It’s A Sign Of The Times!                                               29 March 2024

Q1 is well on course to see the Dubai real estate sector post over US$ 27.2 billion, (AED 100 billion) in sales and over 30k transactions. The first two months of the year witnessed a 30.9% increase in sales to US$ 19.6 billion and a 26.6% rise in transactions to 22.9k. There is no doubt that the promising start to the new year bodes well for another positive year for the sector, driven by government initiatives and infrastructure developments, along with significant launches from Emaar and Nakheel. It is hard to disagree with Realiste, a specialised prop-tech firm in real estate investment solutions, anticipating a 15% growth in Dubai’s real estate market this year, with its founder Alex Galt noting Dubai’s appeal in aspects such as safety, cleanliness, tourism, and overall quality as a driving force behind its anticipated rise as a global real estate hub in 2024. Its latest analysis sees specific areas within Dubai, including Business Bay Second and Palm Jumeirah, posting substantial price increases this year, further enhancing the attractiveness of real estate investments in these locales. The fact that Dubai

saw a 12% increase in enrolments, with an additional 39k students enrolling in private schools, indicates that Dubai is becoming an ever-increasing hub for growing families. One major obstacle could be affordability in the low to mid-market segment, but this could be partly offset by declining mortgage rates and easing inflation/cost-of-living, along with limited post-handover payment plans now seen in the off-plan market.

CBRE posted that “looking ahead, price growth in both Dubai’s apartment and villa segments of the market are likely to remain relatively strong; however, we do expect that the rate of price growth will taper off. In the rental market, on the back of the prevailing market fundamentals, the lack of supply and heightened demand levels, we expect that residential rents in Dubai will maintain their upward trajectory; that being said, the rate of growth will likely moderate further.” A common theme seems to be that growth will continue this year but at a slower pace. Further down the road, it is inevitable that this bull market, which is now over three years in the making, will turn. Unlike the last bear market, any downturn will be orderly and could still be some two years away.

February’s ValuStrat Price Index (VPI), 23.1% and 2.1% higher on the year and the month, registered 164.1 points. Compared to its 100 points base set in January 2021, villas were at 206.1 points, and apartments were 136.6 points. The index is meant to show updated residential capital values on a monthly basis and for Dubai’s residential rental values on a quarterly basis. On a monthly and annual basis, the apartment submarket rose by 1.9% and 18.6%, with the highest year on year capital growth in apartments posted in Discovery Gardens (30.7%), The Greens (27.9%), Palm Jumeirah (27.4%), Town Square (23.0%), and Dubai Production City (22.9%). Villa gains were more noticeable – at 2.4% and 28.0% on a monthly and annual basis. The top annual performers were Jumeirah Islands (36.1%), Palm Jumeirah (35.1%), Dubai Hills Estate (33.6%), and Mudon (29.6%). Off-plan Oqood (contract) registrations jumped 32.6% annually and 5.7% monthly, with ready home transaction volumes growing 30.5% annually and 9.0% monthly, representing a minority 36.9% share of overall February residential sales. There were twenty transactions of ready properties priced over US$ 8.17 million, (AED 30.0 million), located in Emirates Hills, Palm Jumeirah, District One, Jumeirah Bay Island, and Dubai Hills Estate.

The top four selling developers in the month were Emaar (13.3%), Damac (9.9%), Danube (7.6%), and Sobha (5.7%). Top off-plan locations transacted included projects in Jumeirah Village Circle (11.8%), Dubai Maritime City (11.4%), Business Bay (6.4%), and Bu Kadra (4.5%). The majority of ready homes sold were in Jumeirah Village Circle (9.0%), Business Bay (7.2%), Dubai Marina (5.9%), Downtown Dubai (5.8%), and Dubai Hills Estate (5.1%).

Within a few days of its launch, AHS Properties has confirmed that it had already sold 80%, (valued at US$ 681 million), of its US$ 845 million Casa Canal Interiors by Fendi Casa. The tower houses a diverse range of luxurious units, of between 4.5k sq ft – 30.0k sq ft, including exclusive boutique houses, four to six-bedroom sky villas, penthouses and sky palaces. The project was designed by Shaun Killa and interior designs will be by Hirsch Bedner Associates – HBA. Amenities will include a cigar lounge, private pools, fine-dining options, a state-of-the-art spa, wellness, and recreational arenas (yoga and beauty rooms), a screening room and a concierge/chauffeur service. The Dubai-based luxury real estate developer was founded seven years ago by Abbas Sajwani.

It is reported that Samana Developers is planning to launch eighteen projects this year, valued at US$ 3.40 billion, with contracts for all those projects being signed in 2024. The Dubai-based private real estate firm said it will launch 11k units in locations such as Arjan, Jumeirah Village Circle, Marjan, Dubailand, Discovery Gardens, Furjan, Motor City, Sports City and Meydan. By the end of last year, Samana was one of the top ten developers in Dubai – this year, it hopes to be in the top five fastest-growing firms. It is also looking at an inaugural development in Ras Al Khaimah, and “also planning a five-star hotel in Marjan island”. Samna has already appointed an advisory firm to apply corporate governance to be IPO-ready for the Dubai listing, “towards 2025-2026.”

According to Valustrat, there are now almost 25k active Airbnb listings in Dubai – a massive 227% increase from 2021’s figure of 11k; current annual average occupancy is at 56%. The agency notes that over 50% of listings are to be found in the following four locations in Dubai’s prime tourist hotspots – Dubai Marina, Jumeirah Beach Residence, Downtown Dubai and Business Bay. The average profit margin of about US$ 1k per unit each month and most will aim to build a portfolio comprising tens of properties. In 2022, Dubai was ranked as the most profitable and expensive location in the world for Airbnb landlords, according to a survey by UK-based landlord insurance company CIA Landlords. The sector is heavily regulated with anyone, with a holiday home for rental, having to register with the Department of Economic Development to get a licence from the Department of Tourism and Commerce Marketing. Each subleased property has to have permission from the owner and a move-in permit is required from each building.

Over the past twelve months, the Department of Economy and Tourism noted that it had closed down three Dubai car rental companies for violating the laws related to consumer protection rights. Ahmed Ali Mousa, director of consumer protection at Dubai’s DET, advised that “there are different categories of fines, depending on the violation, with a minimum of Dh10k, (US$ 2.72k). If the violation is repeated, the fine is doubled each time. However, we don’t wait till that time. If the violation is repeated, such companies’ offices are closed.” Recently, it issued a circular to all vehicle rental firms to return deposits of the customers, within thirty days of returning the vehicle. The RTA notes that there has been a 23.7% rise in the number of companies registered, with an increase of registered vehicles to 78k. The director also noted that the Department also penalised some car rental firms for exorbitantly charging for car washing, and advised users to ensure they have a clear contract with the company and if “they face any challenges, they are welcome to reach out to us for any protection through our call centre or website.”

An aviation company in Dubai has signed a deal with a Dutch business to bring the world’s first flying car to the Middle East and Africa. Aviterra, which will be PAL-V’s exclusive agent, will order one hundred PAL-V’s Liberty flying cars and invest in the European company; no details or delivery timetable were available. The two-seat Liberty – described as the world’s first flying car because it combines a gyroplane and a car – transforms from a road vehicle into an aircraft, within five minutes. This vehicle, which will be able to be used from home to home, can reach 100 kph, within nine seconds, and has a top speed of 160 kph; as an aircraft, it has a flight range of between 400 km and 500 km and a maximum speed of 180 kph. It can reach an altitude of 11k ft and requires an airstrip or airfield stretching at least 200 mt to take off and land. Its current price is set at US$ 799k.

Last year, the Dubai International Chamber posted a 550% increase in attracting one hundred and four SMEs to the emirate, with businesses from the ME/Eurasia and Asia/Australia accounting for 32% and 29%. Sector-wise, trade/logistics, IT – including AI, blockchain, robotics and software, food/agricultural, healthcare/pharmaceuticals and public services accounted for 17%, 13%, 10%, 9% and 7%. The total number of global representative offices operated by the Dubai International Chamber almost doubled to thirty-one last year, from sixteen a year earlier. Mohammad Ali Rashed Lootah, President and CEO of Dubai Chambers, commented that “our network of international representative offices in key global markets has effectively promoted Dubai’s business community and highlighted the emirate’s value for companies seeking global expansion.”

Formed only two weeks ago – and to coincide with the start of the holy month of Ramadan – by HH Sheikh Mohammed bin Rashid, an education fund to help disadvantaged families around the world has already raised US$ 210 million, (AED 770 million); its target is US$ 272 million (US$ 1.0 billion). The Mothers’ Endowment campaign, inspired by the role mothers play in society, was created to provide educational materials, start social programmes and equip schools. Mohammad Al Gergawi, secretary-general of Mohammed bin Rashid Al Maktoum Global Initiatives, noted it “builds upon the success of previous charity and humanitarian initiatives launched in the UAE, which helped to drive development across underserved communities through a series of sustainable programmes that improve quality of life and ensure well-being”.

Last week, the UAE Ministry of Finance announced the launch of a digital public consultation to gather the views of relevant stakeholders on the implementation of the Global Minimum Tax (GMT) or Global Anti-Base Erosion Model Rules (Pillar Two) (GloBE Rules) as well as other tax matters. The consultation will be open from 15 March to 10 April and accessible via the ministry’s website or the UAE’s Government Portal. The government is expecting a big response from all stakeholders ranging from multinational groups operating in the UAE, advisors, service providers and investors. There are two sections to the consultation – the first is to gather the views of stakeholders concerning the potential policy design options for the implementation of the GloBE Rules in the UAE, specifically the development of a domestic minimum tax. The second part of the consultation is to understand stakeholders’ views on the introduction of substance-based incentives to be applied in the UAE.

Driven by an almost doubling in its education platform and a 14% hike in healthcare, Amanat Holdings posted a 40% jump in 2023 revenue to US$ 196 million; EBITDA increased 46% on the year to US$ 75 million, with Adjusted Net Profit before Tax and Zakat 38% higher on the year to US$ 43 million. Consequently, the company was in a position to declare a US$ 14 million dividend, with additional interim dividends planned for 2024.

Dubai Electricity and Water Authority’s shareholders have approved a total dividend payment of US$ 845 million (AED 3.01 billion). The next twelve-month dividend yield is 5.0%, with reference to IPO share price of US$ 0.676, (AED 2.48), per share. Saeed Mohammed Al Tayer, MD and CEO, commented: “Dewa is committed to achieving operational excellence and sustainable growth. In 2023, Dewa’s annual revenue exceeded AED 29 billion, (US$ 7.90 billion), operating profit was over AED 8.7 billion (US$ 2.37 billion) and EBITDA was over Dh14.7 billion, (US$ 4.00 billion), all figures reflecting the highest in its history”.

At the Emirates Central Cooling Systems Corporation’s AGM, shareholders approved its board of directors’ proposal to distribute cash dividends of US$ 116 million (US$ 0.0158 per share, equivalent to 42.5% of the company’s paid-up capital). Earlier in the year, Empower had posted record annual revenue of US$ 827 million and net profit of US$ 262 million for the year ended 31 December 2023. The company was listed in 2022 on the DFM and the dividend distribution was in alignment with the company’s dividend distribution policy – to pay a minimum dividend amount of US$ 232 million per annum in the first two fiscal years; following its listing – a US$ 116 million H1 dividend was paid last October.    

The DFM opened the week on Monday 25 March 27 points (0.6%) higher the previous fortnight, shed 16 points (0.4%) to close the trading week on 4,246 by Friday 29 March 2024. Emaar Properties, US$ 0.05 higher the previous fortnight, shed US$ 0.05, closing on US$ 2.23 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 4.81, US$ 1.60, and US$ 0.39 and closed on US$ 0.66, US$ 4.77, US$ 1.59 and US$ 0.40. On 29 March, trading was at 326 million shares, with a value of US$ 114 million, compared to 275 million shares, with a value of US$ 418 million, on 22 March 2024.

The bourse had opened the year on 4,063 and, having closed on 29 March at 4,246 was 183 points (4.5%) higher. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, to close the quarter at US$ 2.23. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.66, US$ 4.77, US$ 1.59 and US$ 0.40.  On 29 March, trading was at 326 million shares, with a value of US$ 114 million, compared to 138 million shares, with a value of US$ 58 million, on 31 December 2023.

By Friday, 29 March 2024, Brent, US$ 3.46 higher (4.2%) the previous fortnight, gained US$ 1.44 (1.7%) to close on US$ 87.00. Gold, US$ 299 (11.0%) higher the previous five weeks, gained US$ 73 (3.4%) to trade at US$ 2,238 on 29 March.

Brent started the year on US$ 77.23 and gained US$ 9.77(12.7%), to close 29 March 2024 on US$ 87.00. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 164 (7.9%) to close YTD on US$ 2,238.  

Driven by an unexpected increase in US crude inventories, by 9.3 million barrels, in the week ended 22 March, on top of a two million barrel jump a week earlier, oil prices slumped mid-week, with Brent trading at US$ 85.35. The American Petroleum Institute also reported a 2.4-million-barrel rise in crude stocks – a fifteen-month high weekly increase – at the Cushing, Oklahoma storage centre, (with a capacity of ninety million barrels and accounts for 13% of total US oil storage). YTD oil prices had risen by some 11.0% due to Opec+ supply cuts and geopolitical uncertainty, and many analysts expect prices to settle around the US$ 90 level. The Opec+ alliance recently extended voluntary cuts of 2.2 million bpd into Q2 to stabilise oil markets, with every likelihood that the bloc will restore some barrels, (that could be as high as 1.5 million bpd), to the market in H2 to meet higher demand.

Probably not before time, Dave Calhoun will leave embattled Boeing by the end of the year, amid a deepening crisis over the firm’s safety record, further tarnished by an unused door being blown out on an Alaskan Airline Boeing 737 Max; in addition to its chief executive, the head of commercial activities will retire with immediate effect, whilst its chairman will not stand for re-election. The current supremo took over from Dennis Miulenburg, in early 2022, after the outcry from two brand new 737 Max planes having been lost in almost identical accidents that claimed the lives of three hundred and forty-six passengers and crew. On his appointment, he promised to strengthen Boeing’s “safety culture” and “rebuild trust”. Following the latest incident, a report from the US National Transportation Safety Board concluded that four bolts meant to attach the door securely to the aircraft had not been fitted, and to exacerbate the problem, Boeing is facing a criminal investigation into the incident itself, as well as legal action from passengers aboard the plane. In a letter to staff, he described the Alaska Airlines incident as a “watershed moment” for Boeing and it had to respond with “humility and complete transparency”. The question has to be asked if this was a “watershed moment,” what were the fatal crashes involving Lion Air and Ethiopian Airlines?

Under EU jurisdiction, justsix companies – Alphabet, Apple, Meta, Amazon, Microsoft and ByteDance – have obligations, under their 2022 Digital Markets Act, over uncompetitive practices; it is no coincidence that they are also the world’s largest tech firms. Now the EU has announced it would be investigating three of them – Meta, Apple, and Alphabet, which owns Google – for potential breaches of the DMA. If rules have been broken, fines can be onerous, with fines of up to  10% of annual turnovers. The EU said it will investigate five different possible acts of non-compliance:

• 1 & 2 – Whether Apple and Alphabet are not allowing apps to freely communicate with users and make contracts with them
• 3 – Whether Apple is not giving users enough choice
• 4 – Whether Meta is unfairly asking people to pay to avoid their data being used for adverts
• 5 – Whether Google preferences the firm’s own goods and services in search results

Another stock riding the current wave of AI optimism is Dell Technologies, with its founder and chief executive, Michael Dell, joining the likes of other tech billionaires, such as Bezos, Theil, and Zuckerberg who have been cashing in by selling stakes in their companies during the current price boom. It seems the fifty-nine-year-old, who formed the company in 1984, has been unloading his stock, to the value of US$ 465 million, for the first time in three years, this month. He still owns 50% of the company, currently valued at almost US$ 80 billion, (having gained 52.4% YTD), and is currently the thirteenth richest person in the world, with assets of US$ 99.7 billion. Maybe it is time for lesser mortals to do likewise, before some sort of reality returns to the market.

On its first day of trading, shares in Donald Trump’s media company soared past US$ 70, which then priced Trump Media’s Truth Social, at more than US$ 9.0 billion, but slipped back by the end of trading to US$ 58 – still 16.0% higher on the day. This will see Trump Media & Technology Group’s finances bolstered by a much needed US$ 200 million, with Trump’s stake currently worth more than US$ 4.0 billion; however, this comes with a caveat that many analysts say that this is far more than the firm’s performance warrants; in the first nine months of 2023, its revenue crawled to just US$ 3.3 million, with 8.9 million accounts, whilst it lost in the region of US$ 50 million; in comparison, recently-listed Reddit, with seventy million users, posted revenue figures of US$ 800 million and has an US$ eleven billion market cap.

Having been found guilty of stealing billions of dollars from customers, Sam Bankman-Fried, co-founder of the failed crypto exchange FTX, has been sentenced to twenty-five years in prison. FTX was one of the world’s largest crypto exchanges before its 2022 demise, turning Bankman-Fried into a business celebrity and attracting millions of customers who used the platform to buy and trade cryptocurrency. He was convicted by a New York jury last year on charges, including wire fraud and conspiracy to commit money laundering, after a trial that detailed how he had taken more than US$ 8 billion from customers, and used the money to buy property, make political donations and put toward other investments. There is no doubt that he got off fairly lightly, as the maximum sentence could have been for more than one hundred years.  Judge Kaplan also ordered the defendant to forfeit US$ 11.0 billion that can be used to compensate victims.

Following a review of its four hundred and fifty outlets, US-owned pizza chain Papa Johns has decided to close almost 10% of its restaurants that have been “underperforming”, having identified forty-three sites, all located in England, that were “no longer financially viable. Papa Johns had previously said it planned “strategic closures” in order to free up money for investment and improving profitability at its remaining UK sites, with plans also to expand further into non-traditional sites like holiday parks and the chain said it would “announce other large retail partners in the coming months”. With UK its second biggest market, it confirmed it was “committed to driving growth in the UK and improving results over the long term”.

Another leisure sector company, the London-listed leisure group Revolution Bars, which owns Peach Pubs and the Revolucion de Cuba chain, is also looking at closure of some of its venues – about 25% of its eighty locations – as it holds talks with investors about an emergency fundraising and also considering putting itself up for sale. This follows a period of “external challenges” which had hit trading it was “actively exploring all the strategic options available to it to improve the future prospects of the group”. When reporting on trading results in January, the company said that the Revolution brand was underperforming because the cost-of-living crisis had hit younger people harder.

Chris O’Shea is a lucky man having found out that his annual 2023 remuneration had jumped 82.2% to US$ 10.36 million, which includes an annual bonus (US$ 1.77 million) and long-term bonus, pension and benefits, (US$ 7.45 million). Most of the increase for Centrica’s chief executive, (who earlier in the year said his pay was “impossible to justify”, and a “huge amount of money” and that he was “incredibly fortunate”), came from the gas provider’s soaring share price over the past three years. In 2023, British Gas posted a tenfold increase in profits to US$ 1.04 billion after regulator, Ofgem allowed it to take a bigger slice of profits to recoup US$ 632 million it lost in the aftermath of the Russian invasion of Ukraine.

China’s third largest seller of smartphones, Xiaomi posted that it had received over 50k orders in the first twenty-seven minutes of sales of its Standard SU7 model, priced at US$ 29.9k, with the Max version selling at US$ 41.5k. Its entry into the very competitive EV market, with global sales slowing, will see Xiaomi in a price war with the big players such as BYD and Tesla, whose Model 3 retails for US$ 34.1k. SU7 will have a range of 700 km, compared to Model 3’s 567 km. The SU7 has drawn comparisons to Porsche’s Taycan and Panamera sports car models. It will be made by a unit of state-owned car manufacturer BAIC Group at a plant in Beijing that can produce as many as 200k vehicles a year, helped by a US$ 10.0 billion investment over the next decade.

2020 was a bad year for Australian/Chinese bilateral relations after Beijing imposed a series of tariffs and other economic burdens on more than a dozen Australian goods and commodities – including coal, barley, timber and lobsters – citing trade or production issues. However, other parties saw the move as a retaliatory campaign of economic coercion for political steps the Australia government had taken, including being the first Western country to bar Chinese tech firm Huawei from bidding for the country’s 5G tender and demanding an inquiry into the origins of Covid-19. This week, China has announced it will remove significant tariffs, of over 200%, on Australian wine, with the Albanese government managing to reduce other trade barriers; last August, China lifted tariffs on Australian barley. China had previously been the most lucrative market for Australian winemakers – accounting for nearly a third of all bottles shipped overseas – and despite pivoting to other markets, not all wine produced was sold so there has been a marked wine glut since 2021. It is estimated that the industry lost US$ 1.37 billion in 2021. China remains Australia’s number one trade partner and export destination for several commodities. Despite the tariff hits to certain industries – estimated to be worth about US$ 13.0 billion – the value of the China-Australia trade relationship has remained at a consistent level and trade has increased 12%. The majority of the value in the US$ 206.8 billion trading relationship comes from China’s reliance on Australian raw materials such as iron ore.

Over the past twelve months, CoreLogic’s Home Value Index has risen 8.9% – an indicator that Australian property prices continue to climb at an impressive rate; the current median dwelling value stands at US$ 208.6k – a new all-time high – and despite impressive price gains in recent years, demand continues to be robust, with little signs of a marked slowdown this year. The obvious main driver continues to be an excess of property demand over supply, with the consultancy noting that “the broad-based capital gains seen over the past year reflect the ongoing imbalance between housing supply and demand, which has helped to counteract the less favourable market and affordability conditions.” One of its market tools showed that 88.4% of the 4.63k house and unit markets analysed nationally saw values rise over the year, with Brisbane, Adelaide, and Perth witnessing the most widespread value uplift year-on-year, across both houses and units. It concluded that “positive net migration flows, low housing supply and comparatively low housing prices have all helped support widespread growth”.

On the rental side, the CoreLogic’s report also showed 94.2% of the 4.03k house and unit markets analysed recorded an annual rent rise, while nearly 40% saw rental values rise by 10% or more. Interestingly, the study noted that “over the past few years, rental growth has been skewed to capital city units, but as unit rent affordability has been eroded, some prospective tenants may be shifting towards house rentals, likely reforming larger households as a way of sharing the rental burden or to more affordable markets further afield.”

In its latest Financial Stability Report, issued this week, the RBA expects another tough year for households and businesses, but that the banking sector was well capitalised to absorb any losses from rising arrears. The RBA posted that “conditions will remain challenging for many households and businesses in Australia this year,” with many households facing financial pressure, not helped by decade-high interest rates and painful inflation. It noted that around 5% of borrowers with variable rate mortgages have had expenses exceeding their incomes, and that an expected half percentage point increase in the jobless rate would push most affected borrowers into cash flow shortfall, but not necessarily straight into mortgage default; February unemployment returned to 3.7% from a two-year high of 4.1% the month before. In a scenario analysis, the RBA found that most mortgagors and larger businesses would still be able to service debts if interest rates were to increase by another fifty bp from the current twelve-year high of 4.35%, and that less than 1% of all housing loans are ninety or more days in arrears and less than 2% of high-leveraged borrowers are in arrears. Concluding with some good news – the RBA expects pressures facing households will start to ease as inflation slows, real wages move higher and rates begin to decline, (probably in July).

The state-controlled Xinhua news agency has posted that Chen Xuyuan, a former president of the Chinese Football Association, has been sentenced to life in prison for bribery, after he recently pleaded guilty to taking bribes worth a total of over US$ eleven million. He is but one of more than a dozen coaches and players that have been investigated, as part of an anti-corruption crackdown, led by President Xi Jinping, that started with the real estate sectors and now encompasses sport, banking and the military. Chen abused his various positions as the president and chairman of Shanghai International Port Group by accepting money and valuables in exchange for his help with obtaining project contracts and arranging sporting events. The court ruling said he had brought “tremendous damage” to China’s football cause, with three other senior football officials having been sentenced to between eight and fourteen years in prison for corruption. Earlier in the year, Li Tie, an ex-Everton midfielder and former head coach of China’s national men’s soccer team, confessed to fixing matches and offering bribes to people, including Chen, to get China’s top coaching job.

Eleven years ago, the scandal of fixing the Libor and Euribor rates broke following which various banks were fined a total of over US$ 9.0 billion but rather predictably  no senior executives were ever prosecuted – in other words many picked up bonuses for what some would call dubious behaviour whilst other stakeholders, customers,  paid some years later; subsequent prosecutions in London and New York focused the blame on individual traders, with thirty-seven of them prosecuted for rate manipulation. Two of them, Tom Hayes and Carlo Palombo, both of whom have spent time “inside” before being released in 2021, were found guilty of rigging key interest rates have had their appeal against their convictions dismissed by the Court of Appeal. The convictions hinged on whether the traders acted dishonestly by influencing the setting of key Libor and Euribor interest rates, or whether it was normal practice at the time. In the US, rate rigging convictions, including for Mr Hayes, have been overturned after an appeal court said the US government had failed to provide evidence the traders had said anything false or broken any rules. However, the UK Court of Appeal said the US judgment “is not, and could not be, relevant” to the issues in English law; it also dismissed concerns that judges had decided whether their conduct was permitted, but this should have been for the jury to decide. The traders say they will now apply to take their cases to the Supreme Court. The UK is currently the only jurisdiction in the world that treats what traders did as criminal.

Despite declining falling food and fuel sales, (with the former mainly because of the month was the fourth wettest in history), February shop sales stayed flat, with clothing sales moving higher, driven by shoppers splashing out on the new season’s collections.; this has followed a lacklustre December, (down 3.2%), return, with a robust 3.6% bounce back in January. The sector is being hit by the double whammy of poor weather and challenging economic conditions., as the country recovers from the Q4 mild recession. Although Prime Minister Rishi Sunak has said the UK economy will “bounce back” in 2024, little credence should be given, as he has been proved hopelessly wrong with his previous forecasts.

Jeremy Hunt epitomises how out of touch the Sunak government is from economic reality. Last week, the millionaire Chancellor said that people on higher salaries still ‘feel under pressure’ and argued that his new tax cuts will help people on the average salary. He claimed that US$ 126k (GBP 100k), is ‘not a huge salary’ for people in his SW Surrey constituency after critics accused him of being out of touch. The Chancellor said “what sounds like a large salary – when you have house prices averaging around GBP 670k (US$ 846k) in my area and you’ve got a mortgage and childcare costs – it doesn’t go as far as you might think”. It seems that UK’s median gross annual salary for full-time employees was US$ 44.1k, (GBP 35.0k)  and in Surrey US$ 53.0k, (GBP 42.0k) – 58% lower than the Chancellor’s US$ 126k. The average punter in the UK must be asking how can politicians, with relatively huge fortunes, understand the impact of their decisions on people on the breadline? The names of some include the prime minister, Rishi Sunak, who according to The Times, was a “multimillionaire in his mid-twenties”, and his wife who claimed non-dom status for so long and did not have to pay UK tax. His family are believed to own four properties including a grade II-listed manor house in the village of Kirby Sigston, near Northallerton, in his Richmond constituency, which was bought for US$ 1.9 million in 2015 and a five-bedroom townhouse in South Kensington, London, which records show was last sold for US$ 5.7 million in 2010. He is also believed to own a flat in South Kensington in addition to a penthouse apartment with views of the Pacific Ocean in Santa Monica, California. His wife, Akshata Murty, is the daughter of the co-founder of Indian tech giant Infosys and her shares in the company are believed to be worth around US$ 543 million. Other millionaire Tories include the likes of Jacob Rees-Mogg, Nadhim Zahawi, Alister Jack and Sajid Navid.

Oji Holdings, a Japanese nappy maker, is the latest firm  to announce that  it will stop producing diapers for babies in the country and, instead, focus on the market for adults – an indicator that Japan has fast become an ageing population, where birth rates are at a record low; in the country last year, the number of babies born totalled 758.6k – 5.1% lower than the 2022 figure and the lowest number since the Nineteenth Century. In the 1970s, annual birth rates topped two million. Oji Holdings said its subsidiary, Oji Nepia, currently manufactures four hundred million infant nappies annually, compared to seven hundred million at its peak in 2001. It seems that sales of adult nappies outpaced those for infants in the country for more than a decade. the adult diaper market has been growing and is estimated to be worth more than $2.02 billion. Oji Holdings also said it would continue to make baby diapers in Malaysia and Indonesia where it expects demand to grow.

Japan now has one of the world’s oldest populations, with almost 30% of them aged sixty-five or older, and in 2023, the proportion of those aged above eighty surpassed 10% for the first time. This is creating a crisis for the Kishida government as it loses its third position in the economic world to Germany, not helped by a shrinking population.Efforts to date to address these challenges have met with little success for a variety of reasons – lower marriage rates, more women joining the workforce and the increased costs of raising children. Even the Prime Minister has noted that “Japan is standing on the verge of whether we can continue to function as a society,” adding that it was a case of “now or never”. Other Asian nations are in the same boat including South Korea, (which has the lowest birth rate in the world), Hong Kong, Singapore and Taiwan, where birth rates continue in decline. On top of that, an ageing population and the impact of a decades-long one child-policy, which ended in 2015, are also creating demographic challenges in China. It’s A Sign Of The Times!

According to panellists at JLL’s “Navigating the growth spectrum: Exploring Strategies for sustained success”, Dubai’s real estate sector is expected to continue its upward trajectory in 2024, despite a softening global outlook, and on track to deliver approximately 34k units, compared to an estimated 42k last year – an indicator that the pace of increase is slowing.  (Meanwhile, Property Monitor expects 40k units to be handed over by the end of 2024, after 100k were launched last year, with most of that total not hitting the market until the end of 2025 at the earliest). The triple factors that continue to keep the market hot are robust economic fundamentals, government initiatives, and increased investor confidence; all this in an era of continuing inflationary pressures, with escalating land prices and construction costs. The JLL experts noted that “the positive sentiment and performance of various macroeconomic indicators reflect trust and resilience both in the UAE and GCC markets, even as Dubai continues its run as a dominant force in the region’s property sector.”

Looking at other assets in the property sector, the panel noted that “buoyed by its high desirability index, residential, hospitality, and office remain the top-performing segments in the UAE. Commercial real estate represents a competitive landscape with supply-demand gaps for high-quality spaces. Core asset classes continue to generate interest in the UAE’s capital market and the aggressive pricing strategy, pursued by asset managers, witnessing prime office and hospitality yields about to break the 7.0% threshold.” In the office market, robust demand for office space continued in a sellers’ market, rents continued maintained growth, due to the limited availability of quality space, and rising inquiries from occupiers. Despite a growing preference for quality over quantity, Grade A offices were limited in supply. As a result of the introduction of progressive government visa, changing work patterns and remote working opportunities, there was a surge in demand for flex offices.

With development in the emirate’s most prime areas – including the likes of Downtown, Maritime City, Jumeirah Village Circle, Meydan City, Arjan and Business Bay – having almost reached capacity, the law of supply and demand comes into the equation which means that the prices of plots of land are heading north. An increase in land values, allied with the rise in building costs, can only have one conclusion – villa/apartment prices have to move higher. S&P analysts said that the Dubai developers’ financial health is improving “due to record pre-sales and faster cash collections,” but have warned that oversupply risks “could precipitate a cyclical reversal.” This observer notes that any slowdown is still some way off because many of the projects post Covid will have a gestation period of thirty months optimum and the majority will only be ready for hand off late 2025-early 2026. Whether the cooling off takes place then will depend on several factors – the population growth, the increase in the number of short-term lets, the number of two-home families, people working in Dubai and currently living in other emirates deciding to move because of the daily ‘traffic carnage’ and the rise of overseas, (and indeed local), investors.

Dubai’s Department of Economy and Tourism posted that in January, the emirate’s hotel revenue reached US$ 560 million – 16.5% higher than a year earlier. In the month, the total number of hotel nights reached 3.84 million, up 10.5% on the year, and the average return per room was US$ 146.

Under the directives of HH Sheikh Mohammed bin Rashid, Nakheel and Meydan are set to become part of Dubai Holding, under the leadership of HH Sheikh Ahmed bin Saeed in an effort to sustain and advance growth through a unified and integrated vision that builds on gains, spurs efforts and boosts Dubai’s global competitiveness. The Board of Directors of both Nakheel and Meydan Company will be abolished. The Dubai Ruler noted that “today we directed the inclusion of Nakheel and Meydan companies under the umbrella of Dubai Holding, forming a global economic entity with a diverse portfolio in sectors such as technology, media, hospitality, real estate, retail, and more”. He added, “The goal is to create a more financially efficient entity, owning assets worth hundreds of billions, and comprising global expertise across various sectors with which we can compete regionally and globally, achieving our national objectives, and realising the Dubai Economic Agenda D33”.

Established twenty years ago, Dubai Holding’s portfolio includes Jumeirah Group, Dubai Properties, Tecom Group, Arab Media Group, Dubai International Capital, Dubai Group, EITC, Meraas, Wild Wadi Waterpark, The Emirates Academy of Hospitality Management and Dubai Park & Resorts. Investments and joint ventures under the Dubai Holding portfolio include Dubai Hills Estate, du, Rove Hotels, and Dubai Waste Management Centre. It has always targeted to create an innovation-driven knowledge-based economy. Today, it has assets valued at US$ 32.4 billion across twelve nations. Tecom Group alone owns and operates ten sector-focused business clusters, with Dubai Internet City and Dubai Media City being the flagships with the other eight being Dubai Outsource City, Dubai Studio City, Dubai Production City, Dubai Knowledge Park, Dubai International Academic City, Dubai Science Park, Dubai Industrial City and Dubai Design District (d3). Projects under Meraas Holding and Merex Investment – a joint venture with Brookfield Asset Management – are also partly under the Dubai Holding umbrella. These include City Walk, La Mer, and Bluewaters Island.

Sheikh Hamdan bin Mohammed, chairing the first meeting of the reconstituted Executive Council of Dubai since its reconstitution, approved a portfolio of PPP projects of the Dubai Government valued at US$ 10.90 billion. Encompassing a gamut of projects, as part of its PPP strategy, the new portfolio targets to further enhance cooperation and inspire new collaborations between the Dubai public and private sectors; its main ambitions are for Dubai to become a strong, vibrant hub for global economic development and a platform for emerging sectors. Over a three-year period, until 2026, the new PPP projects portfolio will cover ten fundamental economic sectors. The Department of Finance (DoF) has built a comprehensive performance framework programme to ensure accurate management of the PPP ecosystem performance,  revolving around five strategic objectives:

• ensuring compliance with the PPP Law, policies and guidelines throughout the partnership lifecycle
• encouraging government entities to adopt the PPP model
• encouraging private sector participation in public sector projects
• stimulating innovation in project financing, development and operation through private sector participation
• pushing towards the adoption of environment, social and governance

practices in the PPP ecosystem

Over the past year, the Central Bank of the UAE has overseen record levels of growth in assets, credit, deposits and investments, and maintained strong levels of capital efficiency, provisions and reserves, to ensure compliance with the highest standards of governance, transparency and risk management.  All the cumulative indicators, year on year, for banks operating in the country have headed north:

Total Assets                                     11.1%                                 US$  1.11 trillion
Gross Credit                                       6.0%                                 US$ 542.78 billion

Total of all Deposits                          13.5%                                 US$ 687.19 billion
Aggregate Capital/Reserves               5.2%                                  US$ 133.16 billion

Total Capital Adequacy Ratio             17.9%

Foreign Assets of the Central Bank    16.7%                                 US$ 185.61 billion

Liquid Assets                                         29.0%                                 US$ 202.18 billion

Tier1 Capital Adequacy Ratio               16.6%
CET 1 Capital Ratio                                14.9%

It expects that there will be further growth this year, with the upward momentum continuing, despite all the global geopolitical and economic challenges and changes.

Money Supply M1, which comprises Currency in Circulation outside Banks (Currency Issued – Cash at banks) plus Monetary Deposits, increased by 12.4% to US$ 225.97 billion. Money Supply M2 (M1 plus Quasi Monetary Deposits (Resident Time and Savings Deposits in Dirham, plus Resident Deposits in Foreign Currencies), grew by 18.8% reaching US$ 551.34 billion. Money Supply M3 (M2 plus government deposits at banks and at the Central Bank) rose by 16.0% at US$ 666.27 billion.

Following an independent 2019 investigation that found that NMC had not reported more than US$ 4.0 billion in debt, UAE-based hospital operator, NMC Healthcare, was placed into administration in April 2020. Almost four years later, it has signed an out-of-court settlement with Dubai Islamic Bank to resolve all ongoing and pending legal disputes between them and any associated third parties. Details of the agreement were not disclosed but it appears that DIB will receive a cash consideration and Holdco notes to settle certain claims, which will entitle the bank to become an economic owner of NMC Holdco, NMC Healthcare’s new holding company. NMC Holdco owns the restructured NMC operating companies through its wholly owned subsidiary, NMC Opco, which owns and runs eighty-five healthcare facilities in the UAE and the ME region. Legal claims were filed in the UK and Abu Dhabi against NMC founder BR Shetty, M Prasantanghat and the Bank of Baroda, in a US$ 4 billion case alleging fraud.

Borse Dubai, the holding company for the DFM and Nasdaq Dubai, and owned by the Investment Corporation of Dubai, is to sell about twenty-seven million shares, at US$ 59 a piece, in a secondary offering, with the holding company of the DFM selling almost a third of its stake in Nasdaq, the New York-based exchange operator for US$ 1.59 billion. Borse Dubai will receive all of the proceeds from the secondary offering, and the transaction remains subject to market conditions, and on conclusion, it is expected to hold about 62.4 million shares, equating to 10.8% of Nasdaq; it has also agreed to an eighteen-month lock-up of its remaining stake. Borse Dubai invested in Nasdaq in 2008, as part of a complex deal, where Nasdaq acquired the Dubai company’s shareholding in Sweden’s OMX.

On its opening day of trading on Thursday, shares of Parkin debuted on the DFM and saw its value soar by 30.0% from its opening of US$ 0.572, (AED2.10), to US$ 0.744, (AED2.73); thirty-six million shares changed hands; it closed the week on US$ 0.755, (AED 2.77). The company was established last year to oversee parking operations in the emirate. The Dubai Investment Fund had sold 749.7 million ordinary shares of Parkin, 24.99% of the total issued share capital, in the IPO which closed on 14 March, with the final offer price implying a market cap of US$ 1.72 billion; its IPO was oversubscribed by 165 times.

