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Nothing New                                                           29 December 2023

The real estate and properties transactions valued at US$ 3.81 billion in total during the week ending 29 December 2023. The sum of transactions was 216 plots, sold for US$ 1.19 billion, and 2,126 apartments and villas, selling for US$ 1.47 billion. The top three transactions were all for plots of land, the first in Zaabeel Second for US$ 662 million, the second in Al Thanyah Fifth for US$ 124 million and in Wadi Al Safa 4 for US$ 58 million. Madinat Hind 4 recorded the most transactions, with thirty-four sales, worth US$ 14 million, followed by thirty-two sales, in Palm Jabal Ali for US$ 250 million, and twenty-five sales, in Al Hebiah Fifth, valued at US$ 32 million. The top three transfers for apartments and villas were in Business Bay for US$ 97 million, followed by one in Al Barsha First for US$ 41 million and the third in Madinat Dubai Almelaheyah for US$ 36 million. The mortgaged properties for the week reached US$ 864 million, with the highest being for land in Zaabeel Second, mortgaged for US$ 163 million; two hundred and three properties were granted between first-degree relatives, worth US$ 545 million.

In many locations, the end of 2023 has seen Dubai property prices at all-time highs. Looking to next year, it seems inevitable that prices – both rents and sales – will continue to head north, albeit as a slower pace, but probably still at double-digit levels. The recent trend of higher rents pushing more people into actually purchasing their own property will continue into the new year. However, the inflated cost of living expenses, along with historically high mortgage rates, will see many either downsizing or moving further out of the metropolis to get the same size residence at a cheaper level. It is just a fact of life that when property prices go too high, people have not too many alternatives but to downsize. 2024 will see even more launches, particularly at the lower end of the market. Prices in locations such as Arjan, Dubai South, JVC, Reem and Townsquare offer bigger homes, at lower prices, than found in central and prime areas.

Another feature that has become more prevalent since the pandemic is the rise in upgrading, and even extending, of existing homes; this has two consequences – an increase in the property value and also a bigger built-up area to live in. However, there are reports that costs in this sector have more than doubled since the pandemic and in several cases quality levels have fallen.

Data indicates that that more first-time buyers, (both newcomers to the emirate as well as current residents), moving from rent to entering the Dubai property market), and this can only be a positive sign for local realty. In some cases, and despite mortgage rates, hovering around the 6% level, it is more economical buying rather than renting. Many of these entrants are looking at properties, (both smaller townhouses and apartments up to the US$ 817k level), which account for over 70% of the Dubai market total.

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.

Abu Dhabi National Hotels and Emaar Hospitality Group have agreed to transition the management of five of Emaar’s Dubai hotels – Address Boulevard, Address Dubai Mall, Address Dubai Marina, Vida Downtown and Manzil Downtown – effective 01 January 2024. All five properties will be directly managed by ADNH on a franchise model under other luxury international hotel brands. Three luxury hotels in Dubai, including The Address Dubai Marina and two in Downtown Dubai, will be rebranded after Abu Dhabi National Hotels (ADNH) joined forces with hospitality company Marriott, with rebranding of three hotel being JW Marriott Hotel Marina (from The Address Dubai Marina), Hotel Boulevard, Autograph Collection (from Vida Downtown Dubai Hotel) and The Heritage Hotel, Autograph Collection (previously Manzil Downtown Dubai Hotel).

Last Sunday, Sheikh Hamdan bin Mohammed bin Rashid, granted a US$ 41 million bonus for government employees. The award by Dubai’s Crown Prince was approved under the guidance of HH Sheikh Mohammed bin Rashid, with it intended for those civilian employees who had met certain standards that have been set by the authority; it is meant to motivate employees to keep excelling and to provide a better life for Dubai government employees.

It is reported that the country generates at least 15% extra rainfall because of its cloud-seeding strategy, with it yielding an additional 168-838 million cu mt of rainfall each year. The UAE Research Programme for Rain Enhancement Science, which oversees the cloud seeding operations, notes that the usable water volume within the range of 84-419 million cu mt, equating to the overall approximately 6.7 billion cu mt of rainfall received annually in the country. On average, there are some nine hundred hours of cloud seeding every year, with operations amounting to approximately US$ 8k for every flight hour.

The Federal Tax Authority has issued a new guide providing a comprehensive and simplified explanation and instructions for the tax system that came into effect on 01 June 2023; it will outline the criteria to determine whether individuals are subject to the Corporate Tax Law. It also clarifies that an individual must register for corporate tax purposes and obtain a Tax Registration Number if total turnover exceeds US$ 272k (AED 1 million) within a calendar year of 2024. Non-residents are also subject to corporate tax in cases where they have a permanent establishment in the UAE, with a total turnover of the permanent establishment exceeding US$ 272k.

This week, and after four months of negotiations, the UAE finalised the terms of a Comprehensive Economic Partnership Agreement with Mauritius, marking the UAE’s first with an African nation. The UAE has a fifty-year trade history with the African island nation and this CEPA, when implemented, will pave the way for increased trade and investment flows and bilateral private-sector collaboration. In H1, non-oil bilateral trade between the two countries, stood at over US$ 63 million, with opportunities strongest in the chemicals, metals and petroleum products sectors. To date, the UAE has signed several such trade deals – in the ME, SE Asia, Eastern Europe and Latin America – with the CEPA programme, targeting US$ 1.09 trillion in total trade value by 2031 and doubling the size of the wider economy by 2030; this deal is also expected to drive FDI into fintech, healthcare and tourism sectors. Last year, the Mauritian economy grew at 8.5% – its fastest rate in thirty-five years.

The UAE has also finalised a CEPA with the Republic of Congo, (also known as Congo-Brazzaville), with a mandate similar to previous agreements. The deal builds on growing bilateral co-operation between the two countries, which, in H1, saw non-oil trade increase by 134%, on an annual basis, to US$ 2.1 billion between the Emirates and the Republic of the Congo. The deal also followed the signing of three strategic agreements between the nations early this year on double taxation avoidance, investment promotion and protection, and air transport. After its ratification, the deal aims to reduce or eliminate tariffs, remove other trade barriers, bolster market entry, refine customs processes and establish frameworks for investment and collaboration.

The latest IMF Arab Economic Competitiveness Index ranks the UAE as the most economically competitive nation in the Arab world and confirms the country’s sustained progress in crucial sectors, including its strong federal economy, a rapidly increasing attractive investment hub and growing popularity as a social environment. It topped in various sections, including;

• government financial sector index, ranking first in the deficit/surplus to GDP ratio and second in the tax burden index
• Investment environment and attractiveness, topping the economic freedom index
• Institutional and good governance sectors, achieving an advanced ranking in both administrative corruption and government efficiencies
• Infrastructure sector index, leading in mobile phone subscriptions and the percentage of the population with access to electricity, while ranking second in the share of air transport and shipping to total global transport and shipping

The report indicated that the Arab nations are striving to develop service sectors, facilitate business environments and enhance infrastructure to address challenges that hinder their competitiveness.

The DFM opened the week on Monday 25 December 2023, 47 points (1.1%) higher the previous week, gained a further 47 points (1.2%) to close the trading week on 4,063, by Friday 29 December 2023. Emaar Properties, US$ 0.09 higher the previous fortnight, gained US$ 0.06, closing on US$ 2.16 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 4.62, US$ 1.55, and US$ 0.38 and closed on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38. On 29 December, trading was at 138 million shares, with a value of US$ 58 million, compared to 65 million shares, with a value of US$ 32 million, on 22 December 2023.

The bourse had opened the year on 3,438 and, having closed on 29 December at 4063, was 625 points (18.2%) higher, YTD. Emaar started the year with a 01 January 2023 opening figure of US$ 1.60, to close the year at US$ 2.16. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.59, US$ 3.54, US$ 1.55 and US$ 0.41 and closed YTD at US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38.   On 29 December, trading was at 138 million shares, with a value of US$ 58 million, compared to 66 million shares, with a value of US$ 18 million, on 31 December 2022.

By Friday, 29 December 2023, Brent, US$ 3.77 higher (18.7%) the previous fortnight, shed US$ 1.94 (2.5%) to close on US$ 77.23. Gold, US$ 27 (1.3%) higher the previous week, gained US$ 9 (0.4%) to trade at US$ 2,074 by 29 December 2023.

