubai’s broader strategy to integrate air taxis into the city’s public transport network, alongside buses, metro, and taxis.
It is reported that a Comprehensive Economic Partnership Agreement with the Republic of Korea will be signed by the end of 2025. Dr Thani bin Ahmed Al Zeyoudi, Minister of Foreign Trade, was in attendance at the UAE-Korea business roundtable, which began yesterday in Abu Dhabi and focussed on strengthening cooperation across sectors including defence, energy, food and technology. The Minister added that the agreement will enhance and diversify bilateral trade and economic relations through substantial tariff elimination or reduction, the removal of non-tariff barriers, and support for trade in goods and services while facilitating investment flows between the two countries. Non-oil trade between the UAE and Korea rose by 11.0% to US$ 6.6 billion in 2024, with trade amounting to US$ 3.1 billion during H1.
During the year, it is reported that the UAE has advanced CEPA talks with EU, Japan, Nigeria and Mercosur; the five member states of the latter bloc, formed in 1991, are Argentina, Bolivia, Brazil, Paraguay and Uruguay, with Venezuela, having been suspended in 2016.
Abu Dhabi’s Crown Prince, Sheikh Khaled bin Mohamed bin Zayed Crown Prince of Abu Dhabi, under the directives of President HH Sheikh Mohamed bin Zayed, has approved a US$ 50.0 billion investment in Canada under a framework that includes projects in AI, energy, logistics, mining sectors and other key industries. The agreement was signed at the sidelines of a visit by Canada’s Prime Minister Mark Carney to Abu Dhabi. Last year, foreign direct investment stock from the UAE in Canada stood at US$ 8.8 billion, while that country’s direct investment stock in the UAE totalled US$ 242 million in the same year.
The Ruler of Dubai has launched an international economic programme to enhance the country’s global position in foreign trade. He commented that ““we have launched an international economic programme to enhance the UAE’s global standing in foreign trade. The programme aims to attract the top one thousand global companies in international trade and launch a digital portal connecting thousands of Emirati exporting companies to foreign markets, thus providing greater opportunities for their products and new markets for their exports. This will strengthen the country’s position as a key hub in international trade routes”.
Visa’s Global Economic Insight reports that, on a global analysis, luxury spending has slowed in many global cities for the first time since the financial crisis. However, Dubai remains an outlier being the only major city where luxury spending has remained robust, enhancing its status as the most resilient luxury market worldwide. It has done so riding on the coattails of increasing number of international visitors, a fast-growing base of high-earning households as well as an influx of wealthy entrepreneurs. The study notes that over 11% of Dubai residents made a luxury purchase each quarter and that about 37% of households earning more than US$ 150k a year; (this equates to a monthly income of just under AED 46k – which does seem on the high side). The report also notes that luxury spending is no longer the domain of the top 1% alone. The appeal now extends across affluent consumers in the top 5%, emerging affluent groups in the top 10% and even upper-middle-income households in the top 20%.
Following recent media reports on gold imports from Sudan, the UAE Ministry of Foreign Trade has issued a statement regarding the government’s policies and regulations for the gold sector in the country. The UAE is the second largest global gold trading centre and as such imports golf from many exporting countries. It posted that last year gold, to the value of US$ 186.0 billion, passed through the UAE, with Sudan accounting for only 1.06% of the total at US$ 1.97 billion. Over the past five years, it has put in place an effective regulatory framework to enhance the security, safety, and transparency of all gold transactions. Tight regulations are in place covering all aspects of the process including mandatory anti-money laundering and customer knowledge procedures, annual audits, and comprehensive application at all points of entry that fully comply with, and sometimes exceed, the regulatory procedures. The OECD guidelines for due diligence on responsible supply chains of metals from conflict-affected and high-risk areas are also followed, with the UAE also complying with the standards of leading global gold trading centres. The statement concluded by adding “based on the international gold community’s confidence in the UAE market, the effectiveness of the regulatory framework in place, and the strong commitment to maintaining the integrity of the gold trade, stakeholders in this sector will continue to work in partnership with global bodies to ensure that our enforcement and reporting practices meet the highest international standards”.
For the first time since its 1971 independence, the government has transferred its Eid Al Etihad public holiday so that residents can enjoy an extended four-day weekend for UAE National Day. This new law came into being at the beginning of 2025. Initially scheduled for 02 December and 03 December, (Tuesday and Wednesday), they have been officially moved to 01 December and 02 December, (Monday and Tuesday), so that a four-day continuous break can be taken, from Saturday to Tuesday.