 The DFM opened the week on Monday 18 March 9 points (0.2%) higher the previous week, gained 18 points (0.4%) to close the trading week on 4,262 by Friday 22 March 2024. Emaar Properties, US$ 0.01 higher the previous week, gained US$ 0.04, closing on US$ 2.28 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.66, US$ 4.85, US$ 1.57, and US$ 0.36 and closed on US$ 0.67, US$ 4.81, US$ 1.60 and US$ 0.39. On 22 March, trading was at 275 million shares, with a value of US$ 418 million, compared to 424 million shares, with a value of US$ 201 million, on 15 March 2024.

By Friday, 22 March 2024, Brent, US$ 3.46 higher (4.2%) the previous fortnight, gained US$ 0.17 (0.2%) to close on US$ 85.56. Gold, US$ 217 (7.1%) higher the previous four weeks, gained US$ 82 (3.9%) to trade at US$ 2,083 on 22 March.

Hui Kaa Yan and Evergrande, the Chinese property giant he founded, have been accused of inflating revenues by a massive US$ 78 billion in the two years before the firm defaulted on its debt. The China Securities Regulatory Commission has fined the company’s mainland business, Hengda Real Estate, US$ 584 million, and its owner over US$ 6 million, and laid much of the blame on him for allegedly instructing staff to “falsely inflate” Hengda’s annual results in 2019 and 2020. Last September, Mr Hui, who was once the richest person in the country, was put under police surveillance, as he was investigated over suspected “illegal crimes”, and, in January, the company was ordered to liquidate by a Hong Kong court. With a debt totalling over US$ 300 billion, the liquidators will investigate Evergrande’s overall financial position and identify potential restructuring strategies. Normally this would involve, inter alia, selling off but it is highly likely that this will not happen, as the Chinese government may be reluctant to see work halt on property developments in the country, where many would-be homeowners are waiting for homes, they have already paid for. The other factor to bear in mind is that the property sector accounts for over 33% of the Chinese economy and, if that were to see a major slowdown, it would have a knock-on effect not only on the domestic, but also the global, economy. The building sector has had major liquidity problems, ever since 2021, when authorities introduced measures to curb the amount big real estate developers could borrow. Latest data indicate that property investment in China fell 9% in January and February from a year ago, whilst new construction starts also dropped by 30% – their worst fall in more than a year.

The US Department of Justice is suing Apple, accusing the tech giant of maintaining an illegal monopoly on smartphones, with the lawsuit citing five examples of Apple suppressing technologies that would have increased competition – so-called “super apps,” cloud stream game apps, messaging apps, smartwatches and digital wallets. Attorney General Merrick Garland described the company’s behaviour as “exclusionary, anticompetitive conduct that hurts both consumers and developers”, and that “they stifle innovation, they hurt producers and workers, and they increase costs for consumers”. Apple’s share of the US smartphone market is at a stifling 65%. It claims that Apple encourages banks to participate using their digital wallet but at the same time “exerts its monopoly power” to block them from developing similar products for iPhone users. The lawsuit also adds if an iPhone user messages a non-iPhone user through Apple Messages, the text is only a green bubble, it is not encrypted, videos are pixelated, and users cannot edit messages or see typing indicators. Apple is also in the headlights of the EC regulators who are expected to announce investigations in the coming days into whether it has breached Europe’s Digital Markets Act. Apple shares were down 3.5% in US morning trading.

Following the release of its latest B200 “Blackwell” AI chip, which is thirty times speedier at some tasks than its predecessor, it is almost certain that Nvidia the firm will increase its already 80% dominant market share. Furthermore, the firm, which is the third-most valuable company in the US, behind only Microsoft and Apple, has seen its share value surge 240% over the past twelve months when its market value touched US$ 2.0 trillion in February. Nvidia said major customers, including Amazon, Google, Microsoft and OpenAI, are expected to use the firm’s new flagship chip in cloud-computing services and for their own AI offerings. It has also outlined a new series of chips for creating humanoid robots, as it enters a period of intense competition, from the likes of AMD and Intel, but noted that “even if Nvidia loses some share, they can still grow their overall business because there’s just a lot of opportunities for everybody”.

In a class action brought on behalf of over 8k Australian taxi and hire car owners and drivers, Uber has agreed to settle a lawsuit, valued at US$ 178 million. The class action, filed in 2019, alleged they lost income when the ride-hailing giant “aggressively” moved into the country. The law firm, Maurice Blackburn, noted that “Uber fought tooth and nail at every point along the way,” and that “this case succeeded where so many others have failed”.   .   .   . “what our group members asked for was not another set of excuses – but an outcome – and today we have delivered it for them.” The court still needs to approve the proposed settlement as being in the best interests of group members. The San Francisco-based Uber, founded in 2009, operates in around seventy countries and more than 10k cities globally.

The German Football Association’s (DFB) has decided to switch the supplier of the national team’s kit to US firm, Nike as from 2027. Its previous kit supplier was the German company Adidas, who had been its supplier for the past seventy years. Although many politicians and the German footballing world appeared stunned with the news, the DFB said the deal made financial sense and would support grassroots German football. Reports indicate that the Nike offer of US$ 108 million a year was more than double that of its German counterpart. Adidas will now be looking over their shoulder and becoming concerned about their fifty-year link with FIFA going the same way.

Whilst sales at rivals, LVMH and Hermès, remain resilient as they both post higher than expected 2023 sales, Kering, the owners of Gucci, is expecting Q1 sales to be 20% lower because of a slowdown in Asia, especially in China which accounts for 33% of its total revenue. The overall sector has grown over the past decade, but recent sales have not been as impressive. Kering, whose other brands include Yves Saint Laurent, Balenciaga and Bottega Veneta,  has noted that its profit warning “reflects a steeper sales drop at Gucci, notably in the Asia-Pacific region”. With annual 2023 profits having fallen by 17%, it was no surprise to see its share value had also slumped – by 23%. Last year, Kering overhauled Gucci’s top management by appointing Jean-François Palus as its chief executive officer and Sabato De Sarno as its creative director; 2024 will see whether this will result in improved financials.

There are reports that Ted Baker is heading for administration, as it commented that “damage done” during a tie-up with another firm was “too much to overcome”. It seems that No Ordinary Designer Label (NODL), Ted Baker’s holding company in the UK and Europe, had “built up a significant level of arrears” during a tie-up with Dutch firm AARC. The partnership with AARC, which ran Ted Baker’s shops and online business in Europe, ended in January. Authentic Brands Group, the Ted Baker brand owner since 2022, confirmed it will continue to trade and customer orders will be fulfilled, and that it was in “advanced discussions” with several potential buyers.  Authentic, which owns brands including Reebok, Hunter and Juicy Couture, as well as licensing agreements in place for stores in cities in Asia and the ME, bought Ted Baker two years ago in a US$ 268 million deal. Although Ted Baker “will continue to trade online and in stores, “there are no indications about the future of its almost 1k staff numbers and its forty-six stores.

As part of an extensive three-year cost-saving plan, Marmite and Dove soap-owner Unilever is planning to cut global staff  numbers by 7.5k, (out of a total of 128k), and that it would split off its ice cream business which includes the Wall’s, Ben & Jerry’s and Magnum brands which will start immediately and should be completed by the end of next year. The redundancies will primarily involve office staff and is expected to save US$ 868 million over the next three years. The company chairman noted that “the separation of ice cream and the delivery of the productivity programme will help create a simpler, more focused, and higher performing Unilever,” and “it will also create a world-leading ice cream business, with strong growth prospects and an exciting future as a standalone business.” There appears to be two options available – either a demerger, which would mean current shareholders receiving shares in a newly listed entity, or a direct sale.

There are reports that London-listed Naked Wines has hired Interpath to advise it on options for its debt facility, after a share price slump, in the midst of tough trading conditions. Over the past twelve months, its shares have slumped by over 30%, giving it a market cap of of around US$ 63 million. Last month, it named Rodrigo Maza, its UK chief, as its new group CEO, reporting directly to the company’s founder and chairman, Rowan Gormley. The company, which, works with hundreds of independent winemakers and has nearly one million customers, is confident that it will be able to “to secure a similar-sized facility that has less limitation on utilisation and more flexible covenants”.

Thames parent company, Kemble Water, has seen accounting experts appointed by a group of its creditors to advise them how to recover US$ 242 million owed by the water company. The debt is held by the UK’s biggest water utility, with fifteen million customers, and falls due next month. Some reports indicate that a syndicate of financiers, which is owed the sum by Kemble Water, under which Thames’s regulated operations sit, has drafted in a big four accountancy firm amid growing concerns about the company’s survival; last December, the utility’s senior management told a MPs’ hearing that it was “not currently” able to repay the funding. In recent times, it has been beset by problems because of the “generous” dividends given to shareholders, poor record on leaks, sewage contamination and executive pay. It thinks that a 40% hike in consumer bills, and a delay in its capex plans, may help with payments.

Marks & Spencer is close to a deal with HSBC, whose UK arm owns M&S Bank, to overhaul its banking arm as a financial services and loyalty ‘superapp’. Their current contract expires shortly and there is hope that a new deal can be put in place before then. M&S Bank has more than three million customers, offering personal loans, travel insurance, store payment cards and a buy now pay later credit product. Under the existing agreement, M&S is entitled to a 50% share of the bank’s profits, subject to certain deductions. The retailer’s long-term target is to set up a ‘superapp’, encompassing payments, financial services and its Sparks loyalty programme. This announcement comes weeks after both Sainsbury’s and Tesco pulled out of the banking sector. The former’s advisers are still seeking a buyer, whilst Tesco is in line to sell its bank to Barclays in a deal worth an initial US$ 764 million.

The US central bank has left its key interest rate unchanged again, at the range of 5.25% – 5.50%, while it looks for more evidence that inflation is coming under control. Many other central banks – including the CBUAE, BoE, ECB and RBA – did likewise, but Turkey pushed rates up 5% to 50% whilst the like of Egypt and Nigeria saw their rates rising above 20%. Noting that it would expect to cut rates sometime this year, the Fed is proceeding cautiously and will wait until it is sure that the economy is growing, the labour market strong and inflation continues to head south. To date, despite high interest rates, the US economy has performed well – compared to many others – with its 2024 forecast 50% higher, at 2.1%, compared to the previous estimate last December at 1.4%. Furthermore, it is quickly heading to its inflation target rate of 2.0%, with officials expecting the rate to fall to 2.4% by year-end; last month, it nudged 0.1% higher to 3.2%.

For the first time since 2008, Japan’s central bank has raised the cost of borrowing, by increasing its key interest rate from -0.1% to a range of 0%-0.1%. It comes as wages have jumped after consumer prices rose. It also abandoned a policy, (started in 2016 when negative rates were first introduced), known as yield curve control, which saw it buying Japanese government bonds to control interest rates; this policy has for long been criticised because it kept long-term interest rates from rising. Earlier in the month, Japan’s biggest companies agreed to raise salaries by 5.28% – the biggest wage hike in more than three decades – which had resulted in wages flatlining since then, as consumer prices rose very slowly or even fell. This month, the country had avoided falling into a technical recession after its official economic growth figures were revised upwards to 0.4% in Q4.

Last Monday, Pakistan’s central bank held its key interest rate at 22.0% as inflation risks continued to loom; rate cuts are expected to commence in Q2. Inflation hit a record high of 38.0% last June, mainly attributable to new taxation measures imposed to comply with the IMF’s demands for a rescue programme. In January 2024, the central bank had raised the average inflation forecast for the fiscal year ending in June to 23%-25%, from a previous projection of 20%-22%, due to rising gas and electricity prices. The inflation rate last month rose 23.1%, on the year, its slowest since June 2022, partly due to the “base effect”. But the bank noted that it still remained high and subject to risks. The State Bank of Pakistan’s (SBP) monetary policy committee has taken a cautious approach and is looking at bringing “inflation down to the target range of 5–7% by September 2025.” Next month sees the expiry of a US$ 3.0 billion standby arrangement with the IMF.

The UK Office for National Statistics Government posted that February borrowing, at US$ 106.25 billion, was higher than expected, (but lower by US$ 4.30 billion than the same month in 2023), partly due to higher benefits payments such as cosy-of-living support, but also offset by growth in tax receipts exceeding growth in spending. Last month, public debt equated to 97.1% of the country’s GDP, which remains at levels last seen during the early 1960s. Despite a key government pledge that debt should fall as a percentage of GDP over the next five years, according to the Office for Budget Responsibility (OBR) – an independent body that looks at the government’s plans on tax and spending – that pledge is on track to be met, debt is forecast to keep rising until 2028-29.

UK February price rises eased 0.6%, on the month, to 3.4% – its lowest level since September 2021 –  and by more than the much anticipated 3.6%, raising expectations that the BoE may start cutting interest rates sooner than expected, probably by July at the latest The Office for National Statistics noted that easing food price inflation was largely behind the fall and although it has recovered well from its December 2022 high of 11.0%, led mainly by surging energy costs, it is still above the central bank’s 2.0% target In line with others, the BoE raised interest rates aggressively in late 2021 from near zero to counter price rises first stoked by supply chain issues during the coronavirus pandemic and then the Ukrainian crisis, which pushed up food and energy prices The BoE was extremely slow to tackle the problem of inflation and came late in the day to the party by being almost forced to raise rates which have eventually contributed to bringing down inflation worldwide.

The Tax Office is chasing more than US$ 22.31 billion (AUD34 billion) worth of debts owed by small businesses and self-employed Australians; these had been put on hold during Covid. Sometimes, using aggressive enforcement action to collect the money, the ATO is pushing some businesses over the edge, with the inevitable result of a marked rise in insolvencies, which could top levels last seen during the 2008-2009 era of GFC. The rate of company insolvencies in the past financial year is tracking 36% higher than last year and 25% higher than pre-Covid levels; over the past four months alone, they are now 49% higher than last year. These actions include the agency reporting tens of thousands of small businesses with debts to credit reporting agencies, issuing garnishee notices, which can result in the money being taken directly out of a business owner’s bank account, and the agency initiating wind-up applications. Many have been also hit by the double whammy of a slowing economy, including construction, hospitality and retail, and the fact that they still owe other creditors, apart from the ATO. Total collectable debt owed to the ATO jumped 98.5% to US$ 34.35 billion as of December 31, 2023, compared to the same period four years earlier in pre-Covid 2019. Small business account debt accounts for US$ 22.35 billion of total collectable debt. One thing is certain, Australia is the last place to think What If We All Stopped Paying Taxes?

The Way It Is!                                                 15 March 2024

Muhammad Binghatti, CEO of Binghatti Holding, has given three important reasons why the Dubai property sector continues to expand, with him expecting average prices increasing by 14.0% this year.  They are population growth, (probably by 3.0% plus in 2024), higher demand for mortgages, due to an expected drop in interest rates, and more international millionaires investing in Dubai property. The 2024 Dubai market rally is entering its fourth year and is still ongoing, albeit at a slower pace, maybe with the exception of the ultra-luxury sector. Dubai’s property market rally that started after the Covid-19 pandemic will continue in 2024 also, but the pace is likely to slow down as the market matures. Residential property prices reached their peak in 2023 as both apartments and villas set  new records. The rally is mainly driven by the ultra-luxury segment on the back of a very strong inflow of high-net-worth individuals into Dubai and the growing popularity of luxury branded residences in the emirate.

The introduction of the ten-year visa by Dubai authorities has had a surprise impact on the emirate’s property sector, more so after banks dropped the requirement of a minimum down payment of US$ 272k (AED 1 million). It seems that many property developers are increasing the size of apartments to accommodate the growing demand for US$ 545k, (AED 2 million) residences which is the minimum requirement to be eligible for a Golden Visa; this is irrespective of the down payment and the property’s status (whether off-plan, completed, mortgaged, or not). Investors, with US$ 409k investments, are increasing their budget to reach the ten-year residency eligibility threshold. Since it was first introduced in 2019, foreign investment in realty has increased markedly.

As demand for Dubai ultra-luxury properties continues to soar, Arista Properties has launched a US$ 136 million project, designed by HBA Architects, in Wadi Villas, located in Mohammed Bin Rashid Al Maktoum City, District 11, Meydan.  The development will only have thirty villas, ranging from 4 B/R to 6 B/R, with prices from US$ 3.8 million to US$ 10.9 million; completion is slated for 2026. The gated community’s amenities will include a co-working lounge, café, concierge services, 24/7 security, maintenance, CCTV surveillance, visitor’s driver lounge, rainforest boardwalk, private parking, infinity lap pool clubhouse, fitness centre, games room, library and indoor/outdoor kids’ play area. Additionally, each villa features an elevator, private pool and patio BBQ terrace.

With a 3.4% year-on-year growth in occupancy levels, Dubai hotels attained 90.8% last month; other metrics also moved north – including average daily rate and revenue per available room up 9.3% to US$ 241 and by 13.1% to US$ 219. Between 20 – 22 February, occupancy, ADR and RevPAR reached 96.2%, 96.8% and 96.5% respectively, with daily occupancy levels in the market remaining above 80% throughout the entire month. The daily room rate increased on 21 February, reaching US$ 304. Three of the many events held last month, that contributed to these impressive numbers, were the Gulfood exhibition, the FIFA Beach Soccer World Cup and the Dubai Duty-Free Tennis Championships.

GlobalData’s latest report shows that the UAE construction market size was valued at US$ 94 billion last year, with the UK-based data analytics and consulting company forecasting that AAGR growth will be more than 3.0% between 2025-2028. It noted that the growth was more than assisted by an increase in investments in transport and renewable energy infrastructure, with improvements in the EV market. There was no surprise to see that residential captured the highest share of the UAE’s construction market last year, which indicated that the real estate sector continued its growth momentum, with expectations that the sector will maintain good growth rates during this year.

There was a marked improvement in new order volumes that helped February’s S&P Global Dubai Purchasing Managers’ Index to move 1.9 higher, on the month, to 58.5 in February – its highest level since May 2019, and its joint-strongest reading since 2015. The rise in Dubai’s non-oil private sector activity was also helped by favourable market conditions and a positive response to greater sales efforts. The PMI is derived from individual diffusion indices which measure changes in output, new orders, employment, suppliers’ delivery times and stocks of purchased goods. David Owen, the body’s senior economist, noted that “that the Dubai non-oil sector is one of the fastest growing worldwide according to global PMI data. Output and new order volumes are proving especially robust, with companies reporting new clients, higher demand and a still improving economy post-pandemic”. The economy’s growth will continue its upward momentum well into 2024, driven by slowing inflation, the fact that the UAE was removed from the FATF’s grey list, which will inevitably facilitate foreign currency exchange and boost FDI, and lower interest rates.

There are numerous issues that UAE consumers face with banks and insurance companies, from being overcharged fees to more serious problems such as financial fraud and the mis-selling of financial products. Now the government has come to their assistance. Last week saw the introduction of Sanadak, the UAE’s first ombudsman, with its prime raison d’etre being to resolve consumer issues, within the financial sector, by lodging complaints against banks and licensed insurance companies, directly to the new body. This will remove the current requirement to take claims to court and judicial authorities. Fatma al Jabri, the first chairman of Sanadak, noted that “the UAE is paving the way for a more coherent financial landscape where complaints are resolved efficiently and transparently, fostering an environment of trust and stability,” and “that is independent in the Mena region, setting the benchmark for consumer production and financial preparedness.” The previous process was that consumers were first required to lodge a complaint with their bank, and if they did not receive a response within thirty days or were not satisfied with the reply,  consumers could only escalate their complaint with the UAE Central Bank’s Consumer Protection Department if the bank had not responded to a complaint, within thirty calendar days, or if they were not satisfied with the outcome. Now consumers can submit complaints, free of charge, for any product, service or offering provided by financial institutions and licensed insurance companies. If the complaint is accepted – there are a number of eligibility criteria listed on the website such as misleading, deceptive, fraudulent or unfair conduct by, or on behalf, of a licensed financial institution or insurer – Sanadak may require parties to provide more information. If not satisfied with the decision, consumers can appeal the decision at a cost of US$ 136. It will also work with financial institutions and insurance companies to ensure they comply with consumer protection standards.

HH Sheikh Mohammed bin Rashid, in his capacity as Ruler of Dubai, issued Decree No. (13) of 2024 on the Unified Digital Platform for establishing companies in Dubai. Its main aim is to integrate various licensing processes in Dubai, including those managed by the Department of Economy and Tourism, the Authorities of special development zones and freezones, including the Dubai International Financial Centre (DIFC), and other relevant entities – and forms part of Dubai’s efforts to enhance its business environment and advance economic growth. It hopes to offer a streamlined channel for accessing information, obtaining licenses, and availing other services related to economic activities, and introduced for the benefit of the end-user, the investor. It also seeks to enhance electronic integration between licensing departments and other key entities to avoid duplication of procedures and supports Dubai’s digital transformation in line with the objectives of the Dubai Economic Agenda D33 to establish the city as a leading global digital economy hub. Furthermore, Resolution No (5) ensures that all licensing entities and federal and local entities, tasked with regulating and supervising business activities in Dubai, are responsible for facilitating a smooth journey for investors in Dubai and implementing the procedures required to facilitate this. It also outlines various measures to provide a smooth experience for investors including registration on the ‘Invest in Dubai’ digital platform, unified digital data registration, instant licensing, instant license renewal, one-step fee payment, streamlining of licensing requirements, and the standardisation of procedures, rules and conditions. The Decree stipulates that the Department of Economy and Tourism is responsible for operating, managing and developing the ‘Invest in Dubai’ platform in collaboration with relevant licensing bodies, in line with the digital transformation guidelines set by the Dubai Digital Authority.

The UAE and Hungary have signed an economic cooperation agreement aimed at stimulating trade and investment flows in priority sectors of mutual interest, aiming key sectors such as industry, commerce, investment, tourism, logistics, infrastructure and real estate. Since 2019, non-oil bilateral trade has more than tripled, and last year by 23.1%, to US$ 1.13 billion. As per the agreement, a joint committee will be established to facilitate and oversee economic engagement, developing mutually beneficial programmes and initiatives, while also establishing a mechanism to oversee their successful implementation.

Eagle Hills, which is chaired by Mohamed Alabbar, has been selected by the federal government to work on a US$ 6.3 billion mixed-use property project in Budapest which may increase to US$ 10.9 billion in later phases. This follows the signing of the agreement between the UAE and Hungarian governments. The Minister of State, Dr Thani Al Zeyoudi, confirmed that “this is a government-to-government agreement which laid out the foundation for companies like Eagle Hills to come in and do huge investments in the property development sector in Hungary.” The Budapest project is “comprehensive”, featuring residential and commercial towers, with the Hungarian government planning to connect the district with the railway network and direct access to the airport. The project should take a “couple of years” to complete but the emphasis now is on finalising the business terms between Eagle Hills and the Hungarian government.

January saw a 29.0% hike in Dubai’s lifestyle business to over US$ 272 million, as the emirate welcomed 1.77 million international tourists in January 2024, an increase of 20.4%, compared to a year earlier. The top three source markets – accounting for 52.7% of the total – were Western Europe, the GCC and South Asia, with totals of 327k, 311k and 294k. Last year, Dubai World Trade Centre welcomed 2.47 million participants – a 25% increase on the year, as the number of MICE (Meetings, Incentives, Conferences and Exhibitions) events was 23% higher at three hundred and one. There were one hundred and seven Exhibitions and International Association Conventions and Industry Conferences, which attracted 1.56 million attendees – 33% up on the year – of which 46.3%, (722k), were from overseas, a massive 60% increase from 2023. The events saw a 45% increase in the number of exhibitors to 53.8k – 78% of which were from overseas. 850k attended the thirty-five entertainment, live, and leisure events. Figures like these go a long way to helping the D33 Agenda achieve the emirate’s aim to be in the top three global economic cities by 2033. There were thirty-three new entrants in 2023’s calendar of events – seventeen Exhibitions, nine International Associations Conventions and seven conferences, collectively attracting nearly 95k participants and over 2k exhibiting companies. They included World of Coffee, World Police Summit, International Federation of Oto-Rhino-Laryngological Societies – IFOS 2023, Seatrade Maritime Logistics Middle East and Asia Baby Children Maternity Exhibition. The top-performing industries in 2023 were the Healthcare, Medical, and Scientific sector, with twenty-four events, (including AEEDC and Arab Health), that attracted 275k attendees, the Information Technology sector, attracting 260k attendees, dominated by GITEX Global and its associated events and the Food, Hotel, and Catering sector, attracting 226k attendees, led by Gulfood and Gulfood Manufacturing.

DWTC Authority Free Zone issued six hundred and one new licenses last year, bringing its total to 1.9k – an indicator of its pivotal role in driving economic growth and entrepreneurship in Dubai. It is the emirate’s leading driver of global competitiveness, known for fostering innovative SMEs. Its real estate and asset management business performed well in 2023, with the stand-out being One Central, its flagship development, registering a 95% occupancy rate.

The emirate’s first stand-alone free zone, dedicated exclusively to digital commerce, Dubai CommerCity, is a JV between Wasl Properties and the Dubai Integrated Economic Zones Authority. Last year, it registered record growth in its digital trade operations and transit portal, with increases of 56%, 158% and 92% posted for the volume of goods processed through its transit platform, DCC Way, the number of orders fulfilled via its digital trade platform and the increase in goods shipping operations from distribution centres facilitated by its digital trade platforms. Its VP of Operations, Abdulrahman Shahin, noted that “these achievements further underscore Dubai’s standing as a regional pivotal economic hub and a leading logistics centre, aligning with the objectives of the Dubai Economic Agenda D33, which aims to double Dubai’s GDP and attract foreign direct investment.” The free zone, spanning an area of 2.1 million sq ft, provides a competitive digital trade system, innovative solutions, advisory services on sector regulations, integrated logistics solutions, including warehousing and last mile delivery solutions, integrated digital trade platform solutions, digital marketing services, and other support services.

Preliminary data from the Ministry of Finance indicate that the UAE Q4 government’s revenue rose 8.0%, to US$ 42.5 billion, on the year, as it continued to diversify its sources of revenue. The Q4 total expenditure – comprising net investment in non-financial assets and current expenses, consumption of fixed capital, paid interest, subsidies, grants, social benefits and other transfers – also rose, by 9.1%, to US$ 35.8 billion. The value of the government’s net lending/net borrowing – an indicator of the financial impact of government activity on other sectors of the economy – amounted to US$ 6.7 billion. The Ministry of Finance’s Younis Al Khoori added that “the UAE government is keen to diversify its revenue sources, while also ensuring optimal use of financial resources and improved efficiency of government spending.”

Al Etihad Credit Bureau posted that, last year, the number of bank loans and credit cards, issued by banks and financial institutions operating in the country increased, by 3%, to reach 2.52 million contracts (loans and credit cards). The number of active contracts (loans and cards) reached 9.8 million contracts at the end of December 2023, with an increase, year on year, of 10.1%. Its database has records of 16.6 million individuals and companies, including 7.1 million borrowers (individuals and companies), of which 4.2 million are active borrowers (individuals and companies). The number of individual borrowers reached 3.99 million clients, while the number of borrowing companies topped 189k, in addition to 1.7 million companies in the records of the AECB.

Majid Al Futtaim posted a 12.0% hike in net profit to US$ 740 million, with revenue nudging 1.0% higher to US$ 940 million, driven by strong property and entertainment businesses; EBITDA rose 12.0% to US$ 1.25 billion, as total assets increased 5.4% to US$ 18.99 billion. Despite the economic problems, especially involving currency devaluations in in Egypt, Lebanon, Pakistan and Kenya, and the general turmoil in the geopolitical environment, the company is “confident in our ability to navigate the path ahead while delivering value to our stakeholders in 2024 and beyond.” Founded in 1992, MAF is the largest mall operator in the region and has extensive business interests ranging from retail and leisure to property development. The Group employs 43k and hosts six hundred million visitors to its various malls every year.

With the exception of retail, all units performed well in 2023 including:

property                     revenue and EBITDA up 20.0% to US$ 1.88 billion and 21.0% to US$ 981 million, driven by increased footfall in UAE shopping malls and strong sales at its Tilal Al Ghaf residential property development

shopping malls           tenant sales of US$ 8.17 billion, an increase in overall occupancy to 96% and an 8% rise in footfall

hotels                          revenue 4.0% higher at US$ 191 million and 82% occupancy rate

retail                           declines in both revenue, 4.0% to US$ 6.73 billion, and EBITDA, 15.0%, “impacted primarily by currency devaluations” and a “shift in consumer sentiment related to geopolitical tensions in the region”

digital                          having opened twenty regional stores in 2023, digital retail business posted a 17.0% hike in revenue to US$ 708 million. In September, it rolled out its Launchpad X concept store – a collaborative commercial shop for entrepreneurs

entertainment            business rose 7.0% annually to US$ 490 million. Last June, it opened its fourth regional snow park in Abu Dhabi

DMCC noted that last year it welcomed almost 2.7k new companies – its second-best year – bringing the free zone’s total number of companies to over 24k, attributable to factors such as the launch of new industry ecosystems, the expanded service offerings and the physical growth of the Uptown Dubai district with the launch of Uptown Tower. The DMCC accounts for 11% of the emirate’s total foreign direct investment, growing its ongoing status as a global hub for trade in commodities like diamonds and precious stones, gold, energy and agri-softs as well as high-value services such as crypto, gaming and Web3.

Over the past five years, DMCC has posted an impressive 11% CAGR growth in the emirate’s diamond trade figures to US$ 38.3 billion. The value of polished diamonds traded in the UAE surged by 32%, year-on-year, reaching US$ 16.9 billion in 2023 – and now accounts for 44.1% of the total trade value – with a total of US$ 21.3 billion-worth of rough diamonds being traded in the UAE last year. Despite the global price of rough diamonds decreasing approximately 20% in 2023, the UAE’s rough diamond trade only decreased 13%, year-on-year, by value whilst maintaining strong trading volumes. Ahmed Sultan bin Sulayem, executive chairman, noted that “the polished segment now represents almost half of our diamond trade, consolidating our status as the world’s number one hub for rough and polished and, with major industry players continuing to be drawn to Dubai away from the old hubs of yesterday, DMCC will continue to set the benchmark for the services and value that diamond traders need to grow and prosper.” Dubai has also bolstered the support it provides for traders of lab-grown diamonds (LGDs) as it looks to replicate the success it has seen in the natural diamond industry. The value of LGDs traded in 2023 rose 10% year-on-year, reaching a total of US$ 1.6 billion.

DP World Limited posted positive 2023 results, with revenue 6.6% higher at US$ 18.25 billion, as adjusted EBITDA rose 1.9% to US$ 5.11 billion, at a 28.0% margin. Revenue growth was driven by Drydocks World (+US$ 400 million) and the full-year consolidation benefit of the Imperial Logistics acquisition (+US$ 900 million), with like-for-like growth driven mainly by the Ports and Terminals and Logistics business. The like-for-like adjusted EBITDA margin stood at 28.9%, while the profit for the year decreased by 17.7% to $1.51 billion, mainly due to higher finance costs. There was a 2.9% rise, to US$ 4.58 billion, in cash generated from the company’s operating activities. Chairman Sultan Ahmed bin Sulayem, stated, “this achievement is particularly noteworthy considering the significant challenges posed by a deteriorating geopolitical landscape and challenging macroeconomic conditions”, and “despite the uncertain start to 2024, with the ongoing Red Sea crisis, our portfolio has continued to demonstrate resilience. The outlook remains uncertain due to the challenging geopolitical and economic environment. Nevertheless, we anticipate our portfolio will sustain robust performance, and we maintain a positive outlook on the medium to long-term fundamentals of the industry and DP World’s capacity to deliver sustainable returns consistently”.

With the aim of expanding its supply chain services, amid increasing disruption to global trade, DP World has already opened one hundred freight-forwarding offices since the start of H2 2023 and is planning a further eighty by year end. Those freight forwarding offices, already set up, employ 1k staff, adding to DP World’s 108k-strong workforce, and the eighty planned offices are expected to add a further 800 employees. The global ports operator added that the move aims to provide customers with efficient access to cost-effective and reliable supply chains, while helping them navigate the complexities of global trade. A DP World’s spokesman said plans to expand the freight-forwarding services were “unrelated” to the Red Sea shipping attacks and are instead part of a “long-term strategy”, and that “customers will benefit from a single-source solution to getting their products from the point of creation into the hands of their customers.” Its freight-forwarding service spans order and origin management, port handling and freight management for ocean and air, and at-destination services such as customs, logistics, last-mile delivery and warehousing services.

To nobody’s surprise, Parkin has increased the number of shares, by 20.0%, to 89.96 million shares for retail investors interested in investing in its IPO; this equates to 12.0% of the total shares on offer from the initial 10.0%, due to “an exceptional level of oversubscription and demand from retail investors”. The 2.0% increase has been taken up by the qualified investor tranche being reduced to 659.73 million shares. The overall size of the public float remains unchanged at 749.7 million shares, equating to 24.99% of Parkin’s total issued share capital. Parkin is looking to raise as much as US$ 428 million through its listing on the DFM, with a price offering of between US$ 0.545 – US$ 0.572, (AED 2.00 – AED 2.10), which would give Parkin a market cap of between US$ 1.63 billion – US$ 1.72 billion (AED 6.00 billion – US$ 6.30 billion).

By Thursday, it was announced that the IPO received a record investor demand of US$ 70.52 billion, raising US$ 429 million, with a share value of US$ 0.572, (AED 2.10). It was oversubscribed 165 times across retail and institutional tranches of the deal, “the highest ever oversubscription level achieved on the DFM”. The company expects to start trading on the Dubai bourse on 21 March.

.According to the Dubai Securities and Exchange Higher Committee, companies in Dubai raised US$ 9.4 billion through selling shares on the DFM since 2021, with aggregate investment demand topping US$ 272.5 billion (AED 1 trillion). Strong investor interest, along with continued IPO activity, helped the general index to become the fifth best performing in the world. Sheikh Maktoum bin Mohammed, Deputy Prime Minister, noted that the General Index delivered “exceptional performance” last year, crossing the 4,000-point mark for the first time in eight years. A significant increase in trading activities, a rise in capital inflows and an influx of investors drove the record performance of the emirate’s bourse. The DFM, in attracting 230k new investors since 2022, improved its capitalisation by 18.2%, on the year, to US$ 187.5 billion.

The DFM opened the week on Monday 11 March 104 points (2.4%) lower the previous week, gained 9 points (0.2%) to close the trading week on 4,262 by Friday 15 March 2024. Emaar Properties, US$ 0.03 lower the previous week, gained US$ 0.01, closing on US$ 2.24 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.66, US$ 4.67, US$ 1.57, and US$ 0.36 and closed on US$ 0.66, US$ 4.85, US$ 1.57and US$ 0.36. On 15 March, trading was at 424 million shares, with a value of US$ 201 million, compared to 136 million shares, with a value of US$ 70 million, on 08 March 2024.

By Friday, 15 March 2024, Brent, US$ 1.93 lower (2.3%) the previous week, gained US$ 3.46 (4.2%) to close on US$ 85.39. Gold, US$ 138 (7.1%) higher the previous three weeks, gained US$ 79 (3.8%) to trade at US$ 2,083 on 15 March.

This week, Opec confirmed that it was sticking to its initial forecast that oil demand will increase for this year and next by 2.2 million bpd and 1.8 million bpd. However, it did see that global economic growth would be 2.8% in 2024, 0.1% higher than an earlier forecast, citing “robust” expansion in economic activity in H2, particularly in the US, India and Brazil, with China and Russia at steady levels and Japan in decline. Because of an extension of the production cut, extending to 2.2 million bpd by some Opec+ producers, including the UAE, Saudi Arabia and Kuwait, non-Opec crude production this year is now projected to grow by 1.1 million bpd, down 120k bpd from last month’s estimate. Production by core Opec members, which now excludes Angola, increased by 203k bpd last month, on the month to average 26.57 million bpd.

In 2023, Saudi Aramco posted a 17.0% decline in revenue to US$ 440.88 billion, with net profit 24.7% (US$ 39.8 billion), lower on the year to US$ 121.3 billion. The main reasons for the decline were reduced oil prices in 2023, lower volumes sold, and cuts in refining and chemical margins. In contrast, lower revenue and profit figures resulted in reduced royalty, tax and zakat payments; dividends rose by 30% to US$ 97.8 billion.  Capex was up 28.0% to US$ 49.7 billion.

Little wonder that Airbus is batting the embattled Boeing out of the park, with the US plane maker having to put quality ahead of quantity, as it tries to come to terms with all its manufacturing problems and shortfalls. In the first two months of 2024, Airbus has delivered seventy-nine jets, (including last month delivering forty-nine commercial planes to twenty-eight customers), well ahead of Boeing’s fifty-four, (delivering twenty-seven commercial planes to twenty-two customers). Having fallen by almost 29.0%, the US company’s share value on Tuesday stood at US$ 112.4 billion, some US$ 24.0 billion lower than the other member of aviation’s duopoly – the lag between both totals is the most ever.

TikTok users in the United States could soon be shut out of the country, as House of  Representatives politicians move forward with a bill giving its Chinese-based owner ByteDance an ultimatum – to sell or face a ban; if ByteDance chooses to divest its stake, TikTok will continue to operate in the US, but the latter happens only if President Biden determines “through an inter-agency process” that the platform is “no longer being controlled by a foreign adversary”. If the current bill becomes a law, which will also have to pass through the Senate, it would require ByteDance to give up control of TikTok’s well-known algorithm, which feeds users content based on their preferences. The main worry to politicians, and those who want the app banned, is that the Chinese authorities could force TikTok to hand over data on the one hundred and seventy  million Americans who use it, even if  the Chinese firm has confirmed that it has never shared US user data with local authorities and will not even if it is asked; two other worries are that TikTok censors content unfavourable  about China and that the government has used TikTok to influence recent US elections. Meanwhile, small businesses, who rely on the platform for marketing or to sell products on the TikTok Shop, warned against the ban, with many heading for Washington to participate in a lobbying blitz against the bill. The company told users, Congress was planning a “total ban” on the platform which could “damage millions of businesses, destroy the livelihoods of countless creators across the country and deny artists an audience”.