Brent started the year on US$ 85.91 and shed US$ 8.68 (8.7%), to close 29 December 2023 on US$ 77.23. Meanwhile, the yellow metal opened 2023 trading at US$ 1,830 and gained US$ 244 (13.3%) to close on US$ 2,074.  

In Q3, Sukuk issuances were at US$ 51.7 billion, almost the same as in the previous quarter but 12.3% lower on an annual basis. In the first nine months of the year, issuances, at US$ 154.6 billion, were 24.7% lower on the year. The main drivers behind the declining returns were rising oil prices and the traditional summer lull in trading. By the end of Q3, the global Sukuk market had reached US$ 823.4 billion, with 90% of the total derived from five countries – Malaysia, Saudi Arabia, Indonesia, UAE and Türkiye, with 40%, 28%, 13%, 6% and 3%. 75% of the total was issued in local currency, with outstanding Sukuk, rated by Fitch, exceeding more than US$ 150 billion – 12.2% higher on the year.

Because of falling lithium prices, shares in Australia’s Core Lithium crashed by more than 20% after the company announced it was reviewing its operations near Darwin because of “the deterioration in lithium market conditions”. The company officially opened its Finniss lithium mine near Darwin in 2022 and is now considering halting production, whilst it has suspended early works on its proposed second mine, BP33. The miner, with the only lithium mine in the Northern Territory, noted that the price of spodumene concentrate (high-purity lithium ore) had fallen 80% this year, “including by more than 40% since the end of October”. It indicated that it is to consider a range of options, including “possible temporary curtailment of mining operations” and “reductions in exploration and other discretionary expenditures”. In November 2022, shares in Core Lithium reached a peak of US$ 1.14, which are now trading at US$ 0.18.

Following a transport ministry investigation, and after admitting that it had falsified safety tests, Daihatsu has closed all four of its plants – in Osaka, Oita, Shiga and Kyoto – until the end of January. The Toyota-owned carmaker confirmed that it had been manipulating safety tests on sixty-four makes for three decades, twenty-four of which are being sold under the Toyota badge. Consequently, it has stopped shipments of all its vehicles in a move that could put 9k jobs in jeopardy. Established 1907, Daihatsu sells around 1.1 million cars per year, which make up around 11% of Toyota’s ten million vehicle sales per year, and it seems test results were falsified because of pressure to keep production rolling.

Twitter, now known as X Corp, has lost a court case, resulting in it violating contracts by failing to pay millions of dollars in bonuses that the social media company had promised its employees. Its former senior director of compensation, Mark Schobinger, sued Twitter in June, claiming breach of contract, and alleging that Twitter had promised employees 50% of their 2022 target bonuses but never made those payments. Twitter had argued that the company made only an oral promise that was not a contract, and that Texas law should govern the case. The judge ruled that California law governed the case and that “Twitter’s contrary arguments all fail”. X has been hit with numerous lawsuits by former employees and executives since Musk bought the company and culled more than half of its workforce.

With Biden’s White House refusing to overturn a ban on sales and imports of the Series 9 and Ultra 2 watches, Apple have retorted by indicating that it will appeal against the US International Trade Commission decision after sales of its newest smart watches were halted in the US over a patent row. This follows a move by the device maker Masimo which had accused the tech giant of poaching its staff and technology, which was found to have infringed two patents owned by the medical device maker. The initial decision was made in late October, which was subject to a sixty-day review by the president – this ran out on Christmas Day. Earlier in December, Apple had taken pre-emptive action by removing the devices from its US site and from stores in the country.  However, US sales were resumed on Wednesday after the tech company filed an emergency appeal with authorities.

Stonepeak is reportedly investing US$ 570 million into the AA to acquire a 15% stake in the UK breakdown recovery service; the US-based investment company specialises in infrastructure and related deals. This would value the AA, which had US$ 2.79 billion net debt at its last year-end, at US$ 5.08 billion. The company, which went private again in 2021 after being delisted on the London Stock Exchange, has been revitalised under its chief executive, Jakob Pfaudler, with an estimated US$ 1.27 billion being added to its net value; over that period, it is now cash-generative and customer numbers once again growing – along with its rival, the RAC, it boasts over fourteen million members, and has 2.7k patrols attending an average of 9.4k breakdowns every day.

After months of negotiations, Sir Jim Ratcliffe has now agreed a deal worth about US$ 1.60 billion to acquire a 25% stake in Manchester United FC. Until recently, the billionaire industrialist faced a rival bid from Qatari banker Sheikh Jassim bin Hamad Al Thani, but he withdrew his offer, leaving the Ineos founder to negotiate with the Glazer family. In a Christmas present to United fans, he announced that he had invested US$ 300 million in the club and is set to take control of United’s football operations. It is fair to say that the American interloping family was not much loved by the majority of fans because of a perceived lack of investment, (and interest), in the club. The Manchester-born entrepreneur has been a life-long ‘Reds’ fan, and already has some footballing interests, as he owns French side Nice and Swiss club Lausanne-Sport. In May 2022, he made an unsuccessful US$ 5.40 billion offer to buy Chelsea, after owner Roman Abramovich put the London club up for sale. There is no doubt that the club, which has won the English championship twenty times, has struggled since the departure of Alex Ferguson.

If Boxing Day is any indicator, there is every chance that retail sales are on the rise, with footfall, compared to 2022, 10.0% higher in central London and up 8.8% nationally; however, when taking into account data from retail parks and shopping centres, footfall was only up 4.0%. Early online sales, as well as major retailers such M&S, Next and John Lewis not reopening their stores until 27 December, have also had a negative impact on footfall, which when compared to pre-pandemic 2019 is 14.9% lower nationally and, rather surprisingly, up 1.6% in central London. One of the main drivers for the London figures was the influx of international visitors, despite there being no VAT refund available on their purchases. Meanwhile, the cost-of-living continues to deflate domestic spending and to dampen consumer confidence.

The last week of the year saw the Australian share market surge to its highest level since April 2022, helped by a 7.0% uptick over the past month. To add to the festive spirit the Ozzie dollar climbed to its highest level in five months, mainly attributable to a weakening greenback, caused by expectations of a Q1 interest rate cuts and more of the same throughout the year. In Wednesday’s trading Rio Tinto, BHP Group and Fortescue all hit record highs of US$ 93.35, US$ 34.73 and US$ 19.90 as the ASX 200 hit 7,598 points.

In 2023, a record 500k people migrated to the ‘Lucky Country’, with this number likely to halve next year. There is no doubt that migration was one of the key drivers of economic growth this year, as it boosts consumer spending, government revenues (higher tax receipts), higher property prices etc, and was the key to the country’s GDP keeping its head above water. Demand from all the additional people was strong enough to keep Australia’s unemployment rate hovering around the 3.5% level, despite the influx of extra workers, but undoubtedly unemployment will slowly start to increase, as falling demand catches up with the labour market. If it were to climb to 4.0%, there will be an increased demand for government handouts – another drag on the exchequer which would also be hit by lower tax receipts. Consumer spending will also be hit by a double whammy of cuts in overtime and an increase in underemployment – working less hours. On top of that, new migrants need accommodation, so that will also impact on an already tight property sector with prices still on an upward curve, albeit at a reduced pace. One possible drag on prices could be the lag from the impact of higher mortgages that had been fixed for many and have now gone to market – and higher – rates.

The last week of the year saw the local share market surge to its highest level since April 2022, helped by a 7.0% December uptick. To add to the festive spirit, the Ozzie dollar climbed to its highest level in five months, mainly attributable to a weakening greenback, caused by expectations of a Q1 interest rate cuts and more of the same throughout the year. In Wednesday’s trading Rio Tinto, BHP Group and Fortescue all hit record highs of US$ 93.35, US$ 34.73 and US$ 19.90, as the ASX 200 hit 7,598 points.

At the beginning of 2023, the RBA underestimated how far interest rates would and were unpleasantly surprised when it had to raise cash rate five times during the year from a starting position of 3.1% to 4.35%; in 2022, the RBA implemented a cumulative 3.0% increase from 0.1%. Some analysts had expected another hike this month and the jury is out whether there will be another hike to come in the new year; the current 4.9% inflation rate is still above the RBA’s 2%-3% target. The forecast is for one more visit to the trough by the end of Q1, despite a Q4 0.2% rise in GDP, followed by up to three rate cuts during the remainder of the year.