Last Monday, Sonder announced that it was immediately winding down its global operations. The short-term rental company, to be found in major cities around the world, revealed plans to file for bankruptcy in the US that would involve liquidating its assets and beginning insolvency proceedings in other countries where it operates. In Dubai, the firm had offered apartments in popular areas such as Business Bay, Downtown Dubai, Dubai Marina and JBR. Now property owners and developers, who had used the US firm to manage their residential units, will have to find alternative platforms. Its sudden downfall was financial challenges related to its agreement with hotel operator Marriott International as a key factor behind the shutdown.
Starting next month, with a pilot scheme between Bahrain and the UAE, the Gulf Cooperation Council has approved a ‘one-stop’ (single-point) travel system. Once fully implemented across all six member states, flying across the Gulf will be as simple as travelling between cities in the same country. It will also align with the Schengen-style GCC tourist visa that goes live in 2026.
The system is a joint border/identity and security clearance process run by Gulf Interior Ministries that lets eligible passengers complete immigration, security, and related checks at one checkpoint before boarding. Initially, it seems that the system can only be used by the citizens of the six GCC nations – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE – but not yet by expat residents.
The DFM opened the week, on Monday 17 November, on 6,025 points, and having shed seventy-five points (1.2%), the previous week, lost a further one hundred and fourteen points (1.9%), to close the week on 5,856 points, by 21 November 2025. Emaar Properties, US$ 0.12 higher the previous fortnight, shed US$ 0.11 to close on US$ 3.65 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.75 US$ 6.98, US$ 2.58 and US$ 0.43 and closed on US$ 0.73, US$ 6.68, US$ 2.52 and US$ 0.42. On 21 November, trading was at two hundred and forty-nine million shares, with a value of US$ one hundred and forty-three million dollars, compared to five hundred and sixty-seven million shares, with a value of US$ one hundred and eighty-three million dollars on 21 November.
By mid-afternoon, 21 November 2025, Brent, US$ 0.17 (0.1%) higher the previous week, had shed US$ 1.85, (2.9%), to close on US$ 62.00. Gold, US$ 115 (2.9%) higher the previous week, shed US$ 48 (1.2%), to end the week’s trading at US$ 4,071 on 21 November. Silver was trading at US$ 51.65 – US$ 2.30 (4.5%) lower on the week.
Hyundai Motor Group has confirmed it will invest US$ 86.47 billion in South Korea over the next five years, after Seoul finalised a trade deal reducing US tariffs on South Korean vehicles, by 10% to 15%. Over the past five years, similar investments, totalling US$ 61.0 billion, were made by Hyundai Motor and its group affiliate Kia Corp. Days earlier, details were released on the trade deal, which includes South Korea’s pledge to invest US$ 350 billion in US strategic sectors. The carmaker’s chairman, Euisun Chung, commented that “we are well aware of concerns about exports declining and domestic production shrinking due to US tariffs of 15%”, and that “we will diversify export markets, increase exports from domestic factories and more than double auto exports through new electric-vehicle factories by 2030”.
Carl Cowling, the chief executive of WH Smith, has finally agreed to resign, with immediate effect, because of his role in the accounting failure earlier in the year that prompted the retailer to slash its profit forecasts. This follows an independent Deloitte review of its N American division showing that the company had recognised supplier income incorrectly, whilst noting that weaknesses in the composition of the finance team, along with insufficient systems, controls and review procedures. As a result, the expected group headline trading profit will reduce by some 55%, on the year, to between US$ 130.5 million – US$ 143.6 million. N American profit was forecast to fall to between US$ 6.5 million – US$ 19.5 million – down sharply on the US$ 71.8 million forecast before the accounting errors were first flagged. Little wonder that its share price has slumped by over 50% in the three months since August.
By 14 November, Pakistan’s total liquid foreign exchange reserves rose to US$ 19.74 billion as of 14th November, driven by an increase in the State Bank of Pakistan’s holdings, with SBP reserves rising by US$ 27 million to US$14.55 billion. Foreign net exchange reserves held by commercial banks stood at US$ 5.19 billion, marking a week-on-week decline of US$ 12.6 million.
Japan’s exports rose 3.6% to US$ 62.44 billion in October, marking the second straight month of gain and a record for the month. Imports edged higher – 0.7% to US$ 63.94 billion – also up for the second consecutive month. Meanwhile, Japan’s exports to the US fell 3.1% on the year to US$ 11.19 billion – lower for the seventh straight month. By region, exports to China rose 2.1% to US$ 69.95 billion, and imports inched up 0.8% to US$ 15.86 billion. Japan’s trade surplus with the rest of Asia, including China, swelled more than eightfold to US$ 1.34 billion, with exports increasing 4.2% to US$ 33.58 billion and imports up 0.6% to US$ 32.23 billion. A deficit of US$ 619 million was recorded, with the EU marking the twenty-first consecutive month in the red, as exports gained 9.2% to 5.80 billion, and imports declined 9.0% to US$ 6.39 billion.