At the High Court in London, Mr Justice Mellor ruled that Dr Craig Wright was not the person who invented Bitcoin, something that the Australian computer scientist had previously claimed that he was actually Satoshi Nakamoto. Nobody has known the identity of the cryptocurrency founder(s) but it is widely accepted that on 03 January 2009, the bitcoin network was created when Nakamoto mined the starting block of the chain, known as the genesis block. Ever since 2016, Dr Wright has professed that he is Satoshi but his claims and evidence to back them up have long been questioned by cryptocurrency experts, with this case being brought by a group of Bitcoin companies.

Last June, TikTok estimated it has 8.5 million Australians and 350k businesses using the app, and that the number continues to grow. For what it is worth, and despite TikTok Australia saying it does not, and would not, share its data with any foreign government, this has not stopped Prime Minister Anthony Albanese saying he had no plans to ban TikTok, commenting “you also need to acknowledge that for a whole lot of people, this provides a way of them communicating”. However, it must be noted that last April, the Australian government also banned TikTok on government-issued devices – based on advice from intelligence and security agencies – and last December, the Australian Information Commissioner commenced investigations into the app after it was accused of taking data from the devices of people who don’t even have TikTok. 

Altria Group, the maker of Marlboro cigarettes, is to divest thirty-five million of its shares in AB InBev, (the owner of the Bud Light and Stella Artois beer brands, as well as other brands such as Beck’s, Corona and Leffe), worth more than US$ 2.2 billion and equating to about 17.3% of its total holding. Altria’s chairman, Dylan Mulvaney commented that the sale is “an opportunistic transaction that realises a portion of the substantial return on our long-term investment.” This comes after Bud Light sales had been hit by a US boycott over its work with transgender influencer Dylan Mulvaney, resulting in Modelo taking over as the top-selling beer in the US, with other brands, including Coors Light and Miller Light, gaining fast. The Belgian-based brewer, which saw annual US revenues dive 9.5% “primarily due to the volume decline of Bud Light”, confirmed in a regulatory filing that it had agreed to buy US$ 200 million of its shares from Altria. However, annual global revenues rose by 7.8% for the year, with profits of more than US$ 6.1 billion. Following the news, AB InBev’s US-listed shares fell by almost 4% in extended trading in New York.

Sanjay Shah, the founder of London-based hedge fund Solo Capital Partners, has gone on trial in Denmark accused of defrauding the country out of US$ 1.8 billion, through major tax evasion and avoidance schemes; he has been held in Denmark since being extradited to the country, following his arrest in Dubai in 2022. He is one of one of nine British and US nationals accused of being involved in the so-called cum-ex schemes which were designed to exploit weaknesses in national tax laws and focused on huge share trades, which were carried out with the sole purpose of generating multiple refunds of a tax that had only been paid once. It also involved the sale of shares from one investor to another immediately before the payment of a dividend to shareholders, with both parties claiming the dividend even though the tax itself, charged on the dividend at source, would only have been paid once.

The latest news on the takeover bid for Currys is that Elliott Advisors, which had offered US$ 970 million, has walked away after being rejected by the retailer’s board “multiple times” and that it was “not in an informed position to make an improved offer for Currys on the basis of the public information available to it”. Currys retorted stating that the US investment had “significantly undervalued” the business. Shares in the UK electrical retailer, which could still receive a bid from China’s JD.com, fell 10% on Monday following the news. By Friday, the Chinese retail giant confirmed that it will not be making an offer to buy Currys. It is reported that one of its major shareholders, JO Hambro Capital Management, indicated that an offer of say US$ 1.15 (GBP 0.90) would be acceptable; this would equate to US$ 1.0 billion.

Having not posted an annual profit over the past three years, John Lewis went into the black in 2023, with a US$ 71 million profit following a US$ 298 million deficit a year earlier. Waitrose profits and sales grew by 19% and 5%, while at John Lewis, profits were up by just 2%, as sales lost 4%. Despite making a profit, staff, numbering 75k, at John Lewis will face another year with no bonus being paid, as well the possibility of job cuts; numbers as high as 11k, over five years, have been bandied about. The company, behind Waitrose grocery shops and the John Lewis department stores, is employee-owned by permanent staff, known as partners. Those 76k workers typically get an annual bonus payment and 2023 was only the third time since 1953 that they did not. The firm said it was investing in its retail businesses and in staff base pay which could be increased by a record of US$ 148 million this year, as 67% of staff possibly get a 10% uplift.

With the decision to combine its brand and licensing arm, Virgin Management, and loyalty programme, Virgin Red, it seems that the Virgin Group will retrench about 8.0% of its 425-strong London staff. The redundancies were designed to remove “duplication and streamline operations”. This comes a week after a surprise move saw Nationwide acquire Virgin Money for US$ 3.85 billion, with Richard Branson on the receiving end of a US$ 511 million windfall, from his minority shareholding, as well as a US$ 320 million exit fee when its brand disappears from the combined group.

It has taken some time, (twenty-three years), to reach a conclusion but finally the Australian Tax Office has managed to nail Singtel, the parent company of telco giant Optus, which has lost its bid to get almost US$ 595 million deducted from its taxable income in Australia. Following its 2001 acquisition of Optus, Singapore Telecommunications had attempted to claim the deductions based on interest paid on loans between two of the company’s subsidiaries. In 2021, the Federal Court ruled that the lending did not comply with requirements under the “arm’s length” test – related companies dealing with each other have to behave as independent entities and to ensure they are not entering deals geared towards enabling tax avoidance.

This has proved to be a huge victory for the ATO and its Tax Avoidance Taskforce, which had been formed in 2016 to eradicate illegal and fraudulent tax arrangements. Deputy Commissioner Rebecca Saint noted that “this decision is another win for the Tax Avoidance Taskforce towards maintaining the integrity of the Australian tax system and holding multinationals to account”, adding that “whilst many large businesses are meeting their tax obligations, there are some that continue to engage in profit shifting practices. Taxpayers that set excessive prices for their related party dealings to shift their profits to low-tax jurisdictions should be on notice.” She estimates that the Taskforce has removed almost US$ 29.9 billion of past and future interest deductions from the tax system, resulting in billions of dollars of additional tax being collected in Australia, and has helped secure more than US$ 19.6 billion in additional tax revenue from multinational enterprises, large public and private businesses.

Last Friday, the ASX 200 closed on yet another record high at 7,847 points – an indicator that the Australian bourse has recovered well from its 6,781 points level of 31 October 2023. Four years ago, in March 2020, the bourse was sitting on 4,817. The main driver seems to be a strong rally in bank shares, as it seems that the US Federal Reserve is leaning towards an earlier rate cut, with inflationary pressures dissipating, with the RBA following suit.

By the end of last week, and after a mammoth fifteen years of negotiations, India had signed a free trade agreement with the European Free Trade Association – comprising Norway, Switzerland, Iceland and Liechtenstein – which will see investments in India of US$ 100.0 billion Prime Minister, Narendra Modi, noted that “this landmark pact underlines our commitment to boosting economic progress and creating opportunities for our youth.” The deal will see the host nation lifting most import tariffs on industrial goods from the four countries, in return for investments over fifteen years; the investments are expected to be made across a range of industries, including pharmaceuticals, machinery and manufacturing. Over the past two years, India has signed trade deals with Australia and the UAE, with the UK hoping to sign a free trade deal prior to the coming Indian general election later this year.

Visiting Pakistan, an IMF delegation has carried out its second and last review of a US$ 3 billion standby arrangement. If successful, the IMF will release a US$ 1.1 billion tranche, after the country secured the last-gasped rescue package last summer to avert a sovereign default. Prime Minister Shehbaz Sharif has already directed his finance team, headed by newly installed Finance Minister Muhammad Aurangzeb, to initiate work on seeking an Extended Fund Facility after the standby arrangement expires on 11 April. The world body has said it will formulate a medium-term programme if Islamabad applies for one.

With a June cut by the US Federal Reserve on the cards, and following keenly awaited inflation data, the pan-European STOXX 600 closed up 1.0%, to a record high on Tuesday; the hike was down to automakers and banks. Expectations are that the ECB will follow suit, especially after the recent slowdown in inflation in the euro zone. Germany’s DAX index ended at a fresh record high after data confirmed domestic inflation eased in February to 2.7%. French blue-chip shares also rose to an all-time peak, while UK’s FTSE 100 scaled its highest level since May 2023.

Rishi Sunak has warned English football’s powerbrokers that a deal will be introduced regardless of their willingness to agree it and that legislation to establish the new watchdog is likely to be introduced this month. Earlier in the year, the PM commented that “my hope is that the Premier League and the EFL can come to some appropriate arrangement themselves – that would be preferable.” Talks over the New Deal have been dragging on since the beginning of 2023 and later in that year, a US$ 1.18 billion agreement looked on the cards, but talks, with the EFL ground to a halt, with the EPL chief executive, Richard Masters, confirming that this was caused by internal divisions about the scale and structure of the proposed deal. A planned meeting for last Monday was called off, as it became evident that it would not win support from the required majority of fourteen clubs.

The Office for National Statistics confirmed that January saw growth of 0.2% in the UK’s GDP, after falling into a technical recession (two consecutive quarters of negative growth) in December. However, GDP did fall 0.1% in the quarter ending 31 January – an indicator that the UK economy is definitely not out of the woods yet and still struggling. The main drivers behind the positive January news were the customer-facing services industry, (which accounts for about 80% of the country’s output), expanding by 0.2%, with construction output 1.1% higher.  Again, the caveat was that over the quarter ending 31 January saw a 0.9% fall and zero growth. It must be noted that January figures may be subject to change, as figures are often amended when more information becomes available. Strong retail sales could also point to the fact that the economy could start bouncing back.

Not the best news for the US economy was that February inflation rose 0.4% to 3.2%, as annual US inflation came in slightly warmer than expected; this sets a problem for the Federal Reserve as to when it should start cutting interest rates, but is unlikely to occur this coming Tuesday, with the rate staying at between 5.25% – 5.50%. Core CPI, which excludes food and energy, rose 3.8%, year-on-year, down from 3.9% in January. In the previous week, the Labour Department posted that employers added 275k jobs in February, adding that unemployment nudged up to 3.9%, while wage growth slowed; this could give the Fed some relief that the economy is cooling. Earlier in the month, Fed Chairman, Jerome Powell, told US politicians on Capitol Hill that the central bank was getting closer to cutting rates, but that he and others at the Fed have routinely said they need “greater confidence” before they can begin dialling back. He added that “when we do get that confidence, and we’re not far from it, it’ll be appropriate to begin cutting rates,”

It is no secret that the New York commercial property market is struggling especially when one hears of stories of say 360 Park Avenue South. This twenty-storey building was sold for US$ 300 million and has been vacant since 2021 for redevelopment. One of the owners handed over its 29% stake to another partner, walking away from commitments to fund US$ 45 million more in upgrades, in exchange for just US$ 1. Early last year,Jacob Garlick agreed to acquire the Flatiron Building at an auction, but failed to pay the required deposit, and three of the four existing ownership groups took over the building. It had been vacant since 2019 and the latest is that it will be turned into condos. According to Moody’s Analytics, almost 20% of US office space was said to be unoccupied – the highest vacancy rate in forty years – and is expected to head higher over the next eighteen months. That being the case, property values have already headed south to the tune of up to 25%. A recent report estimates that US$ 660 billion has been wiped out over the past four years. Even if the space gets rented, just 12% of Manhattan’s office workers are estimated to be showing up in person five days a week.

To add to the property owners’ woes of falling occupancy levels, dipping revenue returns, allied with high borrowing costs, have seen a growing number going into negative gearing, as property values soften, leaving the borrowing banks absorbing the losses. There are reports that some three hundred US banks are at risk of failure due to the problem, including the New York Community Bank skirting with investors already fleeing with their deposits. It is estimated that the six largest U.S. banks saw delinquent commercial property loans nearly triple to US$ 9.3 billion in 2023 amid high vacancy rates and increasing borrowing costs, with almost 50% of all US banks have commercial real estate debt as the largest loan category overall. While commercial loans are more heavily concentrated in small U.S. banks, several major financial institutions have amassed significant commercial loan portfolios. Even the Fed chairman has acknowledged that “there will be losses. “I do believe that it’s a manageable problem. If that changes, I’ll say so.” To make matters worse, in the coming months, many of the mortgages that were taken out before the US central bank raised interest rates will need to be refinanced, inevitably at higher rates. There are losers everywhere – the banks, the investors, the employees, the taxing bodies, the local economy and the US economy. That is The Way It Is!

Say No More!                                                    08 March 2024

Despite fears from some analysts, (who probably should have known better), Dubai real estate transactions surged by 27.0% in February to 11.9k deals, compared to a year earlier, whilst value wise, there was a 35.0% jump to US$ 9.97 billion. A month earlier, January sales came in 26.9% higher, on the year, to US$ 9.65 billion. In February, the consultancy noted that there was a 23.0% increase in existing property transactions, to over 5.5k, with the value of these transactions having surged by 46.9%, year-on-year, to US$ 6.41 billion. Off-plan posted a 31.0% rise in transactions, with their value 18.5% higher to US$ 3.56 billion. Property Finder found out that two B/R and 1 B/R apartments were the most sought-after rental option, accounting for 35% and 33% of all searches, as well as 59% of homebuyers were searching for apartments, (and the 41% balance for villas/townhouses). Top areas searched to own apartments included Dubai Marina, Downtown Dubai, Jumeirah Village Circle, Business Bay, and Palm Jumeirah. Dubai Hills Estate, Al Furjan, Arabian Ranches, Palm Jumeirah and Mohammed bin Rashid City were the most desired areas to own villas/townhouses. Leading areas for rentals were Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Business Bay and Deira. Dubai Hills Estate, Damac Hills 2, Jumeirah, Al Barsha and Umm Suqeim were popular when it came to searches to rent villas/townhouses.

Based on Q4 data, Palm Jebel Ali stands out as the top-performing location for long-term investors. Some industry executives indicate that there are investors who are selling up, already at a 10% premium, but others see the new Palm Island as the next big destination after the on-going success of the smaller Palm Jumeriah Island. Since the relaunch – after a twenty-year plus hibernation period – Nakheel Properties began launching villas last September, with more launched by the master developer in December; there was very strong demand from local and foreign investors. Seemingly, some people are considering it as a future residence, but for others, it is about potential capital appreciation. Research from Emirates NBD Research estimated that in Q4, Palm Jebel Ali generated US$ 3.87 billion in sales, followed by Dubai Marina, with US$ 2.26 billion, and Business Bay’s US$ 1.39 billion. In the prime villa sales segment, Jumeirah Islands and The Palm were the outstanding 2023 performers, with price increases of 33% and 36%, year-on-year. It is expected that when finalised, that could be as early as 2028, Palm Jebel Ali will have 110 km of beachfront, eighty hotels and resorts, and more than 35k households.

According to property consultancy Global Branded Residences, there are fifty-one branded residences currently in Dubai, most of which are well-known hotel brands, with a further seventy planned over the next five years; more than 75% of the new residences will be non-hotel brands, from the automotive, fashion and design industries. Dubai is seen as a magnet for global capital looking to invest in branded residences, driven by factors such as its position as a global hub, favourable government initiatives, a growing economy and robust investor demand, all of which encourage long-term residency. The majority of such future projects will be in Downtown Dubai, Business Bay, Dubai Marina and JBR. Despite having to pay a premium, of up to an estimated 15%, developers tend to prefer branded residences, as they can pass on this premium to buyers, who are happy to pay the extra amount because of the brand and the services/amenities that come with such properties.

Ahead of its launch, Shamal Holding unveiled details of its Dubai Harbour Residences – “a low-rise, boutique residential development, with three hundred and fifty apartment units, ranging from studio to four-bedroom apartments. Located within the district of Dubai Harbour, at the intersection of the Palm Jumeirah and Bluewaters Island, the developer “expects to have the combination of hotels, restaurants, and retail facilities. Additionally, we are adding more berths to the marina, so we’ll be over seven hundred berths. This is also because of the demand that we have, which is at about 90% occupancy, so you can tell that we’re ideally positioned to take the destination forward”. The RTA will undertake the construction of a two-lane bridge in each direction, spanning 1.5k mt and accommodating 6k vehicles per hour, which will extend from Sheikh Zayed Road to Dubai Harbour.

A new entrant to the Dubai property scene is Confident Group, a leading real estate brand of India, which has announced the completion of its first project, completed in just eleven months. It noted that 70% of its Lancaster units, (1 B/R and 2 B/R), have already been booked by customers. Residents of Confident Lancaster will enjoy a host of amenities, “including round-the-clock security, private parking, swimming pools, gyms, spa centres, a cinema, party room, barbecue area, and indoor games,” Confident, which has launched over two hundred and three projects, spanning nearly 100 million sq ft of development in Kerala and Karnataka, is expected to launch another five projects in Dubai, which will be developed individually or in partnerships.

NABNI Developments and Hilton have released plans for Waldorf Astoria Residences Dubai Downtown, set for completion in 2028; this will be the first-ever standalone Waldorf Astoria residential address outside of the US. Located on a 65k sq ft plot in Downtown, the design will be carried out by Carlos Ott Architects, (who have already collaborated with NABNI on several Dubai projects including Lamborghini Building), and interiors by award-winning hospitality design firm Hirsch Bedner Associates.

The latest CBRE study includes details that the total value of real estate projects, currently planned or under construction in the UAE, stands at US$ 409 billion, and accounts for 24.4% of the total projects in the GCC. The consultancy expects a slight drop in transactions but that “price growth in the apartment and villas segments of the market will continue. However, we expect this rate to moderate somewhat over the course of the year.” In its 2024 Market Outlook for Middle East real estate, residential properties are expected to provide a yield of 7.0% to 7.5%, with prime residential real estate in the UAE expected to provide a yield of 6.25% to 7.0%.

Last year, the Dubai retail sector saw average rents 17.6% higher and that levels of demand will continue to be robust even though the level of quality stock in Dubai remains a cause for concern; this may impact new rental registrations moving lower although demand will remain net positive. Rental rates are expected to continue to increase, but at a more moderate level. In the office space category, CBRE forecast that Prime and Grade A assets will continue to outperform the market, given the scarcity in supply and rising demand for high-quality assets. Rental rates will also move higher, albeit at a slower rate, partly attributable to the limited number of developments in the Dubai pipeline.

On 01 March, the Real Estate Regulatory Authority Index was updated and is likely to impact tenants who have been living in properties for over two years. The CEO of Betterhomes, Richard Waind, noted that this will bring future renewals more in line with rents found today on the open market. The calculator tells landlords and tenants how much rent on renewal can increase, based on a benchmark rent for each community. He noted that “the recent increase in the calculator is likely to impact those tenants who have been in situ for over two years and are now likely to see a larger rent increase on renewal than they would have prior to the revision. I expect this will mean some tenants may look to move, or downsize, while for other tenants this may mean they decide to take the plunge and buy a property.” Some analysts see the possibility of rents moving up to 20% in the short-term that could result in present tenants, especially in villas, deciding to downsize or make the move to buy rather than continuing to rent.

Last year, Sobha Realty – which finalised a multi-year principal partnership with Arsenal FC and a venture with IIFA 2023 to expand its global presence – posted a record 51% jump in revenue to US$ 42 million; this year, it expects a 29.0% increase to US$ 5.45 billion. In 2023, it handed over 1.8k units and now claims a 10% market share in Dubai. Its latest launches include Sobha Hartland-2 and Sobha Seahaven Sky Edition, and last year raised US$ 300 million with a Sukuk issuance.

Dubai Mall continues to be the most visited place in the world, and last year there was a 19.3% increase in visitor numbers to 105 million; 2024 promises to be even busier, as twenty million have already visited the attraction in the first two months of the year.

Following a slowdown in the previous month, the latest S&P Global PMI indicates that, in February, the UAE non-oil sector rose at its fastest pace since pre-Covid 2019, driven by a rise in output and business confidence. Despite supply constraints, caused by disruptions in the Red Sea, the Index rose 0.5 to 57.1, while the output sub-index jumped 2.6 to 64.6, attributable to new business, stronger client activity and marketing activities.  Global shipping has indeed been impacted by this ongoing disruption, with some companies reporting delays to input deliveries, resulting in a sharp accumulation of outstanding work. New orders rose at their softest rate for six months, suggesting output growth could also begin to slow. However, employment levels rose at their quickest pace since May 2023, with hiring higher to support workloads and offset backlog growth. February also witnessed client orders improving, but increased competition for business resulted in more price cuts – the strongest since mid-2020. An interesting fact confirmed by the Minister of Economy, Abdullah bin Touq Al Marri, was that the country achieved “a historic first” in 2023, as its non-oil sector accounted for 73% of the UAE’s GDP – a sure sign that the country’s diversification move is paying dividends.

With the holy month of Ramadan due to start this Sunday, 10 March, the Ministry of Human Resources and Emiratisation announced a two-hour reduction in work hours for private sector employees during the holy month. The working hours apply to both fasting and non-fasting employees. Companies have the option to implement flexible or remote work schedules within the limits of daily working hours. Any additional hours worked beyond the reduced schedule may be considered overtime, for which workers will be entitled to extra compensation. All ministries and federal agencies will operate from 9am to 2.30pm from Monday to Thursday, and 9am to 12 noon on Friday.

Under the name, ‘Project Landmark’, Emirates General Petroleum Corporation has launched a first-of-its-kind project in the UAE, and globally, where companies and brands can secure naming rights for their service stations. At the ceremony, held at Dubai’s Museum of the Future, a new model for strategic partnerships, between Emarat and other businesses, (both local and international brands), was launched; each service station will provide a business platform for companies to reach customers and deliver services.

In the latest IPU’s ‘Women in Parliament 2023′ report, UAE is positioned fifth in the world behind Rwanda, Cuba and Nicaragua where women account for 61.3%, 55.7% and 53.9% of total parliamentary seats. The UAE women have parity with the men, as do Andorra and Mexico. The global proportion of MPs who are women nudged 0.4% higher to 26.9%, based on elections and appointments that took place in 2023. In the Americas, women accounted for 42.5% of all MPs elected or appointed in chambers that were renewed in 2023, the highest regional percentage. The region thus maintains its long-held position as the region with the highest representation of women in the world, at 35.1%.

By the end of the week, HH Sheikh Mohammed bin Rashid Al Maktoum, had  issued a law regarding a 20% tax on all foreign banks operating in Dubai; these will include special development zones and free zones, except those licensed to operate in the Dubai International Financial Centre. It will be imposed on the taxable income of a foreign bank, and the corporate tax rate will be deducted from this percentage.

The Dubai Integrated Economic Zones Authority, which encompasses the Dubai Airport Free Zone, Dubai Silicon Oasis, and Dubai CommerCity posted a 15.3% jump in 2023 net profit, with its contribution to the emirate’s GDP moving slightly higher to 5.1%. With its revenue climbing by 8.1%, and its market value of its net assets at US$ 5.67 billion, its EBITDA rose to 49.2%. DIEZ economic zones have witnessed marked growth in the six key sectors which collectively represent 95% of total companies. Wholesale/retail, professional/scientific solutions/services, information/IT, financial/insurance, administration/support and transportation/storage posted growth levels of 24.4%, 89.6%, 18.1%, 106.9%, 93.0% and 48.3% respectively. The total number of personnel working in DIEZ economic zones saw a marked rise of 30.5% to top 70k. During the year, DIEZ achieved record sustainability results by reducing carbon emissions; it increased solar energy generation by 30%, initiated adaptive air conditioning control systems to reduce electricity consumption by 30% and transitioned to LED lighting, resulting in more than 50% savings in total consumption. These measures resulted in a 12% reduction in carbon emissions. During the year, DIEZ finalised its new strategic approach to strengthen the emirate’s position as a premier regional and global investment destination, by targeting the Authority’s contribution to empower businesses and drive economic growth. During the year, it launched a US$ 136 million venture capital fund to support entrepreneurs, investors and emerging companies.

The shareholders of TECOM Group have approved the Board’s recommendation to distribute a cash dividend of US$ 109 million (US$ 0.0218 per ordinary share) for H2 2023. The approved cash dividend payment is in line with the dividend policy set out in the IPO prospectus, in which the company committed to paying a total annual dividend amount of US$ 218 million until next September.

The DMCC, the world’s flagship free zone and Government of Dubai Authority on commodities trade and enterprise, has hosted three events in Hong Kong and China in its quest to attract Chinese businesses to Dubai. The strategy seems to be working as the number of Chinese companies now operating in the free zone rose 25% last year to 852– and also 25% a year earlier in 2022. DMCC is home to over 14% of the estimated 6k Chinese businesses based in the UAE.

Emirates Global Aluminium posted declines in both revenue and net profit driven by a fall in global prices from the decade-highs reached in 2022, (average LME prices in 2023, at US$ 2,264, were 16.6% lower than 2022’s US$ 2,715). Revenue fell 15.0% to US$ 8.04 billion and profit by 54.1% to US$ 926 million, with EBITDA down 38.0% to US$ 2.10 million. However, there were marginal increases in production, to 2.48 million tonnes, and sales volume. Its total debt at the end of the year was 15.7% lower on the year at US$ 4.52 billion. The dividends were set at US$ 1.00 billion – the same as seen in 2022. However, it is expected that global aluminium demand is expected to grow significantly over the coming decade, particularly for low carbon and recycled metal. The company is one of the world’s largest aluminium producers, with smelters in Abu Dhabi and Dubai, a refinery in Abu Dhabi and a bauxite mine in Guinea.

For the first time in its history, the Board of Deyaar Developments announced the approval of a dividend distribution of US$ 48 million – US$ 0.019 per share – equating to 4% of share capital. In 2019, a UAE court ordered Dubai-based developer Limitless to pay Deyaar US$ 112 million in a land dispute and US$ 17 million in fees and compensation.^[4][5] In October 2022, the Board approved a US$ 136 million cash settlement, following which Deyaar reset its business model and since then the results have been impressive.

Driven by soaring revenue from its toll gates, Salik posted a 3.0% hike in Q4 net profit to US$ 80 million, as revenue climbed 12.2% to US$ 153 million, with net finance costs up 21.0%. The toll-gate operator said Q4 revenue-generating trips rose 11.1%, year-on-year, to 123.2 million. The revenue from toll usage fees, primarily generated through trips, constitutes the bulk of Salik’s overall revenue, but this will change this year as it plans to pursue additional revenue sources beyond its core tolling business, including providing technology solutions for parking. It does expect its core business – toll gate revenue – will increase by up to 6% in 2024 and EBITDA margin in the region of a credible 65%. For the whole year, 2023 revenue and net profit were 11.4% higher at US$ 575 million but 17.3% lower at US$ 300 million; revenue-generating trips for the year were 11.7% higher at 461.4 million.

An old stalwart of the DFM returns after trading in its shares were suspended in November 2018, after it reported heavy financial losses. Dubai-based contractor Drake & Scull International plans to return to the bourse, after it had increased its capital by US$ 82 million and received court approval of its restructuring plan that writes off 90% of its debt. This came about when it gained approval from creditors who accounted for 67% of the company’s total debt value. A 27 March EGM will vote on whether the shareholders approve of the move and if so, it could return to trading again on the DFM. The contractor was impacted by the three-year oil price slump that began in 2014, with an almost disastrous effect on the property sector and heavily affected the local property and construction sector. Last year, the company posted a higher net loss compared to its 2022 return – US$ 96 million to US$ 61 million – with 2023 revenue 16% higher at US$ 26 million; it had US$ 97 million worth of assets at year-end.

The DFM opened the week on Monday 04 March 113 points (3.1%) higher the previous week, lost 104 points (2.4%) to close the trading week on 4,253 by Friday 08 March 2024. Emaar Properties, US$ 0.07 higher the previous week, shed US$ 0.03, closing on US$ 2.23 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 4.70, US$ 1.77, and US$ 0.37 and closed on US$ 0.66, US$ 4.67, US$ 1.57and US$ 0.36. On 08 March, trading was at 136 million shares, with a value of US$ 70 million, compared to 213 million shares, with a value of US$ 112 million, on 01 March 2024.

By Friday, 08 March 2024, Brent, US$ 2.19 higher (2.7%) the previous week, shed US$ 1.93 (2.3%) to close on US$ 81.93. Gold, US$ 44 (2.1%) higher the previous fortnight, gained US$ 94 (4.5%) to trade at US$ 2,083 on 08 March.

In coordination with other members, the UAE has confirmed it would extend an additional voluntary cut of 163k bpd, for Q2, in coordination with some OPEC+ countries; production will remain at its current level of 2.912 million bpd; this is in addition to the April 2023 announcement that it would cut 144k bpd extending until the end of December 2024. The latest cut volumes will be reversed gradually subject to market conditions.

As annual air traffic is set to increase 4.6% in the ME, Airbus’ latest Global Services Forecast sees the region’s commercial aircraft services market will more than double in value – from US$ 12.0 billion to US$ 28.0 billion – by 2042, equating to a 4.4% CAGR. Airbus expects the market for ‘Maintenance’ to grow from US$10 billion to US$23 billion. Meanwhile, the market for enhancements and modernisation will show the biggest growth in the period, expanding at 5.5% to US$ 3.6 billion, driven specifically by cabin and system upgrades. The market for training and operations is expected to double in 2042, reaching US$1.6 billion. For the ME region, Airbus anticipates the need for a further 208k highly skilled professionals – comprising 56k new pilots, 52k and 100k new cabin crew members.

There are reports that Bridgepoint, the biggest shareholder, at 40%, in Moto GP’s parent company, Dorna Sports, is in advanced discussions to sell the business for more than US$ 3.80 billion.Over the past eighteen years, Bridgepoint has driven Moto GP to expand internationally, resulting in soaring revenue and a sharp increase in profitability. The Canada Pension Plan Investment Board owns slightly less than 40%, with the balance held by Dorna’s management. Uniting Moto GP and F1 under common ownership would provide Liberty Media with the opportunity to derive financial and commercial synergies, but any potential competition probe could scupper the deal – Bridgepoint acquired Moto GP’s parent in 2006 from CVC Capital Partners after the latter bought into F1, drawing scrutiny from EU watchdogs.

Pursuant to “challenging trading conditions” over the past six months, there are reports that the Alshaya Group, (the licensed franchise partner for Starbucks in Mena for more than twenty-five years, operating more than 1.3k coffee shops and employing 11k workers), plan to lay off some 2k workers. The reason for this move comes on the back of a downturn in business arising from consumer boycotts linked to the Gaza war. Laxman Narasimhan, chief executive of Starbucks, noted that “first, we saw a negative impact to our business in the Middle East. Second, events in the Middle East also had an impact in the US, driven by misperceptions about our position”, and “it’s important to note that Starbucks is not the only brand targeted by activists during this war. The situation remains complex and sensitive, affecting businesses and individuals alike.”

OpenAI was founded in December 2015 by several individuals including Elon Musk and Sam Altman. Now the Tesla founder is suing the company he helped start, accusing it of prioritising profit over developing AI for the public good. In a court filing, he is suing the firm, and its chief executive Sam Altman, for a breach of contract by reneging on its pledge to develop AI carefully and make the tech widely available; the AI giant was originally founded as a not-for-profit company but has grown to have commercial interests, with Elon Musk claiming that “under its new board, it is not just developing but is actually refining an AGI [artificial general intelligence] to maximise profits for Microsoft, rather than for the benefit of humanity”. The filing also noted that the company has “been transformed into a closed-source de facto subsidiary of the largest technology company, Microsoft”, which had provided a US$ 1 million investment in 2019 and another for US$ 10 million two years later.; a significant share of this was in the form of computational resources on Microsoft’s Azure cloud service.

A report by Counterpoint shows that Chinese sales of Apple’s iPhones fell 24% in the first six weeks of this year, having been hammered by the local favourite Huawei which saw sales, over the same period, coming in 64% higher. The US tech giant, which was also being attacked by aggressive pricing from the likes of Oppo, Vivo and Xiaomi,” saw its overall smartphone sales shrink by 7% in the same period. Having struggled for years, following US sanctions, sales suddenly surged last August following the release of its Mate 60 series of 5G smartphones which came as a surprise to the market as Huawei had been cut off from key chips and technology required for 5G mobile internet. In the first six weeks, Honor, which is the smartphone brand spun off from Huawei in 2020, was the only other top-five brand to see sales increase in China with sales of Vivo, Xiaomi and Oppo also declining. Vivo remained China’s top-selling smartphone maker last year, followed by Huawei claiming 16.5% market share, with Apple, (having a 15.7% share down from 19.0% in 2022) coming in fourth place. In Q4, Apple’s sales dipped 12.9% to US$ 20.82 billion – a sure indicator, that despite introducing discounts on its official sites in China, Apple returns are disappointing investors.

In what it considered was breaking the bloc’s competition laws, the EU has fined Apple over US$ 3.0 billion by unfairly favouring its own music streaming service; the investigation followed a complaint from music streaming giant Spotify. In challenging the decision, Apple retorted by saying the decision failed to “to uncover any credible evidence of consumer harm” and “ignores the realities” of the market, which is dominated by Spotify. The EC noted that Apple banned app developers from “fully informing iOS users about alternative and cheaper music subscription services outside of the app”, with the EU’s competition commissioner adding that “this is illegal, and it has impacted millions of European consumers.” Apple should have no problem paying this fine when its Q4 profit came in at US$ 33.92 billion. An appeal will take years to go through the courts but meanwhile, Apple will have to pay the fine and comply with the EU order. The commission also has opened a separate antitrust investigation into Apple’s mobile payments service, and the company has promised to open up its tap-and-go mobile payment system to rivals in order to resolve it.

After HelloFresh posted an earnings warning, down to US$ 438 million from US$ 622 million, its shares slumped by over 40%; at the same time, the German meal-kit maker also cancelled its revenue and profit targets for next year, pointing to higher costs in the development of its “ready to eat” business; the same problems are faced by its peers such as the Mindful Chef and Gousto. Covid was a boom time for such companies when many were ensconced at home, but since then customer numbers have fallen – in 2022, global numbers for HelloFresh were 8.5 million, now 7.1 million; the decline in business has had an impact on its share value that has fallen from US$ 109, at the height of Covid, to less than US$ 8 at the beginning of this week.

In December, Mike Ashley’s Frasers Group acquired the loss-making designer brands platform Matches for US$ 67 million, with the aim of turning it around to a profitable enterprise. Three months later, Matches, which sells items from established designers such as Balenciaga, Gucci and Prada, is put into administration with Frasers adding that its acquisition was making unsustainable losses.; most of its sales are online, selling merchandise to one hundred and seventy-six countries.

Following the sudden departure of Bernard Looney last September, BP appointed Murray Auchincloss, formerly BP’s CFO, as its new chief executive. He has not done so badly as it is announced that his pay packet last year was over US$ 10 million – including his salary, a bonus and share based rewards of US$ 1.3 million, US$ 2.3 million and US$ 5.9 million, as well as other benefits. Late last year, BP announced that is predecessor would forfeit up to US$ 42 million after his departure, including US$ 32 million in long-term share awards. Global Witness accused BP of giving its chief executive” a multi-million, fat cat pat on the back” after becoming “one of the biggest winners of Russia’s war in Ukraine while most people were “living pay check to pay check”.

On Tuesday, Bitcoin broke through to hit a new all-time high of more than US$ 69k surpassing the previous high posted in November 2021 – a year later, the cryptocurrency had sunk to around US$ 16.5k; it ended the week at US$ 68.6k. The latest surge is down to major US finance giants pouring billions into buying bitcoins; these entities are the same that vehemently voiced their opposition to cryptocurrencies from their very existence start in 2009, supposedly invented by the now infamous Satoshi Nakamoto. Finally realising that they were ‘walking on quicksand’, in January, US regulators reluctantly approved  several spot Bitcoin Exchange-Traded Funds (ETFs) and billions of dollars started pouring in for Bitcoin. That allowed giant investment firms, like Blackrock, Fidelity and Grayscale, to sell products based on the price of Bitcoin. Between them, they have been buying hundreds of thousands of bitcoins, rapidly driving up their value. Retail investors have probably left it too late in this cycle to cash in but one thing is certain about this volatile currency – it will go down as quickly as its value has risen. When it sinks to US$ 30k, then is the time to buy and hold until it tops US$ 65k and then leave the market. Such a scenario could easily occur over the next twelve months.

When most of the population thought that things could not become worse, they did overnight, with Egyptians waking up on Wednesday to a further 6.0% rate hike and the Egyptian pound being devalued, for the fourth time since 2022, and losing 60% in value by midday. This is after the Central Bank of Egypt decided to allow market forces to determine the value of the currency. The Monetary Policy Committee aims to unify the exchange rates and eliminate foreign exchange backlogs following the closure of the spread between the official and the parallel exchange rate markets. It also hopes that this strategy will bring underlying inflation under some sort of control, with headline inflation slowly dipping south.

Premier Li Qiang announced that China had set a 2024 growth project of around 5.0% and would introduce a series of measures, aimed at boosting its flagging economy, after admitting that the country’s economic performance had faced “difficulties”, adding that many of these had “yet to be resolved”. Measures included the development of new initiatives to tackle problems in the country’s crisis-hit property sector, aims to add twelve million jobs in urban areas, increased regulation of financial markets, with research being stepped up in new technologies, including AI and life sciences. Premier Li Qiang almost admitted that “risks and potential dangers in real estate, local government debt, and small and medium financial institutions were acute in some areas,” and that “under these circumstances, we faced considerably more dilemmas in making policy decisions and doing our work.” There are still many economists who still think that for years, the Chinese economies have been fabricated and even last year’s official 5.2% could really have struggled to top 2.0%. The economy will also suffer by the double whammy of low birth rates and an increasing ageing population, as youth employment becomes an increasing challenge to the government. As most global economies have had to deal with soaring inflation rates over the past thirty months, China seems to have missed its brunt and avoided soaring inflation rates.

Now the shoe is on the other foot, as the country is starting to come to terms with the problem of deflation, with consumer prices in China falling in January at the fastest pace in almost fifteen years, marking the fourth consecutive month of declines – the sharpest decline since post GFC 2009. In a deflationary cycle, consumers (and businesses) will keep putting off buying big ticket items on the expectation that they will be cheaper in the future. Another feature is probably more damaging – with prices and incomes may decline, debts do not, resulting in debt repayments becoming more onerous, as companies have to deal with revenues heading south and households having to manage with a declining income. It also has an impact on people and businesses with debts. Prices and incomes may fall, but debts do not. For a company with falling revenue, or a household with a declining income, debt payments become more of a burden.