The Chinese government is set to introduce regulations that will limit the amount of money and time that people can spend on video games, with the aims of limiting in-game purchases and preventing obsessive gaming behaviour. On the news, shares in major tech companies sank, wiping tens of billions of dollars off their value, with Tencent, NetEase and Dutch tech investor Prosus down 12.4%, 24.0% and 14.0%; only two years ago, a law was introduced that  online gamers under the age of 18 would only be allowed to play for an hour on Fridays, weekends and holidays. The planned curbs also reiterate a ban on “forbidden online game content that endangers national unity” and “endangers national security or harms national reputation and interests”. They must not offer rewards that entice people to excessively play and spend, including those for daily logins and topping up accounts with additional funds.

The ICAP founder, and former Conservative Party treasurer, Lord Spencer received a timely Christmas present with a US$ 266 payment from last week’s takeover of SingLife by Japan’s Sumitomo Life Insurance. It is reported that, five years ago, he had invested some US$ 76 million into the Singaporean financial services group, giving him a healthy 350%+ return. In 2021, he helped to engineer the purchase of Aviva’s Singaporean life business and is said to have played a leading role in the negotiations with Sumitomo. A big donor to Boris Johnson’s successful Tory leadership campaign, he was ennobled in 2010 and chairs the Centre for Policy Studies, Thatcherite thinktank.

UK Finance expects house prices are expected to fall in 2024, (by up to 5%), but that the cost of renting a home will continue to rise by up to 6%. However, a flat national economy, along with a less secure jobs market, and still high mortgage rates, could affect the confidence of people wanting to move or buy a first home. The consultancy also expects mortgage lending to fall, and for more people to fall into arrears, with lending for house purchases declining by up to 8% next year; in 2024, a further 1.6 million homeowners will see their current fixed-rate deal expire, the vast majority of whom could see their monthly repayments rise sharply. Nationwide sees the housing market being subdued next year and expects house prices “to likely record another small decline or remain broadly flat over the course of 2024”. Last month, the Office for Budget Responsibility, said that it expected house prices to drop by 4.7% in 2024, whilst Nationwide noted that “if the economy remains sluggish and mortgage rates moderate only gradually, as we expect, house prices are likely to record another small decline or remain broadly flat over the course of 2024.” Meanwhile, Halifax, the country’s biggest mortgage lender, has forecast a fall of between 2% and 4%, but highlighted the same reasons. It is estimated that rents for new lets, that have risen by 31%, (equating to US$ 4.3k), since 2020, are likely to keep rising, but at a slower 5% pace than has recently been the case.

Despite a multi-layer military operation, codenamed ‘Prosperity Guardian’, to keep shipping safe, Hapag-Lloyd will not resume using the Suez Canal, indicating that the Red Sea trade route is still “too dangerous” and will continue on the longer Cape of Good Hope route; it has indicated that twenty-five ships are facing diversion. The length of delays the ships face in reaching their destination vary in length from eighteen days for those heading to or from the eastern Mediterranean, up to fourteen days for those travelling to or from Northern Europe, and seven days for US east coast journeys. Yemen’s Houthi rebels, backing Hamas in the Israel-Gaza war, said they are targeting vessels which they believe are heading for Israel, with the announcement by the world’s fifth largest shipping firm, by capacity, coming after the Mediterranean Shipping Company said that one of its container ships had been attacked. However, Maersk said it will resume Red Sea operations. One immediate casualty is Egypt, desperate for foreign exchange, which will see much needed ‘Suez Canal revenue’ reduced until normality return to the area.

2024 Dubai Forecasts

• having delivered the highest level of profit (US$ 2.97 billion), and revenue (US$ 32.64 billion), last fiscal year, ending 31 March 2023, expect Emirates to deliver even more impressive figures this year – at least 20% higher
• DXB will record the number of passengers reaching ninety million, surpassing the previous 88.2 million number record, posted in 2018
• the UAE government will sign at least twelve more Comprehensive Economic Partnership Agreements this year, as part of its ongoing strategy to targeting US$ 1.09 trillion in total trade value by 2031 and doubling the size of the wider economy by 2030
• Fitch projects that adjusted Dubai debt will fall from 62% to 53% of GDP, helped by several factors including its strong resurgence post-Covid, assets sales of several GREs, increased dividends from associated companies, higher oil prices and a boost in tourism. 2024 will see this figure decline even further to 47%
• two more government-related companies listed on the DFM
• one Dubai family IPO to be listed on the DFM
• the DFM has jumped by 61.2% over the past three years, from 2,492 points to 4,016 – and 20.4% in 2023. 2024 will see double digit growth again, but only at around 11%
• UAE Fitch-rated banks posted a 20.3% 2023 hike in cumulative net profit to US$ 10.35 billion – expect a high single-digit increase in 2024
• Dubai population will grow by 150k to 3.801 million
• 45k units added to bring Dubai’s property portfolio to 875k units
• there is no doubt that property prices have skyrocketed since the pandemic and average prices will continue to move higher – in 2024, expect at lower double digit growth

2024 Global Forecasts

in 2023, the global economy slowed but missed being hit by an inflation and commodity price-driven recession. 2024 will see slower economic growth but interets rates should nudge lower and inflation will remain sticky around the 3.5% mark – and still not hitting its 2.0% target range

geoplitical tensions will not go away but just move from location to ocation, with West Africa, Taiaawn and Yemen places to watch. Wherever they occur, it will damage the health of global economies including the US and China

• Australia, India and parts of Europe will be hit by a mix of floods and record high temperatures which will impact global economic growth
• oil prices will top US$ 110 sometime during a year of volatile trading that will see production three million bpd higher
• the price of flight tickets will continue to remain high for a variety of reasons – including higher aviation fell costs, geopolitical tensions, inflation and supply chain bottleneck – but still lower than pre-pandemic levels
• despite all the talk circulating around climate control, coal will have another record production year in 2024
• high global debt will continue to hurt the poorer nations with a major famine/pandemic all but inevitable
• the so-called “Magnificent 7” – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla – will have another good year but slightly down compared to 2023
• a major banking scandal will impact the European banking sector
• a high-profile assassination will rock the economic world
• global growth will be lower than the IMF’s latest 3.0% forecast, and, as usual, the emerging nations will bear the brunt
• Donald Trump will be the US president come the November election
• Rishi Sunak will not be the UK prime minister by year end and neither will Narendra Modi

The following table traces how certain indices have performed over the years. Gold has had a particularly good year – up 13.33% – with many expecting further rises in Q3. Brent has had its troubles, that have been well documented, but it seems that this could be its nadir for the current cycle. Iron ore had another good year, with double digit growth noted for the past two years. Coffee was 8.16% higher in the year but still some way off its 2021 high of US$ 226.75. Cotton continues its downward slide and is 28.0% lower than two years earlier. Silver remains flat and has little support in the market – there is little chance that it will rise from its moribund state in 2024. Copper is expected to move higher at a slightly quicker pace next year. The weak greenback is the main reason for the rise in both the euro and sterling, whilst the Aussie dollar remains flat and there is no surprise to see the slump in the rouble. The bourses are moving in the right direction with an impressive 20.38% return on the local DFM. H2 saw bitcoin move higher and although up 152% higher, is still down 11.4% from its 2021 year-end close.