For the sixth straight month, China’s November one-year loan prime rate, a market-based benchmark lending rate, remained at 3.0%. The over-five-year LPR, on which many lenders base their mortgage rates, also remained unchanged from the previous reading of 3.5%.
There has been a welcome agreement for the Swiss that sees Donald Trump’s tariffs being reduced from an eye-watering 39% to 15% that also includes a deal that the Swiss promise to invest US$ 200 billion in the US, a third of which will be carried out by the end of next year. Investments will include gold refining and pharmaceuticals, along with plans for plane manufacturer Pilatus to build a big US plant, and train-maker Stadler to expand its US operations in Utah. Swiss Economics Minister Guy Parmelin noted that significant damage had been done since the additional tariffs had started in August. Swiss industry leaders followed the Prime Minister to the White House – just like the Three Wise Men – bearing gifts including a Rolex gold watch and a specially engraved gold bar from Swiss-based gold refining company MKS. Part of the deal saw Switzerland agreeing to axe tariffs on a quota of US meat exports including beef, bison and poultry.
After five months of trade declining, driven by the Trump tariffs, India’s October goods exports to the US jumped 14.5% on the month – and this despite the country having been hit with 50% tariffs, (25% – ‘normal’ – and a further 25% for buying Russian oil) that started on 27 August. The improved data came as there was a trade off with Indian state-run oil firms agreeing to import more annual liquified petroleum gas from the US and Trump exempting many farm goods from reciprocal tariffs. Last Monday, it was estimated that India’s shipments to the US had dropped nearly 28.4% between May and October, erasing more than US$ 2.5 billion in monthly export value. The first deal signed will see its state-run oil companies sourcing some 10% of the country’s annual LPG needs from the US. In 2024, even though October exports to the US moved higher, India’s overall goods exports fell 11.8% on the year, with 75% of its top twenty markets seeing a decline in bilateral trade.
Late last week, the Trump administration said import taxes on coffee and bananas will be lowered, as part of trade deals with four Latin American countries – Argentina, Guatemala, El Salvador and Ecuador. As part of an initial framework, a reciprocal tariff of 10% will stay on goods from Guatemala, Argentina and El Salvador, as will a 15% tax on imports from Ecuador into the US. But the deals will exempt products that cannot be produced in the US “in sufficient quantities,” such as coffee. Days earlier, Trump and Treasury Secretary Scott Bessent both vowed to lower coffee prices, which have jumped about 20% in the US this year, with the latter also signalling relief on tariffs on bananas and other fruits. Strangely, the world’s biggest coffee producer, Brazil is not covered by the deal. Furthermore, the administration has settled a framework agreement with Argentina on expanding access to beef markets overseas, with a deal to improve reciprocal and bilateral market access conditions for trade in beef. The soaring price of beef has been such a problem for the US President that he ordered the Justice Department to investigate the meat-packing companies over their possible role in driving up beef prices. The four agreements with Latin American trading partners are expected to be signed within the next two weeks. In recent weeks, trade agreements have been settled with the EU, South Korea, Japan, Cambodia, Thailand and Malaysia.
There was some good news on the inflation front, with the October headline rate dipping 0.2%, on the month, to 3.6% – still some way off the BoE’s longstanding 2.0% target – and an indicator that it may cut rates next month, after the budget; an early Christmas present, for many including mortgage holders, from the BoE on 18 December, could see rates 0.25% lower at 3.75%. The main drivers behind the drop were declining gas and energy prices, following changes in the Ofgem energy price cap. Meanwhile, core inflation – which does not include energy, food, alcohol and tobacco prices – fell 0.1% to 3.4%, with services inflation 0.2% lower at 4.5%. Food and drink inflation has increased by 0.4%, on the month, to 4.9%, With trade union Unite noting that “today’s figures will bring no comfort to the millions of families having to choose between heating and eating this winter. Food prices are going through the roof, with many essentials now costing a quarter more than they did three years ago and still rising”. The least Rachel Reeves can do next week is to ensure that she does nothing to push the inflation rate any higher.
The Office for National Statistics posted that the government borrowed US$ 22.80 billion last month, bringing a total borrowing of US$ 153.04 billion since the start of the year; in October, interest payments were a fraction lower, month-on-month, at US$ 11.00 billion. As a percentage of GDP, total debt now stands at 94.5% and figures like this will not help the Chancellor sleep any better, as she looks set to tighten fiscal policy in the forthcoming budget. Other bad news came with retail sales contracting, (by 1.1%), for the first time in three months. Furthermore, the closely-watched GfK consumer confidence index also slipped by a larger-than-forecast two points to minus nineteen. To make matters worse, every sub-category – covering sentiment towards savings, the economy and personal finances – fell amid fears of tax increases in next week’s budget.