Following the well-publicised demise of Silicon Valley Bank last year, the IMF is warning that US lenders’ continued exposure to risk could spark a new financial crisis, as high interest rates, economic uncertainty and declining commercial real estate prices still put US banks at risk of failure. The report specifically mentioned a “weak tail of banks” that are vulnerable because of high interest rates. The world body noted that the episode showed how a group of weak banks can force regulators to enact emergency measures, even if that group of banks is “not individually systemic” and that regulators were partly to blame for not flagging the problems faced by SVB sooner.

Despite more jobs being created in February, (270k), the US unemployment rate nudged up, by 0.2%, to 3.9% on the month, to its highest rate in two years. The jump in the unemployment rate was due to an estimated 334k more people reporting being out of work. Overall, analysts said there was little in the report to fuel major worries or raise fears that the economy would be harmed by higher interest rates, although Harvard professor Josh Furman added that the latest figures tilted the “balance of worry ever so slightly away from inflation and towards recession”. The job gains were attributable to increased. hiring by health care firms, the government and bars/restaurants.

With the Nationwide Building Society edging in on a US$ 3.72 billion deal to acquire Virgin Money, with both entities continuing to be run as separate units, it will become the UK’s second largest mortgage and savings group by market share and be worth some US$ 469.0 billion, with total lending and advances of about US$ 363.0 billion. It is expected that there will be no material change in the size of the 7.2k Virgin Money payroll – at least in the short term – and that the Virgin Money brand will be retained for around six years. The all-cash offer of US$ 2.82 per Virgin Money share equates to a 38% premium on Virgin Money’s share price last Wednesday; a further US$ 0.0256 a share dividend pay-out would come on top of that payment. The bank was formerly the Clydesdale and Yorkshire bank group and rebranded after a US$ 2.05 billion takeover of Sir Richard Branson’s banking group in 2018.

The Australian Transaction Reports and Analysis Centre has ordered an external audit of UK’s Bet 365 over its compliance with anti-money laundering and counter-terrorism financing laws. With the online betting sector coming under increased  scrutiny, Austrac’s CEO, Brendan Thomas noted that “businesses without adequate processes in place to manage those risks leave themselves vulnerable to exploitation by criminals,” The watchdog, which investigates banks, casinos and betting companies to make sure they have robust compliance systems to prevent them from profiting from the proceeds of crime,  have been probing Ladbrokes owner Entain since 2022, while another rival Sportsbet is facing an external audit. In the country, all customers have to be assessed by such firms and all transactions monitored in order to identify, mitigate and manage the risk that they might be engaging in money laundering or financing terrorism. Laws have recently been strengthened that have seen the use of credit cards banned for online gambling, whilst stricter rules have been introduced relating to advertising.

As an aside, Bet365 made a US$ 78 million loss, in the year ending 31 March 2023, despite revenue growing to US$ 4.32 billion; the previous year it turned in a US$ 42 million profit. Last year, its chief executive Denise Coates was paid around US$ 282 million as well as a further US$ 64 million in dividends. Ms Coates, who has a degree in econometrics, founded the Bet365 website in 2001 and the company is now the biggest private sector employer in the UK.

For the first time, it is reported that chicken meat has surpassed lamb. The Australian Bureau of Statistics posted that, in Q4, poultry slaughter increased by 0.02% to US$ 662 million, while lamb and sheep meat slumped by 7.6% to US$ 586 million, as the volatile nature of the lamb supply chain between the farm gate and the supermarket led to a reduction in the value of sheep meat. Another reason for the decline is that farmers have been selling off sheep and lambs, at a lower weight, which caused a drop in price and overall drop in value. Last Spring, lamb prices almost halved compared to a year earlier, whilst some reports indicated that sheep were being sold for just US$ 0.66; however, it took some time for supermarkets to adjust prices lower.

As with other major retailers trying to retain staff, and keeping ahead of the minimum wage threshold, both John Lewis/Waitrose and the Co-op are raising their minimum pay levels. The former will raise pay for store workers to US$ 14.72 and to US$ 16.43 for those in London, whilst the Coop will raise pay by 10.1% to US$ 15.30 and US$ 16.77 in London; the National Living Wage currently stands at US$ 14.59. Tesco, Sainsbury’s, Aldi and Lidl have already raised pay rates, with M&S and Asda starting next month.

There are reports that UK Finance, the country’s banking association, has warned its members that some eight hundred ‘rogue’ filings, related to one hundred and ninety companies, have been lodged at Companies House, the UK’s central corporate register. The banking body also confirmed that it had warned both Companies House and the Department for Business and Trade that the forms related to the discharging of financial liabilities were submitted in late February. It also stated that a number of members and law firms had “flagged an issue regarding the apparently erroneous satisfaction of security (registered charges) on Companies House relating to a number of live business clients”.

Following the Chancellor’s Wednesday Budget, the Institute for Fiscal Studies said households would be worse off at the election, expected this year, than they were at the start of this parliament, even though the Chancellor cut US$ 0.0255 off National Insurance, equating to UD$ 12.73 billion; the think tank also noted that this will be a record tax-raising exercise. Raising a slight laugh among Opposition MPs, Jeremy Hunt pointed to upgrades to short-term forecasts saying the UK would soon be “turning a corner” on growth as it has on inflation. He tried to get away with the fact that the cut would benefit millions of workers, on average earnings, who would be some US$ 1.27k better off, but failed to mention that he was only giving back “a portion” of the money taken away through other tax changes; previous freezing of tax thresholds has resulted in many having to pay more tax – overall, for every US$ 1.27 given back to workers (including the self-employed) by the NICs cuts, US$ 1.66 will have been taken away due to threshold changes between 2021 and 2024, with this rising to US$ 2.42 in 2027. The IFS estimates that by 2027, the average earner would be only US$ 178 better off, and only people, earning between US$ 40.8k and US$ 70.1k a year, would be better off from the combined tax changes. The Resolution Foundation said that, after taking account of rising prices, the average wage will not regain its 2008 level until 2026. Say No More!

Lipstick On Your Collar!                                                    01 March 2024

Emaar Properties announced that it would be investing US$ 26.14 billion on two luxury projects – The Heights Country Club, (at an estimated US$ 15.0 billion) and Grand Club Resort, (at US$ 11.17 billion) – situated adjacent to one of its current developments, The Oasis, on the outskirts of Dubai. No specific details were released but according to the developer, both “are expected to significantly enhance sales and profitability” and include “a substantial number of villas and townhouses.” Last June, Emaar launched the US$ 20.0 billion The Oasis, a luxury waterfront property development, with 7k residential units, including mansions and villas. The market is still awaiting further details of its tower to be built at Dubai Creek Harbour, which initially was thought  was to become the world’s tallest, but plans have been reportedly pared back.

A Betterhomes study concludes that sellers are currently positioned advantageously, capitalising on a surge in property transactions and escalating prices driven by growing buyer demand, resulting in Dubai’s realty sector fast turning into a sellers’ market, as the move to cash in on ‘profits’ gains traction post Covid. There is no doubt that property prices are slowing down after a three-year rally, with some investors having already sold out. The consultancy’s MD, Louis Harding, added that “one of the key benefits for sellers in this swiftly expanding market is the potential for a lucrative return on investment, with property owners currently enjoying favourable rates”, and that “the rapid growth in Dubai’s population further amplifies property demand and prices, creating an advantageous landscape for sellers, particularly areas with limited supply.” In terms of RoI, it noted that Downtown, District1 MBR, Jumeirah, Dubai Hills, Palm Jumeirah and DIFC were the best performing locations.

Emirates NBD’s Mayed Alrashdi warned that the sector could face “some headwinds in 2024, including continued high-interest rates, declining affordability for the average household, and a growth in the supply of new units,” whilst noting that there had been a 7.0% dip in 2023 mortgage transactions to US$ 34.1 billion as the continuing impact of high mortgage rates dented household spending. By the end of the year, demand was still outpacing supply but there are analysts who see the increase in inventory (which one put at 60k – 41.5k apartments and 18.5k villas) could swing the balance towards equilibrium. Indeed, if this amount of 60k units were added to Dubai’s property portfolio, at 2023-year end, of 823k, (official 2022 figures of 783.6k plus an unofficial 2023 estimate of 39.4k), it would bring the 2024 total to 31 December to 883k.

The US-based Discovery Land Company has launched an ultra-luxury, two sq km, development, adjacent to the Jetex private jet terminal at Dubai World Central; the land was bought for US$ 272 million in 2022. The development will comprise one hundred and ninety-eight mansions and villas, as well as one hundred and thirty-two apartments, on various plot sizes; plot prices start at US$ 7.5 million, up to US$ 50 million, and since December there has been an average 25% price increase. Buyers can select one of Discovery Land’s Olson Kundig designs for villas, starting at US$ 681 per sq ft, or approved custom designs for their villas, which are expected to start at around US$ 409 per sq ft. It is forecast that the site will generate approximately US$ 6 billion in total sales. There will be an annual management fee, yet unknown, for buyers that pays for the multitude of services offered on-site, including doctors and wellness specialists. According to the developer, there has been strong demand to date to live in Dunes, (with 50% of phase 1 already sold out, which will be a members-only community), with a Tom Fazio-designed golf course and several luxury amenities. The site is already home to the Lakehouse, a farm-to-table restaurant and bar overlooking the 11th hole and is close to a variety of lake-focused recreational activities, including swimming and paddle boarding. Up to 70% of the project is set aside for common space, open greenery and the golf course, which will be limited to members and their friends. The community will also have a wellness centre and spa, equestrian centre, organic farm, adventure park and kids club, and a trail that circumnavigates the site. The developer already operates more than thirty high-end global communities.

The latest Which? “best and worst airlines for 2024” ranking surveys seventeen international carriers and once again Emirates performs well, being placed second to Singapore among the top long-haul economy airlines.

		Customer	On Time	Last Minute
		Score		Cancellation
	Singapore	83.0%	64.0%	0.0%
	Emirates	81.0%	75.0%	0.1%
	Virgin Atlantic	76.0%	77.0%	0.8%
	Qatar	74.0%	83.0%	0.0%
	Qantas	71.0%	43.0%	1.2%
	Etihad	70.0%	85.0%	0.0%

Seats on Singapore and Emirates had a similar pitch of 32 inches to 34 inches, compared with Etihad’s 31 inches to 33 inches, whilst both leading carriers were rated the same on customer service, seat comfort, food and drink, in-flight entertainment, cleanliness, cabin environment and value for money; they also stood out “for spotless planes, excellent entertainment systems and friendly service”. However, Singapore was rated slightly higher on boarding, with five stars as opposed to four for Emirates. British Airways was ranked joint third lowest out of the seventeen carriers at a score of 59%, followed by American Airlines, also at 59%, Air Canada at 58% and Lufthansa at 56%. Jet2.com was named the best short-haul airline with a score of 81%, whilst Wizz Air was ranked bottom for short-haul flights for the second year in a row, at 44%, followed by Ryanair at 47%, Iberia at 49% and Vueling at 53%.

Emirates has promoted two veteran senior executives, Adel Al Redha and Adnan Kazim, to added roles of deputy presidents, under President Tim Clark; both will retain their current roles of COO and CCO. The President had postponed retirement plans during Covid and there has been no apparent decision on any new date for his departure.

Boeing has been brought to task by the US Federal Aviation Administration, who has given the plane maker ninety days to come up with a plan to improve quality and meet safer safety standards. FAA administrator Mike Whitaker has told Boeing he expects it to provide the FAA with a comprehensive action plan within three months that will incorporate the coming results of the FAA production-line audit and the latest findings from an expert panel report. Now its biggest customer, Emirates has seemingly joined forces with the industry watchdog, agreeing that there was a “disconnect between the management and the safety system”, with supremo, Tim Clark, hinting at delivery delays. The carrier is the largest buyer of the 777X, with two hundred and five on order, with the first due to have been delivered in 2020, but now expected next year. There is no doubt that Boeing must take a fresh look at every aspect of their quality control and focus more on safety, with the Emirates boss agreeing and noting that “whether this means a change in the governance model, I don’t know. When you change the governance model, it invariably involves changing the people around the old governance model.”

Kenya, East Africa’s largest economy, has become the latest nation to conclude a comprehensive economic partnership agreement after becoming one of the first African countries to begin bilateral trade deal talks, with the UAE, in 2022; this was part of a strategy to diversify its oil-based economy. UAE Minister of Foreign Trade, Thani Al Zeyoudi, noted that bi-lateral non-oil trade rose 26.4%, on the year, to US$ 3.1 billion in 2023 and “we will now look to expand across sectors from food production and mining to technology and logistics.” Foreign trade is an integral part of the UAE’s economic agenda – in 2023, the country’s non-oil trade in goods came in 12.6% higher, at US$ 710.0 billion, compared to a year earlier, and up 34.7% on 2021.

Brand Finance’s latest survey shows the UAE ranked tenth globally in its latest Soft Power Index – and ranked first in the region – with its value climbing 43% from US$ 700 million to US$ 1.0 trillion. The survey, including 170k from one hundred and ninety-three nations, placed the US, the UK and China in the top three positions. Encompassing fifty-five main and sub-indicators, it measures the positive reputation of countries and their ability to have a positive impact, as well as to understand the perceptions and opinions of the global public on matters including the investment environment, products and services, living, working, studying, and visiting. The country scored well in indicators related to ‘Strong and Stable Economy’, ‘Future Growth Potential’ and ‘Influence in Diplomatic Circles’.

After February price rises, (except for diesel), the UAE Fuel Price Committee has increased all retail fuel prices, for March. Eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic saw prices frozen by the Fuel Price Committee. In March 2021, prices were amended to reflect the movement of the market once again, with all March 2024  retail prices heading north:

The breakdown in fuel price per litre for the month is as follows:

• Super 98: US$ 0.768, to US$ 0.826 in March (up by 5.2%)

• Special 95: US$ 0.738, to US$ 0.796 in March (up by 5.2%),

• Diesel: US$ 0.815, to US$ 0.861 in March (up by 5.7%)

• E-plus 91: US$ 0.777, to US$ 0.733 in March (up by 6.0%)

Dubai Taxi Company posted an 11.0% jump in 2023 revenue, to US$ 531 million, as the number of taxi trips in the emirate increased. EBITDA rose a credible 55% to US$ 134 million, (at a 25% margin), whilst net profit was at US$ 94 million, 54.0% higher on the year. By the end of the year, its fleet of 7.4k vehicles had managed to complete forty-six million trips – 8.0% higher on the year. The Board recommended a US$ 19 million Q4 dividend, equating to US$ 0.0077 per share, in line with the company’s IPO commitment.

Established in January, Parkin, which was set up to oversee Dubai’s parking operations, becomes the latest government entity to offer shares to the public. The latest initial public offering will see 24.99%, (equating to 49.7 million shares), being sold to the public. Subscriptions will open next Wednesday, 05 March, for a week, with up to 10% being offered to retail investors, with a minimum subscription amount of US$ 1.36k. As part of the qualified investor offering, 5% will be reserved for the Emirates Investment Authority and 5% for the Pensions and Social Security Fund of Local Military Personnel. The price range for the deal will be announced on 05 March and the final offer price will be set on 14 March, with listing on 21 March. Parkin is the largest provider of paid parking spaces and services in Dubai, accounting for more than 90% of the emirate’s on and off-street paid parking market. It manages about 175k on and off-street parking spaces across eight-five locations, and close to 18k spaces across seven developer-owned parking lots and also issues permit to drivers, enabling them to subscribe to public parking, use and operate it, and to reserve parking spaces. It becomes the sixth state-owned entity that has listed on the DFM following in the footsteps of DEWA, (which raised US$ 6.1 billion), Tecom, Salik, Empower and Dubai Taxi Company.

Dubal Holding LLC posted a 2023 US$ 488 million net profit, compared to a US$ 1.0 billion return the previous year. DH, the investment arm of the Dubai Government in the commodities and mining, power and energy, and industrial sectors, expanded operations and acquired international assets during the year. Further to the acquisition of Thermalex, (a US aluminium extrusion company specialised in aluminium multiport extruded tube), the company is also exploring the possibility of other opportunities, including large profiles and machined components for the automotive, industrial and new energy verticals such as hydrogen, as well as building a recycled aluminium/cast house facility from extrusions/ profiles. Dubal Holding is the wholly owned subsidiary through which the Investment Corporation of Dubai holds a 50% stake in EGA along with other industrial entities. Other investments comprise a minority stake in Sinoway Carbon Company Ltd, a Calcined Petroleum Coke production facility in China’s Shandong Province, full ownership in OSE Industries LLC (an aluminium extrusion company in Dubai), and a 50% shareholding in Emirates Global Aluminium.

Deyaar Development is launching a US$ 191 million, thirty-three storey project in Jebel Ali, comprising a range of studios to 3 B/R apartments. Eleve becomes Deyaar’s second project of 2024, following the January launch of Rosalia Residences in Al Furjan, which has fully sold out; completion is slated for early 2027. Chief Executive, Saeed Al Qatami, noted that Dubai had been recording “fundamental growth” in its property market and is “not a bubble”; he forecast price rises of up to 15% this year as the demand for property, especially in the affordable sector, is expected to continue growing this year, but that prices of luxury homes will stabilise. He commented that end users are buying property in the secondary or ready home market, while investors – mostly from India, Pakistan and the UAE – dominate the off-plan sector. The developer, majority owned by Dubai Islamic Bank, expects its revenue to rise 30% annually this year.

The DFM opened the week on Monday 26 February, 33 points (0.8%) lower the previous week, gained 131 points (3.1%) to close the trading week on 4,357 by Friday 01 March 2024. Emaar Properties, down US$ 0.04 the previous week, was up US$ 0.07, closing on US$ 2.26 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 4.81, US$ 1.74, and US$ 0.36 and closed on US$ 0.67, US$ 4.70, US$ 1.77and US$ 0.37. On 01 March, trading was at 213 million shares, with a value of US$ 112 million, compared to 100 million shares, with a value of US$ 79 million, on 23 February 2024.

The bourse had opened the year on 4,063 and, having closed on 29 February at 4,308, was 245 points (6.0%) higher. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, to close the month at US$ 2.21. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.66, US$ 4.99, US$ 1.75 and US$ 0.36.  On 29 February, trading was at 220 million shares, with a value of US$ 151 million, compared to 138 million shares, with a value of US$ 58 million, on 31 December 2023.

By Friday, 01 March 2024, Brent, US$ 1.76 lower (2.1%) the previous week, shed US$ 2.19 (2.7%) to close on US$ 83.90. Gold, US$ 12 (0.5%) higher the previous week, gained US$ 32 (1.6%) to trade at US$ 2,083 on 01 March.

Brent started the year on US$ 77.23 and gained US$ 4.37(5.7%), to close 29 February 2024 on US$ 81.60. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and shed US$ 26 (1.3%) to close YTD on US$ 2,048.  

Both Boeing and the Federal Aviation Administration (FAA) said it would also review the findings of a new report for the US government which concluded that there were serious concerns about Boeing’s safety management systems, and that there was a “disconnect” between senior management and regular staff. The embattled plane-maker has had a turbulent recent history including two fatal crashes in 2018 and 2019, as well as the recent Air Alaska incident which saw a section of a plane being blown off mid-air.  The report noted that Boeing staff were hesitant to report problems and worried about retaliation because of how the reporting process was set up, as well as not having a clear system for reporting problems and tracking how those concerns were resolved. All these matters will end up with Boeing having to delay deliveries of new planes much to the dismay and chagrin of many of its customers including Ryanair.

Ryanair has posted that air fares could be 10% higher this summer as the budget carrier has to manage the shortage of planes because of the delay in the Boeing production line, leading to ordered Boeing planes arriving late; delayed delivery will constrain capacity for passengers. Michael O’Leary has indicated that “delivery of fifty-seven Boeing 737 Max 820’s was due by March, but the firm thinks only 40-45 may arrive in time for the summer season,” whilst noting that “if capacity was growing, I think fares would be falling.” He has also commented that costs saved through hedging on fuel would mean that Ryanair’s fare increase would not be as steep as the 17% rise seen in 2023, and that there would be a “higher fare environment across Europe” this summer. The airline’s original forecast for the year to the end of March 2025 was that it would carry 205 million passengers, up from 183.5 million in the twelve months before, but now its supremo notes that “with less aircraft, maybe we’ll have to bring that 205 million down towards 200 million passengers.”

To increase its market share in China, in an ongoing price war with local producers such as BYD, Tesla has resorted to new incentives, including insurance subsidies; Model 3 sedans and Model Y SUVs will now be entitled to a maximum of US$ 4.8k worth of incentives comprising US$ 1.1k discount in insurance products, US$ 1.4k discount, if the buyer chooses a change of paint, and US$ 2.3k if buyers take up a limited-time preferential financing plans  for purchases of Model Y. Earlier in the year, the US EV manufacturer cut prices on some Model 3 and Y cars – and last month offered cash discounts for some Model Ys. Today, 01 March, BYD lowered the starting price of a new version of its Song Pro hybrid SUV by 15.4%. Let the price battle commence.   .    .   . again!

To help drive its transition to EVs at its Luton plant, Stellantis, the parent company of Vauxhall, has turned to the UK government for further financial investment The company has confirmed it will produce “limited” volumes of electric vans for five of its group brands – including Vauxhall Vivaro Electric, Peugeot E-Expert and Fiat Professional E-Scudo in both right and left-hand drive versions – from 2025. Last year, two other major carmakers, Nissan and Jaguar Land Rover, confirmed plans for further investment in the UK. The Japanese company will invest US$ 1.5 billion to build two electric car models at its Sunderland plant, whilst the Tata-owned car maker revealed plans for a US$ 5.1 billion EV battery plant in Somerset. Stellantis’ Ellesmere Port plant, which produces small vans, was the first in the country to go fully electric last year, with the group posting that from 2028, all the group’s vehicles will be electric-only.

There were stories a decade ago that Apple was considering entering the EV market but current reports put that rumour to bed. The tech giant has never publicly acknowledged the project, reportedly known as the Special Projects Group, which involves around 2k people. There were reports that billions of dollars on R&D were spent and that the final product would be a fully autonomous vehicle without a steering wheel and pedals. There is no doubt that the market has slowed somewhat over the past twelve months, with the likes of Ford and General Motors postponing plans to expand EV production, as well as Tesla warning that 2024 revenue will be lower on the year. Only last week, electric truck maker Rivian said it would cut its workforce by 10% and forecast no growth this year in its production.

In a bid to retain its employees, Marks & Spencer has announced staff pay rises, increasing minimum pay outside the capital to US$ 15.14 and in London to US$ 16.59. About 40k staff, across the food and clothing units, will get a raise, with the retailer announcing it would be making “substantial improvements” to its maternity, paternity and adoption policies. It joins competitors such as Aldi, Lidl and Sainsbury’s in increasing its minimum pay for staff outside of London to US$ 16.59 per hour. M&S indicated that the increases since March 2022, it had invested more than US$ 184 million in its overall retail pay package. Furthermore, maternity leave and paternity leave will be increased to twenty-six weeks and six weeks.

Five years ago, Ocado signed a deal with M&S to sell the retailer’s food on the internet and paid an upfront payment of US$ 707 million and is due to pay a further US$ 241 million, based on certain targets being met. Now, there appears to be an impasse with one company stating that “we have a very solid case to get full payment, we know that M&S may not entirely share that view ”, and the other saying that “the financial performance of Ocado Retail means the criteria for the performance payment was not met.” The 50:50 JV was signed in early 2019 and went live the following year in September so it seems the biggest winner will be the lawyers.

As it tries to save up to US$ 1.26 billion over the next three years, Sainsbury’s is planning to cut around 1.5k jobs, subject to consultation, with roles being lost at its contact centre in Cheshire, in-store bakeries, and some local fulfilment centres. The retailer said it had reassured colleagues that it would find alternative roles for them where possible, as it would “for any colleague affected by changes proposed”. The savings will be invested back into the business, the retailer added. It will invest more money in technology and innovation, resulting in the need for fewer local fulfilment centres – and hence fewer jobs.

Announcing that it was to cut costs, Sony will close its PlayStation’s London Studio and retrench 900 staff members, equating to about 8% of its workforce in the US and Japan. Supremo Jim Ryan commented that “the leadership team and I made the incredibly difficult decision to restructure operations, which regrettably includes a reduction in our workforce impacting very talented individuals who have contributed to our success.” In January, rival Microsoft revealed plans to lay off 1.9k people in its gaming division, which included those at recently acquired Activision-Blizzard. PlayStation 5 has sold more than fifty million units worldwide, more than double that of Microsoft’s Xbox Series X/S sales, whilst Nintendo’s Switch console has seen sales of over 140k units. Last month, Nintendo posted that although its revenue was 16% higher on the year, its net income slumped by more than 25%.

Elliott’s second bid of US$ 957 million – following an earlier  one of US$ 885 million – has been rejected by Currys because it was”significantly undervalued”. The US firm is up against Chinese rival JD.com which has shown interest in buying the embattled retailer, with more than eight hundred stores. Under UK takeover rules, Elliott, which bought UK book shop chain Waterstones in 2018, has until 16 March to make a final offer. Currys has been struggling with falling sales, as consumer spending power dipped including a 3% fall over the usual business Christmas period.; it is also facing pressure from online traders such as Amazon. On 16 February, the day before Elliott made their first bid, Currys’ shares were trading at US$ 0.59 and by Tuesday 27 February, they had risen to US$ 0.84.

In Hong Kong, Ever Credit Ltd, a unit of Kingboard Holdings, a laminates maker and property investor, has filed a claim against China’s biggest private property developer Country Garden for non-payment of a loan worth US$ 205 million, and is now facing a liquidation petition. In January, China Evergrande, with more than US$ 300 billion of debt, was ordered to liquidate by a Hong Kong court. Shares in Country Garden fell more than 10% in early Hong Kong trade yesterday following the announcement. Since the property market accounts for about 33% of China’s economy, the Chinese government has to tread warily ensuring that the thousands of people, who have already paid for their currently incomplete apartments, can move eventually move in. The current crisis started since 2021, when authorities introduced measures to curb the amount big real estate companies could borrow, which has led to several large property developers having defaulted on their debts in the last few years.

Late last week, the Australian federal court convicted and sentencedwaste management companies Bingo Industries, and Aussie Skips Bin Services and Aussie Skips Recycling for criminal cartel offences, under sections 45AF and 45AG of the Competition and Consumer Act, relating to a price fixing arrangement for demolition waste services in Sydney. Both former MDs, Daniel Tartak, and Aussie Skips’ Emmanuel Roussakis, were also convicted and sentenced.The former was fined US$ 66k and sentenced for two criminal cartel offences to two terms of imprisonment of eighteen months each, with the latter fined US$ 50k and sentenced to eighteen months’ imprisonment for one criminal cartel offence.  Both were barred from managing corporations for five years. Bingo was fined US$ 20 million and Aussie Skips over US$ 2 million, after each company pleaded guilty to having fixed and increased prices with the other for the supply of skip bins and the provision of waste processing services for building and demolition waste in the city. The cartel only operated for less than four months – from May to August 2019. Cartel conduct harms consumers, businesses, and the economy, and is likely to increase prices, reduce choice and distort innovation processes.

Wayne LaPierre, the former CEO of the National Rifle Association, has been found guilty of misspending millions of dollars of the organisation’s money which he used for trips on private planes, superyachts and travelling overseas. Last Friday, the 74-year-old, who had been at the helm for thirty-three years, was ordered to repay US$ 4.4 million, whilst the organisation’s retired finance chief, Wilson Phillips, had to pay back the group US$ 2 million.  LaPierre announced his resignation the night before the trial. He had billed the NRA more than US$ 11 million for private jet flights and spent more than US$ 500k on eight trips to the Bahamas over a three-year span. He also authorised US$ 135 million in NRA contracts for a vendor whose owners showered him with free trips to the Bahamas, Greece, Dubai and India, as well as access to a 33-metre yacht. Mr LaPierre claimed he had not realised the travel tickets, hotel stays, meals, yacht access and other luxury perks counted as gifts, and that the private jet flights were necessary for his safety. Furthermore, jurors found that the NRA omitted or misrepresented information in its tax filings and violated New York law by failing to adopt a whistle-blower policy. The court case outcome is a further blow to the powerful group, which has been beset by financial troubles and dwindling membership in recent years.

In Q4, India posted an 8.4% jump in Q4 economic growth and is expected to soon become the world’s third largest economy, surpassing Japan and Germany; the main driver was the manufacturing sector which jumped 11.6% in the period, whilst private consumption, which accounts for over 65% of the country’s GDP, rose by 3.5%. Over recent times, Prime Minister Modi has raised government spending on infrastructure and offered incentives to boost the manufacturing of phones, electronics, drones and semiconductors to help India compete on the international stage. Yesterday, his government agreed to a US$ 5.2 billion investment to construct three semiconductor plants. The IMF expects India’s economy to expand by 6.5% this year as compared to 4.6% for China.

Lebanon appears to live through one crisis to another, with the latest being faced with damages, estimated at US$ 2.5 billion, due to ongoing conflict on its southern border with Israel. Amin Salam, the country’s Economy Minister, and who was in Abu Dhabi for the WTO’s thirteenth Ministerial Conference, is seeking international funding to “rehabilitate” the farmlands, impacted by the war, including the Beka Valley “that became toxic due to the specific weapons they’re using.” It has also hit the tourism sector, (which last summer season added up to US$ 7 billion from tourists and Lebanese diaspora), and caused extensive damage to buildings, infrastructure and private property, heaping more costs on an already struggling economy.

Rishi Sunak has revealed how some of the money from abandoning the HS2 northern leg will be reallocated, with Northern England receiving US$ 3.20 billion and the Midlands US$ 2.75 billion. The cash will go to a “local transport fund” to help towns, rural areas and smaller cities, with councils and local authorities deciding how to spend the money, (that seems to be a recipe for disaster). However, it seems that MPs and ministers must “hold local authorities to account” over how the new money is spent. The prime minister said it would empower local leaders “to invest in the transport projects that matter most in their communities – this is levelling-up in action”.

Twelve months after initiating an investigation into UK housing, the Competition and Markets Authority has now launched a probe whether eight major house builders – Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey and Vistry – have been sharing information which could influence house prices. It also said “significant intervention” in the market was needed to ensure enough homes were built to meet demand. The CMA said that its investigation had uncovered evidence suggesting “information sharing”, which “could be influencing the build-out of sites and the prices of new homes” but confirmed that it had not yet reached any conclusions as to whether or not competition law has been broken. The watchdog also raised concerns over the quality of new homes, indicating there were “persistent shortfalls” in the number of homes being built. In its 2019 manifesto, the Conservative Party promised to build 300k homes by mid-2020s and to make the planning system “simpler”. Not surprisingly, it has failed to deliver on two counts – only 250k were built last year and the CMA indicating the planning system was one of the key factors slowing down construction of new homes, describing it as “complex and unpredictable”.

Despite UK housing activity remaining weak – in an environment of interest rates not falling as much as expected and even nudging slightly higher in some cases – latest BoE data shows

January approvals for house purchases rising 7.2% on the month to 55.2k, its highest level since October 2022. Property sales were slightly up compared with December, but 12% lower than January 2023. Credit card borrowing also moved higher to US$ 2.4 billion, as people spent more on the likes of car finance and other loans than they repaid in the month. As the new fixed deal mortgage rates gained traction towards the end of 2023, lenders have been shifting the interest rates charged on home loans at a quicker rate since the start of 2024.  This started with some significant cuts to the cost of new fixed-rate deals, which have recently crept back up, and there are many who are awaiting further BoE rate cuts in the coming months. Recent figures show homeowners actually repaid more money on mortgages than they took out in new lending in the year to January – the first time this has happened since comparable records began thirty years ago.

For the first time in twelve months, UK property prices headed upwards, at US$ 330k, but still 3% lower than their summer 2022 peak. Nationwide saw February prices 0.7% higher on the month but noted that the outlook was still “highly uncertain, in part due to ongoing uncertainty about the future path of interest rates.” It also noted that the decline in borrowing costs around the turn of the year appears to have prompted an uptick in the housing market.”

The Institute for Fiscal Studies has warned the Sunak government that it should not cut taxes in this month’s Budget, unless it can spell out how it will afford them, saying the case for tax cuts was “weak”. The Chancellor is on record that he was looking at trimming public spending, as a way to deliver tax cuts, but the IFS noted that any tax cuts “should wait” until he was able to carry out a detailed spending review. It also commented that taxes were heading to record-high levels when measured against the size of the overall economy, and that government debt was also high and moving higher, and “barely on course” to be falling in five years’ time – one of the government’s self-imposed rules. The IFS suggested that it may be more beneficial for the economy if the Chancellor reformed stamp duty on purchasing properties or shares, rather than going ahead with minor tax cuts, such as reducing income tax or a further cut to National Insurance rates. The current betting seems to be on maintaining fuel diesel at current levels and cutting NI by 1%, which would cost US$ 5.7 billion. The IFS estimated that for the Chancellor to keep real-terms spending per person at current levels for unprotected services  – including justice and local government – alongside “plausible” settlements for the NHS, childcare and other commitments, which are ring-fenced; would cost over US$ 31 billion. Other bodies – including the IMF and the Office for Budget Responsibility – are proffering advice basically ruling out immediate tax cuts.

Today saw Australia’s ASX 200 close on a fresh record high, at 7,726, after Wall Street’s S&P 500 and Nasdaq ended overnight at record highs, of 5,096 and 16,091 respectively. Not to be outdone, Japan’s Nikkei also posted a record high of 39,910. The reason for the bourses’ optimism was that a key US inflation reading was in line with expectations. However, the confidence was not felt in many Asian markets because of the uncertainty facing China’s economy, not helped by renewed turbulence in the property sector; this resulted in MSCI’s broadest index of Asia-Pacific shares, outside Japan, however, dipping 0.1%.

Several analysts are worried about the state of the Australian economy, with the distinct possibility of a recession on the horizon. There are various economic theories being thrown around, but some point to the fact that because demand for lipstick and recreational activities has picked up, this often precedes a major economic downturn. There are renewed warnings Australia’s economy could be heading for recession as shoppers tighten their purse strings. Even Treasurer, Jim Chalmers, was in sombre mood, noting that “we understand that the inevitable consequence of higher interest rates, persistent inflation and global uncertainty means that we are expecting quite weak growth in our economy.” He also added that “if we’re talking about 0.2% [economic growth] for this quarter’s growth and we’re talking the same sort of numbers in the next quarters for March and June, you don’t need very much to go wrong to suddenly produce a [recession].” As Paul Zahra, who now runs the Australian Retailers Association, noted that “when we’re seeing a downturn in sales — because I’ve been in this game for a little longer than I’d like to admit — we see that women particularly will go and actually spend money on a new lipstick to update their look, versus buying a new dress”. Maybe Jim Chalmers will judge when Australia is in recession when he sees Lipstick On Your Collar!

Get Away With It?                                                                        23 February 2024

For the second consecutive week, there are no weekly property statistics readily available for the week ending 23 February.

Interesting figures from Australia’s CoreLogic show the price gap between apartments and standalone houses has widened by 45%, (equating to US$ 193k), since March 2020 and January 2024, driven by soaring land values, scarcity of houses available for purchase and a desire for more space are keeping prices substantially higher compared to units. The report also noted that in the almost four-year period, house prices in the capital cities increased by US$ 157k, compared to apartments’ US$ 43k. The trend is still apparent in the shorter term, with houses rising US$ 61k (11.0%) but units only by US$ 27k (6.9%). All capital cities show similar rises, but it was more marked in Sydney where pre-pandemic prices of houses showed a 33% premium which has since risen to its current 68% level. Dubai realty paints a similar landscape.

Binghatti Holding has announced that it is to launch a three-year US$ 500 million Sharia-compliant bond, as it strives to diversify its funding base. The Dubai-based property developer is set to build the world’s tallest residential tower – Binghatti Burj – in a partnership between Binghatti and Jacob & Co. On Tuesday, the firm announced that it was preparing for a “significant financial milestone” in the coming days, subject to market conditions. Last year, two other leading developers raised money via sukuks – in October, Damac Properties raised US$ 300 million and last May, Aldar Investment Properties, the real estate management unit of the emirate’s largest listed developer, Aldar Properties raised US$ 500 million through its debut green sukuk.

Edgnex Data Centres by Damac and Vodafone are investing US$ 100 million to take advantage of Turkiye’s burgeoning digital transformation sector. The partnership is to construct a new data centre project in Izmir and will have a capacity of six megawatts and is expected to be completed by 2025. It will offer “end-to-end services” and be positioned as a “one-stop-shop”, connecting to Europe through terrestrial and submarine cables. The government’s Digital Transformation Office noted that it was introducing a broad digital transformation strategy, and is “exerting all efforts” to help the country “not only consume technology, but also produce technology by using its resources effectively”. Statista reckons that Izmir already has seven data centres, tied with the capital Ankara and Bursa, while Istanbul has forty, and estimates that revenue in the country will grow at CAGR of 5.8% to move from its current value of US$ 1.62 billion to reach US$ 2.0 billion by 2028.

As expected, DXB, posting an annual record 31.7% hike in passenger numbers to 87.0 million, surpassed its previous record of 86.4 million that was recorded in pre-pandemic 2019. Flight movements also hit a record 416k flights, 21.3% higher compared to 2022. The forecast for this year is an expected 88.2 million, which is still 1.1 million shy of the airport’s record number of 89.1 million recorded in 2018. DXB is currently connected to two hundred and sixty-two destinations across one hundred and four countries, via one hundred and two international carriers. The leading countries, with the most traffic, are India, Saudi Arabia, UK, Pakistan, the US, Russia and Germany, with 11.9 million passengers, 6.7 million, 5.9 million, 4.2 million, 3.6 million, 2.5 million and 2.5 million. London retained its position as the top city destination with 3.7 million passengers, followed by Riyadh, with 2.6 million, and Mumbai’s 2.5 million. Last year, the airport handled cargo – down 4.5% – to 1,806k million tonnes.

Its seems that some of India’s top airlines could take note of the success seen at DXB where last year, the airport processed a record seventy-seven million bags, with a success rate reaching 99.8% in handling operations. This week, India’s Bureau of Civil Aviation Security directed seven airlines including carriers like Air India, Vistara and IndiGo, to implement necessary measures to ensure timely delivery of baggage, noting that passengers’ luggage should be delivered to them within thirty minutes after landing, with a 26 February deadline to comply with the order. Late baggage delivery has been a persistent problem across airports and whether this directive has any impact remains to be seen.