			%age	29 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec	31 Dec
		Unit	Rise	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014
Gold	US$	oz	13.33%	2074.0	1,830	1,831	1,895	1,517	1,285	1,305	1,151	1,060	1,186
Iron Ore	US$	lb	11.01%	134.7	121.3	106.7	155.7	91.53	71.3	71.28	75	47	73
Oil -Brent	US$	bl	-10.10%	77.2	85.91	77.78	51.8	66.67	53.8	66.62	56.82	36.4	57.33
Coffee	US$	lb	8.16%	188.2	174.00	226.75	128.25	129.2	101.9	126.2	133	124	161
Cotton	US$	lb	-2.70%	81.2	83.40	112.65	78.12	68.95	72.2	78.5	69	64	62
Silver	US$	oz	-0.41%	24.1	24.18	23.36	26.41	17.86	15.56	16.99	16	13.82	15.77
Copper	US$	lb	1.83%	3.9	3.82	4.46	3.52	2.8	2.64	3.3	2.48	2.14	2.88
AUD	US$		0.15%	0.682	0.681	0.726	0.77	0.702	0.7	0.78	0.72	0.73	0.81
GBP	US$		5.20%	1.273	1.21.0	1.353	1.359	1.326	1.27	1.35	1.24	1.48	1.53
Euro	US$		2.98%	1.105	1.073	1.137	1.218	1.12	1.14	1.2	1.05	1.09	1.21
Rouble	US$		-19.12%	0.011	0.014	0.013	0.014	0.016	0.014	0.017	0.016	0.014	0.017
FTSE 100			3.77%	7733.0	7,452	7,403	6,481	7,542	6,721	7,688	7,142	6,242	6,548
CSI300			-11.39%	3431.0	3,872	4,940	5,212	4,097	3,142	4,031	3,310	3,731	3,532
S&P 500			24.19%	4769.0	3,840	4,766	3,756	3,231	2,507	2,674	2,238	2,044	2,091
DFMI			20.38%	4,016	3,336	3,196	2,492	2,765	2,530	3,370	3,531	3,151	3,774
ASX 200			7.83%	7590.0	7,039	7,844	6,587	6,802	5,652	6,171	5,665	5,345	5,415
Bitcoin	US$		152.37%	42539.2	16856	48011	29,043	7,201	3,694	13,081	998	427	302

It seems that two sectors of the UK economy have gone retro. Last Friday, The Post Office saw a record high for personal cash withdrawals on a single day, with US$ 79 million being withdrawn on the day. Furthermore, with the revival of the physical music market surging, UK sales of vinyl LPs have hit their highest level since 1990, with sales up 11.7% to 5.9 million units – the sixteenth consecutive year of growth. Cassette sales also did well, topping 100k for a fourth consecutive year. Taylor Swift has three albums in the UK’s top 10 best-selling long-players this year – 1989, Speak Now and Midnights. Also in the top ten best-selling vinyl albums were new releases by Ed Sheeran, Lewis Capaldi and Lana Del Rey, along with two classic albums from the 70s – Fleetwood Mac’s Rumours and Pink Floyd’s the Dark Side of the Moon (Live At Wembley 1974). In 1992, the Office for National Statistics noted that the UK economy had shrunk by 4.3% from peak to trough and that there had been a double-dip recession after a brief recovery at the end of 1991. Thirty years later, the UK economy looks in bad shape and with Rishi Sunak and his cohorts there is Nothing New!

Do They Know It’s Christmas?                                                  22 December 2023

The real estate and properties transactions valued at US$ 16.6 billion in total during the week ending 22 December 2023. The sum of transactions was 216 plots, sold for US$ 1.34 billion, and 2,729 apartments and villas, selling for US$ 2.04 billion. The top three transactions were all for plots of land, the first in Al Yelayiss 5 for US$ 662 million, the second in Al Hebiah Fourth for US$ 16 million and in Al Goze for US$ 16 million. Palm Jabal Ali recorded the most transactions, with thirty-five sales, worth US$ 232 million, followed by twenty-nine sales, in Madinat Hind 4 for US$ 14 million, and twenty-two sales in Al Hebiah Fifth valued at US$ 16 million. The top three transfers for apartments and villas were all apartments, the first in Palm Jumeirah for US$ 196 million, followed by one in Dubai Investment Park First for US$ 25 million and the third in Island 2 for US$ 17million. The mortgaged properties for the week reached US$ 624 million, with the highest being for land in Al Sufouh Second mortgaged for US$ 139 million; two hundred and fifty-seven properties were granted between first-degree relatives, worth US$ 545 million.

Over the past twelve months, Dubai’s population has grown 104k to 3.651 million. There is a theory that supply has been lagging demand because of Covid but what is sometimes forgotten is that Dubai’s population growth rate has been moving at a much quicker rate over the past four years, post-Covid – by 2.279% to 3.411 million in 2020, by 1.964% to 3.478 million in 2021, by 2.070% to 3.550 million in 2022 and by 2.845% to 3.651 million in 2023. It is estimated that the number of housing units will reach 830k by the end of this year – an increase of 46.4k from 2022’s total of 783.6k (639.0k apartments and 144.6k villas). A quick estimate would see the approximate household size being 4.40 people per household, with recent trends showing that this ratio is declining.

                                         

		Villas	Apartments	Total	%age	Population	%age	Household
	000s							Size
	2019	120.6	542.6	663.2		3,335		5.03
	2020	130.5	581.2	711.7	7.313%	3,411	2.279%	4.79
	2021	138.5	617.9	756.4	6.281%	3,478	1.964%	4.60
	2022	144.6	639	783.6	3.596%	3,550	2.070%	4.53
	2023	150	680	830	5.921%	3,651	2.845%	4.40

By the end of this year, Dubai will have a portfolio of some 830k housing units and a population of some 3.651 million – an increase of around 104k this year; the ratio of apartments to villas is in the region of 82:18, (680k:150k). Average occupancy will be 4.40 (3,651,000/830,000)

The outlook for 2024 is positive with a caveat that we live in a period of turbulence and all bets could be off the table if a major incident were to occur next year. There is every likelihood that Dubai’s population will jump by at least be 3.65% in 2023, which would add 0.128 million to the population by the end of 2024 at 3.784 million; based on an average 4.30 per household, total unit portfolio would be 880k – a 50k unit annual increase. Over the previous four years, the number of Dubai residential units rose from 663.2k at the end of 2019 to 830.0k by 31 December 2023 – a 166.8k jump, equating to 41.7k per annum. Dubai’s residential property market supply has been lagging population growth with the affordable segment also witnessing shortages after luxury in certain areas of the emirate.

Industry executives say that supply will not be able to keep pace with the demand even in 2024 due to the high influx of foreigners and residents increasingly turning buyers amidst rising rentals. The increase in population is attributed to the high inflow of foreign workers, professionals and investors who flocked to the emirate this year, attracted by the higher returns on investments and the introduction of a variety of residency permits. This was reflected in the Dubai Land Department’s nine-month data which showed the number of transactions jumped by 33.8% to 116.1k worth US$ 116.89 billion. There are areas of under-supply which have contributed to price growth in recent years – such as the villa market, waterfront locations, and mature, established communities which are now ‘built out’ – with little or no land left for further development. In these segments, demand often exceeds supply and drives price growth. There is no surprise to see prices in the more affordable areas rising at a quicker rate because of high mortgage rates and the fact that the whole sector is becoming costlier – with more expensive properties being priced out for many on – or considering climbing on to – the property ladder. Such locations would include Business Bay, Discovery Gardens, DPC, DSO, JV and The Greens. However, a major concern is that if price rises do not cool quick enough over the next three years, many at the lower level will be priced out of the market.

Latest figures from Property Monitor indicate that Dubai property prices continued their upward trend in November, rising by 1.17% to a record high of US$ 346 per sq ft – 3% higher than the previous all-time high of September 2014. Currently, it appears that the apartment segment is growing at a faster rate than that previously seen in the villa/townhouse sector. Cavendish Maxwell estimate that since “bottoming out in October 2020, prices have gone on to increase 44.9% on average, with all three residential property types experiencing varying growth trajectories… Apartments — appreciating, but not at the same pace as villas and townhouses —lagged somewhat in their recovery until Q3 2022 and have since realised stronger gains, while townhouses and villas have experienced muted growth appearing largely to have topped out.”

Sankari Properties is set to build a US$ 1.0 billion ultra-luxury, twin tower development in Business Bay, located in the Marasi Marina Area. With starting prices at US$ 10.0 million, the project will encompass a range of 3 B/R, 4 B/R and 5 B/R apartments, with unit sizes from 600 sq mt; each of the fifty-seven apartments will occupy an entire floor. With a launch date to be announced “very soon”, completion date is slated for Q4 2027. Its chairman, Mohammed Sankari, also noted that the company’s pipeline of projects will include ‘a few more surprises’, with one on the Palm Jumeirah. Sankari Properties was founded this year on the fortieth anniversary of Paris Group, the flagship unit of UAE-based holding company Sankari Investment Group, which was established in 1983 by Mohammed’s father Abdulkader Sankari.