The dithering Chancellor surprised the market with yet another of her now-infamous U-turns when she announced that, after weeks of speculation, she would not raise income tax in her much-anticipated budget next Wednesday, 26 November. It is reported that she had been planning a two pence hike in income tax, allied with a twopence cut in National Insurance in a bid to fill the US$ 39.6 billion (GBP 30 billion) ‘black hole’ in the public finances. The idea, espoused by the Resolution Foundation think tank, would have raised several billion pounds, mainly from non-wage income such as landlords and savings. However, it seems that the Office for Budget Responsibility has assessed that because of the strength of wages and tax receipts in the coming years was greater than first thought, this could result in the black hole declining by a third, (US$ 13.2 billion), to US$ 26.4 billion (Although it was evident that Rachel Reeves was suggesting that tax rates would have to move higher, Health Secretary Wes Streeting appeared to confirm the shift away from anything that could be seen to break election promises and negate manifesto pledges).
The bond markets were not amused and showed their displeasure, as indicated by a spike of some 0.13 points, to 4.57%, in ten-year gilts, thus pushing up the effective government borrowing costs by a potential US$ 131 million to its annual debt servicing costs; sterling weakened against major currencies. It also showed concern that other tax raising schemes – such as entrepreneurs leaving the UK and extra tax on partnerships – had been floated but pulled for fear of upsetting some stakeholder or other and simultaneously upsetting the markets who had been fooled by the Chancellor’s toing and froing. The jitters are back whilst the Chancellor will announce an extension in the US$ 52.50 billion a year freeze on tax thresholds – which would raise US$ 10.5 billion – as millions of taxpayers, with salary increases ensuring them a place in the higher tax brackets. It seems that the Prime Minister is more concerned about his reputation among his MPs rather than restoring consumer confidence in the public finances.
Even though an earlier Federal Reserve report seemed to indicate that there may not be a rate cut next month and that there had been concern of a potential AI bubble may soon burst, Asian markets rallied yesterday after Nvidia released operating figures. There had been continuous reports that stock in the global tech sector had been overcooked, and that a major correction was on the cards. However, following the release of its Q3 October results – which saw a 62% surge in sales to US$ 57 billion, driven by demand for its chips used in AI data centres which climbed by 66% to US$ 51 billion – bubble fears were somewhat allayed. Q4 sales forecasts in the range of US$ 65 billion also topped estimates, pushing Nvidia shares up by almost 4.0%. The chief executive, Jensen Huang, of the bellwether stock for the AI sector, commented that “there’s been a lot of talk about an AI bubble. From our vantage point, we see something very different”, adding that sales of its AI Blackwell systems were “off the charts” and that “cloud GPUs are sold out”. Before Nvidia figures came out, the concern that AI stocks were overvalued were manifested by four consecutive daily drops in the S&P 500 index; there were genuine fears that there could have been another similar dotcom boom/bust of the late 1990s coming into play. However, shares in the firm — which last month became the world’s first US$ 5 trillion stock — rose more than 5%, with both the S&P 500 and Nasdaq futures also moving north, as did the Asian bourses. However, despite all the upbeat news this week, this blog is of the opinion that an adjustment is all but inevitable in the near future. With the billions of dollars flooding into the nascent AI sector, returns for investors will take time to materialise, with funds being used to enhance the infrastructure needed to meet future demand. Furthermore, the money pouring into AI will take away funding from other sectors of the economy resulting in cash flow problems.
Investors in cryptocurrencies, ETFs and other related securities will be having sleepless nights, as Bitcoin sunk to US$ 80.76k by midday today, having topped US$ 124.31k on 07 October – a 35% slump in just six weeks. Some analysts see more of the same, as fear has entered the market, with the crypto Fear and Greed Index, ranging from zero to one hundred, measuring the prevailing sentiment in the sector, scores the current situation at eleven, indicating ‘extreme fear’. This is the lowest it has ever been and a long way off the twelve-month high of eighty-eight – ‘extreme greed’ – posted last November. To guess what will happen, history may help. Since 2017, Bitcoin has recorded declines of at least 25% on more than ten occasions, six drops of more than 50% and three retreats of more than 75%. This would indicate that it will recover but the problem is how low will it fall before that occurs. One thing is almost certain – at US$ 80k, Bitcoin will inevitably bounce back by at least 50% over the next six months. In times of uncertainty and volatility, Fortune Favours The Brave!
howesdubai.com 