Flydubai posted its largest-ever annual profit, jumping 75% to US$ 572 million, driven by a record number of passengers, amid booming demand for air travel – and despite high fuel prices, (accounting for 32% of total costs), and supply-chain disruption. Revenue increased by 23.0%, to US$ 3.05 billion, as passenger numbers increased by 31% to 13.8 million, bringing the total carried to 108 million, since its 2009 debut flight. By the end of 2023, flydubai added thirteen new Boeing 737 aircraft to its fleet, increasing its capacity by 27% to 40,292 million available seat km, and ending the year with eighty-four aircraft – twenty-nine 737-800s, fifty-two 737 Max 8s and three 737 Max 9 jets; three 737-800 planes were returned to the lessors at the end of their lease agreement. Because of its well-publicised problems, Boeing has had to cut its production levels; so as to meet the surge in travel demand and add capacity during peak travel periods and has been unable to supply all planes ordered by the Dubai carrier; accordingly, flydubai has had to sign an agreement with Smartwings for six wet-leased aircraft. This year, it expects to receive a further twelve new Boeing 737s. During 2023, it also expanded its route network with seventeen destinations, ending the year with a network of one hundred and twenty-two destinations in fifty-two countries. Last year, the carrier added a further 1k to its payroll, (of which 73% were pilots, cabin crew and engineers), to bring its total workforce to over 5.5k.

With this week’s announcement that it had secured a multi-year partnership with Wimbledon, Emirates is now the Official Airline Partner for all four tennis Grand Slam tournaments, including the US Open, Roland Garros and the Australian Open. As the Official Airline Partner of The Championships, Wimbledon, Emirates will take the world of tennis to new heights, with exciting activations on-ground. The Championships is set to take place from 01 – 14 July at the All England Lawn Tennis Club. Through the partnership, Emirates will enjoy a wide-range of benefits including on-court branding in Centre Court and No.1 Court, on-site activations to engage with tennis fans, marketing, digital, and social media rights, as well as hospitality tickets. Deborah Jevans, Chair of the All-England Club, posted that “Wimbledon is joining forces with a premium brand and one of the world’s leading sponsors of tennis, and sport more generally.” Emirates has been the Official Airline of the ATP Tour since 2013 and Premier Partner since 2016. The airline’s portfolio includes some of the most high-profile events on the ATP and WTA tours. EK also supports sixty other tennis tournaments, as well as having supported the Dubai Duty Free Tennis Championships since its 1993 inception.

Emirates Flight Catering has fully acquired Bustanica, the world’s largest indoor vertical farm, which is located adjacent to Al Maktoum International Airport at Dubai World Central. The facility, encompassing 330k sq ft, has the capacity to grow more than one million kg of exceptional quality leafy greens a year, while using 95% less water than conventional agriculture. Bustanica’s produce, such as lettuce, spinach, parsley, and kale, is grown without pesticides or herbicides, and is 100% clean, fresh, and nutrient-rich. Produce from this innovative agriculture venture is used on all EK flights, and other airlines, and is available across the country’s major retailers including Spinney’s, Waitrose, Carrefour, and Choithrams. Furthermore, Bustanica will also help enhance the country’s food and water security.

The Roads and Transport Authority announced that transportation in Dubai increased by 13.0% on the year to 702 million passengers in 2023. Public transportation in Dubai, managed and controlled by the RTA includes Dubai Metro, Dubai Tram, taxis, smart rental vehicles public transportation buses, and marine transportation (abras, water taxis, water buses, and ferries).The authority is continuing to expand and develop the mass transit system, which will include the start of implementation of the  thirty km, fourteen station, Dubai Metro Blue Line project.

On Monday, HH Sheikh Mohammed bin Rashid toured the twenty-ninth edition of Gulfood – the largest global annual global food and beverage sourcing event, drawing 5.5k exhibitors and visitors from one hundred and ninety countries. Dubai’s Ruler noted that the five-day event serves as a major platform for accelerating global collaboration in the food sector, and that such events are aligned with the goals of the Dubai Economic Agenda D33, to double the emirate’s GDP, and establish it as one of the world’s top three urban economies. He also added that the emirate was well positioned to play a key role in enhancing global food security due to its position as a hub for technology and innovation, and its high-quality infrastructure and connectivity. He was also briefed on technological advancements in the F&B industry, primarily targeted at enhancing efficiency, reducing food waste, reducing expenditure and tightening supply chains. Gulfood 2024 started on Monday at the Dubai World Trade Centre, with it expected to be the biggest yet, with 49% of the 5.5k+ confirmed exhibitors participating for the first time. Under the theme ‘Real Food, Real Business’, Gulfood 2024 will bring together global brands as well as thousands of new exhibitors to showcase authentic food products, ingredients, and culinary practices, that could result in excess of US$ 12 billion in commercial deals.

May will see the twenty-third Airport Show take place in Dubai – the world’s largest annual event dedicated to the airport industry. The B2B event, taking place at the Dubai World Trade Centre, will have more than one hundred and fifty exhibitors from more than twenty countries and 7.5k visitors from over thirty countries. The Airport Show will have co-located events – ATC Forum, Airport Security Middle East, and the 11th edition of the Global Airport Leaders Forum). HH Sheikh Ahmed bin Saeed noted that the “Airport Show will remain the best venue to select and source the cutting-edge technologies and newest innovative products to better the airport operations.”

With an estimated US$ 350 million investment, FedEx Express confirmed that it would be building a new Middle East, Indian Subcontinent and Africa (MEISA) hub at Dubai World Central Airport in Dubai South. The facility was officially inaugurated by Sheikh Ahmed bin Saeed, President of the Dubai Civil Aviation Authority, Chairman of Dubai Airports and Chairman and Chief Executive of Emirates Airline and Group. The 57k sq mt structure will have advanced technologies that include automated sort systems that enhance the efficiency, accuracy, and speed of package processing and distribution from the facility. The hub also boasts two automated high-speed x-ray machines, equipped with AI to efficiently scan goods and enhance security. Additionally, a 170 sq mt cold storage area caters to a wide range of temperature-sensitive shipments.

Despite a decline in the international movement of goods and services, the country’s non-oil foreign trade topped a record US$ 953 billion (AED 3.5 trillion) last year, bolstered by its economic diversification plans; the split between goods and services was 74.3./25.7. The UAE’S trade, with its leading ten partners, expanded 26% in 2023, with his HH Sheikh Mohammed bin Rashid noting that “we indicated at the beginning of 2023 that it will be a record year for the economy … and the UAE has cemented new bridges of co-operation through comprehensive partnership agreements in 2023,” and that .“the UAE today is at the heart of the global trade flow and its economic commitments with everyone continue. Our motto will always be that we say what we do and do what we say.” There is no doubt that the UAE is well on course” to achieve its non-oil trade target of AED 4 trillion, (US$ 1.09 trillion) by 2031. Non-oil exports of goods now make up 17.1% of the country’s total non-oil foreign trade, compared with 13.0% in 2018.

With an initial target of stimulating more than US$ 327 million in new international trade, DP World, in partnership with Adroit Overseas Canada and Al Amir Foods, is to construct a 200k metric tonnes facility, spanning a quayside area of nearly 100k sq mt; it is also expected to enhance bulk handling by about 750k MT.  The project – over two phases – will also comprise processing and packaging units, and, according to DP World’s Sultan bin Sulayem, “will add world-class infrastructure to our flagship port, support national efforts to strengthen food security and significantly expand our flourishing agricultural trade ecosystem in Dubai”. Jebel Ali Port currently handles about 73% of the UAE’s food and beverage trade by value. The National Food Security Strategy 2051 aims to put the UAE at the top of the Global Food Security Index by then. In addition, the country is set to introduce measures, over the next five years, to boost the contribution of food and agriculture to its economy by US$ 10 billion and create 20k jobs.

The UAE has ordered building material providers to revert to previous prices or face hefty fines of up to US$ 272k that will be handed out for non-compliance. In order to maintain fair pricing across markets, the Ministry will implement measures to curb unjustifiable price hikes for materials, particularly construction items. It also added that it aims to promote fair competition, prevent monopolistic practices, and ensure consumer-friendly markets in collaboration with all industry stakeholders.

The good news of the week is that, after two years on the Financial Action Task Force’s “grey list”, the country may be taken off it, after addressing shortcomings in its anti-money laundering and counter-terrorist financing measures. Some investors will shun investing in countries on the “grey List” and will only invest in jurisdictions with strong AML and CTF frameworks to reduce risks associated with financial crimes This move will prove a boon to the country’s economy, as it will boost international investor confidence and attract more foreign direct investment. It will attract more asset managers who will see the UAE as a safer and more stable environment, following the delisting and evens the playing field more in the country’s favour on the international stage. FATF acknowledged that the UAE made progress in areas such as facilitating money-laundering investigations, imposing sanctions on non-compliance at financial institutions, and increasing prosecutions.

China continues to be the UAE’s leading trading partner, followed by India, Saudi Arabia, Turkey, Iraq, Switzerland, Hong Kong, Japan and Oman. Following the implementation of Cepa, Turkey’s trade figures have more than doubled to account for 5.1% of total non-oil trade, while trade with Hong Kong grew 47.9% and India by 3.9%; trade with the US  and China rose 20.1% and 4.2%.The value of non-oil exports increased by 16.7%, to US$ 120.16 billion, with gold, aluminium, oils, cigarettes, jewellery, copper wire and ethylene polymers topping the list of the country’s most important exports of goods. Last year, there were also increases in reexports and imports – up 6.9%, to US$ 188.01 billion, and by 14.2%, to US$ 381.47 billion; the top goods imported were gold, telephones, petroleum oils, cars and diamonds. The country’s services trade surplus grew to US$ 56.40 billion in 2023, driven by the travel and tourism industry, with tourist numbers 19.4% higher on the year at 17.15 million. Trade in services reached US$ 263.49 billion, of which US$ 159.95 billion was in services exports, including in ICT, professional/financial services, education, medical tourism, Islamic financial services, logistics and creatives.

Dr Ahmed Habib a climate expert from the National Centre of Meteorology confirmed, “we conducted twenty-seven cloud seeding operations between 11 – 15 February, targeting clouds with favourable conditions, characterised by strong updrafts and high humidity. These missions aimed to enhance rainfall in the country.” According to authorities from the country’s meteorological department, the recorded rainfall from last week is equivalent to the rain received by the UAE three decades ago, noting that “the eastern part of the country received 317 mm of rainfall in 1988,” adding that this year, the Umm Al Ghaf station recorded a maximum of 224.1 mm of rainfall. This comes after a drier December, compared to previous years during the same month.

e& posted a 2023 record consolidated net profit of US$ 2.81 billion – 3.0% higher on the year; revenue grew 8.3% to US$ 14.66 billion, driven by the Group’s successful business transformation, expanding business verticals and diversifying revenue streams. Ebitda rose 3.7% to US$ 7.11 billion – a margin of 49%. Subscriber numbers rose 3.0% to over fourteen million, whilst its total aggregate base, rose 4%, to 169 million. The Board proposed a dividend of US$ 0.109 per share for H2 2023, representing a total dividend of US$ 0.218 per share. It also recommended a new progressive dividend policy with an increment of US$ 0.008 every year starting from 2024, bringing the dividend-per-share to US$ 0.242 by 2026, subject to shareholders’ approval.

The DFM opened the week on Monday 19 February, 30 points (0.7%) higher the previous week, shed 33 points (0.8%) to close the trading week on 4,226 by Friday 23 February 2024. Emaar Properties, US$ 0.19 higher the previous fortnight, shed US$ 0.04, closing on US$ 2.19 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 4.96, US$ 1.78, and US$ 0.37 and closed on US$ 0.65, US$ 4.81, US$ 1.74 and US$ 0.36. On 23 February, trading was at 100 million shares, with a value of US$ 79 million, compared to 214 million shares, with a value of US$ 90 million, on 16 February 2024.

By Friday, 23 February 2024, Brent, US$ 11.26 higher (6.4%) the previous fortnight, shed US$ 1.76 (2.1%) to close on US$ 81.71. Gold, US$ 29 (1.4%) lower the previous fortnight, gained US$ 12 (0.5%) to trade at US$ 2,051 on 16 February.

As air travel quickly recovers from the impact of the pandemic, the civil aviation industry is readying for an air travel boom which will necessitate massive capex for expansions and redevelopments. The ME sector is worth an estimated US$ 60.0 billion and will see continuing high growth – air connectivity in the region. had seen a 26% growth in the three years to 2022, (which does include the Covid period which saw air travel slump). It is estimated that the one hundred and  two ME airports will handle 1.1 billion passengers by 2020, more than double 2019’s return of four hundred and five million; to cater for this capacity increase, total investment is predicted to be around US$ 151.0 billion. According to a CAPA report:

• four hundred and twenty-five major construction projects were at existing airports worldwide, with US$ 450 billion in investments
• two hundred and twenty-five new airport projects, of which more than 70% of the investment was in Asia Pacific
• 1.07k airport investors, of which 258 were airport operators, groups or consortiums
• about 68% of all projects were based on terminals – either expansions or new developments

A recent report has disclosed that the global airport construction market grew to $1.14 trillion in 2023 and would reach $1.80 trillion by 2030.

With surging revenue, Rolls Royce’s 2023 underlying profits more than doubled to US$ 2.0 billion, with expectations that this will rise by at least 6% this year, attributable to a surge in demand from the aviation sector, an improvement in the company’s power business and rising defence orders. Its chief executive, Tufan Erginbilgic, noted that “our transformation has delivered a record performance in 2023, driven by commercial optimisation, cost efficiencies and progress on our strategic initiatives.”

In the US, theSecurities and Exchange Commission has alleged that the husband of a BP employee, Tyler Loudon, made US$ 1.76 million in illegal profits. The watch dog claimed that he had heard some of his wife’s telecons, about BP’s takeover of TravelCenters, leading him to buy 46.5k shares in the firm. His wife,  an M&A manager at the energy firm, was working on the acquisition. When the deal went through, TravelCenters share price rose nearly 71% and Mr Loudon allegedly immediately sold all of his newly bought shares for a profit. The SEC said, “we allege that Mr Loudon took advantage of his remote working conditions and his wife’s trust to profit from information he knew was confidential.” Mr Loudon confessed to his wife about buying the TravelCenters shares after the Financial Industry Regulatory Authority began asking questions about the BP deal and who was “in the know”. She then reported the insider trading episode to her supervisor, and despite BP finding no evidence that she knowingly leaked the information about the deal to her husband, or knew he had bought the shares, her employment was terminated. Three months later in June 2022, she initiated divorce proceedings.

Late last week, there were reports that the owner of Waterstoneswas plotting to invest US$ 882 million in a bid to acquire Currys, the listed electrical goods retailer, with its current market value at US$ 662 million; its share value has dropped by about a third over the past twelve months. Elliott Advisors, best-known for its activist sieges against the boards of some of the world’s largest companies, then made a formal proposal to the board, but the proposal “significantly undervalued” the company. Like other major UK retailers, Currys has been impacted by high inflation and soaring cost of living expenses, as witnessed by a dip in like-for-like sales during the crucial Christmas trading period. The company, founded in 1884, was first listed in 1927 and in 2021 was rebranded under its current name, having absorbed shops operating under brands including PC World, Dixons and Carphone Warehouse. Currys, which employs more than 15k people in the UK, trades from about three hundred stores, and also in eight countries, including Denmark, Finland and Sweden under the Elkjop brand. In total, it employs 28k people and operates more than eight hundred stores.

To help with production of its “next generation” of sports cars, including its luxury DBX707 SUV, Aston Martin is planning to recruit four hundred additional employees at its two UK factories. The firm said demand for the SUV, and the introduction of other models, led to the move and that recruitment had already started.

Embattled retailer, The Body Shop, (which went into administration last week), has confirmed that it plans to close half of its two hundred stores in the UK – including seven on the day of the announcement, Tuesday 20 February; it will also cut 40% of roles, (roughly three hundred staff), at its London-based head office. The seven now closed are Surrey Quays, Oxford Street Bond Street, Canary Wharf, Cheapside, Nuneaton, Ashford Town Centre and Bristol Queens Road. Following the closures, “more than half” of the remaining one hundred and ninety-eight outlets will remain open. Administrators said that the brand’s current portfolio is “no longer viable” after “years of unprofitability” and that, as part of the restructuring, there will be a “renewed focus” on products, online sales channels and wholesale. The brand’s global franchise partners are not impacted with this portion of the business said to be “central” to The Body Shop’s long-term international strategy.

These are halcyon days for the banking sector, including Europe’s biggest bank, HSBC which registered an 80% surge in 2023 pre-tax profits to a staggering US$ 30.30 billion. (What term does the industry use for price gouging?). Chief executive, Noel Quinn, noted that “our record profit performance in 2023 enabled us to reward our shareholders with our highest full-year dividend since 2008.” HSBC makes most of its profits in Asia, especially China and Hong Kong.

Earlier, NatWest Group posted its highest yearly profit, at US$ 7.84 billion, since just before the GFC in 2007; it also announced a US$ 379 million share buyback. The UK government still owns 35% of the bank since it bailed it out to the tune of US$ 58.14 billion fifteen years ago during the financial crisis. Many UK taxpayers will not be too pleased that it also announced a US$ 450 million staff bonus but a little happier to see the back of the bank’s chairman, Sir Howard Davies. He has been roundly criticised for claiming that it was not “that difficult” for first-time buyers to get on the property ladder and that “you have to save, and that is the way it always used to be.” He is also the same person who declared that NatWest’s board had “full confidence” in CEO Alison Rose after she discussed the closure of Nigel Farage’s account with a journalist at the BBC – next day, it was announced that she was to step down. She will not be paid US$ 6.4 million in share awards and also a bonus of US$ 3.5 million, but will receive US$ 3.5 million in pay, pension contributions and benefits.

Last month, the Financial Conduct Authority commended a probe whether people had been paying too much for car finances, arranged by brokers who earned commission on the interest rates that they set for customers. Consequently, Lloyds Bank, which also owns the Halifax, Bank of Scotland and Scottish Widows brands, has set aside US$ 570 million to cover the potential cost of an investigation into car finance deals. The FCA will be investigating whether people, who believe they were charged too much for car loans, were owed compensation. Under what were called discretionary commission arrangements, some lenders had allowed car dealers to adjust interest rates on loans, which would improve the commission they received – the higher the interest rate, the higher their commission; such commissions were banned by the FCA in 2021. The bank is likely to be the most exposed of all financial institutions because it owns Black Horse, one of the UK’s largest motor finance providers. It is estimated the Financial Ombudsman has received 17k complaints to date about motor finance commission. To add to its woes, the bank was being investigated by the financial watchdog, relating to its money-laundering rules and regulations. Almost as an aside, the bank posted a 57% surge in 2023 pre-tax profits to US$ 9.50 billion, with an underlying net interest income – the difference between the money it charges for loans and pays out for savings – 5.0% higher at US$ 17.74 billion.

Nvidia posted an unbelievable 265% surge in revenue, for the quarter ending 28 January, to US$ 22.0 billion, with revenue more than doubling to US$ 60.9 billion. Furthermore, the world’s most valuable chip maker also forecast a 233% jump in its revenues for the current quarter, beating analysts’ estimates. In addition to its AI chips, sales at the firm’s data centres have grown fivefold over the past twelve months. Gross profit for the final three months of its financial year rose by 338% to US$ 16.8 billion, and annual gross profit by 188% to US$ 44.3 billion. Its stock market value has soared by 225% over the last year, with its share price jumping by more than 9% in extended New York trading on Wednesday.

Yesterday, the Nikkei 225 reached a record 39,099 – finally surpassing its previous record set in December 1989. In line with other global bourses, Japan’s main stock exchange was boosted by Nvidia’s strong earnings driven by demand for its AI processors, and the weakness of the yen, but despite the country falling into a technical recession. Three years ago, the benchmark index tanked, losing almost 60% in value, and since then, the economy has been struggling with deflation.

As shipping around the Cape of Good Hope surged last week, the Suez Canal cargo traffic more than halved, with the impact of the Houthi attacks in the Red Sea gaining traction. For the week, ending 13 February, Suez Canal shipping volumes sank by 55% on the year while volumes around the Cape of Good Hope rose nearly 75%, as many other shipping companies decided to take the safer but longer/more expensive route. The total number of ships passing through the waterway last month fell 36.8%, on the year, to 1,362 vessels.  Not only is the country suffering from reduced revenue but it has also been affected by reduced tourism numbers, record inflation now slightly declining to 29.8%, and a massive US$ 164.5 billion external debt burden. According to the IMF, its talks with Egypt “continue to make excellent progress” for a comprehensive support package, and that “the IMF team and the Egyptian authorities have agreed on the main elements of a programme, and the authorities have expressed a strong commitment to it.”

Official Chinese data indicated that there was a welcome 47% hike in domestic tourism, over the Lunar New Year to US$ 87.96 billion Two of the main drivers behind these figures were the holiday, which finished last Sunday, 18 February 2024, was a day longer than usual and came after years of pandemic lockdowns and restrictions, which were lifted in early 2023. There were 474 million domestic trips over the eight-day celebration – 34% higher on the year and up 19% on pre-Covid 2019 figures, however, it seems that average spend per trip was 9.5% lower compared to 2019. There is some hope that the Year of the Dragon will see more growth in China’s economy that had been rattled in the previous Year of the Rabbit by issues such as another property market crisis, weak exports, concerns about falling consumer prices, and foreign direct investment by foreign business falling to its lowest level in thirty years.

Business Secretary Kemi Badenoch has hit back at claims made by former Post Office chairman Henry Staunton that he had been sacked because she had told him: “someone’s got to take the rap.” He had been Post Office chairman since December 2022, but left the post last month after Ms Badenoch said “new leadership” was needed to tackle the scandal. He added more fuel to the flames by adding that he was also told by a senior civil servant “to stall on spend on compensation and on the replacement of Horizon, and to limp, in quotation marks – I did a file note on it – limp into the election.” To nobody’s surprise Ms Badenoch has come out fighting saying the comments were a “disgraceful misrepresentation” of their conversation. Meanwhile, there are still hundreds of sub postmasters waiting for compensation, with some still tarnished by wrongful prosecution in UK courts.

A BBC report claims that in 2015, the Cameron government were aware that the Post Office had ditched a secret investigation, that had covered the previous seventeen years, that might have helped wrongly accused postmasters prove their innocence. It appears that Ministers were told of the investigation but after postmasters began legal action, it was suddenly stopped. Although the Post Office would surely have known then that Horizon’s creator, Fujitsu, could remotely fiddle with sub-postmaster’s cash accounts, in 2017, it argued in court, that it was impossible. There is a distinct possibility that the Post Office may have broken the law – and the government did nothing to prevent it.

In a last-minute attempt to finalise a landmark financial settlement before the government publishes legislation that will establish an independent football regulator, the English Premier League has called an emergency meeting of its 20 “shareholders” (clubs). The aim is to be able to finalise a New Deal for the seventy-two English Football league teams in the three lower divisions, before 29 February. That will be the date that Lucy Frazer, the Culture Secretary, publishes the Football Governance Bill, which intends to hand a new watchdog power to impose a financial settlement on the sport. Reports indicate that this deal will cost EPL teams between US$ 1.057 billion and US$ 1.168 billion, with the final figure dependent upon the payment of an US$ 111 million sum for the current season. Discussions were on track with an imminent settlement on the cards until last December, Richard Masters, the Premier League chief executive, notified clubs that it was calling a halt to further talks with the EFL because of divisions about the scale and structure of the proposed deal. There has been significant unrest among Premier League clubs over the cost of the subsidy to the EFL, as well as the lack of certainty about the regulator’s powers and other financial reforms being driven forward by the Premier League. The EPL has also other problems to face, the most prominent being the possible fresh fight looming with Manchester City over the associated party transaction rules which most affect clubs with state, private equity or multi-club ownership structures. Then there is the problem of the US$ 5.0 billion chasm between the combined revenues of the twenty EPL clubs and those of the seventy-two EPL clubs.

The UK’s public finances posted a surplus of US$ 21.11 billion in January (the last set of public figures to be released before the Chancellor’s budget next month); this was more than double the same return in January 2023. The exchequer is bereft of funds, despite this surplus, and normally any tax cuts or government spending would not be even considered but with a general election sometime later in the year, Jeremy Hunt will try and “pull a rabbit out of the hat”. Overall, the UK’s debt has risen compared to twelve months earlier and remains at levels last seen in the early 1960s, equating to 96.5% of the size of the economy, measured by GDP.

Brad Banducci was in the news earlier in the week after he was grilled on air over alleged price-gouging tactics used by Woolworths, the country’s largest retailer and amid a spiky, tense and disastrous interview, he just walked out on the reporter. The boss of the Australian supermarket giant was in the news again later in the week after he announced his resignation. Woolworths and Coles account for some 65% of the market and there has been widespread disapproval of some of business practices at a time when the majority of Australians are facing a cost-of-living crisis, not helped by rocketing shop prices, and seeing Woolworths posting a massive US$ 608 million H1 profit, partly attributable to growing margins on its food businesses. Little wonder that it is on the end of another investigation from the nation’s competition watchdog over pricing practices. There are reports that the departing chief executive could be in line for a US$ 16 million pay-out, if both his and Woolworths’ performance targets are met in full. His leaving is the third sudden and early departure of leading Australian executives following Qantas’ Alan Joyce being forced out last September and RBA governor Philip Lowe, failing to secure an extension of his term. All three resignations came after heavy and sustained public criticism, which carried onto social media. Prime Minister Anthony Albanese says something is clearly “going wrong” with supermarket pricing, but he won’t take a hammer to the Coles and Woolworths duopoly because Australia is “not a Soviet country”. How do they Get Away With It?

Duck Before You Drown!                                                 16 February 2024

Real estate transactions for the week ending 16 February are currently unavailable.

Noting that all realty firms should always adhere to the terms and conditions stipulated for real estate advertisements, (including to provide accurate and correct information to customers by obtaining advertising licenses), the Real Estate Regulatory Agency has fined thirty firms, each US$ 13.6k, (AED 50k), for breaking the rules. The industry watchdog had previously issued circulars and warnings to emphasise the provisions and conditions of real estate advertising and ensure compliance. The general public have been advised not to deal with any real estate advertisement that does not have a permit and QR code.

On Wednesday, the Dubai Land Department gave real estate agents a three-day deadline to remove the property advertisements that are no longer up for sale or rental, advising them that they “must update the digital real estate platform portals within three working days, which should result in removing all unavailable properties for rental or sales.”

Speaking at the World Governments Summit in Dubai earlier in the week, Bill Winters, chief executive of Standard Chartered, seems to have disagreed with a recent IMF forecast that downgraded projected Mena economies by 0.5% to 2.9%.  He noted that, “Whenever I hear these IMF-type figures, it doesn’t resonate with what I see on the ground because there’s just tremendous growth [in the GCC], with obviously huge increases in population and economic activity,” and that “This is an extremely bullish environment despite the fact that there’s a war in the neighbourhood. The Gulf is a sanctuary for global capital and people – and that was clear during [and after] Covid, given the influx of business and the people coming with it.” At the conference, IMF’s MD, Kristalina Georgieva noted that the global economy, meanwhile, is set for a “soft landing” and interest rates in the world’s major economies are likely to ease by the middle of 2024 but warned that a prolonged war in Gaza could have spill over effects on the wider global economies.

In an agreement with Dubai’s Roads and Transport Authority, (and all-electric aircraft company Joby Aviation), UK-based Skyports Infrastructure aims to have air taxis operational in the emirate by 2025. The deal sees the RTA overseeing the air mobility services, with Joby given the exclusive right to operate air taxis in Dubai for six years. Skyports was granted exclusive rights to design, construct and operate an initial network of four vertiports in Dubai International Airport, the Palm Jumeirah, Downtown Dubai and Dubai Marina. It seems highly likely that Dubai will become the first location in the world with a commercial, citywide electric air taxi services The Joby Aviation S4, with a top speed of 321 kph, can accommodate a pilot and four passengers, with a maximum distance of 161 km; it is estimated that a flight from DXB to the Palm Jumeirah will take ten minutes.

A MoU between the UAE and India will see the partnership developing digital infrastructure and AI which will explore and evaluate the technical and investment potential of developing data centre projects in India. Initial capacity will be two 2 gigawatts, (supporting the deployment of a supercomputer cluster) and AI compute capacity of 8 exaflops for varied sectoral use. The MoU also seeks to promote investments in digital public infrastructure, AI, R&D, and innovation, while fostering public-private collaboration and knowledge exchange to support India’s digital growth and innovation. It is estimated that India’s data centre network could be valued as high as US$ 1 trillion by 2030. 

Sheikh Maktoum bin Mohammed bin Rashid has announced the launch of the Buna Payments Platform, an innovative platform that delivers advanced payment solutions that meet the highest global standards of compliance; it will also facilitate the clearing and settling of Arab payments. He noted that “the platform underscores the critical role of payment systems in bolstering the Arab economy’s infrastructure and is pivotal in promoting financial inclusion.”

According to the World Bank, in 2023, remittances to poor and middle-income countries grew an estimated 3.8% to reach US$ 669 billion. India was the top remittance recipient country, receiving funds worth US$ 125 billion, followed by Mexico, China, the Philippines, and Egypt, with remittances of US$ 67 billion, US$ 50 billion, US$ 40 billion and US$ 24 billion. The US continued to be the largest source of remittances.

Following approval by the Central Bank of the UAE, it seems that money exchanges houses will gradually increase charges in certain remittance corridors probably starting in Q2; this is the first time since 2019 that charges, via an introduction of an optional fee adjustment, have been increased. The chairman of the Foreign Exchange and Remittance Group, Mohammad Al Ansari noted that “it will be implemented after studying each corridor and could happen in the second quarter of this year. On Monday, the Ferg said exchange houses could opt for a minimum fee increase of 15%, which would typically equate to US$ 0.68 (AED 2.50), with the decision to increase fees dependent on individual exchange companies and their operational costs. The fee increase is expected to be applicable for remittance services through physical branches, while remittances offered through mobile apps of exchange houses will most likely remain unchanged or even reduced to maintain competitiveness. Despite the increase, it is anticipated the average remittance cost of sending US$ 200 will remain at less than 3.5% in the UAE – well down on the global 6.2% average.

Although Al Ansari Financial Services posted a 16.8% decline in 2023 net profit to US$ 135 million and a marginal 1.9% dip in operating income, the firm had a relatively good year. A statement noted that “headwinds in major remittance markets (such as India, Egypt, Pakistan) caused an 8.0% drop in remittance operating income. However, strong diversification drove an overall 9.0% increase in non-remittance operating income, largely mitigating the decline. Notably, transactions across all services grew,” The news in the paragraph above will undoubtedly help offset these costs and strengthen financial performance in the future. A US$ 163 million (AED 600 million) dividend, equating to US$ 0.0218 (AED 8 dirhams), was announced, half of which had already been paid out; this results in a dividend yield of 7.74%.. Al Ansari Exchange’s has two hundred and fifty-six physical branches and is currently in negotiations to integrate with Oman Exchange in Kuwait, with synergies to be realised Q2.

 Dubai International Financial Centre posted a 23% hike in 2023 revenue to US$ 352 million, with net profit surging 45% to US$ 203 million. Last year, there was a 26% hike in active companies, to 5.5k, employing more than 41.5k people, with the total number of new company registrations surging 34% to reach 1. 45k.The number of financial companies grew 22% to reach nearly 1.7k, while non-financial companies rose 28% to over 3.8k. Last year, the number of FinTech companies almost trebled to nine hundred and two, with the DIFC the base for three hundred and fifty wealth and asset management firms. DIFC also posted that it is ahead of schedule to achieve its target of doubling its gross domestic product contribution by 2030, aiming “to achieve the objectives outlined in Dubai’s Economic Agenda (D33), positioning Dubai among the top four global financial centres.” 

Amanat Holdings released impressive 2023 figures this week. The region’s leading healthcare and education investment company posted a 38.9% surge in net profit to US$ 42 million and a 40.0% hike in revenue to US$ 196 million; earnings per share rose 25% to US$ 0.0136. The revenue increases was down to “by almost two-fold growth at the education platform and the growth at the healthcare platform through the consolidation of Sukoon as well as the continued expansion of our long-term care offering in Saudi Arabia.” Total assets were 7.4% higher at US$ 1.14 billion.

Emirates Integrated Telecommunications Company posted a 33% hike in its 2023 net profit, to US$ 449 million, on the back of record revenue, up 7.0% to US$ 3.72 billion amid the introduction of generative AI in its operations, along with “sustained demand for mobile services, and strong growth in post-paid and fixed services”. Revenue from Du’s mobile services segment rose by 6.2% annually to US$ 1.66 billion, while fixed services revenue grew by 8.6% to US$ 1.03 billion, with other revenue increasing by 6.4% to US$ 1.03 billion. Ebitda rose 12.8% to US$ 1.58 billion, reflecting “top-line growth combined with margin expansion and disciplined cost management”. Q4 revenue and net profit both headed north by 7.3% to US$ US$ 970 million and by 38.5% to US$ 108 million. Before its earnings release on Tuesday, Du’s shares were trading at US$ 1.58.

The DFM opened the week on Monday 12 February, 45 points (1.1%) lower the previous week, gained 30 points (0.7%) to close the trading week on 4,259 by Friday 16 February 2024. Emaar Properties, US$ 0.06 higher the previous week, gained US$ 0.13, closing on US$ 2.23 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.66, US$ 4.71, US$ 1.74, and US$ 0.36 and closed on US$ 0.68, US$ 4.96, US$ 1.78 and US$ 0.37. On 16 February, trading was at 214 million shares, with a value of US$ 90 million, compared to 87 million shares, with a value of US$ 71 million, on 09 February 2024.

By Friday, 16 February 2024, Brent, US$ 4.99 higher (6.4%) the previous week, gained US$ 6.27 (8.1%) to close on US$ 83.47. Gold, US$ 16 (0.8%) lower the previous week, shed US$ 13 (0.6%) to trade at US$ 2,039 on 16 February.

A survey by Hays ME reckons that, with the job market growing, 39% of professionals working in the GCC are planning to change companies this year, with the main reason being a lack of career development opportunities. What seems to be on the high side is that 78% of employers in the Gulf region expect an increase in salaries in their organisation. Interestingly, 41% of employers said there were more candidates applying for jobs than in the past – a possible indicator of a shortage of skilled professionals. The GCC Salary Guide, which covered 2.3k employers and working professionals – and eleven professions in nearly four hundred roles – also posted that 67% of employers were wanting to grow their organisation’s headcount this year.

It seems that the El Niño weather phenomenon is the main driver behind global cocoa prices hitting fresh record highs, as dry weather hurts crops in West Africa, (which produces the bulk of global supply), especially the world’s two biggest producers of cocoa, Ghana and Côte d’Ivoire. Late last week, cocoa prices topped US$ 5.87k a ton, which has roughly doubled since the start of 2022. The soaring cocoa prices have already impacted on major chocolate makers’ margins and higher prices for consumers. Hershey has warned: “historic cocoa prices are expected to limit earnings growth this year.”, with the major player not ruling out putting up prices for customers. Recently, Which? noted that the price of some festive chocolate box sets had risen by at least 50% in a year. Although the overall inflation for UK supermarket food and drink eased in November to 8.3%, the rise in the chocolate prices was significantly higher at 15.3%.

This week, the global leading crypto currency headed above the US$ 50k level, driven by renewed interest in high-risk assets, as the US Fed starts to prepare to lower interest rates, and enhanced consumer confidence following the US Securities and Exchange Commission’s approval for Bitcoin ETFs. Crypto trading platform Bitget noted that on 01 January, when Bitcoin was approved, Bitcoin trading volumes were at US$ 16 billion and by 10 January, they had grown to US$ 50 billion. Bitcoin rose by about 12% in the second week of February 2024. The total crypto market capitalisation has risen to US$ 1.87 trillion with Bitcoin crossing US$ 50k for the first time in two years, but still some way off its 2021 high of US$ 67.5k.

Airbus posted a 13.2% decline in its Q4 net profit to US$ 1.56 billion, as revenue came in 11.0% higher on US$ 24.52 billion; full year net profit fell 11.0% to US$ 4.09 billion, not helped by charges related to its space business. The world’s biggest plane-maker expects to deliver eight hundred, jets, as it steps up production of its top-selling A320 family of narrow-body aircraft – an 8.8% increase on 2023 figures, subject to no further disruptions in the global economy, air traffic, the supply chain, the company’s internal operations and its ability to deliver products. Airbus confirmed that it was “on track” to be producing seventy-five A320s Neos a month by 2025. If it meets its 2024 target, that would mean that it would be pulling ahead of Boeing which has been barred by the US Federal Aviation Administration from increasing the existing 737 Max production rate, pending improvements in quality control. This gives the French company an added advantage in a market that pits the A320s against Boeing’s 737 Max. However, Airbus has its own problems including supply chain bottlenecks, fewer skilled workers and an ongoing problem with its Pratt and Whitney engines that has led to hundreds of A320 Neo jets being grounded for inspection. Having hired an extra 13k people last year, the plane-maker is planning to add “roughly half” that number this year.

Following Sainsbury’s recently warning about the availability of black tea, Tetley Tea has confirmed it is monitoring tea supplies on a daily basis as imports reach a “critical period”. The country’s second biggest tea brand said supplies were “much tighter” than it would like, amid disruption in the Red Sea, and noting that its current production levels were not changing, the amount it was able to hold in stock as a buffer would drop “but we’re pretty confident we can maintain supply levels”.

2k jobs are at risk with news that The Body Shop’s UK business had entered administration, but its two hundred retail outlets, and several franchises, will remain open as usual, while efforts are made to try to save the UK firm. Restructuring firm FRP said it would now consider all options to find a way forward for the business and noted that creating “a more nimble and financially stable UK business” was an important step in it becoming a modern beauty brand “relevant to customers and able to compete for the long term”. Part of the process will inevitably see costs, including on property and rents, being slashed and job cuts. Aurelius, the European private equity firm, became Body Shop’s third buyer since 2006; its funder Anita Roddick died in 2007. It bought the brand for US$ 261 million last November and took the drastic decision to place it into administration after poor sales during the key Christmas trading period. Rather like the demise of Wilko last year, three of the reasons for its current problems were that it failed to keep up with competitors on pricing, the boom in online trading and the cost-of-living crisis which saw customers’ spending squeezed.