With the aim of catering to Dubai’s stature as a prime market for HNWIs, Arista Properties has entered the emirate’s booking real estate, starting with up to US$ 1.36 billion over the next four years. It plans to set new benchmarks in the realty sector by infusing bespoke designs and elegance into each of its projects. Its first development will be at Mohammed Bin Rashid City, designed by renowned architect firm HBA, (Hirsch Bedner Associates). Its official partner will be One Broker Group, as the firm is also targeting into commercial real estate, developing luxury commercial spaces in the future. Srishti Gaur, Head of Media Relations, noted that “through this launch in the UAE, we recognise the unparalleled potential of this dynamic market. The UAE, with its visionary leadership, thriving economy, and diverse population, perfectly aligns with Arista’s commitment to redefine luxury living. We are confident that our bespoke services will not only redefine the essence of community luxury living but also enable the industry to reach new heights.”

An agreement with Dubai Mall sees listed toll operator, Salik, delivering a parking management system at the mall by Q3 2024. This move is in line with Salik’s strategy of  diversifying revenue streams and easing traffic for visitors. In conjunction with the mall’s management, the terms of the agreement will feature automatic fee collection for ticketless parking, using vehicle plate recognition to deduct fees from Salik user accounts. According to chief executive, Ibrahim Al Haddad, “the project is important for the company’s strategy to offer sustainable and smart mobility solutions to drivers in Dubai, as well as our objective to diversify into complimentary revenue streams,” and that “the solution eliminates the need for gates or barriers at Dubai Mall, helping to minimise congestion and traffic for customers. We are looking forward to building on the success of this initiative to expand the offering to other locations around the city.” With the private parking market estimated to cater for 50k spaces, Salik “sees a compelling opportunity toexpand further and is actively exploring options for growth in the private parking market in Dubai”.

LHR and Gatwick expect today, Flyaway Friday, to be their busiest of the year, with Dubai being the most popular long-haul destination, (and Geneva for short-haul). On the day, LHR expects 689 flights catering for some 250k travellers. December 22 follows the end of the school term and the beginning of the Christmas holiday period.

The Central Bank of the UAE has raised its 2024 forecast for the GDP growth to 5.7% – up 1.4% on its previous 4.3% projection, with non-oil growth at 8.1`% and oil-growth of 4.7%. It expects this year’s growth to come in at 3.1%, with non-oil growth at 5.9%. It noted that actual Q2 growth of 3.8% was down on the year by 4.2%, with 8.0% being recorded in Q2 2022, with non-oil growth at 7.3%, compared to 4.5% a year earlier. Regarding the non-oil sectors of the economy, the report highlighted significant expansions in financial services, insurance, construction, wholesale and retail trade.

DP World will move its global headquarters to Expo City Dubai, after eighteen years located in Jebel Ali it was established under its current name in September 2005. The fifty-year-old global supply chain operator will move to a new building, (designed by Dubai-based DEC Dynamic Design Studio), integrated with DP World’s iFlow Pavilion and water fountain; it will have nine storeys, encompassing 37.3k sq mt of space, and will house approximately eight hundred dedicated staff. Its Group Chairman, Sultan Ahmed bin Sulayem, noted that the move to Expo City Dubai “puts us at the heart of Dubai’s future, while also signifies our commitment to innovation, sustainability, and making trade flow for our global customers”.

Dubai Customs posted an impressive 94.5% growth to 107k in business registration applications in the first five months of 2023, compared to the same period, pre-Covid 2019. Over that period, there were 358.7k refund requests, 220.7k certificate/report requests and 146.9k inspection date booking requests. The number of completed customs transactions grew 36.0% to 5.9 million. There is no doubt that Dubai Customs is one of the leading government agencies when it comes to IT which it has used to maximum efficiency and to enhance customer service. Its investment in advanced technology has helped to facilitate trade and support global trade so much so that only 0.8% of its 3.51 million transactions are done via service counters.

Replacing the Supreme Audit Institution, and reporting directly to the President, HH Sheikh Mohamed bin Zayed Al Nahyan has issued Federal Decree-Law No. (56) of 2023 on establishing the UAE Accountability Authority. With the twin targets of maintaining and enhancing the integrity of public finances, the Accountability Authority will be the highest authority for financial control, auditing, integrity and transparency in the UAE. It will be tasked to reviewing and auditing the Consolidated Annual Report of the federal government and expressing opinion on it, as well as auditing separate and combined annual financial statements in the entities subject to the control of the Authority. It will be reviewing and undertaking administrative investigation into complaints and reports regarding any misappropriation of funds and assets belonging to the regulated entities, conflicts of interest, misuse of authority, disclosure of official data and information, or exploitation of public office for personal gain or benefit to third parties.

As part of its US$ 437million digital strategy 2023-2030, the Roads and Transport Authority has unveiled eighty-two new projects, structured around six key pillars:  – people’s happiness, quality digital services, data intelligence, integrated digital operations, excellence in asset management, and innovation and partnerships. It will be implemented in four phases – the Preparatory, First, Second and Third Phases – covering seven, sixty-two, ten and three projects, valued at US$ 127 million, US$ 225 million, US$ 68 million and US$ 27 million respectively. It will include enabling 100% fintech-driven mobility, increasing digital service adoption to 95%, digitising the skill set of RTA’s employees to as much as 100%, and developing fifty artificial intelligence use cases. The strategy has also been carefully aligned with the strategic directions of the emirate, RTA’s Strategic Plan 2024-2030 and Dubai Digital Strategy.

According to Euromonitor’s annual Top 100 City Destinations Index 2023, Dubai is the world’s second-best and most attractive city destination to visit; this finding was the result of the emirate possessing a highly conducive business environment, strong international travel demand, consistent development of infrastructure and creative marketing campaigns. The result is based fifty-five metrics across six key pillars – economic/business performance, tourism performance, tourism infrastructure tourism policy/attractiveness, health/safety and sustainability. Paris remained the world’s most attractive city, followed by Dubai, Madrid, Spain, Tokyo, Amsterdam, Berlin, Rome, New York, Barcelona and London. The global market research company expects that Dubai 2023 international trips to be 18.0% higher at 16.8 million, ranking the emirate third after Istanbul (20.2 million) and London (18.8 million) followed by Antalya, Paris, Hong Kong, Bangkok, New York, Cancun and Makkah.

The DFM opened the week on Monday 18 December 2023, 47 points (1.1%) higher the previous week, gained 15 points (0.4%) to close the trading week on 4,016, by Friday 22 December 2023. Emaar Properties, US$ 0.03 higher the previous week, gained US$ 0.06, closing on US$ 2.10 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.66, US$ 4.66, US$ 1.57, and US$ 0.38 and closed on US$ 0.67, US$ 4.62, US$ 1.55 and US$ 0.38. On 22 December, trading was at 65 million shares, with a value of US$ 32 million, compared to 137 million shares, with a value of US$ 443 million, on 15 December 2023.

By Friday, 22 December 2023, Brent, US$ 1.41 higher (18.7%) the previous week, gained US$ 2.36 (3.1%) to close on US$ 79.19. Gold, US$ 25 (1.2%) lower the previous week, gained US$ 27 (1.3%) to trade at US$ 2,065 by 22 December 2023.

Having joined the bloc in 2007, Angola has decided to leave Opec; on the news, oil prices dropped further following yesterday’s announcement – with Brent down 1.68% to US$ 78.37. One of the reasons behind the withdrawal seems to be that last June, the Opec+ meeting reviewed Angola’s quota cuts and decided that it was massively reduced, with the country being given a target of sticking to 1.11 million bpd of output in 2024.; the Angolans were not impressed and decided to vote with their feet. Opec+ now has total production cuts in place of 3.66 million bpd which includes a 2.0 million bpd reduction agreed in 2022, as well as voluntary cuts of 1.66 million bpd, announced in April. Global oil demand growth forecast for 2024 is expected to be 2.2 million bpd.