Since announcing its annual financial results on 07 February, by Tuesday (13 February) this week, UK chip designer Arm Holdings, (whose chips power almost every smartphone in the world), had posted a 98% surge in its share value, over a period of five working days; it noted then that a demand in its AI-related technology had boosted its sales. Arm’s technology is not directly used for AI work, but chip makers like Nvidia are choosing it for central processing units that complement their AI-specific chips. The Cambridge-based firm, founded in 1990, and taken private by Japan’s SoftBank in 2016 in a US$ 32 billion deal, only returned to the stock market last September. Before then, plans to sell the firm to Nvidia, which started in 2020 were shelved in April 2022, after global regulators objected to the deal. Indeed, Nvidia, which has seen its share value more than triple in value over the last year on soaring demand for its AI chips, has seen its market cap currently valued at US$ 1.8 trillion. Even though it has been badly impacted by the declining valuations of some of its investments, including struggling office space firm WeWork, Softbank, which still holds a roughly 90% stake in Arm, has seen its own shares gain almost 30% in the past week.

Claiming the main reason being regulator Ofgem allowing it to recover losses of US$ 629 million it racked up in the aftermath of Russia’s invasion of Ukraine, British Gas, which has 7.5 million customers, posted a tenfold increase in 2023 profits to US$ 944 million, compared to just US$ 91 million a year earlier. However, with firms making record profits when energy prices spiked, suppliers that took on the customers of bust retailers made hefty losses. Centrica, British Gas’s parent company, said its profits fell by 17% to US$ 3.52 billion. This comes at a time when millions of UK households have been hit by higher electricity and gas bills, with energy being the main driver in the rising cost of living in the UK. This came about because Ofgem allowed energy providers to take a bigger slice of profits in H1 2023, to make up from losses arising from customers not being able to pay their energy accounts and honouring existing contracts when dozens of small energy providers went bust in 2021.

It is reported that Nike will reduce its payroll by 2%, (1.6k jobs) starting today and until the end of next month. It seems that those employed in stores and distribution centres, as well as those in its innovation team will not be impacted. Last December, the company slashed its annual revenue forecast and laid out a US$ 2 billion cost-saving plan, blaming cautious consumer spending. Nike is to use its resources to increase investment in categories like running, women’s apparel and the Jordan brand. The sportswear giant has yet to make any comment. These retrenchments will cost the company about US$ 400 million to US$ 450 million in employee severance costs this quarter.

Late last month, Jeff Bezos announced plans that he would be selling up to fifty million shares and, true to his word, on Tuesday, he confirmed that he would divest twenty-four million Amazon shares, worth more than twenty-four million dollars. This is the first time that he has sold any of his stock since 2021. One reason why he has done this, is that last November, he posted that he was moving to Miami, from the Seattle region, adopting a so-called 10b5-1 plan, after Washington state instituted a 7.0% capital gains tax in 2022 – which is not applicable in Florida. It is estimated that this move could have saved the billionaire US$ 288 million so far.

Another high-tech mover is Eon Musk’s decision to shift his rocket company SpaceX from the US state of Delaware to Texas, in line with a similar move two weeks ago for Tesla. This follows a January court ruling in the state of Delaware that annulled his US$ 55.8 billion Tesla pay package from electric car maker Tesla following which the billionaire entrepreneur advised “if your company is still incorporated in Delaware, I recommend moving to another state as soon as possible”.; this despite many big companies, including Amazon, being registered in the state, known for having light taxation.

With Q4 results showing its GDP had dipped by a worse than expected 0.4%, (with analysts actually expecting a positive 1.0%), Japan entered into a technical recession after it had posted a 3.3% contraction in Q3. (A technical recession is called after two consecutive quarterly GDP deficits). Another highlight of Q4 returns is that it seems that Japan may have lost its position as the world’s third-largest economy to Germany. The IMF will only declare a change in its rankings, once both countries have published the final versions of their economic growth figures, but latest figures indicate that Germany’s economy at US$ 4.4 trillion is now US$ 0.2. trillion higher than that of Japan, mainly driven by the yen’s weakness to the greenback, having fallen by about 9.0% last year.

With only 500 jobs created in the month, Australia’s January unemployment rate rose by 22k to 4.1% – the first time in two years that the unemployment rate had been above the 4.0% level; furthermore, hours worked fell by 2.5%, with the underemployment rate ticking up 0.1% to 6.6%. This would seem to indicate that the country’s labour market is cooling down partly as a result of the RBA’s rapid rate rises over the past two years, along with higher inflation, and economic uncertainty. The January figures could have also been skewed by the fact that many Australians were still on holidays when the survey was conducted, as well as other seasonal factors. Treasury secretary Steven Kennedy has said the economy remains on track to beat inflation without a large spike in unemployment, noting that consumer spending is at a fifteen-year low driven by the double whammy of high inflation and high interest rates. He also noted that although households are saving less and consuming less than at any time since the GFC, the level of unemployment remains low by historical standards, which he expects to peak at 4.5% next year. In contrast, the situation around ten years ago was that unemployment settled between 5% – 6 % because of the overzealous use of interest rates maintaining too-low inflation, and it can only be hoped that the RBA does not repeat that mistake again.

Although US price increases softened again last month by 0.3% to 3.1%, it was less than expected, as higher housing and food costs offset a decline in petrol prices. On the news earlier in the week, financial markets opened lower as it appeared that authorities have not got inflation fully under control and thus reducing the chances of any Fed rate cuts in the short term. In June 2022, US inflation peaked at 9.1% and even though progress has been made, it is still over the Federal Reserve’s target of 2.0%. February core inflation remained unchanged over the past two months at 3.9%, as some costs were higher on the year, including housing (6.0%), car insurance (20.5%) and personal care (5.3%).

There was some surprise when UK January inflation figures were relayed, indicating that it had remained flat at 4.0%, 0.2% lower than market expectations, but still double the BoE’s 2.0% target. However, although food prices fell for the first time since September 2021, they are still 7.0% higher than a year ago, with gas/electricity prices climbing at a faster rate than in January 2023; food prices were 0.4% lower attributable to price falls in bread cereals, cream crackers and chocolate biscuits.

The Office for National Statistics posted that by the end of Q4 2023, UK wage growth slowed again, (by 0.4% to 6.2%), but is still outpacing price rises. The number of vacancies fell for the nineteenth consecutive time, down 26k to 932k, in the quarter to January, as the unemployment rate dipped 0.1% to 3.8%. However, there were some signs that the downward trend in job vacancies could be slowing, but the statistics watchdog has said it could not guarantee the reliability of jobs market data, and that it is currently updating how it gathers information about employment, but this will not be fully in place until September. BoE’s Andrew Bailey has said that the ONS figures are the Bank’s only way to gauge unemployment, so their current unreliability is “posing challenges” as policymakers weigh up what to do about interest rates in the coming months. The Bank’s Monetary Policy Committee, which sets interest rates, always closely watch wage growth data and will only cut rates further when they can see more evidence of a tougher jobs market in order to avoid making cuts it may need to backtrack on later.

Just like Japan, the UK went into technical recession at the back end of 2023, after the economy contracted 0.3% in Q4 2023, following Q3’s minus 0.1%. The Office for National Statistics voiced that “all the main sectors fell on the quarter, with manufacturing, construction and wholesale being the biggest drags on growth, partially offset by increases in hotels and rentals of vehicles and machinery,” Excluding the Covid year of 2020, last year’s meagre 0.1% growth was the worst quarterly performance since 2009, when the economy was still reeling from the GFC, and follows a positive 4.3% expansion in 2022. Three drivers behind the disappointing Q4 results were the doctors’ strikes, a fall in school attendance and shoppers spending less in the December run up to Christmas. These figures will not be much help for Chancellor, who will have to cut public spending even more sharply if he wants to deliver promised tax reductions in his 06 March budget, more so because in recent weeks as interest costs on UK government borrowing have increased. Questions are being raised whether Rishi Sunak can meet his pledge made last January to grow the economy. Lord Rose, chairman of Asda, commented that “it looks like a duck, it quacks like a duck, it walks like a duck, it is a duck – it is a recession.” Maybe the message to both the embattled Prime Minister and the befuddled Chancellor of the Exchequer is Duck Before You Drown!

Who Wants To Be A Billionaire?                                      09 February 2024

The real estate and properties transactions, totalling 3,543, were valued at US$ 2.67 billion for the week ending 09 February 2024. The sum of transactions was 197 plots, sold for US$ 439 million, and 2,572 apartments and villas, selling for US$ 1.55 billion. The top three transactions were all for plots of land, the first in Warsan Fourth for US$ 33 million, the second in Al Barshaa South for US$ 21 million and in Wadi Al Safa 3 for US$ 15 million. Madinat Hind 4 recorded the most transactions, with seventy-seven sales, worth US$ 54 million, followed by thirty sales, in Al Hebiah Fifth, for US$ 21 million, and eleven sales, in Jabal Ali First, valued at US$ 14 million. The top three transfers for apartments and villas were a villa in Island 2 for US$ 38 million, another in Jumeirah First, for US$ 32 million, and an apartment in Al Safouh Second for US$ 22 million. The mortgaged properties for the week reached US$ 490 million; one hundred and thirty-five properties were granted between first-degree relatives, worth US$ 198 million.

Despite a slower growth of 5.6%, in 2023, Dubai outpaced Mumbai, Bangkok, Tokyo, Sydney, Shanghai, Madrid, Barcelona, Geneva, Singapore and other cities in terms of capital value appreciation. Savills projects this year’s growth to be as high as 5.9%, which places the emirate a global second to Sydney’s 9.9%. It is estimated that around 9.5k millionaires made Dubai their home in the past two years. The consultancy noted that the Dubai prime market is still relatively competitively priced by global standards, at US$ 850 per sq ft, whilst offering a comparatively low cost of living, a relatively easy visa process, and a warmer climate – all magnets attracting international and domestic buyers. On the global stage, Dubai is a high-yielding city, with returns of 4.8%, as prime yields nudged up 40 bps, during 2023, in which capital values rose by 17.4% and rents by 8.9%. Another plus for the emirate is that the cost of buying, owning and selling a US$ 2 million property in Dubai is more economical than in Singapore, Hong Kong, London, New York, Tokyo, Paris, Mumbai and other cities. In terms of prime residential rental value growth, Dubai was ranked first ahead of Lisbon, Berlin and Singapore.  Dubai rents are cheaper than other cities including New York, Hong Kong, Los Angeles, Singapore, Paris, Geneva and Amsterdam but are more expensive than in Bangkok, Mumbai, Sydney, Madrid, Kuala Lumpur, Beijing and Barcelona.

A Cushman & Wakefield study notes that there is a two-tiered rental market operating in Dubai, with a widening gap between new contracts and lease renewals. Over the past two years, data shows that residential rates rose by 19% – and 27% a year earlier – with apartment and villa sales prices having climbed 68% and 32% since the pandemic, and by 19% and 16% last year. Since their 2014 peak, villa and apartment sales prices are now more than 16% and 6% lower respectively. When it comes to rents, there were 16% and 17% increases noted last year. Betterhomes indicated that apartment and villa rents rose by between 20%-30% and between 10%-20% last year; Cushman & Wakefield reckoned that affordable apartment districts, including Discovery Gardens, Dubailand, Dubai Sports City and Jumeirah Village Circle, saw the sharpest rental increases in the past twelve months due to relatively lower bases, whilst the highest villa increases were in Discovery Gardens, Dubailand, Dubai Sports City and Jumeirah Village Circle. It also noted that 39.4k units, (83:17 – apartments:villas), were handed over last year. That being the case, the number of units at the end of 2023 would be 823k units (official figures for 2022 – 783.6k plus unofficial 2023 figures – 39.4k). With the actual 3.655 million population, at 31 December 2023, this would result in the average occupancy being 4.44 per unit.

The 30 December 2023 blog, ‘Nothing New’ noted:

‘Over the past four years, the average number of new units added to Dubai’s property portfolio every year has been around 42k. At the beginning of every year, the “experts” come out and predict that up to 70k units will be added in the new year. One fact to remember is that by the end of 2024, Dubai’s population will have grown by some 150k and basing that the average unit will house 4.3 persons, that will account for almost 35k new units required. So even if 50k new units hit the market in 2024, there will still be a problem with demand outstripping supply. It will only be in 2025 before any sort of equilibrium returns to the market when most of the 2022 launches become reality. During the pandemic there were very few, if any, launches and most will take up to three years from planning to handover’.

January saw the Dubai’s realty sector off to a flying start, with record-breaking sales totalling US$ 9.65 billion, and a great start for another positive year on the back of sustained momentum from 2023. There was a growing demand for off-plan properties, with the upward trend continuing with a marked 27% increase in the month; Property Finder’s data indicates a 17% annual increase in recorded sales transactions with over 11k transactions. Compared to January 2023, last month’s figures showed that there were more then 6k recorded transactions and a a 21% rise in values, to US$ 4.09 billion.

In a recent survey, Property Finder’s data posted that some 58% of interested property buyers were searching for an apartment – the balance 42%, for villas/townhouses. In contrast, 80% of tenants in the rental market were found to be looking for apartments, while 20% were searching for villas/townhouses. Of the total looking for apartments, 62.2% wanted them furnished – with the balance obviously wanting unfurnished. When it came to villas, more people, (57%), were looking for unfurnished units. Those looking for apartments, the preference for studios, 1 B/R and 2 B/R was spread 22%, 36% and 31%. Those who wanted to rent a villa/townhouse, 43% tenants were looking for three-bedroom units and 34% for four bedroom or larger options. When ownership is involved, the spread was 14%, 33% and 36% for those looking for apartments and 40% and 44% for villas/townhouses.

The most popular apartment locations for buyers were Dubai Marina, Downtown Dubai, Jumeirah Village Circle, Business Bay, and Palm Jumeirah and for villa/townhouse buyers Dubai Hills Estate, Arabian Ranches, Palm Jumeirah, Al Furjan and Damac Hills. Leading areas for rentals were Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Business Bay and Deira. Dubai Hills Estate, Al Barsha, Damac Hills 2, Jumeirah and Umm Suqeim were popular when it came to searches to rent villas/townhouses.

Many analysts forecast that 2024 will see a further reduction in rents but still in double-digit territory. The rental increases, for both apartments and villas, in the so-called new districts of Dubai, will be more moderate than rises in the more established, and more central, Dubai locations. As rents are controlled by the Real Estate Regulatory Agency’s rental calculator, many tenants are opting to stay put because rental increases during renewals are much lower compared to signing new leases. 

Citi Developers has announced that its first foray in the Dubai property, Aveline Residences, is already 70% booked. The US$ 82 million, twenty-one storey project, located in Jumeirah Village Circle, is slated for a Q2 2026 completion. It comprises two hundred and sixty-three apartments, with a payment plan – 10% for the booking fee, 40% during construction and 50% upon handover. Starting prices are from US$ 161k, US$ 270k, US$ 368k and US$ 479k for studio, one-bedroom, two-bedroom and three-bedroom apartments.

A new entrant to the Dubai residential sector is Portgual’s Swank Development who plan a US$ 82 million investment for ultra-luxury villas in Mohammed bin Rashid City in Meydan. Further details will be released soon but the project is slated for a Q1 2026 completion. The developer chose Dubai to launch operations due to its thriving economy, advanced infrastructure, and safety and security, distinguishing it from other regional cities. The company added that “it is the government’s ease of regulations and taxation and lifestyle that is attracting developers from Europe. Dubai has always shone because of lifestyle, safety and security infrastructure.” The Portuguese company is also in talks with master developers to develop more projects in the city. Swank follows in the footsteps of India’s Skyline Builders, Switzerland-based DHG Properties, and European developer Revolution, who have already taken their first steps into the local mature property market.

The Dubai Land Department achieved 1.6 million transactions from various real estate activities, 16.9% higher on the year. The value of real estate exceeded US$ 172.75 billion – 20% higher on the year. It noted that Gulf investors accounted for 10.4k investments, valued at US$ 8.38 billion, Arab investors – 13.2k investments, valued at US$ 7.96 billion and foreign investors, 90.8k buying into 122.9k investments, valued at US$ 75.28 billion. During 2023, real estate investments were 55% higher at US$ 112.26 billion, along with 157.8k investments, including 71.0k new investors – 20% higher; the percentage of non-resident investors rose to constitute 42%of the total new investors. Last year, more women were involved in the real estate sector, with the number reaching 38.1k, valued at US$ 24.66 billion, across 46.7k investments – growths of 53.9%, 42.5% and 39.8% respectively.

Mohamed Alabbar has seemingly confirmed that the cable-tied tower, designed by the Spanish-Swiss architect Santago Calatrava, that was due to be one hundred metres taller than Burj Khalifa, was being redesigned. Emaar Properties’ founder said the tower being built at Dubai Creek Harbour will be a smaller, more elegant structure than previously planned; he also added that the new design had been approved and construction had started on the tower, which will not be as tall as Burj Khalifa. He described the new tower, the centrepiece of the six square kilometre project, as an elegant version of the famous building.

As expected, Dubai posted its best-ever year, in 2023, as international tourist number jumped by 19.4% to 17.15 million, amid the continued expansion of its economy; it surpassed 2019’s then record number of 16.73 million. Sheikh Hamdan bin Mohammed, Dubai’s Crown Prince, stated that “with several indicators outperforming pre-pandemic levels, this year’s results mark Dubai out as a vibrant focal point of growth in the global tourism landscape.”

65% of the incoming tourists came from three regions – GCC/Mena, western Europe and South Asia, with totals of 28%, 19% and 18%. Average hotel occupancy rose 1.5% to 77.4% last year, and also exceeded the pre-pandemic level of 75.3% reported in 2019. Supply of hotel rooms in 2023 was 18% higher than in 2019, with occupied room nights climbing 11% to a record high of 41.70 million – and a marked 30% rise from the pre-pandemic figures. The average daily rates (ADR), at US$ 146, was similar to the previous year, while RevPar (revenue per available room), climbed 6% to US$ 113. The length of stay was 3.8 nights, a 10% increase from 2019 levels. Dubai’s hotel inventory topped reached 150.3k rooms with 821 establishments, compared to 146.5k rooms during the previous year across 804 establishments.

January saw Dubai’s economy continue in growth albeit at a slower pace with the S&P Global PMI dipping 1.1 to 56.6 on the month, with demand remaining strong and rising new orders and purchasing helping maintain its momentum. With the index still higher than the long-run average, it pointed to a continuing improvement in operating conditions in the emirate. However, the survey showed that there were signs of increasing competition leading to more discounting which inevitably results in tighter margins. It seems that the Red Sea crisis is becoming a growing risk to Dubai, as companies are beginning to witness shipment delays which will result into longer wait times, higher costs and capacity constraints.

According to a recent study by global HR platform Deel, the UAE is ranked as the most popular country in the world for ‘international talent seeking employment visas’. Using data from 300k work contracts, across one hundred and sixty countries, it concluded that the UAE topped the rankings, ahead of the Netherlands, France, the UK and Singapore. It noted that France, India, Turkey and the UK were the leading source markets and that the most sought-after roles were for management consultants, content managers, software engineers, influencer marketing managers and strategy directors. The leading industries hiring international workers to the UAE included financial services, information technology/services, computer software, management consulting, and marketing/advertising. It noted that “the UAE’s diverse and multicultural workforce is its greatest asset. By attracting and retaining international talent, the country is positioning itself for continued economic growth and success in the global marketplace.” The Deel report noted that ‘UAE talent’ is highly sought-after by companies in the US, UK, Australia and Canada, particularly in sectors such as computer software, IT services, financial services, marketing/advertising, and software development. Based on the number of international workers hired, the top five cities for global workers were London, Toronto, San Francisco, Buenos Aires and Madrid.

In its 2024 ‘Salary Guide’ report, Robert Half indicated that the country is moving towards being an employers’ market because of the lifestyle and economic problems in other countries. It also noted the influx of talent and greater competition for roles mean candidates are willing to accept lower remuneration to gain a foothold in the ME, which brings down the overall market rate and restricts salary growth. A survey by LinkedIn found that 82% of professionals, in the UAE and Saudi Arabia, preferred working in the GCC region rather than moving to Europe or the US. The three main drivers behind this conclusion were the region’s standard of living made it a preferred destination, (46%), attractive lifestyle (35%) and opportunities for professional growth (31%). The five most sought-after positions in the UAE were as management consultant, content manager, software engineer, influencer marketing manager and strategy director. On a global scale, Europe, the MEA region and Asia-Pacific were ranked the fastest-growing hiring locations. Also on a worldwide basis, teaching, sales, software engineering and content management saw the biggest pay rises and, at the other end of the scale, the biggest declines in wages were in customer support, recruiting, accountancy and marketing,

Standard & Poors posted that, (driven by lower provisioning requirements, improved liquidity levels – as deposit growth outpaced new loan growth – and higher interest margins), UAE banks reported exceptional profits for the full year 2023. The report also noted that the outlook for the banks in the UAE is stable, estimating that increased oil production and support from non-oil sectors, (specifically from the hospitality, real estate, and financial services sectors), will drive economic growth this year. The hike in net profit was also supported by growth in non-interest income, reflecting increased business activity and commercial activity. The agency believes that interest rates will remain higher for longer, which will support banks’ net interest margins. Along with largely stable cost of risk, UAE banks’ profitability is likely to remain robust. The agency also expects retail lending to remain strong as banks continue to expand in this profitable segment. The agency said that UAE banks maintain high liquidity, with the average cash and money market instruments of the ten largest banks reaching 21.8% at the end of last year. Strong core customer deposit bases – which grew by about 12% last year – and limited reliance on external funding contribute to the funding structures of UAE banks. S&P noted that local banks remain in a strong position in terms of net foreign assets, which rose to 27.9% of system-wide domestic loans as of 30 November 2023, from 9.65% at the end of 2021.

Emirates’ supremo, Tim Clark, is the latest senior airline executive to criticise Boeing noting that is in the “last chance saloon”, adding he had seen a “progressive decline” in its performance. He noted that “they have got to instil this safety culture which is second to none. They’ve got to get their manufacturing processes under review so there are no corners cut etc.”  The Dubai carrier is one of the plane maker’s major customers and is now set to send its engineers to monitor Boeing’s production lines of the 777 and its supplier Spirit AeroSystems. Last November, it placed an order for ninety-five wide-body Boeing 777 and 787 jets, used for long-haul flights, valued at US$ 52.0 billion, at list prices.

Emirates has been appointed as the official Global Airline Partner of the NBA, (National Basketball Association), in a multiyear global marketing partnership. The agreement sees the Dubai carrier become the inaugural title partner of the NBA Cup, previously named the NBA In-Season Tournament, as well as the first-ever referee jersey patch partner of the NBA. Group chairman, Sheikh Ahmed bin Saeed, commented that ““the NBA is a valuable addition to our sponsorship portfolio, as it allows us to connect with a vast global fanbase, including in the US, where the game is an integral part of the country’s sports culture.”

Driven by a 6.1% hike in housing/water/electricity/gas group. Dubai’s December CPI index stood at 3.3%, and according to Kamco Invest’s GCC Inflation Update, among the six GCC countries, only Dubai reported an increase in its average annual inflation rate. Overall, only three out of Dubai’s thirteen CPI subgroups recorded year-on-year decreases during the month, with food/beverages group, (the third largest weighted group), recording a 4.2%, compared to a decline of 4.5% during December 2022. On the other hand, the transport subgroup (second largest weighted group) posted a 5.8% decline, compared to 2.9% decrease in 2022. According to the IMF, the primary factors that allowed the GCC regional countries to control their inflation so well are among other things, the combination of subsidies in energy sector, the prevalence of administered prices on basic food items and food security strategies, and the wider continuing economic diversification efforts.

By the end of 2023, the number of EVs in Dubai grew 71.7%, on the year, to 25.9k, with Dewa, advancing the emirate’s green mobility plans, commenting that “we will continue to foster the use of EVs through continuous development of the green charging stations using technologies of the Fourth Industrial Revolution,” and that “Dewa has launched several features to facilitate the charging of EVs on its public charging network, reduce charging time, enhance the infrastructure and provide better access to charging facilities across Dubai.” Dewa has invested in a network of three hundred and eighty-two public charging stations and confirmed that their use rose 59%, compared to 2022 returns.

HH Sheikh Mohammed bin Rashid announced that Dubai’s non-oil foreign trade had already reached its AED 2 trillion ($545 billion) five-year target – a year ahead of schedule. The Dubai Ruler commented that “in 2020, before the Covid crisis, we announced from the Dubai Council a target for Dubai’s non-oil foreign trade to reach AED 2 trillion by 2025. Then the Covid crisis came, and the team informed me of the impossibility of achieving the goal as a result of this crisis that struck the global trade movement. Life experiences taught me that crises are the best time to develop and think outside the ordinary.” In the first nine months of 2023, Dubai’s economy rose 3.3%, with two main drivers being growth in the tourism and transportation sectors. S&P Global Ratings reckons that UAE’s real GDP last year hit 3.4%, and could hit 5.3% in 2024.

A report by Henley & Partners ranks Dubai as the third wealthiest city among the newly expanded Brics bloc which analyses private wealth and global investment migration trends. The total investable wealth, currently held in the Brics bloc, amounts to US$ 45 trillion and the number of millionaires is currently at 1.6 million and expected to increase by 85% over the next ten years; the figure also includes 4,716 centi-millionaires and five hundred and forty-nine billionaires.

The top ten cities, with the number of millionaires are:

1. Beijing             125.6k
2. Shanghai         123.4k
3. Dubai                72.5k
4. Mumbai            58.8k
5. Shenzhen          50.3k
6. Hangzhou         31.6k
7. New Delhi         31.0k
8. Moscow            30.3k
9. Guangzhou:      34.5k
10. Abu Dhabi        22.7k

Among Dubai’s rich are two hundred and twelve centi-millionaires, (people with a net worth of US$ 100 million plus) and fifteen billionaires. It is expected that UAE numbers will have grown by 4.8k last year, which would only be surpassed by Australia’s 5.2k new millionaires. It is estimated that the country’s millionaire population has grown 77% over the last ten years to 116.5k. Although it has only 4.1k high-net-worth individuals, Sharjah’s rich are growing at a faster rate than Dubai, with the number forecast to grow 129% to 9.0k within the next ten years.

Smart and Secure Insurance Agent a company operating in the country, has seen its licence and registration revoked by the UAE Central Bank. The regulator indicated that this action was taken because of Smart and Secure’s weak compliance framework and failure to meet regulatory obligations. The CBUAE, through its supervisory and regulatory mandates, works to ensure that all companies and professionals abide by the UAE laws, regulations and standards to safeguard the transparency and integrity of the insurance industry and the UAE’s financial system.

Dubai Aerospace Enterprise posted a 16% hike in 2023 to US$ 1.35 billion, with net profit coming in at US$ 351 million. Over the year, DAE acquired twenty and sold thirty aircraft, whilst of the acquired units, ten were owned and ten managed with those sold being twenty-two managed and eight managed. Having booked over 1.5-million-man hours and performed three hundred and sixteen checks, DAE signed some one hundred and fifty lease agreements, extensions and amendments, of which one hundred and fourteen owned and thirty-six non-managed. The company announced a partnership with Boeing to become the first facility in the ME to be authorised to complete Boeing 737-800BCF conversions.

DEWA’s Q4 revenue rose 5.5% to US$ 1.93 billion, but for the full-year 2023, there was a 7.0% hike to US$ 795 billion; there was a 1.4% decline in net profit to US$ 2.15 billion, with Q4 showing a 14.6% rise to US$ 490 million, driven by higher demand for electricity, water and cooling services amid continued growth momentum in the emirate. In Q4, total power generation topped 13.4 terawatt-hours – 8% higher compared to Q4 in 2022; for the year, the figure of 56.5 terawatt-hours, up 6.3%. A sign of the population growing was that the utility added 11.2k new customers in Q4, bringing its total customer base to 1.2 million. Clean power accounted for 11 per cent of the total electricity generated in 2023.

Emaar Properties posted a 70% surge in annual net profit to US$ 3.2 billion on the back of increased sales, as the UAE property market continues to move higher even after three years of growth. Dubai’s largest property developer saw revenue 7.0% higher to US$ 7.27 billion, as property sales jumped 15% to US$ 10.98 billion, with a US$ 19.56 billion backlog.

Its majority-owned subsidiary, Emaar Development, specialising in the build-to-sell property development business, registered a 21% annual hike property sales of US$ 10.19 billion. revenue was at US$ 3.24 billion, with ebitda climbing 89% to US$ 2.18 billion. The Dubai property market surged (again) in 2023, by 20% to US$ 17.28 billion and 36%, to 166.4k – by value and the number of transactions respectively.

Emaar achieved 63 per cent annual growth in earnings before interest, taxes, depreciation and amortisation (ebitda) that stood at Dh16 billion during 2023.

With robust growth in tenant sales, Emaar’s shopping mall/retail/commercial leasing operations, posted a 21% rise in 2023 revenue to US$ 1.58 billion. Its mall assets achieved an average occupancy of 97%. 12% of Emaar’s revenue comes from its international real estate operations, which posted property sales of US$ 790 million with revenue totalling US$ 845 million, mainly attributable to operations in Egypt and India, with the latter posting aa four-fold increase in property sales driven by new launches. Emaar’s hospitality/leisure/entertainment divisions generated 20% more revenue to US$ 926 million, driven by the improvement in the emirate’s tourism sector and robust domestic spending. Emaar’s recurring revenue from malls, hospitality, leisure, entertainment, and commercial leasing rose more than 26%, on the year, to US$ 2.51 billion. Revenue from this portfolio contributed over 34% of the company’s total revenue.

The DFM opened the week, on Monday 05 February, 162 points (4.2%) higher the previous fortnight, shed 45 points (1.1%) to close the trading week on 4,229 by Friday 09 February 2024. Emaar Properties, US$ 0.08 lower the previous three weeks, gained US$ 0.6, closing on US$ 2.10 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 4.92, US$ 1.74, and US$ 0.36 and closed on US$ 0.66, US$ 4.71, US$ 1.74 and US$ 0.36. On 09 February, trading was at 87 million shares, with a value of US$ 71 million, compared to 63 million shares, with a value of US$ 47 million, on 02 February 2024.

By Friday, 09 February 2024, Brent, US$ 5.29 lower (6.4%) the previous week, gained US$ 4.99 (6.5%) to close on US$ 77.20. Gold, US$ 39 (1.9%) higher the previous week, shed US$ 16 (0.8%) to trade at US$ 2,039 on 09 February.

Data from Chainalysis reported that payments from crypto-related ransom attacks nearly doubled to a record US$ 1 billion in 2023.  Scammers targeting institutions such as hospitals, schools and government offices for ransom pocketed US$ 1.1 billion last year, compared with US$ 567 million in 2022. The blockchain analytics firm noted that “an increasing number of new players were attracted by the potential for high profits and lower barriers to entry,” with “big game hunting” has become the dominant strategy over the last few years, with a dominant share of all ransom revenue volume made up of payments of US$ 1 million or more. Hundreds of organisations, including government departments, UK’s telecom regulator and energy giant Shell, have reported cybersecurity breaches involving the MOVEit software tool, which is typically used to transfer large amounts of often sensitive data, including pension information and social security numbers. The only good news seems to be losses stemming from other crypto-related crimes, such as scamming and hacking, fell in 2023.

In the twelve months to 31 January 2024, China’s vehicle sales surged 47.9%, year on year, to nearly 2.44 million units, and that the country’s vehicle output last month increased by 51.2% year on year to 2.41 million units. Passenger car output and sales returned rude returns – up 49.1% to 2.08 million and 44.0% to 2.12 million vehicles, whilst commercial vehicle output and sales posted even better numbers – by 66.2%, on the year, to 327k units, and soaring 79.6% to 324k units. January also saw even higher increases last month posted by the new energy vehicle industry, with production and sales – up 85.3% to 787k and 78.8% to 729k. In relation to all electric vehicle production and sales growth levels were 63.9% to 489k and by 55.1% to 445k. Exports also moved higher with January exports 47.4% to the good rising to 443k, with NEV exports by 21.7% to 101k units.

There are reports that Snap is planning to cut 10% of its 5k staff, following the release of its Q4 financials revealing a US$ 368 million loss for the quarter 31 October; there is no definitive news on the future of its UK workforce of 0.5k. Estimates are that the move could cost it between US$ 55 million – US$ 75 million in severance payments “and other charges”. In August 2022, the social media company released 20% of its staff. Snapchat said the move would “reduce hierarchy and promote in-person collaboration”. In contrast, its rival, Meta recently posted a tripling of quarterly profits. It is estimated that, in 2023, the tech sector industry saw a loss of 232k staff, including Meta and Google, all trying to optimise costs to remain profitable.

Even though BP’s 2023 profit almost halved on the year, (US$ 13.8 billion v US$ 27.7 billion), it was still the energy giant’s second highest annual profit in a decade. (Last week Shell also posted lower 2023 profit, at US$ 28.2 billion from US$ 39.9 billion). In Q4, profits were at US$ 3.0 billion, resulting in its share value scooting 5% higher on Tuesday. In H1, BP is planning to return, to shareholders, US$ 1.75 billion of share buybacks, as well as committing US$ 3.5 billion of buybacks.

Tesco has copied its rival Sainsbury’s by leaving the banking sector, with Barclays agreeing to buy the supermarket’s retail banking operations in a deal worth US$ 758 million to the supermarket giant; last month, Sainsbury’s said it was planning a “phased withdrawal” from its banking division in order to focus on its core food business. Barclays is taking over Tesco Bank’s credit cards, loans and savings accounts and has also agreed to market Tesco-branded banking services. It is likely that Tesco’s 2.8k payroll will transfer to Barclays. However, the supermarket has retained some of Tesco Bank’s services, including insurance, ATMs, travel money and gift cards.

Following a December 2023 announcement that Woodside and Santos were in discussions about a possible merger, this week Woodside posted that merger talks with the South Australian energy giant were over. One possible explanation was that the WA’s energy giant is seen as a risk averse entity and was reluctant to proceed any further in what would have seen the creation of an US$ 52.23  billion, (AUD 80 billion) company. Woodside chief executive officer, Meg O’Neill, said the company “continuously assesses a range of organic and inorganic growth opportunities” and it “will only pursue a transaction that is value accretive for its shareholders,” and “we continue to be disciplined in our approach to mergers and acquisitions and capital management to create and deliver value for shareholders,” A combined business would reportedly have had an LNG capacity of sixteen million tonnes a year.

Perceived to be a supporter of Israel is the main driver behind McDonald’s missing a key sales target – its first such quarterly sales miss in four years.  The fast-food retailer is one of several Western companies, including Starbucks and Coca Cola, that have seen boycotts and protests against them by anti-Israeli campaigners. McDonald’s confirmed that the Israel-Gaza conflict had “meaningfully impacted” Q4 performance in some overseas markets, specifically in the ME, Malaysia, Indonesia and France. The fast-food retailer drew criticism after its Israel-based franchise said it had given away thousands of free meals to members of the Israeli military, sparking calls to boycott the brand by those angered by Israel’s military response in Gaza. Most of McDonald’s forty thousand plus stores are run by franchisees, of which about 5% are in the ME. Franchise owners in Muslim-majority countries such as Kuwait, Malaysia and Pakistan have even put out statements distancing themselves from the firm. Its Q4 global sales grew by just under 4% – down from 8.8% in Q3, and below its annual average.

After only eight months in the position, Hafize Gaye Erkan has tendered her resignation as the governor of the Turkish Central Bank; Turkish President Erdogen quickly appointed Fathi Karahan, her deputy governor, as the new supremo, signalling a welcome continuation of the transition to more friendly orthodox economic policies. Erkan commented that she was facing an apparent smear campaign against her and that she was resigning to protect her family, including an infant child. There had been allegations, which she denied, that her father was intimately involved in the central bank’s affairs, despite having no official role at the bank. The lira dipped, 0.5% to 30.489, to the greenback, when the news broke last Friday, with the currency having slumped by about 23% since the governor was appointed last June. During her brief tenure, she had led the about-face in Turkey’s economic policies, which included raising interest rates aggressively, (from 8.5% in June to its current 45.0%) and letting the currency trade more freely in an effort to attract foreign investment. It is expected that the current monetary tightening policy will continue.

The Central Bank of Egypt has raised its overnight deposit rate, overnight lending rate, the discount rate and the rate of the main operation by 200 bp.

Despite being the chief executive of Singapore’s biggest bank DBS, which posted a 27% hike in 2023 profit to US$ 7.67 billion, Piyuah Gupta has seen his bonus cut by 30% after several damaging disruptions to its digital services. The bank noted that his 2022 pay was US$ 11.5 million and that the cut to Piyush Gupta’s variable pay, (including a cash bonus and deferred shares), amounts to US$ 3.1 million, and that his full 2023 salary will be disclosed next month. The bank said other members of its management team will have their variable pay cut by 21%, while more junior employees will get a one-off bonus to help them with higher living costs.

The Albanese government has announced another round of sanctions designed to strangle the flow of money to Myanmar’s junta, three years after the military seized power in an illegal coup. The new round of sanctions will target banks that support state-owned enterprises, but there is pressure from several groups, including activists, who allege a dozen Australian and Australian-linked mining companies still operate in Myanmar. Anti-junta groups are concerned that Australian companies are propping-up the regime. and the government is being pressed by civil society groups to pull them out. But whilst the Foreign Minister Penny Wong announced that the government would impose targeted sanctions on Myanmar Foreign Trade Bank and Myanmar Investment and Commercial Bank, and would also sanction Asia Sun Group, Asia Sun Trading Co Ltd, and Cargo Link Petroleum, she fell short of further action on the miners. It seems that Australia is still lagging well behind the US and European nations which have imposed deeper and wider-ranging sanctions, with it some way off simply to catch up with the sanctions already imposed by its allies and should urgently sanction junta-controlled mining entities, given the continued Australian involvement in that sector. The CEO of Transparency International Australia, Clancy Moore, commented that “Australia’s lack of sanctions on the state-owned enterprises Mining Enterprise 1 and Mining Enterprise 2 that oversee mining sector and collect revenue for the junta means the door is wide open for the ten Australian-linked mining companies to continue to do business with the corrupt and murderous military regime,” and that “we would expect the Australian Government to follow the lead of the US, EU and Canada in sanctioning these important state-owned enterprises lining the pockets of the corrupt and murderous Myanmar generals.”

In 2023, Australian wine exports were hit by a global trend in people drinking less alcohol and cutting costs, with a fall in both the value and volume of exported wine in the middle of a global oversupply. The immediate hope is that the Chinese drop their tariffs which has had a major impact on the industry. In calendar year 2023, wine exports declined by 2% to US$ 1.24 billion and 3% in volume to 607 million litres. On top of that, only 39.3%, equating to forty-four of the one hundred and twelve destinations that received Australian wine during the year imported more value than they did in 2022. It seems that the market is being impacted on both health and financial reasons – people reducing their discretionary spending and also consumers becoming more conscious of their health. Although markets in Hong Kong and Singapore moved higher, those in Europe and US headed south, whilst the Chinese market continues in the doldrums because of the continuing heavy tariffs.

With inflation falling quicker than expected, (starting 2023 at 7.8% and ending on 4.1%), the Reserve Bank of Australia, at their first meeting of the year, left rates unchanged at 4.35%, in line with market expectations. Despite this, the RBA noted that inflation had clearly eased but it was still high at 4.1%, and above the central bank’s target of 2% – 3%, whilst services inflation was only moderating gradually. It forecast that inflation would return to its target range in 2025, and to the midpoint of that range in 2026. However, the global economy is beset with many potential trigger points, including the slowing Chinese economy, conflicts in the Ukraine and Gaza, as well as shipping being disrupted in the Red Sea – all of which have possible impacts on the Australian economy. Add in a local housing shortage, pessimistic consumer confidence, (the Westpac Melbourne Institute Consumer Sentiment Index declining 1.3% to 81 last month), jobless rates at an eighteen-month high and soaring cost of living expenses. The conundrum is that the market seems to be pricing in two rate cuts in 2024, but the RBA may have a different agenda, saying it cannot rule out another rate rise, depending on economic data.

As UK mortgage rates continued to head south, Halifax posted that January saw house prices at their highest for twelve months, driven by a slowdown in inflation and a buoyant jobs market. In January, the typical home cost US$ 368k – 2.5% over the past twelve months. Halifax noted that first-time buyers faced average deposits of US$ 68k and warned that while house prices had risen, interest rates still remained high, compared with the historic lows seen in recent years. An interesting fact is that around 65% of new buyers are in joint names. Halifax data is based solely on its own mortgage lending, which excludes cash buyers who account for about a third of all transactions. A typical two-year fixed mortgage rate last July was at 6.86% and has fallen to 5.57`% by the beginning of February, with further rate cuts later in the year.

With housebuilders struggling since the start of 2022, with higher interest rates denting demand, and construction costs rising, Barratt announced it would buy Redrow, in an all-stock deal, valued at US$ 3.16 billion, that would see the new entity known as “Barratt Redrow”. David Thomas, chief executive of Barratt, said despite the “challenging” economic environment, demand for the company’s homes was “strong”, and he expects the new company would build more than 22k homes a year in the medium term. He also added that “since the start of January, we have seen early signs of improvement in both reservation rates and buyer sentiment, helped by expectations of lower interest rates and the introduction of more competitive mortgage rates.”

A year ago, Chinese billionaire banker Bao Fao, went missing and his whereabouts are still unknown despite his firm, China Renaissance Holdings, recently announcing that he had stepped down “for health reasons and to spend more time on his family affairs,” adding that he “has no disagreement with the Board and there is no other matter relating to his resignation that needs to be brought to the attention of the shareholders”. Days after his February 2022 disappearance, the bank said he was cooperating with authorities who were conducting an investigation. Ben Fao is not the first Chinese billionaire to go missing – and he surely will not be the last! In China, Who Wants To Be A Billionaire?

Mind Your Own Business!                                                         02 February 2024

The real estate and properties transactions, totalling 3,677, were valued at US$ 3.13 billion in total during the week ending 02 February 2024. The sum of transactions was 192 plots, sold for US$ 711 million, and 2,699 apartments and villas, selling for US$ 1.57 billion. The top three transactions were all for plots of land, the first in Madinat Dubai Almelaheyah for US$ 167 million, the second in Al Merkadh for US$ 40 million and in Madinat Dubai Almelaheyah for US$ 39 million. Madinat Hind 4 recorded the most transactions, with fifty-one sales, worth US$ 32 million, followed by twenty-seven sales, in Al Hebiah Fifth, for US$ 21 million, and fourteen sales, in Jabal Ali First, valued at US$ 19 million. The top three transfers for apartments and villas were a villa in Al Mamzer for US$ 50 million, another in Al Wasl, for US$ 18 million, and an apartment in Um Suqaim Third for US$ 15 million. The mortgaged properties for the week reached US$ 610 million; one hundred and fifty-four properties were granted between first-degree relatives, worth US$ 232 million.

It is reported that Binghatti Properties is already talking to potential buyers for the sale of Dubai’s most expensive penthouse, priced at US$ 204 million (AED 750 million). Bugatti Residences by Binghatti’s Sky Mansion Penthouse went on sale for a record price in mid-2023. The forty-six-storey ultra-luxury development, Bugatti Residences by Binghatti, features Sky Mansion Penthouses spanning the top 11 floors. These penthouses allow owners to drive their super-luxury vehicles directly to their apartments, as each penthouse occupies an entire floor. To date, the most expensive penthouse, at US$ 136 million (AED 500 million) is the 21.9k sq ft five-bedroom Como Residences penthouse on Palm Jumeirah, whilst last month, the 77.7k sq ft Super Penthouse R1, comprising the top three levels and the rooftop of the Raffles The Palm Dubai Residences, went on the market for US$ 164 million (AED 600 million).

India’s Skyline Builders has announced the launch of Avant Garde Residences in Jumeirah Village Circle – its first foray into the Dubai market; the thirty-five-year-old real estate developer has a legacy of one hundred and fifty-eight projects, in India, with over sixteen million sq ft developed. The project, spanning 300k sq ft, features eighteen residential floors, five podia, and a ground floor, with one hundred and seventy-two apartments, including studios, one and two-bedroom units, as well as three retail shops; starting prices start at US$ 170k.

Even after four years of impressive growth, 2023 hit record levels to reach US$ 124.2 billion – and all indicators point to a better 2024, mainly because demand is expected to outstrip supply. Because of Covid, launches almost dried up and only returned to some form of normality last year, so that new property handover will only start later in the year. On top of that, after a pandemic-driven lull, Dubai’s population is beginning to move higher. Last year, it grew by 100k, and it will be no surprise to see 2024 welcome a further 150k to bring the emirate’s population to 3.805 million. It is a fact that at the beginning of the year, supply lagged demand and whether a 45k increase in residential units will be enough to satisfy the market is problematic, bearing in mind that up to 36k units will be taken by the newcomers.

Under the patronage of Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed, a global first for Dubai sees the emirate launching the “Dubai Jet Suit” race, on 28 February 2024 – the first ever sporting contest featuring eight opponents going aerial, without the aid of an aircraft. Competitors will rely on suits equipped with jet engines to navigate a predetermined course. The country will be represented by Ahmed Al Shehhi, with the competition taking place between Dubai Harbour and SkyDive.

In a bid to enhance and support the sector, Sheikh Hamdan bin Rashid has launched the ‘Dubai International Growth Initiative for SMEs’; it also aims to accelerate their progress and global expansion. The US$ 136 million fund, developed through a partnership between the Dubai Government and Emirates NBD,  will be used to assist entrepreneurs, who the Crown Prince added “are key contributors to Dubai’s success, and your partnership is vital to achieving the goals of the Dubai Economic Agenda D33”; he also highlighted that entrepreneurs worldwide who have chosen Dubai as their launchpad, writing that they extend their steadfast support locally and internationally.

On Monday, Sheikh Maktoum bin Rashid opened the forty-ninth edition of Arab Health, the region’s largest healthcare exhibition. The Minister of Finance for the UAE and First Deputy Ruler of Dubai commented that “by bringing together the world’s foremost healthcare expertise and institutions and fostering an environment for excellence and innovation in the sector, Dubai continues to consolidate its status as a premier healthcare destination.” The three-day event, held at the Dubai World Trade Centre, features over 3.4k exhibitors, more than forty international pavilions and over one hundred and eighty participating countries. Arab Health 2024 has nine product sectors, which include Medical Equipment & Devices, Disposables & Consumer Goods, Orthopaedics & Physiotherapy, Imaging & Diagnostics, Healthcare & General Services, IT Systems & Solutions, Healthcare Infrastructure & Assets, Wellness & Prevention and Healthcare Transformation.

After price falls over the previous three months, the UAE Fuel Price Committee has increased all retail fuel prices, (except for diesel) for February. Eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic saw prices frozen by the Fuel Price Committee. In March 2021, prices were amended to reflect the movement of the market once again, as January retail prices all headed south:

The breakdown in fuel price per litre for February is as follows:

• Super 98: US$ 0.768, to US$ 0.785 in January (up by 2.2%)

• Special 95: US$ 0.738, to US$ 0.777 in January (up by 5.2%),

• Diesel: US$ 0.815, from US$ 0.817 in January (down by 0.3%)

• E-plus 91: US$ 0.719, to US$ 0.733 in January (up by 1.9%)

In a bid to enhance its position as a leading player in the sector of global trade, transport and logistics, Emirates Post Group Company has unveiled its new brand identity – 7X. This branding represents the connectivity of the seven emirates to the seven continents and across the seven seas, marking a commitment to enabling a world in motion. This is in line with its five-year strategy shift which prioritises operational excellence, digital transformation, customer-centricity, cultivation of strategic partnerships, and promotion of sustainable growth. 7X is the parent of such entities as Emirates Post, FINTX, and Electronic Documents Centre.

Latest figures from the Ministry of Finance indicate that it expects 2023 non-oil growth to have reached 5.9%, and by 4.7% this year, as the benefits of diversification in the economy, and a marked effort to promote sustainable growth, start to gain traction. Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, pointed out that the UAE’s non-oil foreign trade hit a record US$ 337.6 million in H1 – a 14.4% rise on the year; foreign direct investment inflows, up 14.4%, touched US$ 22.7 billion in 2022. He expected the country’s overall to grow to a creditable 5.7% this year, despite all the economic headwinds and a global slowdown.

The Central Bank of the UAE has imposed a US$ 327k fine on a local insurance company, following the result of the findings of a regular examination. This showed that the entity had deficiencies in its AML/CFT policies and procedures and was based on Article 14 of the Federal Decree Law No (20) of 2018 on Anti-Money Laundering and Combatting the Finance of Terrorism and Financing of Illegal Organisations. These laws have been introduced to safeguard the transparency and integrity of the insurance sector and the UAE financial system.

In line with the US Federal Reserve, the Central Bank of the UAE has maintained the Base Rate applicable to the Overnight Deposit Facility at 5.40 %. The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity at fifty bp above the Base Rate for all standing credit facilities.

Greatly assisted by the rude health of the emirate’s economy, Mashreq posted a 107% surge in Q4 profit, to US$ 762 million, on the back of a marked improvement in interest income, 41% higher at US$ 545 million. Dubai’s third-largest lender by assets also registered a 116% surge in insurance, foreign exchange and other income surged 116% year-on-year to US$ 147million. Annual profit also more than doubled to US$ 2.34 billion, as net interest income and income from Islamic financing posted a 69% jump to US$ 2.10 billion. By the end of 2023, the bank’s assets had grown 22.0% to US$ 65.39 billion, with similar increases seen in loans/advances – up 25% to US$ 40.71 billion – and 28.5% in customer deposits to US$ 39.84 billion.

Commercial Bank of Dubai was the latest local bank to return record 2023 profits – 45.2% higher on the year to US$ 722 million – with major contributions from net interest and other operating income, backed by strong loan growth, along with higher market interest rates. Operating profit, with a 31.8% hike, stood at US$ 1.01 billion, with operating expenses at US$ 335 million, and net impairment loss 7.0% higher at US$ 289 million. There were increases in gross loans, total assets, net loans/advances and customer deposits – 11.6% at US$ 24.2 billion, 11.0% to US$ 35.1 billion, 11.5% to US$ 24.1 billion and 8.9% to US$ 22.1 billion. The bank proposed a cash dividend of US$ 0.12 per share.

Tecom Group announced a record 2023 US$ 599 million in revenue, (a 10% increase), whilst net profit surged 49% to US$ 300 million. This improvement came about from new and existing customers operating across all six sectors the Group serves, and bullish consumer and business confidence. Ebitda increased by 23% to US$ 463 million, and the Ebitda margin expanded to 76%, compared to 68% a year earlier. Funds from operations stood at US$ 381 million, up 21% on the year, because of improved collections and increased performance of income-generating assets. The occupancy rate for the commercial and industrial portfolio was 89%, registering the third quarter of sequential growth. The lease of industrial lands witnessed a strong demand in 2023, as the occupancy rate rose to 94%. The Board recommended a dividend pay-out of US$ 109 million to the company’s shareholders for H2 2023.

Dubai Financial Market Company posted a 122.4% surge in its 2023 net profit at US$ 90 million, with a US$ 76 million dividend, (equating to 3.5% of the capital) proposed. Revenue was 54.0% higher, at US$ 148 million, with investment returns/other income contributing US$ 53 million and operating income, US$ 94.0 million, operating expenses, at US$ 58 million, were up 3.9%. In Q4, total revenue, at US$ 56 million, was 79.9% higher, whilst the profit came in up 146% at US$ 39 million. Two new entrants to the DFM – Dubai Taxi Company and Al Ansari Financial Services, the bourse’s first family-owned company – raised US$ 537 million last year – as investor demand led to an oversubscribed value of US$ 4.44 billion. Market capitalisation rose 18.2% on the year to US$ 18.75 billion and sector wise, financials, utilities, real estate, industrials and communication services accounted for 41%, 22%, 17%, 15% and 3.4% respectively. During the year, the DFM General Index grew 21.7%, closing on 31 December on 4,063 points.

The DFM opened the week, on Monday 29 January, 96 points (2.4%) higher the previous week, gained 66 points (1.6%) to close the trading week on 4,229 by Friday 02 February 2024. Emaar Properties, US$ 0.08 lower the previous fortnight, was flat, closing on US$ 2.04 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 4.93, US$ 1.70, and US$ 0.37 and closed on US$ 0.68, US$ 4.92, US$ 1.74 and US$ 0.36. On 02 February, trading was at 63 million shares, with a value of US$ 47 million, compared to 138 million shares, with a value of US$ 127 million, on 26 January 2024.

The bourse had opened the year on 4,063 and, having closed on 31 January at 4,169, was 106 points (2.6%) higher. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, to close the month at US$ 2.02. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.68, US$ 4.82, US$ 1.72 and US$ 0.37.  On 31 January, trading was at 203 million shares, with a value of US$ 173 million, compared to 138 million shares, with a value of US$ 58 million, on 31 December 2023.

By Friday, 02 February 2024, Brent, US$ 3.93 higher (5.0%) the previous week, shed US$ 5.29 (6.4%) to close on US$ 77.20. Gold, US$ 38 (2.9%) lower the previous fortnight, gained US$ 39 (1.9%) to trade at US$ 2,055 on 02 February.

Brent started the year on US$ 77.23 and gained US$ 4.14 (5.3%), to close 31 January 2024 on US$ 81.37. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 9 (0.4%) to close on US$ 2,083.  

On Tuesday, Japanese transport officials raided Toyota’s Hekinan plant to investigate cheating on engine testing, and, at the same time, the carmaker announced that it had retained its number one status – selling 11.22 million vehicles, up 7.0% on the year, and easily beating Volkswagen’s 9.2 million units. Toyota chairman Akio Toyoda vowed to steer the company out of scandal and to ensure the Japanese car maker “sticks to making good cars.” The latest scandal was revealed by a whistle-blower who claimed that Daihatsu Motors, 100% owned by Toyota, had been cheating on its testing for decades. Two years ago, another Toyota-owned company, lorry-maker Hino Motors said it had systematically falsified emissions data, dating back as far as 2003. No major accidents have been reported in connection with any of the cheating. but production has been halted on some of the models, including the ten models affected by the current cheating. The latest problem affects models including Land Cruiser and Hilux sport utility vehicles sold in Japan, Europe, the ME, Africa and Asia, but not in North America.

Toyota Motor issued “Do Not Drive” advisory covers to urge the owners of 50k old 2003-2004 model year Corollas, 2003-2004 Corolla Matrix, and 2004-2005 RAV4s, with Takata air bag inflators, to get immediate recall repairs because an air bag inflator could explode and potentially kill motorists. More than thirty deaths worldwide, including twenty-six in the US, and hundreds of injuries in various automakers’ vehicles since 2009 are linked to Takata air bag inflators that can explode, unleashing metal shrapnel inside cars and trucks. Furthermore, over the last decade, over sixty-seven million Takata air bag inflators have been recalled in the US by more than twenty automakers, and more than one hundred million inflators worldwide, in the biggest auto safety recall in history. Last July, Stellantis warned 29k 2003 Dodge Ram pick-up drivers to immediately stop driving pending repairs after one person was killed when a Takata air-bag inflator exploded. Earlier, in November 2022, Stellantis urged owners of 276k other older US vehicles to immediately stop driving after three other crash deaths, tied to faulty Takata air bag inflators. Honda has reported seventeen US deaths, and more than two hundred injuries, related to Takata inflator ruptures.

With drone attacks in the Red Sea continuing, it appears that global air freight charges have risen for the first time since 11 December; the latest weekly Baltic Exchange Air Freight Index increased 6.4% in the week ending 29 January to US$ 1,972, with air cargo rates outbound from Shanghai, Hong Kong and Singapore, moving by 8.8%, 5.9% and 4.1% higher. DHL has indicated that “some companies are already shifting to other modes of transportation, with air freight being the first choice. If the situation in the Red Sea continues to escalate, more companies may choose to go via air.” Another factor for the spike in air cargo rates is the upcoming Chinese New Year. Meanwhile, other shipping companies have decided to use the Cape of Good Hope and the subsequent higher shipping costs and increased fuel burn. IATA points out that air cargo accounts for more than 35% of global trade by value, but less than 1% of world trade by volume. Dubai maybe a beneficiary of this crisis, with some goods possibly going by air to Dubai and then by sea to Europe.

Microsoft posted a 33% surge in its fiscal Q2 2024, ending 31 December, to US$ 21.9 billion, driven by Azure cloud business and robust strong productivity; over the quarter, revenue was 18.0% higher, at US$ 62.0 billion, with its operating income jumping to US$ 27 billion. The company’s last-quarter diluted earnings increased 33% to US$ 2.93 a share. During the quarter, Microsoft also returned US$ 8.4 billion to shareholders in the form of share repurchases and dividends. Xbox content and services revenue surged 61%, mainly attributable to the US$ 69 billion acquisition of Activision the gaming company behind Call of Duty, Overwatch and World of Warcraft. The company spent more than US$ 6.8 billion on R&D – about 13% of its total quarterly sales. Its total cash/cash equivalents/short-term investments were 27.2% lower over the fiscal H1 standing at more than US$ 81 billion. There was a 20.0% revenue increase in Microsoft’s intelligent cloud division, which includes Azure public cloud, to US$ 25.9 billion, Last month, the technology company announced the addition of a new Copilot key on the Windows keyboard, in a move aimed at supporting the adoption of AI in its hardware products; it will be available in laptops and personal computers manufactured by Microsoft and its partners.

Declining energy prices in 2023 were the main cause behind Shell’s profit declining 29.3% to US$ 28.2 billion, compared to its biggest ever profit of US$ 39.9 billion in 2022, for which it paid a windfall tax of US$ 225 million. Last year, the energy giant paid US$ 1.39 billion in overall tax in the UK of which US$ 303 million was taxed under the Energy Profits Levy. It also returned US$ 29.05 billion to its shareholders in 2023 and was now increasing its dividend by 4% and beginning a US$ 4.42 billion share buyback programme over the next three months.

In after-day trading yesterday, Amazon’s shares jumped almost 8%, after it had posted higher than expected Q4 net profit to US$ 10.6 billion, as revenue climbed 14.0% to US$ 170 billion – the thirteenth consecutive quarter with more than US$ 100 billion in sales. The company noted that “the fourth quarter was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon.” Its sales guidance for the current quarter is for revenue to hover between US$ 138 billion and US$ 143.5 billion, jumping 8% – 13%, compared with the same period a year earlier; operating income is expected to be between US$ 8 billion and US$ 12 billion, compared with US$ 4.8 billion in Q1 2023. For the 2023 year, its net income stood at US$ 30.4 billion, (compared with a net loss of US$ 2.7 billion in 2022), while its revenueincreasing 12% on the year to US$ 574.8 billion in 2023.

PayPal announced that it plans to slash its payroll by another 2.5k; twelve months earlier, the tech firm went through a similar exercise. It indicated that the decision was made to “right-size” the company “through both direct reductions and the elimination of open roles”.  The digital payments giant – which has been facing rising competition from rivals such as Apple, Zelle and Block – has seen its share value slump 20% over the past twelve months. Last week, the firm launched new AI-driven products as well as a one-click checkout feature. In 2023, more than 260k tech industry jobs were lost, and even in the first month of 2024, almost one hundred tech firms – including Meta, Amazon, Microsoft, Google, TikTok and Salesforce – have announced a total of 25k job cuts, with the latest being Block retrenching some 1k.

With major assistance from sales of its iPhone sales, Apple’s net profit rose 13%, in fiscal quarter ending December 2023, to US$ 33.9 billion – 48% higher on the quarter; revenue nudged up 2% to US$ 119.6 billion, the first quarter of increased sales after four consecutive quarters of yearly decline.

Facebook’s parent company, Meta saw Q4 revenue jump 25.0% to US$ 39.1 billion – the third consecutive quarter that the company has reported double-digit revenue growth since Q4 2021; net profit surged by 201% to more than US$ 14.0 billion. On the news, the share value of the tech giant – which owns apps including Facebook, Instagram, Messenger, WhatsApp and other services – closed 15.1% higher at US$ 454.40, which pushed its market cap to US$ 1.01 billion. The company’s earnings per share jumped 201% annually to US$ 5.33., with daily active users increasing by 6.0%, to 2.11 billion. Meta, which employs more than 67k people, expects its March quarter total revenue to be in the range of US$ 34.5 billion to US$ 37 billion.

The world’s fifth richest person, with a net worth of US$ 142 billion, is about to become even wealthier. The chief executive, Mark Zuckerberg, could receive an annual pay out of about US$ 700 million a year from Meta’s first-ever dividend, announced for investors. It also noted plans to buy back an additional US$ 50 billion in shares and issue its first quarterly dividend since listing in May 2012.; holding three hundred and fifty million shares, the chief executive would take home about US$ 175 million every quarter.

Calling it “an unfathomable sum” that was unfair to shareholders, a Delaware judge rejected Elon Musk’s record-breaking US$ 56 billion Tesla pay package, which had been approved by its Board. The judge found the share-based compensation was negotiated by directors who appeared beholden to Musk. The Tesla board has been criticised as failing to provide oversight of its combative, headline-making CEO, who has fought regulators and led several other companies at the same time. In typical Musk fashion, the Tesla supremo advised “never incorporate your company in the state of Delaware.”

In sync with many financial institutions seeing a fall in deal-making activity after interest rates rose, Deutsche Bank is the latest lender to reduce its workforce, planning to cut 3.5k, of its 90k global payroll, by the end of 2025. Germany’s largest bank employs around 7k in the UK but no news is currently available about their future. The industry has seen a fall in takeovers and share listings, which has dented revenues for many financial institutions, and this is the main driver in the current round of redundancies. A drop in deal activity has prompted many firms, including some in the City of London and on Wall Street, to cut their head counts. Citigroup and Goldman Sachs have shed posts, while Barclays – one of the UK’s largest lenders – cut 5k globally in 2023.

Two of the most integral metals, used in energy transition, are lithium and nickel, and one of the biggest players in this mining sector is Western Australia; both minerals are key components of batteries used in EVs.  Forecasts of huge demand, post pandemic, led to sudden price hikes that ultimately fed a surge in exploration and production. For example, in October 2021, lithium was selling at US$ 384 but at the end of last week was 52.3% lower at US$ 183, with nickel, in March 2022, at US$ 46.5 but slumping by 64.5% to US$ 16.5. Following Economics 101 principles, huge demand for the two metals, driven by nascent industries such as batteries for EVs, pushed their prices higher which in turn resulted in a surge in exploration and production – and new mines. When supply rises to outpace demand, then the inevitable happens, the boom-bust cycle goes against the market – mines are mothballed, miners lose their jobs and investors see their investments heading quickly south. Last week the world’s largest lithium producer, Albemarle, said it would cut jobs and pause expansion at its Bunbury refinery in WA’s south to reduce costs and optimise cash flow. Already this year, WA has seen job losses and mine curtailments for Ravensthorpe and Kimberley’s Panoramic Resource’s nickel operations, along with the suspension of Core Lithium’s mines in the NT. WA billionaire Andrew Forrest’s Wyloo Metals was one of the biggest players to take a hit, announcing it would cease nickel mining in Kambalda, with Nickel West to shut down part of its processing operations nearby.

With most western companies having closed operations in Russia, it is reported that Avon, the fourth biggest global beauty company, with over US$ 10.0 billion in global sales, continues to maintain links in Russia, with the BBC reporting that it is still recruiting new sales agents in the country and continuing production in a huge plant there. With its HQ in the UK, it commenced its Russian business in the nineties and has said that it provides “critical support” for women whose livelihoods depend on their business. At the start of the war, the company announced that it was shopping investment and suspending exports of its beauty items from Russia to other markets, including Ukraine. Earlier, Natura & Co, its parent company, commented that it was only maintaining local operations to support its sales agents who are reliant on their business, and that “we believe restricting their access to products would have an outsize impact on women and children there.” Even now, the BBC has found it is still possible to register as a new sales agent for the firm in Russia, with recruits offered prizes, cash bonuses and even holidays for hitting targets. It seems ironic that its Brazilian parent company’s website expresses concern for “all people impacted by this unacceptable aggression” in Ukraine, whilst Avon still has its Naro-Fominsk plant in the Moscow area, where it produces more than two hundred and twenty types of cosmetics and perfumes, and still claims to be the number one perfume brand in the country.

After a marked slowdown in sales, including the Christmas period, H&M chief executive, Helena Helm has resigned, after four years in the position, to be replaced by Daniel Erver, who having worked for the Swedish chain for eighteen years, will step in to Helena Helmersson’s role; on the news, H&M shares slumped by sone 10%.The retailer, lagging behind  rivals including the likes of Zara and Shein, has 3.9k  stores in seventy-seven countries and has had a UK presence since 1976; it is known for its mid-value fashion, including accessories and sportswear. Some of its stores recently introduced homeware. Business wass impacted as the cost-of-living crisis spiralled out of control, with shoppers spending less on items that are seen as discretionary.

With revenue figures such as a 23.5% slump in half yearly figures to 28 October 2023,Superdry may be planning a major overhaul that could result in significant numbers of store closures and job cuts. On news of these dismal figures, Superdry’s market cap dipped to just US$ 20 million. There are reports that the London-listed clothing retailer, with PwC as advisers, are looking at a possible company voluntary arrangement or a restructuring plan, both of which are insolvency mechanisms enabling businesses to reduce their liabilities to creditors. Inevitably, there would have to be shop closures and payroll cuts but currently, there are no details which of the two hundred and fifteen outlets will be closed and how many of the 2.35k workforce will be affected. Superdry commented that “as a management team, we continue to focus on the delivery of our cost efficiency programme and further opportunities to reduce the fixed cost base of the business, with in excess of GBP 40 million (US$ 51 million) of savings due to be realised within the year.” One other possible option is for the founder, Julian Dunkerton – and 25% shareholder – to take the company private.

It is reported that John Lewis is planning to cut about 10%, (of its 76k payroll), in a bid to reduce costs and return to profitability, following a loss of US$ 297 million, after another deficit a year earlier; The cuts, spread over five years, will include redundancies, and not replacing vacant positions, across its supermarkets, department stores and head office. Every member of staff is considered a Partner, with the company owned by its workers through a trust, and who normally receive a bonus at year end; this was not forthcoming last fiscal year, ending 31 March 2023. At the same time, sixteen department stores and several supermarkets were closed, and thousands of jobs were lost.

The BoE has fined HSBC US$ 73 million for “serious failings” to accurately identify deposits eligible for UK’s Financial Services Compensation Scheme, which customer deposits are protected up to the value of US$ 108k. The regulator said the problems occurred between 2015 – 2022, relating to depositor protection rules, that requires banks must have systems and controls in place to make sure that financial information is logged correctly. One of HSBC’s subsidiaries – HSBC Bank – was found to have incorrectly marked 99% of its eligible beneficiary deposits as “ineligible” for FSCS protection; it also provided incorrect evidence that its systems satisfied certain requirements of the deposit protection rules. In 2021, HSBC was fined US$ 81 million by the UK’s financial regulator for “unacceptable failings” of its anti-money laundering systems.

One of Australia’s richest men, Andrew Budzinski, faces a class action over allegations that he, and his company, IC Markets, misled thousands of everyday investors who may have collectively lost hundreds of millions of dollars trading in risky contracts for difference financial products. Strangely, CFDs are illegal in countries, such as the US and Singapore, but can be traded, (albeit under strict conditions), in Australia. The class action alleges that, by offering these highly risky and unsuitable financial products to retail investors (before the ASIC restrictions came into force in March 2021), IC Markets engaged in misleading, deceptive and unconscionable conduct. Bu using CFDs, investors are able to trade on how much assets – such as cryptocurrencies, shares and commodities – will increase or decrease in value. Data shows that Budzinski paid himself dividends of US$ 617 million, (AUD 939 million), as his company posted profits of over US$ 657 million (AUD 1 billion), in the three years ending 30 September 2020. There is no doubt that CFDs are highly volatile and have historically been highly leveraged products, exposing investors to rapid losses, with allegations that IC Markets set “the buy and sell price for its CFDs in a way that was not transparent to retail clients”. It also claimed that the company sold “highly leveraged CFDs to retail investors that were complex, highly risky and unsuitable for those investors”, and that it “used language that made new users feel comfortable, such as representations that users could ‘trade with the world’s largest Forex CFD provider’ and ‘trade with the most trusted CFD provider in the world’ and did not contain prominent warnings of the risks of CFDs.”

India’s Tata group and France’s Airbus have signed an agreement to manufacture civilian helicopters together; the two companies already cooperate to make C-295 transport aircraft in the Indian state of Gujarat. It was noted that the production of H125 helicopters “would include significant indigenous and localisation component”, and the aircraft will also be exported to some of India’s neighbouring countries. The actual facility location has yet to be decided but it is expected that deliveries will start in 2026. President Macron, on his fifth visit to India since May 2023, discussed the possibility of French engine maker Safran assisting in manufacturing fighter jet engines in India. Coinciding with Macron’s visit, jet engine maker CFM International also announced an agreement ,with India’s Akasa Air, to purchase more than three hundred of its LEAP-1B engines, to power one hundred and fifty Boeing 737 Max planes.

A Hong Kong court has ordered that the embattled Chinese debt-ridden property giant Evergrande be liquidated, with judge Linda Chan saying “enough is enough” after the property giant failed to come up with a restructuring proposal. The mega giant, with liabilities of over a massive US$ 323 billion, defaulted on its debts two years ago. Little surprise to see its shares slump 20% on the news last Monday. There is every chance that China’s realty problems, which accounts for almost 25% of the country’s economy, will have an impact not only the local, but also the global, economy. The case was brought to court by Hong Kong-based Top Shine Global, in June 2022 but the vast majority of the money it owes is to lenders in mainland China who have limited legal avenues to demand their money. Following the making of a winding up order, the company’s directors will cease to have control, and a provisional liquidator will likely be appointed by the court, Whether the conclusions of this Hong Kong court are recognised on the mainland remains to be seen.

In a bid to tighten a worryingly high sell off of shares, which has seen nearly US$ 6.0 trillion lost since its last peak in 2021, the Chinese government has tightened its financial industry rules.  They include new rules that will limit “short selling”, that the China Securities Regulatory Commission says will create “a fairer market order”. This is but the latest measure that the watchdog has introduced over the past twelve months, most of which have had a minimal impact. The CSRC said that following “a complete suspension of the lending of restricted stocks”, which takes effect today, further limitations on securities lending will be introduced from 18 March. It is no coincidence that last week, the country’s premier Li Qiang asked authorities to take more “forceful” measures to stabilise share prices, as there are concerns that many investors are selling shares because of the real risk that the country’s economy could face a long period of slow economic growth.

A US judge, who has agreed with Florida Governor Ron DeSantis in his fight with Disney, rejected a lawsuit that had accused the Republican of organising a campaign of “government retaliation”. He indicated that the actions that Disney opposed were legal and it lacked standing to sue the governor, noting that state legislators had the right to make the changes and the company had failed to prove it faced any imminent harm from the governor. The two sides started feuding after Disney, under pressure from its staff, criticised the Parental Rights in Education Act – dubbed the “Don’t Say Gay” bill by critics – which banned discussion of sexual orientation and gender identity for young students, later expanded the ban to cover all school grades.

As widely expected, the Federal Reserve left interest rates at their current 5.25%-5.00% twenty-three year high but noted that rate cuts are coming – but not yet. In the current economic environment, a rate cut will occur probably before the end of June and in the words of Fed Chair, Jerome Powell, the bank was looking for “greater confidence” that the inflation would continue to fall, and that “we’re wanting to see more data.”  Some analysts will be looking for earlier cuts arguing that the soaring price increases, that pushed the central bank to start raising rates in 2022, have slowed, with the December inflation rate at 3.4%. The conundrum facing the US central bank – and other global entities – is that if they keep rates high borrowing remains more expensive, discouraging people and businesses from taking on debt; if pushed lower too quickly, then credit spending may result in excessive growth and subsequent inflation, reducing purchasing power and undermining the sustainability of any economic expansion.

The Labour Department posted that January saw US employers add 353k jobs, well above initial estimates of 185k; the unemployment rate remained unchanged at a near-historic low of 3.7% and annual wages rose 4.5%. Job gains were made in professional and business services, health care, retail trade and social assistance, with losses noted in mining, quarrying and oil and gas extraction. The robust state of the sector is an indicator for the Federal Reserve, to believe it can achieve its inflation goal without widespread job losses. Furthermore, consumer spending has remained resilient and in Q4, 3.3% growth outperformed the Fed’s expectations.

The British Retail Consortium posted that January shop prices rose at their slowest rate – 2.9%, compared to December’s 4.0% – since May 2022, mainly attributable to discounts and lower prices for milk and tea. On average, food prices are still rising by more than 6% a year, whilst price increases for non-food products, which dipped 1.3%, down from December’s 3.1%. It must be remembered that the current political/economic global environment may point to higher prices in the near future. Interestingly, the BRC posted that some eighty-six million more lunchboxes were taken to work in 2023 as people sought to manage budgets more closely, as well as spending on alcohol fell by more than 50%, compared with December – maybe to the increasing impact of the Dry January movement?

The IMF seems to be disagreeing with Jeremy Hunt “advising the UK against further tax cuts”; it noted that preserving public services and investment implied higher spending than was reflected in the government’s current plans. The Chancellor has hinted that tax cuts could be a big help in boosting growth, with the world body hinting that planned spending cuts for this year were unrealistic. This comes at a time when the IMF downgraded the UK’s growth forecast by 0.4% to 1.6%, and when 2023 figures are expected to be around 0.6% – the second slowest in the G7 major economies, behind Germany. One of the IMF jobs is to advise its members on how to improve their economies – luckily, they seem to be often wrong with many of their forecasts and perhaps should keep away from such forecasts until they put their own house in order. The message from the Chancellor is to Mind Your Own Business!”.

Fool Me Once, Shame on You!                                                            26 January 2024

The real estate and properties transactions, totalling 4.12k, were valued at US$ 3.87 billion in total during the week ending 26 January 2024. The sum of transactions was 312 plots, sold for US$ 804 million, and 2,696 apartments and villas, selling for US$ 1.59 billion. The top three transactions were all for plots of land, the first in Al Barshaa South Second for US$ 57 million, the second in Saih Shuaib 2 for US$ 28 million and in Saih Aldahal for US$ 27 million. Madinat Hind 4 recorded the most transactions, with one hundred and thirty-three sales, worth US$ 92 million, followed by forty-nine sales, in Al Hebiah Fifth for US$ 46 million, and twenty sales, in Hadaeq Sheikh Mohammed Bin Rashid, valued at US$ 136 million. The top three transfers for apartments and villas were a villa in Nad Al Shiba First for US$ 48 million, and two apartments, both in Palm Jumeirah, for US$ 21 million and the other for US$ 12 million. The mortgaged properties for the week reached US$ 1.25 billion, with the highest being for land in Trade Centre First, mortgaged for US$ 262 million. One hundred and ninety-five properties were granted between first-degree relatives, worth US$ 232 million.

Azizi Developments has begun construction of a US$ 1.5 billion mega-tall tower that could become the second tallest building in the world, (to the 828 mt Burj Khalifa), if the authorities approve plans; whatever happens, it will definitely be the second tallest in Dubai. To become the world’s second tallest, it would have to be higher than Malaysia’s 679 mt Merdeka 118 and to be more than the 450 mt high Franck Muller Aeternitas tower, which is currently under construction in Dubai Marina.

Downtown Dubai is the location for Binghatti Properties’ latest launch – the uber-luxury project US$ 1 billion Mercedes-Benz Place Binghatti, launched in partnership with the German luxury carmaker; the sixty-five storey property will comprise one hundred and fifty 1 B/R, 2 B/R and 3 B/R apartments, duplex and triplex apartments, and 5 B/R penthouses, with prices starting at US$ 2.72 million, (AED ten million). The 341 mt project, which  is slated for completion by the end of 2026, will also have a range of restaurants, sports and wellness zones, lounges, non-automotive retail, exhibition spaces, and parking. Each and every unit will come with its own private swimming pool. The duplex will feature six bedrooms, a private gym, and an office among other amenities. The triplex will be based on three floors and will come with a private gym, cinema, spa and other amenities. By the end of the week, its chief executive, Muhammad Binghatti, confirmed that 50% of the project had already been sold.