Despite all the recent hoo-ha surrounding the environmental/climate sector, it seems that the global consumption of coal reached an all-time high in 2023, with the IEA energy watchdog confirming that Earth has experienced its hottest ever recorded year – surpassing 2022’s record; it confirmed that consumption of the dirtiest fossil fuel was 1.4% higher at 8.5 billion tonnes.  Increases in China, India and Indonesia – up 4.9% ((by 220 million tonnes), 8.0% and 11% – outweighed sharply falling demand in Europe (23% lower by 107 million tonnes) and the United States (21% lower by 95 million tonnes). China remains the world’s largest user of coal, responsible for 54% of all coal burned worldwide, with more than 60% of coal burned in China used to generate electricity and the country continues to build coal-fired power stations. it is largely agreed that greenhouses will have to be cut by more than 50% before 2030 to meet the global target of limiting global heating and avoiding the disastrous impacts on the world’s climate. The EU’s Copernicus Climate Change Service said earlier in December that 2023 will be the hottest on record after November became the sixth record-breaking month in a row. However, the IERA sees a decline in coal consumption in 2024, as renewable power generation from solar and wind continues to expand.

BP has become the latest international conglomerate to pause all shipments through the Red Sea after recent attacks on vessels by Houthi rebels; the tech giant noted that it made the decision because of the “deteriorating security situation”, with a number of freight companies also suspending their ships from operating through the region. The Red Sea is one the world’s most important routes for oil and fuel shipments, as well as for consumer goods, with ships being targeted travelling through the Bab al-Mandab Strait – also known as the Gate of Tears – which is a 32 km wide channel and known for being perilous to navigate. Any diversion means that ships must take a much longer route navigating around southern Africa which will add up to ten days to a journey to Europe, as well as adding extra costs. It seems that nearly 15% of goods imported into Europe, the Middle East and North Africa are shipped from Asia and the Gulf by sea, including 21.5% of refined oil and more than 13% of crude oil. There is always the chance that oil prices could move higher and lead to higher inflation, which has just fallen to 3.9%, after topping double digit territory last year – and probably the last “present” needed for Christmas.

Houthis have declared their backing for Hamas in its war with the Israelis and the rebels based in Yemen said they were targeting vessels which they believe are heading for Israel. US defence secretary Lloyd Austin held a virtual meeting with ministers from more than forty countries on Tuesday and called on more nations to contribute to the security efforts, noting that “these reckless Houthi attacks are a serious international problem and they demand a firm response”.

There are reports of a possible merger between two of Hollywood’s “Big Five” studios, Warner Bros Discovery and Paramount Global, and if the US$ 38.0 billion deal goes through, it would see the owner of HBO channels and CNN team up with the studio behind the Mission Impossible films and CBS News. The streaming of shows and films has meant that traditional media companies have had to invest more money and cut costs to maintain margins and to compete with the likes of Netflix, Amazon Video and Apple TV. Last year, AT&T’s WarnerMedia unit and Discovery merged to become Warner Bros Discovery, with a portfolio that included Discovery Channel, Warner Bros. Entertainment, CNN, HBO, Cartoon Network and franchises such as Batman and Harry Potter. Currently, Netflix has subscribers 247.2 million globally, well ahead of Paramount Plus total subscribers at 63.4 million and Warner Bros Discovery’s 95 million.

Malaysian businessman, Leonard Glenn Francis, is one of ten US citizens in Venezuela released as part of deal that saw Joe Biden authorise the release of Alex Saab, a close aide to Venezuela’s president, Nicolás Maduro. The fugitive billionaire – known as Fat Leonard – masterminded a brazen US$ 35 million fraud against the US Navy. In August 2022, he escaped house arrest in California, where he was being held after admitting to his role in a sprawling scam that cost the US tens of millions of dollars and implicated dozens of navy officers. In September that year, he was detained trying to board a plane from Venezuela to Russia. His crime centred on his Singapore-based business – which had contracts to service US naval vessels – to defraud the US Navy, while also plying American officers with cash and gifts as bribes. Francis was first arrested in 2013 and pleaded guilty to offering US$ 500k in bribes in 2015.

Lebanon has become another casualty of the Israel-Gaza war, as the country has been hauled back into recession territory, as a result of the Israel-Gaza war. After five years of recession, The World Bank had forecast a 0.2% growth in 2023 but now has downgraded this to a possible 0.9% recession. Lebanon shares a border with Israel in the south and is at risk of being dragged into the conflict and had already been in the midst of a political and institutional vacuum, and a crippling socio-economic crisis for over four years, it has now been hit by another large shock, fearing “that the current conflict centred in Gaza could escalate further into Lebanon.” Since its last expansion, in 2017, the economy has endured what the World Bank has called one of the worst global financial crises since the middle of the 19th century. Inflation, which has haunted Lebanon for several years, is projected to accelerate to 231.3% this year, mainly a reflection of the continued deterioration of the underlying macroeconomic environment. The World Bank noted Lebanon’s banking sector, continued in insolvency, with losses at US$ 72 billion, and that the banking sector’s losses as a share of GDP are “among the largest, if not the largest, in the world”.

Although supportive of manufacturers from across the world investing in US jobs and workers, President Biden indicated that he viewed a strong domestic steel industry as vital to the US economy and national security and said he supported a careful Committee on Foreign Investment in the United States review of Nippon Steel Corp’s US$ 14.9 billion  proposed acquisition of US Steel Corp; he added  it deserved “serious scrutiny,” given the company’s core role in US steel production that is critical to national security. His National Economic Council Director, Lael Brainard, said President Joe Biden welcomed manufacturers from across the world investing in US jobs and workers, but also believed “the purchase of this iconic American-owned company by a foreign entity – even one from a close ally – deserves serious scrutiny in terms of its potential impact on national security and supply chain reliability.” It seems there is strong criticism of the proposed agreement by both Democratic and Republican lawmakers and the powerful United Steelworkers union – and Biden is heading into an election year.

For the first time since its major economic crisis, Sri Lanka’s bankrupt economy has recorded its first positive growth, with Q3 GDP  1.6% higher, on the year. The island nation has posted a minus 8.0% when it declared bankruptcy in April 2022. However, the IMF, which released the second tranche of its US$ 2.9 billion bailout earlier this week, has said that Sri Lanka’s overall growth for 2023 would remain negative, but that this should turn positive in 2024. The loan comes with strings attached, with the world body insisting on some stringent measures, with President Ranil Wickremesinghe saying that reforms were essential despite strong criticism from the opposition. Sri Lanka, which defaulted on its sovereign debt, is still in negotiations with external creditors for concessions on repayment to achieve sustainability, a key component of the IMF bailout.

India maintains its position as the world’s largest recipient of global remittances, with a 12.3% surge in inward flow to US$ 125 billion this year. The US continued to be the largest source country for remittances while the GCC countries, including the UAE and Saudi Arabia, remained top sources of remittances in 2023. The World Bank’s latest Migration and Development Brief points to a continuing growth in remittance flows to low- and middle-income countries (LMICs) in 2023, 3.8% lower, reaching a total of US$ 669 billion. Led by India, South Asia sustained its position as the top recipient region while the MENA region saw a decline in remittance flows for the second consecutive year, mainly driven by a sharp drop in flows to Egypt. Apart from India, the other top four remittance recipient countries were Mexico, China, the Philippines and Egypt, with totals of US$ 67 billion, US$ 50 billion, US$ 40 billion and US$ 24 billion. Last year, the top five were India (US$ 111 billion), Mexico (US$ 61 billion), China (US$ 51 billion), the Philippines (US$ 38 billion), and Pakistan (US$ 30 billion). In the fiscal 2022 year, India received remittances from the following three countries – US, UAE, UK – accounting for 23.4%, 18.0% and 6.8% of the total. Regionally, Saudi Arabia, Kuwait, Oman and Qatar had shares of 5.1%, 2.4%, 1.6% and 1.5%. Unfortunately, recipients continue to suffer from high remittance costs, with the World Bank’s Remittances Prices Worldwide Database noting that remittance costs remain persistently high, averaging 6.2% to send US$ 200 in Q2 2023; not surprisingly, banks continue to be the costliest channel for sending remittances, with an average cost of 12.1%.

The UK’s November inflation rate fell at a quicker than expected 0.7% drop to 3.9% – its lowest figure in twenty-four months – with many expecting it to fall to just 4.3%. The Office for National Statistics noted that dropping fuel and food prices helped drive a bigger-than-expected decrease and that it was the first time since June 2022, that food price inflation had fallen to single digit figures. Despite the apparent good news, prices still remain substantially above what they were before the invasion of Ukraine, and the current rate is still almost double that of the BoE’s long-standing 2.0% target.