Alphabeta Properties has introduced a new concept to Dubai’s real estate sector, when it comes to renting out a residential building. The Dubai property development and management company is initiating a unique auction system to select tenants for its M77 apartments and will select its tenants via an invite-only online auction. Comprising seventy-seven apartments and located on Meydan Avenue, it will also include a full-floor gymnasium, a fifty mt Olympic-sized pool and a smart keyless entry system. Rents for the one, two and three B/R apartments range from US$ 29k – US$ 41k, US$ 59k – US$ 71k and US$ 68k – US$ 95k, dependent on size and floor space. Interested candidates are required to register, and those shortlisted will be invited to take part in the auction and also visit the properties in person. The developer has already delivered over US$ 272 million worth of projects in different localities, including Al Barsha, Jumeirah, Al Safa and others. The company has built its portfolio around leasing, and most tenants are based in the affluent rental market segment.

Aqua Properties launched its mixed-used four-tower, The Central Downtown project in Arjan, slated for completion in 2026. The towers will be completed on a 300k sq ft plot — atop a sprawling 150k sq ft shopping mall – and will house 1.17k residential units from studio to 1, 2 and 3 B/R, along with a selection of retail outlets. The project boasts a roof podium featuring a series of indoor and outdoor amenities, as well as a golf simulator, wave pool, jacuzzi and a multipurpose hall. Aqua Properties recently announced plans to launch a series of significant developments in Dubai, valued at US$ 817 million.

Master developer Expo City Dubai has unveiled its latest residential properties, as the city continues to grow, launching Sky Residences – a collection of one-to-three-bedroom apartments, as part of the vibrant Expo Central communities. Sky Residences is one of three distinct clusters of apartments, with prices ranging from US$ 488k, that form Expo Central, each within a few minutes’ walk of the city’s attractions; units will be handed over by Q3 2026. Last year, the triple-tower Mangrove Residences was unveiled, with units selling out fast. Both projects are seen as important steps to make Expo City a sustainable location, as well as the cornerstone of Dubai’s 2040 Dubai Urban Master Plan.

Betterhomes has released data that indicates that Indians, moving from last year’s third place, have replaced Russians as the leading buyers of real estate in Dubai in 2023; UK buyers move down to third place, compared to 2022. Making up the top ten are Egyptians, Lebanese, Italians, Pakistanis, Emiratis, French and Turkish. Last year, there was a marked variance in the increase, in the average sales price of villas, with prices pushed higher because of a shortage of inventory in key locations. There were marked increases seen in JVT (29%), Dubai Hills Estate (29%) and Arabian Ranches (25%) which pale into insignificance when villa prices on Palm Jumeirah were up 74%; on the flip side, Jumeirah Golf Estates posted a marginal 1% decrease. Average apartment prices ranged from 8% – 20%, with three of the better performers being JGE, Dubai Hills Estate and Downtown Dubai with increases of 21%, 21% and 17%.

Bayut data confirms what many others already know – that the bull market in the Dubai property market continued in 2023, helped by factors such as a record influx of local and international investors attracted taking advantage of the “unprecedented boom,” wanting to own property in this surging market. It pointed to a notable uptick in sales prices for apartments and villas across prime neighbourhoods in Dubai, registering surges of between 4% and 21% last year. CBRE note a 42% rise in rents since January 2020, and property prices increasing by approximately 33%, with villa rents having followed a similar trend, averaging an annual US$ 88.4k, with an annual 19.2% increase in November.

Bayut also noted that in 2023 a total of 132.6k property sale transactions, amounted to a total value of US$ 111.66 billion. CBRE said there had been a 42% rise in rents since January 2020, with property prices increasing by approximately 33%; villa rents followed a similar trend, averaging an annual US$ 88.4k, with a 19.2% increase in November. There is no doubt that Dubai’s property has bounced back strongly from the pandemic-induced slowdown, helped by government initiatives such as residency permits for retirees and remote workers. Last year, the Dubai real estate market continued to break records, with residential sales transactions 38.1% higher at 120.7k. This growth came predominantly from apartment sales, which increased by 49% to 94.2k.

The most popular locations in the affordable property segment, for potential investors and home buyers, were in International City, Dubailand Residence Complex and Damac Hills 2; in the mid-range budget – Jumeirah Village Circle, Dubai Silicon Oasis, Al Furjan and The Springs – and for luxury property – Dubai Marina, Business Bay, Arabian Ranches and Dubai Hills Estate. The average transaction prices for affordable villas have generally decreased by 10% to 26%, with the exception of Damac Hills 2, which recorded a minor increase of 0.54%. In the mid-tier property segment, the average sales transaction prices for apartments have generally increased by up to 3.0%, although Jumeirah Lake Towers saw transactional sale prices fall by 0.77%. Sought-after areas with mid-tier villas have reported 15% – 21% increases in average transaction sales price, whilst in the luxury sector, transactional prices have been between 3.0% and 17%.

The study indicated that, based on Return on Investment, DIP, Liwan and Discovery Gardens returned the best returns, with yields of over 11% in the apartment sector. In the mid-tier segment, Dubai Silicon Oasis, Dubai Sports City and Motor City returned the best rental yields of up to 9.0%, whilst in the luxury apartment segment, areas like Al Sufouh, Green Community and Jumeirah Golf Estates have seen returns of up to 10%. When it comes to villas, in the budget sector, Al Rashidiya sees RoI surpassing 9.0%, with areas such as International City and Jebel Ali posting ROI percentages of over 8.0%. For mid-tier villas, JVC, Town Square and Reem have recorded projected ROIs of between 6.0% to 8.0%. Al Barari is the stand-out performer in the luxury villa category, with an ROI of over 8.0%.

Data from aviation consultancy OAG confirmed that Dubai International has surpassed Atlanta’s Hartsfield-Jackson International to become the busiest global airport; it recorded five million seats in January 2024 – 0.3 million higher than ATL, which saw its capacity decrease by 8% on the month. Last year, DXB registered 56.5 million seats – compared to 2022’s 53.98 million and pre-pandemic’s 45.27 million. Calculations used to classify the busiest global airports are based on total capacity (domestic and international), and for the top ten busiest international airports only using international seats. The other eight airports to make the top ten busiest globally include Tokyo International (Haneda), Guangzhou, London Heathrow, Dallas/Fort Worth, Shanghai Pudong, Denver International, Istanbul and Beijing Capital International.

Last year, the Mohammed bin Rashid Aerospace Hub at Dubai South posted a record annual 8% hike in private jet movements to 16.7k in 2023, with some drivers including the hosting of the Dubai Airshow, COP28, and the soft opening of the new ExecuJet FBO and hangar. MBRAH is the region’s busiest airport for international business aviation movements in the ME. During the year, there were several agreements with new partners seeking to set up their facilities across different zones to provide different MRO services.

According to Dubai Business Events, last year, the emirate extended its status as a hub for international business events, posting a record three hundred and forty-nine bids to host major conferences, meetings and programmes – 49% higher than recorded in 2022, and up 18.5% than the then 2019 pre-pandemic record number of two hundred and ninety-five. Some of these have already taken place, with others to take place in the future, and it is estimated that they will attract more than 191k international delegates.

This week saw the third 2024, two-day edition of World of Coffee, opened by Abdulla Bin Touq Al Marri, Minister of Economy, and featuring 1.65k local, regional, and global brands and companies. This year, space was expanded 50%, with fifty-one countries participating in its activities. The minister commended the event organisation’s efficiency and praised the hard work of the teams involved; he visited the Roasters Village, Cupping Room, and Brew Bar pavilions. According to Data Bridge Market Research, the value of the coffee and Espresso drinks market in the MENA region is expected to reach around US$ 1.33 billion by 2030, on the back of an anticipated Compound Annual Growth Rate of 2.6%.

One Dubai family was duped by responding to a call from Apollo Times office, advising that a free gift had been won but they would have to attend the agency’s office in Karama. On arrival, the family were exposed to a time-share scam, with an all-expenses paid trip to the US for eight family members, priced at US$ 10.9k if they signed up for the platinum package. Late last year, a couple paid US$ 7.6k for a gold membership, with the promise of a world tour. Last Saturday, numerous other UAE residents visited Apollo’s office seeking answers about trips that never materialised but were shocked to find the company had shut down, and its owners and staff had disappeared. Trips to all over the world, including Europe, Australia, US and Singapore, as well as to Umrah, had been promised. Victims said that each time they tried to book a trip, they were told the slots were unavailable and that they had to wait. Excuses ranged from the unavailability of hotels to a lack of advance notice, and the only “prizes” that were delivered a dhow cruise dinner and a stay at a three-star hotel in Fujairah.

Last month, Sharjah-based Royal Palm closed its doors abruptly after employing a similar modus operandi to defraud numerous residents. In February 2023, Royal Regis Tours and Travels shut down, leaving hundreds counting their losses. The company had sold over half a million dirhams worth of holiday packages that never materialised. Prior to this, Arabian Times Travel & Tourism LLC (Arabian TTT) defrauded approximately two hundred people in a similar fashion. Unfortunately, Apollo is the latest – but definitely not the last – fraudulent exercise emanating from a travel agency to scam Dubai residents.

According to the Dubai Media Office, in the first nine months of 2023, the Dubai economy expanded 3.3%, driven by growth in the emirate’s tourism and transportation sectors. Data indicates that the emirate’s accommodation and food services industry recorded 11.1% growth, while the transportation and storage services sector surged by 10.9%. HH Sheikh Mohammed posted that “it is also a reflection of Dubai’s favourable economic climate, robust world-class infrastructure, pro-business regulations and deep talent pool which together consistently draw in a diverse array of investors and entrepreneurs from all corners of the globe.”

In H1 2023, Dubai’s GDP expanded by an annual 3.2% to US$ 60.9 billion. In the first nine months of the year, the transport/storage sector, (which includes land, sea and air transport and logistics), was a major contributor accounting for 13.1% of the emirate’s GDP, equating to US$ 116.9 billion. Dubai’s information/communication technology industry grew 4.4% annually to US$ 4.09 billion. The accommodation/food services sector accounted for 3.4%, (equating to US$ 3.02 billion), of Dubai’s economy. Helal Al Marri, director general of Dubai’s Department of Economy and Tourism, commented that “our focus is not only on maintaining the current momentum but also on further strengthening an environment that enables businesses to thrive,” with the aim to increase the size of the economy to US$ 8.72 billion, under the government’s D33 agenda. It also targets to make Dubai a global digital economy leader, and the fastest growing and most attractive global business centre, a centre for sustainability and economic diversification, and an incubator and enabler of talented citizens.

Established in March 2022, Dubai’s Virtual Assets Regulatory Authority is the competent entity in charge of regulating, supervising, and overseeing VAs and VA Activities in all zones within the emirate, with the exception of the DIFC. VARA has two roles – protecting investors and establishing international standards for Virtual Asset industry governance and supporting the vision for a borderless economy. Last year, it worked hard to establish Dubai as the leading, responsible hub for regulated VA, awarding nineteen regulated VASP licences – of which eleven are already operational. A further seventy-two Initial Approvals have been issued to new entrants to the Dubai market that have already commenced the licensing process.

Emirates NBD posted a 3.0% rise in Q4 profit, to US$ 1.09 billion, attributable to the continuing strength of the local, and wider Mena region, economies. Dubai’s biggest lender by assets saw total quarterly income increase by 5.0% annually to US$ 2.81 billion, driven by a 2.0% year-on-year rise in the bank’s net interest income to US$ 2.13 billion, with non-funded Q4 income surging by 18.0% to US$ 681 million. The bank’s chairman, Sheikh Ahmed bin Saeed, noted the rise in quarterly net profit reflects “a healthy regional economy and the success of the group’s diversified business model”. Annual returns saw its net income rise 65.0%, to a record US$ 5.86 billion, attributable to factors such as asset growth, a stable low-cost funding base, increased transaction volumes and substantial impaired loan recoveries, (with provisions 33.0% lower at US$ 940 million). Total income jumped 32.0% in December to US$ 11.72 billion, driven by “excellent deposit mix, solid loan growth and strong fee and commission growth across all business segments”. Other positive indicators include a marked improvement credit quality, with the impaired loan ratio improving to 4.6%, (its lowest level since 2009), loans growing 5% to US$ 131.06 billion, customer deposits 16% higher at US$ 159.04 billion and total assets up 16% to US$ 231.15 billion. The bank’s Board proposed a US$ 0.027 dividend, in addition to a special US$ 0.005 dividend to celebrate the bank’s sixtieth anniversary; this equates to a doubling of the shareholders’ payment on the year.

The country’s biggest Sharia-compliant lender by assets posted a 24.1% jump in 2023’s fiscal net profit, to US$ 6.79 billion profit, attributable to rising non-funded income and lower impairment charges, (down 34.0% to US$ 354 million). Revenue from Islamic financing and investing transactions surged nearly 46.7% to US$ 4.69 billion, with income from properties held for development and sales jumping 72.3% to almost US$ 65 million. Commissions, fees and foreign exchange income also moved higher by more than 12% to US$ 488 million. Customer deposits increased 12.0% to US$ 60.49 billion, with current and saving accounts comprising 37% of the total deposit base. DIB’s net financing and sukuk investments rose 12.0% to US$ 73.02 billion last year, with its balance sheet up 9.0%.

Deyaar’s 2023 net profit, tripled for the 12 months to the end of December, to US$ 120 million and its net operating profit came in 95% higher at US$ 77 million, as total assets expanded by 6.5% to US$ 1.78 billion. Revenue was 56% higher to US$ 354 million, mainly due to the very healthy state of Dubai’s property sector, and a jump in “property development revenue of US$ 112 million from the sale of properties”, along with a 15% rise in revenue from other businesses. Mar Casa, Deyaar’s luxury seafront residential destination at Dubai Maritime City, valued at US$ 302 million, and launched in March 2023, was sold out in record time. Other projects handed over last year were the Mesk and Noor Residential communities, with its flagship project. Its flagship project Midtown also introduced its final residential community, Jannat.

The DFM opened the week, on Monday 22 January, 37 points (0.9%) lower the previous week, gained 96 points (2.4%) to close the trading week on 4,163 by Friday 26 January 2024. Emaar Properties, US$ 0.08 lower the previous week, was flat, closing on US$ 2.04 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.69, US$ 4.75, US$ 1.58, and US$ 0.38 and closed on US$ 0.68, US$ 4.93, US$ 1.70 and US$ 0.37. On 26 January, trading was at 63 million shares, with a value of US$ 47 million, compared to 138 million shares, with a value of US$ 127 million, on 19 January 2024.

By Friday, 26 January 2024, Brent, US$ 0.95 lower (1.2%) the previous three weeks, gained US$ 3.93 (5.0%) to close on US$ 82.49. Gold, US$ 22 (1.1%) lower the previous week, shed US$ 16 (0.8%) to trade at US$ 2,016 on 26 January 2024.   82.49

Despite a Q4 dip in revenue, Apple’s net profit jumped 10.7% on the year, and this week it surpassed Amazon to become the world’s most valuable brand, valued at US$ 516.6 billion – a 74% increase from last year; this came despite the tech firm seeing its prime product iPhone’s volume share flattening. Brand Finance rated Microsoft, Google, Amazon and Samsung well behind the leader with brand values of US$ 340.4 billion, US$ 333.4 billion, US$ 308.9 billion and US$ 99.4 billion respectively. In the region, the usual suspects – Aramco and Adnoc – filled the first two places, with the world’s biggest oil producing company posting an 8.0% decline in value to US$ 41.6 billion and Abu Dhabi petro giant growing its value by 7.0% to US$ 15.2 billion and climbing ten places on the global ladder to one hundred and twenty-eighth. Saudi Telecom Company and etisalat by e& both posted 12.0% gains on the year to US$ 13.9 billion and US$ 11.7 billion.

On Wednesday, Microsoft returned to its top position, (albeit temporarily), with its shares gaining nearly 9.2% since 01 January, and a massive 67.3% over the past twelve months; its market cap topped the US$ 3 trillion level to touch US$ 404.71 per share. The main driver seems to be the company’s strategic investments in AI under the transformative leadership of Satya Nadella.  Earlier this month, the Redmond, Washington-headquartered technology company announced the addition of a new Copilot key on the Windows keyboard, in a move aimed at supporting the adoption of AI in its hardware products. Morgan Stanley has elevated their price target to US$ 450, from US$ 415, and said they “remain confident in upside to our above consensus estimates”. However, Apple has since reclaimed the top position, with its market capitalisation reaching about US$ 3.03 trillion

Three months after acquiring Activision-Blizzard, (maker of the Call of Duty and Warcraft series), in a US$ 69.0 billion deal, 1.9k workers, (8.6% of the 22k current workforce), in Microsoft’s gaming division are to be laid off. It seems staff within the Xbox division and at publisher Zenimax – which oversees studios including Bethesda and Arkane – will also be impacted. Last year, there had been a series of redundancy announcements in the video game and tech industries and the first month of 2024 has seen much of the same.

Last May, Terraform Labs’ TerralUSD and Luna tokens lost US$ 40.0 billion of their value which contributed to the so-called “cryptocrash” then; now, the firm has filed for bankruptcy in the US. Its founder, South Korean Do Kwon is currently in jail in Montenegro, after having been found guilty of forging documents, and still faces charges in his home country – the US – and Singapore for defrauding investors by US regulators. In December 2021, its Luna token began trading at US$ 5 and surged over the ensuing four months to top US$ 116 million the following April, but on 09 May 2022, it collapsed, losing 99% of its value in just forty-eight hours to US$ 0.02. This resulted in an estimated US$ 400 billion being wiped from the value of other cryptocurrencies such as Bitcoin. Documents show that Terraform still has up to US$ 500 million in assets and that its two shareholders are Do Kwon (92%) and co-founder Hyunsung Shin (8%).

Earlier in the week, there were reports that Boeing will now carry out checks on a second model of its 737 fleet – with the US Federal Aviation Administration grounding more than one hundred and seventy of the 737 Max 9 fleet, after a cabin panel broke away thousands of feet above the ground. The agency said, “as an extra layer of safety”, airlines should also inspect older 737-900ER models, which use the same door design, even though there had been no reported issues of any problems, even though it uses the same style of panel to “plug” an unused door. The FAA is investigating the firm’s manufacturing practices and production lines, including those linked to subcontractor Spirit AeroSystems, which provided the panel. Following the Air Alaska incident earlier in the month, after the watchdog grounded one hundred and seventy-one 737 Max 9 jets, United Airlines, which has seventy-nine such planes, says it expects to lose money in Q1, due to their grounding of the jets; the carrier has been forced to cancel hundreds of flights, as inspections continue to be carried out. The 737-900ER models have carried out eleven million hours of operations without any similar incident to the newer 737 Max 9s, so the FAA did not see the need for the older model to be grounded while the visual inspections are carried out by operators. By the middle week, Alaska Airlines chief says checks on Boeing 737 MAX 9 planes have found ‘many’ loose bolts.

Boeing status, and already tarnished safety reputation, took another blow this week with news that a Delta Air Lines Being 757 passenger plane’s nose wheel fell off and rolled away, as the jet lined up for take-off, at Hartsfield-Jackson Airport in Atlanta. Not surprisingly there was no early comment by the plane maker, but the FAA confirmed that it was investigating the incident. However, on Wednesday, chief executive, Dave Calhoun, said the manufacturer will not operate its planes unless the company is fully confident in their safety.

In Q4, China’s BYD overtook Tesla as the leading global EV maker and now it seems that Elon Musk is keen to introduce a cheaper model to compete with cheaper gasoline-powered cars and a growing number of inexpensive EVs, including those made by Chinese and Vietnamese rivals. There are plans for Tesla to commence production of a new mass compact crossover electric vehicle codenamed “Redwood” in mid-2025; an entry-level US$ 25k vehicle seems to be on the cards. Tesla sent “requests for quotes,” or invitation for bids for the “Redwood” model, to suppliers last year, with an expected weekly production volume of 10k vehicles. At a meeting on Wednesday, Tesla forecast a 21% hike in 2024 deliveries – well down on a long-term 50% target, set by its founder three years ago. posting a 38% surge in deliveries last year, and record sales of 1.8 million cars, Tesla warned that this year will see growth “notably lower”, following which its share value dropped 6% in extended trade in New York. Elon Musk also warned that Chinese rivals “will pretty much demolish most other car companies in the world” unless trade barriers are put in place and noted that Tesla had to slash prices repeatedly last year in a bid to keep demand up, so that revenue grew at about half that pace. In its quarterly update to investors, Tesla said it was not expecting another big wave of expansion until it launches a new model. The slowdown in Tesla’s revenue and margins reflects what is happening in the EV market, where, after several years of robust growth, there are signs that sales are sliding, with major car companies scaling back on production. automaker

Vietnamese automaker,VinFast says it plans to spend up to US$ 2 billion to build an electric vehicle factory in India, the world’s third-largest auto market by sales, and has committed to an Initial US$ 500 million in the first phase of construction in Thootukudi, in India’s Tamil Nadu state; it is expected that production will be in the region of an annual 150k units. This will be VinFast’s first foray into India and is part of a global expansion that has included exports of EVs to the United States. It is building a US$ 4 billion EV factory in North Carolina, where production is slated to begin this year, and has invested US$ 400 million to set up production lines in Indonesia. It has also started shipping EVs, made in Vietnam, to neighbouring Laos to serve as a fleet for Green SM, an EV taxi operator that is mostly owned by VinFast’s founder, Pham Nhat Vuong. India is one of the fastest-growing electric vehicle markets in the world, with more than 90% of its 2.3 million electric vehicles  cheaper and more popular than motorbikes, scooters, and rickshaws. The government has launched a US$ 1.3 billion federal plan to encourage EV manufacturing and provide discounts for customers.

A sign that the Indian economy is ticking over nicely is that this week its stock market overtook Hong Kong to become the fourth-biggest equity market globally by market capitalisation; on Tuesday, its market cap stood at US$ 4.33 trillion, compared to its rival’s US$ 4.29 trillion. The US is way ahead of any of its competitors with a market cap of US$ 50.86 trillion, followed by China’s US$ 8.44 trillion and Japan’s US$ 6.36 trillion.

Last week, Apple announced that it would permit app developers to sell products in places other than its own store – but only if they still paid commission. The tech giant decided to take this action following a recent court decision, involving Apple and Fortnite, in which Apple won but it fell foul of a law by not allowing app developers to tell people about other ways of paying, including through links that bypass Apple’s own App Store payment system. Consequently, it charges the biggest developers a 30% fee to use this system, though smaller developers pay around 15%, and 85% of developers do not pay a fee at all. Apple has introduced a new set of rules in the US which will allow people to subscribe to services without using its system, but it will charge developers up to a 27% commission to do so. This has more than annoyed Spotify which called the commission amount “outrageous” and accused Apple of “stopping at nothing” to protect its profits. In the UK, the Digital Markets, Competition and Consumer Bill is currently going through parliament that could decide limits that Apple could charge for their services.

In line with several other high profile tech companies, eBay is planning to lay off some 9.0% of its staff, (1k employees), with its chief executive, Jamie Iannone, saying the move was the “most significant and toughest” of all planned changes to ensure “long-term, sustainable growth”. He also said eBay plans to scale back the number of contracts it has within its alternate workforce over the coming months. The move comes as tech companies continue to lay off employees to streamline operations, after a hiring spree during the pandemic. Earlier in the month, Google retrenched hundreds of employees across its hardware, engineering and digital voice assistant units, as “part of efforts to optimise its operational costs”. Before that, the world’s biggest e-commerce company’s live-streaming unit, Twitch, said it was laying off 33% of its workforce (equating to five hundred) calling it a “difficult decision” intended to help the company “build a more sustainable business”, and help it stay for the “long run”. A report by Challenger, Gray & Christmas indicated that technology job losses in 2023 were 73% higher, at 168k, compared to 2022.

Arguing that just 8% of customers chose to use a branch exclusively to manage their money, Lloyds confirmed 1.6k staff will lose their jobs but that the banking group’s relationship growth team would be strengthened by the addition of eight hundred and thirty jobs; staff will be available to customers in branches through video meetings or over the phone. Last year, it closed a further forty-five branches – twenty-two Halifax branches, nineteen Lloyds and four Bank of Scotland; staff that are impacted will be offered roles within the bank. Lloyds has been announcing changes to its business since February 2022 and, with this latest move, it will take the total of Lloyds group branch closures to two hundred and seventy-six, leaving five hundred and fifteen Lloyds Bank sites, four hundred and thirteen Halifax branches, and one hundred and thirty-three Bank of Scotland branches remaining. Other financial institutions have also been cutting payroll numbers, with Barclays, NatWest, Virgin Money, Ulster Bank, Metro Bank, (planning 20% staff cuts), and RBS all announcing closures in 2023.

It is reported that Google has started construction on a new US$ 1 billion data centre in the UK, to be located on a thirty-three-acre site in Hertfordshire, purchased by the firm in October 2020. It expects that the new project will boost the growth of AI and “help ensure reliable digital services to Google Cloud customers and Google users in the UK”. The tech giant currently employs 7k but this number will increase, initially due to the construction process, posting “this new data centre will help meet growing demand for our AI and cloud services and bring crucial compute capacity to businesses across the UK while creating construction and technical jobs for the local community”.

It is reported that the EU competition watchdog will block Amazon’s takeover of vacuum cleaner maker iRobot – and this comes after it was given the green light from the UK’s Competition and Markets Authority; it had found that its place in the UK market was “modest” and that it already faced several significant rivals. European regulators are concerned that iRobot’s tie-up with Amazon could make it difficult for other vacuum-makers to compete.

One of the UK’s well-known food suppliers, Premier Foods, is planning to cut prices on more of its products, including Mr Kipling, Bisto and Angel Delight. Latest figures indicate that food prices are rising less quickly, with Premier planning to increase prices of own-brand products – this sector had seen marked growth attributable to surging food prices, as food inflation figures topped 19% only ten months ago in March 2023; last month, it had dropped to 8.0%. The company started lowering prices in Q4 and noted that discounts had helped it to report strong trading over Christmas, with group sales up 14.4% on the year.

Towards the end of last year, there was concern that some suppliers and retailers had not been passing on savings quickly enough down the supply chain to shoppers. In November, the UK’s Competition and Markets Authority concluded that makers of some popular food brands had raised prices by more than their costs over the past two years.

Last December, China’s National Press and Publication Administration had proposed regulations limiting the amount of money and time people spent playing video games. However, last Tuesday the draft rules were no longer on the NPPA website which then saw share prices of Chinese gaming firms – including the world’s biggest gaming company Tencent Holdings and its rival NetEase plummet almost US$ 80.0 billion at the time – surge after this apparent U-turn. China is the world’s biggest online gaming market and the government had introduced legislation to limit in-game purchases. Its largest crackdown to date, was in 2021 when children were banned from playing for more than an hour on certain days.

In a bid to make its business more profitable, Scottish investment firm Abrdn is to cut five hundred jobs, (equating to about 10% of the workforce), as it hopes to cut US$ 191 million costs, mainly in non-staff, as it faces “challenging” market conditions in 2024. About 80% of the savings will be from its investments arm, which in the six months to the end of December “continued to face structural headwinds”.

The expected agreement that would have seen Sony and India’s Zee merge has been abandoned because “as, among other things, the closing conditions to the merger were not satisfied by then”. Part of the problem is Zee’s chief executive, Punit Goenka, who had been touted to head up the new entity, is now the subject of a probe by India’s market regulator. When the deal was first announced, the newly planned firm was set to become a major media player in the country, challenging rivals such as Walt Disney’s Hotstar. Both firms have operated in India for years and own streaming platforms ZEE5 and SonyLIV, with the country becoming an increasingly lucrative market for streaming platforms that are targeting a young digital audience.

Driven by the double whammy of high interest rates and increased costs for buyers, annual US home sales sank to their lowest since 1995, with many potential sellers with lower rates deciding to stay at their current abode. Last year, only 4.09 million homes were purchased, with tight supply pushing up prices to a new record. There was a 1.0% rise in the 2023 median price to US$ 389.8k, having climbed by more than 40% since 2019. The buying frenzy, which had started during a period of rates being slashed to boost the sector during the pandemic, started to fizzle out in 2022, when rates began to soar. In the subsequent period, an increasing number of buyers entered the market, whilst many with loans, (with shorter terms or variable rates are more common), found it better and more economically sensible to stay because of the high costs, including rates of up to 7.0%, to move.  This has also created a stark divide between would-be buyers and existing homeowners.

Latest reports show that freight traffic going through the Suez Canal has almost halved
since October, when Yemen’s Houthi rebels began attacking cargo ships in the Red Sea. The Suez Canal handles 12%-15% of global trade and 25%-30% of container traffic, with the latter’s shipments down 82% in the week to 19 January from early December. The United Nations Conference on Trade and Development reported that the number of ships using the canal since early December had fallen by 39%, leading to a 45% decline in freight tonnage. There are two other key global trade routes disrupted, one following Russia’s invasion of Ukraine and the other being the Panama Canal, where low water levels from drought meant shipping last month was down 36% year-on-year and 62% from two years ago. All these disruptions have resulted in delays, higher costs and higher greenhouse gas emissions, because ships were opting for longer routes and also travelling faster to compensate for detours.

Before the start of the Gaza-Israel war, the World Trade Organisation had forecast that the global economy would grow 3.3% in 2024, but since then, events, such as the ME crisis and the friction in the Red Sea, may see this prediction rather ambitious. Add in other factors – including presidential elections, in several high-profile counties such as the US UK and India, and a worrying drought in the Panama Canal, the economy would do well to beat the miserable 0.8% 2023 growth. The WTO Director General, Ngozi Okonjo-Iweala, indicated that the world is “moving towards normalisation”, but at the same time conditions are “not normal”.

The bull market, that started on 12 October 2022, continues unabated as last Friday, the S&P 500 closed at a record high 4,840, and even higher today, boosted by the tech sector, driven by chipmakers, such as SMCI, Nvidia and Broadcom, surging on AI optimism and the belief that interest rates will start to head south. At the same time, the Dow Jones Industrial Average also hit new records, trading on the day at 37,864 and today at over 38,000.  Although the Nasdaq recovered 43% lost in 2023, it would need to rise another 4.8% to return to its record high close of 16,057, reached on 19 November 2021.

With Australia’s population surging over the past eighteen months, following the reopening of international borders, the IMF has finished a global study on the macroeconomic effects of migration, along with the drivers of big migration inflows. It concluded that migration surges have historically been associated with higher growth and favourable labour market outcomes, with negligible price pressures except in the housing market. The latter could be partially solved by boosting supply which has been a problem for the Albanese – and earlier – governments. It concluded that there has been a positive impact of migration on macroeconomic outcomes—output, employment, and productivity—without significant inflationary impact.

The IMF also indicated that the country has the second highest level of foreign-born residents in the OECD and that “around 30% of Australia’s population was foreign-born in 2019, which is more than twice the OECD average of 14% and higher than other major migrant-receiving OECD countries such as Canada (21%), Germany (16%), the UK (14%),  the US (14%) and France (13%)”, and that migrants constitute 40% of the total population in large metropolitan regions. One significant factor was that recent migrants to Australia tended to have higher levels of educational attainment than existing residents and than the migrant intake of most other nations.

Every year, the IMF releases an annual assessment of every country’s economy, and Australia is no exception. Although there are many positives in their study, it does warn that that the country’s 2024 growth will be 0.4% lower, on the year, at 1.4%. That being the case, Australians will have had endured a per capita recession for almost two whole years running. Another warning sees the global body noting that inflation may not fall to RBA’s 2%-3% target range until 2026, and “highlighted the potential need for further monetary tightening to achieve the targeted inflation range by 2025”; this year, it expects the average cash rate at 4.4%, and that there will be a negative savings rate of -5.1% of Australians’ disposable income this year. It also urged further restraint on public spending, whilst acknowledging the fact that the federal government did return to surplus for the fiscal year ending 30 June 2023 and its

 commitment to debt sustainability.” The IMF also noted that a comprehensive tax reform would be beneficial and highlighted that rebalancing the tax system from direct to indirect taxes, while addressing regressive impacts, would promote greater efficiency. Some worrying news was that home prices last year rose to 4.9 times income, across the capital cities, and it forecast that this would keep rising for the next five years at an average of 5% plus. Accordingly, it “supported the initiatives to boost housing supply to improve affordability and emphasized the criticality of supportive planning and land‑use policies.”

After the government decided that Australia’s “golden visa” was “delivering poor economic outcomes”, it has been axed and will be replaced with more skilled-worker visas, capable “of making outsized contributions to Australia”. Since its 2012 inception, thousands of significant investor visas have been granted, with 85% of successful applicants coming from China. Its aim was to drive foreign investment and stoke innovation, with candidates having to invest more than US$ 3.3 million, (AUD 5 million), in Australia to be eligible, but critics have long argued that the scheme was being used by “corrupt officials” to “park illicit funds”. Transparency International Australia noted that “for far too long corrupt officials and kleptocrats have used golden visas as a vehicle to park their illicit funds in Australia and arguably hide their proceeds of crime.”

This blog has previously commented on the housing crisis in Australia driven by factors such as affordability and supply shortage, not helped by 2023 net migration figures of 500k. This week, there are reports from New South Wales that since 2016, about 53% of apartment buildings, registered in the state, have had at least one serious defect. The current NSW Building Commissioner, David Chandler, was appointed in 2019. The scale of the problem can be seen that his staff numbers have risen from thirty to more than four hundred to tackle this problem. Only last month, the NSW Building Commission was established to tackle shoddy development work across the state and has already issued sixteen building work rectification orders. In 2021, a third of buildings registered had one or more serious defects compared to five years prior where 63% of strata managers reported problems. Lawyer Bronwyn Weir, co-author of the 2018 Building Confidence report, which examined how effective compliance and enforcement systems were in the construction industry across Australia, noted, “construction really changed in the mid to late 90s with some shifts by all Australian governments towards what we call a privatised model of building certification, and what that also meant was fewer inspections that also led to lower levels of detail and documentation,” and “so [it was] a combination of things, but generally the system is not robust enough”. The Building Confidence report also found systemic issues with the construction industry nationwide. The conundrum facing the NSW Premier Chris Minns – and other state leaders – is the demand for increased housing cannot be met if regulations are tightened. For example, Minns is on record saying he has “no chance” to reach his annual 75k target he agreed to in National Cabinet last year.

The annual Sunday Times top taxpayers’ listing in the UK is always worth reading, with 67% of this list paying less tax this year than they did a year earlier; it is estimated that these one hundred individuals added US$ 6.32 billion (GBP 5.35 billion). The top three “contributors” were the Russian financial trader, Alex Gerko, Bernie Ecclestone and Bet365’s owner, Denise Coates; they paid tax amounting to US$ 847 million, (GBP 665 million), US$ 828 million (GBP 650 million), and US$ 479 million (GBP 376 million). The former F1 supremo is a new entrant to the list having had to pay the tax to avoid imprisonment, after having failed to declare more than US$ 510 million held in a trust in Singapore when asked by tax authorities in 2015. Others in the top ten include, Fred and Peter Done and family – owners of gambling company Betfred, Sir Tim Martin – owner of pub chain JD Wetherspoon, Sir James Dyson and family – vacuum cleaner and household appliance company, the Weston family – owners of brands including Selfridges, Primark, Ryvita, Silver Spoon, Ovaltine and Twinings,  Mike Ashley – owner of brands including, Sports Direct, House of Fraser, Evans Cycles and Jack Wills, John Bloor – owner of Bloor Homes and Triumph Motorcycles, and Bruno Schroder and family,investment management company. Other names include JK Rowling, Ed Sheeran and Anthony Joshua – in at thirty first, thirty second and eighty-eighth.

3.3% Q4 growth in the US economy surprised the market that was expecting more like 2.0%, with the main drivers being robust household and government spending. Over the year, the economy grew more than 0.6% to 2.5% but had improved markedly in H2 with Q3 growth of 4.9%. Noting the last two quarterly returns, the immediate outlook for the resilient US economy is promising and is a godsend for the eighty-one-year-old resident of the White House in election year – with consumer sentiment improving, the stock market is up, petrol prices are down, unemployment remains low and inflation easing to 3.4%, down from more than 9.0% in 2022.

In an unusual move, Kerri Badenoch has pushed the blame on the UK’s failure to hit post-Brexit trade targets, on a change of the US president. The Business Secretary claimed that although the UK has free trade agreements covering 60% of overseas trade, it missed its 80% target because she said Joe Biden’s administration had no appetite for trade deals.  She also indicated that “the Biden administration decided it was not doing trade deals – with anyone not just us.” She noted that the US had moved to specific smaller deals in areas like semiconductors and critical minerals. Liam Byrne, chair of the Business and Trade Select Committee, posted that the Institute of Directors business group had estimated that meeting that goal would require export growth of 3.5% per year – strangely, the Office for Budget Responsibility has estimated current growth at 0.1%. One of the two is going to be proved completely out of kilter – and no prizes for guessing which one!

In the UK, Which? has reported increasing number cases of “shrinkflation”, with the study also noting that 33% of people surveyed had also noticed skimpflation” on supermarket shelves. Examples of the former include mouthwash, tea, sausages, toothpaste and crisps, with one of the worst being Listerine Fresh Burst mouthwash, which shrank from 600ml to 500ml – but went up in price by US$ 0.66 in Tesco, equating to a staggering 46% increase in the unit price per 100ml. The latter relates to popular food items that have been downgraded with cheaper ingredients, including Tesco Finest sausages were reduced from 97% pork to 90%, Yeo Valley Spreadable Butter went from containing 54% butter to 50% butter and Morrisons Guacamole (150g) went from 80% avocado to 77%.

Following a deadly 2015 dam collapse, that claimed nineteen people, a Brazilian judge has ordered mining giants BHP, Vale and their Samarco iron ore 50:50 JV to pay US$ 9.67 billion  in damages. The collapse caused a giant mudslide that wiped out the village of Bento Rodrigues and also polluted the Rio Doce river, compromising the waterway to its outlet in the Atlantic Ocean (six hundred and fifty km away). The judge added that the money, which will be adjusted for inflation since 2015, will be put into a state fund and used for projects and initiatives in the area impacted by the dam collapse. A 2016 report released found that the collapse of the dam was due to design flaws. A small earthquake on the day of the dam burst may also have “accelerated” the failure. BHP and Vale also face a class action lawsuit in the UK with more than 700k claimants. In January 2019, another tailings dam owned by Vale collapsed in the same state near the town of Brumadinho, resulting in two hundred and seventy deaths. The message to the miners is Fool Me Once, Shame on You!