However, this rate is still well above those seen in the US and the eurozone where inflation has eased to 2.1% and 2.4% respectively. Although the UK’s inflation rate is on par with that of France, it is higher than the rates of 2.3% and 0.6% seen in Germany and Italy. There are various reasons why the UK rate is higher, with the main one being food price inflation rate is at 9.2%, compared to those of France, Germany, Italy and the US – 7.9%, 6.1%, 6.1% and 1.6%. The UK has to import a lot more food (about 50%), than many of its peers, with import prices rising a lot more than for domestic food.

The UK is once again at risk of recession after revised figures showed the economy shrank in Q3, with its GDP contracting by 0.1%, following an amended zero rate the previous quarter – it had earlier been reported as a 0.2% expansion. A technical recession occurs after two consecutive quarters of contraction and the UK has “dodged the bullet” on a few recent occasions. Whether a 2024 recession actually takes place is probably academic, but one certainty is that economic growth will remain subdued during next year. (The Office for National Statistics has forecast Q4 growth at 0.1%).  Chancellor Jeremy Hunt’s main hope is for inflation to keep heading south and then the measures he outlined in his Autumn Statement would “deliver the largest boost to potential growth on record” – or so he thinks! The conundrum is that higher interest rates can reduce inflation and benefit savers – but the flipside is that it impacts economic growth by making it more expensive for consumers and businesses to borrow. The latest GDP data from the Office for National Statistics (ONS) suggested that rising interest rates are weighing on consumer spending, which slowed over the period.

Christmas has long gone from being a religious festival, celebrating the Birth of Jesus Christ. This year, it seems that consumer spending will remain downbeat, with families struggling with high mortgage repayments, soaring energy prices etc and suppliers, with supply issues and higher running costs Furthermore, there is ever growing global tensions. including the continuing Russia-Ukraine crisis and the horrific war occurring in the Saviour’s birthplace, Bethlehem. Do They Know It’s Christmas?

Are We Human?                                                                15 December 2023

The real estate and properties transactions totalled US$ 3.51 billion during the week ending 15 December 2023. The sum of transactions was 304 plots, sold for US$ 962 million, and 2,744 apartments and villas, selling for US$ 1.95 billion. The top three transactions were all for plots of land, the first in Palm Jumeirah for US$ 256 million, the second in Saih Shuaib 4 for US$ 46 million and in Madinat Dubai Almelaheyah for US$ 28 million. Wadi Al Safa 2 recorded the most transactions, with one hundred and twenty-three sales, worth US$ 39 million, followed by thirty-one sales, in Al Hebiah Fourth for US$ 222 million, and twenty-two sales in Madinat Hind 4 valued at US$ 7 million. The top three transfers for apartments and villas were all apartments, the first in Palm Jumeirah for US$ 136 million, followed by one in Trade Center Second for US$ 83 million and the third in Al Thanayah Fourth for US$ 18 million. The mortgaged properties for the week reached US$ 482 million, with the highest being for land in Trade Center Second mortgaged for US$ 99 million; two hundred and thirty-six properties were granted between first-degree relatives, worth US$ 134 million.

YTD, at the end of November, Dubai’s residential transactions reached new record highs – at 112.4k – despite a decline in off-plan sales in November, on the back of a slight moderation in the recent price surge; monthly transactions of 9.0k were 13.2% lower, with a 26.4% decline in off-plan sales, partly offset by a 5.1% hike in the secondary market segment. The YTD November figures were 22.5% higher than the twelve months’ 2022 return. CBRE noted that average annual price rises in November came in at 18.9%, compared to 19.1% a month earlier; average apartment prices increased by 18.3% and average villa prices by 22.2%. Average apartment prices reached US$ 374 per sq ft, and average villa prices topped US$ 457 per sq ft. Interestingly, average apartment sales rates are still 7.7% lower than the record highs registered in 2014, with average villa sales rates currently 16.2% above. Jumeirah registered the highest sales rate per sq ft in the apartment segment of the market at US$ 680, whilst Palm Jumeirah registered the highest sales rate per sq ft in the villa segment of the market at US$ 1,422. In the rental market, annual rental growth in November was at 19.2%, (19.7% in October) – for apartments and villas by 19.6% and 16.6% at US$ 30.4k and US$ 66.9k. In line with prices, Palm Jumeirah and Al Barrari were the two locations for the highest rents -US$ 70.4k and US$ 313.5k. Early indicators point to a continuing softening into the new year, as there will be a slowdown in off-plan sales, with developers delivering stock already in their portfolio and already sold.

Meraas has announced its third collaboration with Bulgari – the beginning of construction on the Bulgari Lighthouse, a new luxury twenty-seven storey beachfront tower at Jumeirah Bay Island, a six million sq ft sanctuary developed by Meraas. The project will comprise four- and five-bedroom penthouses, with various layouts and configurations. As penthouses increase in size and scale, additional features include a private pool, private lift access, an air-conditioned garage, and sweeping terraces. Its curated residences are separated by layers of architectural coral that filter light, air, and the outside world. The Sky Villa Penthouse will encompass the top three floors of the Bulgari Lighthouse and is surrounded by expansive private rooftop gardens, outdoor living spaces, two private pools, and stylish lounge areas on either side of the building, designed by world-renowned architecture firm Antonio Citterio Patricia Viel. All residents can enjoy access to the facilities of the neighbouring Bulgari Hotels & Resorts.

ESG Hospitality has announced the complete sale of all branded apartments at its first Dubai development project, located in the Dubai Hills Estate, the Mallside Residence and Hotel.  Its Curio Collection by Hilton encompasses one hundred and forty-four branded apartments, with the eighteen-floor hotel and residential tower offering a mix of studio, one, two, and three-bedroom apartments, including an extensive selection of retail, dining, and lifestyle offerings. As part of the global Curio Collection by Hilton, the development also features a one hundred and five-key hotel, with an all-day dining restaurant, infinity pool, pool bar, children’s pool, fitness centre, and spa, which are available to both residents and guests. The tower’s top floor will host specialty restaurants and a rooftop bar and lounge.

The hospitality sector seems confident to predict that Dubai is set to reach the 200k hotel rooms landmark by 2030. Speaking at Skift Global Forum East, Sébastien Bazin, Group Chairman and CEO of Accor has ruled out overcapacity as the Asia and Gulf regions have been “building a true tourism plan.” At the same event, Timothy Kelly, president, Atlantis Global, said Dubai is set to have the highest number of hotel rooms in the next couple of years, surpassing Las Vegas, as the emirate witnesses strong growth in tourist numbers and also the inflow of new hotels. He estimates that Dubai will overhaul Las Vegas room inventory of 155k, within the next three years, and will have more hotel rooms than any other city or destination in the world. Dubai Tourism noted that the emirate had 146.5k hotel rooms, at eight hundred and four establishments by the end of 2022, compared to 138.0k rooms and seven hundred and fifty-five establishments a year earlier. He also noted that “the amount of properties that they’ve been able to unveil and bring into the market, there’s demand for that as the emirate has great infrastructure and great relationships”.

Dhows, traditional wooden sailing vessels, have been an integral part of Dubai’s history and culture for centuries, with latest trade figures indicating that there had been a significant increase in trade through traditional wooden dhows. It is estimated that about 11k dhows entered Dubai’s ports in 2023, transporting more than 1.3 million metric tonnes of cargo – 10% higher on the year. The Marine Agency for Wooden Dhows is responsible for streamlining entry and exit processes and is actively engaged in implementing several initiatives aimed at expediting clearances for transactions. A major enhancement has seen the time required for loading and completing ship procedures from forty days to around three, whilst the previous eight to ten hours waiting time has been slashed to just thirty minutes. Dubai Creek, Deira Wharfage and Al Hamriya Port are the key hubs for trade through wooden dhows in Dubai.

Flydubai was named Airline of the Year at the Aviator Middle East Awards that recognised the carrier for setting industry standards by delivering exceptional inflight experiences, efficient operations, as well as contributing to enhancing the Middle East’s global connectivity and driving the region’s economic growth. Its CEO, Ghaith Al Ghaith, also commented that “this award recognises our commitment to making travel more accessible across the region, providing the right product at the right time and to supporting Dubai’s aviation hub. This award goes to everyone working hard at flydubai to ensure we continue to push boundaries and to our passengers and stakeholders for the trust they have in us.” Having added twenty destinations YTD to its expanding network, flydubai created a growing network of more than one hundred and twenty destinations in fifty-four countries served by a young and efficient fleet of eighty-four Boeing 737 aircraft.

A new law, issued by HH Sheikh Mohammed bin Rashid, has established the Dubai Investment Fund as an independent public entity operating on a commercial basis, empowering the Fund with the financial and administrative independence to pursue its objectives along with the legal mandate to do so. Furthermore, Sheikh Hamdan bin Mohammed bin Rashid, issued Dubai Executive Council Resolution No. 94 of 2023 related to the formation of the Fund’s Board of Directors chaired by Sheikh Maktoum bin Mohammed bin Rashid, with Abdulrahman Saleh Al Saleh serving as Vice-Chairman of the Board, with Abdulaziz Mohammed Al Mulla, Rashid Ali bin Obood, and Ahmad Ali Meftah as members. Abdulaziz Mohammed Al Mulla has been appointed as the MD and CEO of the Fund.

Dubai Investment Fund will be responsible for investing Dubai government funds, surpluses and the general reserve locally and internationally. Its main aim is to generate returns, benefiting both current and future generations, while implementing best practices and the investment policy approved by the board of directors. It will also seek to bolster the financial stability of the Dubai Government by financing the government’s deficit and establishing strong financial reserves, thereby promoting long-term financial sustainability. The fund will actively contribute to the realisation of the emirate’s strategic priorities, and endorsed public policies, through efficient investments in strategic and development projects. Priority is accorded to initiatives that foster Dubai’s sustainable development across vital sectors, including the economic and social spheres, while diversifying income sources. The Fund will focus on investments in stocks, bonds, and securities to achieve sustainable returns and can explore prospects in local or international financial markets while following investment policies, approved by the board of directors. Additionally, it can deal in movable and immovable assets, manage funds, provide mortgages and guarantees, besides participating in the financial derivatives business, all in compliance with Dubai’s laws.

Dubai Investment Fund will function as Dubai Government’s vested authority when it comes to owning shares in entities like Dewa, Salik Company, Dubai Taxi Company, and other companies directly owned by the Dubai Government. Additionally, it covers government-owned companies, as identified by Dubai’s Supreme Fiscal Committee. The Fund will relieve the Dubai Government of rights and obligations related to companies, specifically in the context of ownership of shares comprising the capital of such companies, as well as all contracts, agreements, commitments, deposits, bank accounts, and loans associated with such shares. All relevant government entities in Dubai must register, under Dubai Investment Fund, all their assets, stocks, shares, movable and immovable properties, licences, permits, bonds, privileges, and other instruments. Additionally, Dubai World will be affiliated with the Dubai Investment Fund while preserving its legal identity as defined by Law No. (3) of 2006 and its amendments regarding the establishment of Dubai World.

Following India’s announcement that it would ban the export of all onions until 31 March 2024, prices of the vegetable have jumped sixfold in the UAE retail sector. Industry executives in the country are looking at other markets for a cheaper supply line, with the likes of Turkey, Egypt, Iran and China possible options – but in terms of quantity, quality, and price, Indian onions are considered the best in the market.

As Dubai’s economy is still strengthening, there was no surprise to see the emirate’s seasonally adjusted S&P Global PMI keep in positive territory at 56.8, although 0.6 lighter than the October return. The main drivers behind the latest return include new orders and output improved. A reflection of the marked improvement in business conditions can be gleaned from the fact that inventories also continued to rise at a historically rapid pace in the month. Although new order growth also stayed above trend, November witnessed a softer increase after hitting the fifty-two-month record last month, with sales momentum slowing, attributable to increased market competition. Employment in the emirate also improved in November, albeit at a softer pace than October. The survey noted that other metrics of the emirate’s non-oil private sector economy’s health, such as output and inventories, “remained strong compared to historical trends, suggesting that firms are still expecting to grow and hence expanded both input buying and output volumes”.

To ensure that doing business in Dubai becomes easier, the Department of Economy and Tourism has introduced the ‘Dubai Unified Licence’ – a unique commercial identification provided to all businesses in the emirate. It will be issued to existing and newly established entities, operating with either a mainland or a free zone licence. The registry consolidates all economic establishments in Dubai and its free zones into a single platform for data management, collation and sharing, serving as a reliable single digital information source. The initiative aims to standardise and streamline Dubai’s business processes, in accordance with global best practices, as well as ensuring greater transparency and ease of access to business-related information. As part of the initiative, establishments will undergo thorough validation, verification and screening by the appropriate authorities in order to receive their unique digital identity of which 50k licences have already been issued.

With the US Federal Reserve announcing it would be keeping the Interest on Reserve Balances, to which the base rate is anchored, unchanged, the Central Bank of the UAE followed suit and has maintained the Base Rate to the Overnight Deposit Facility at an unchanged 5.40%.The Central Bank has also decided to maintain the interest rate on borrowing short-term liquidity from the CBUAE at 50 bp above the Base Rate for all standing credit facilities. The Base Rate signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.

The Central Bank has joined the AFAQ, which links payment systems in GCC countries, offering financial transactions in local currencies and in real-time with lower fees. (AFAQ is a regional payments system provided by Gulf Payments Company, in cooperation with Saudi Central Bank, to execute financial transactions in GCC local currencies, in a short period of time with competitive pricing within a safe and stable ecosystem. It is in line with the CBUAE’s strategy to provide secure and instant payment platforms and enhance integration with the regional payment ecosystem. Barclays has also joined the organisation, being the first such financial institution in the UAE. To date, the state banks of Bahrain, Saudi Arabia and Kuwait have joined, along with a number of commercial banks from the three countries. The remaining GCC Central Banks and commercial banks will join in due course, in line with an agreed work timetable.

This week, the Central Bank of the UAE revoked the licence of Cogent Insurance Broker and struck the UAE-based company’s name off the Register, pursuant to Art 22 (2) of the Board of Directors resolution No 15 of 2013 Insurance Brokerage Regulations. This administrative sanction follows an internal examination that found that Cogent had a weak compliance framework and failed to comply with its regulatory obligations.

e& has signed a binding agreement for the 100% acquisition of Norwegian telecommunications company Telenor’s local unit, as it continues to expand its operations in Pakistan. It was signed by Pakistan Telecommunication Company, e&’s listed operating entity, and Fornebu-based Telenor for the acquisition of Telenor Pakistan at an enterprise value of US$ 381 million. The move will allow the local tech giant to focus on building the best next-generation network and drive the growth of digital transformation in Pakistan. The country’s telecommunication sector had about one hundred and ninety-seven million subscribers, which covers nearly 89% of the population, and posted 2022 revenue of US$ 2.45 billion, (up 7.8% on the year), and contributed 2.7% to Pakistan’s GDP. It is estimated that within five years, the country’s telecom market is projected to hit US$ 5.15 billion, from an estimated US$ 4.38 billion in 2023, growing at a compound annual rate of 3.28%.

The DFM opened the week on Monday 11 December 2023, 41 points (1.0%) lower the previous fortnight, gained 47 points (1.1%) to close the trading week on 4,001, by Friday 15 December 2023. Emaar Properties, US$ 0.05 lower the previous week, gained US$ 0.03, 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$ 4.74, US$ 1.53, and US$ 0.38 and closed on US$ 0.66, US$ 4.66, US$ 1.57 and US$ 0.38. On 15 December, trading was at 137 million shares, with a value of US$ 443 million, compared to 103 million shares, with a value of US$ 65 million, on 08 December 2023.

By Friday, 15 December 2023, Brent, US$ 17.40 lower (18.7%) the previous seven weeks, gained US$ 1.41 (1.9%) to close on US$ 76.83. Gold, US$ 79 (6.9%) lower the previous week, gained US$ 25 (1.2%) to trade at US$ 2,038 by 15 December 2023.

Turkish Airlines has ordered two hundred and thirty Airbus planes as part of a multibillion dollar deal including one hundred and fifty A321 planes, seventy A350 wide-body aircraft and a number of freighters; there are also rights to extend the deal to 355 aircraft. The airline has said publicly for months that it wants to place a big order as it aims to almost double its fleet in the next decade. This order  is also in accord with President Recep Tayyip Erdogan’s ambition that Turkey  becomes a global power assisted by a strong national carrier

It follows a handshake accord in Istanbul, and adds weight to President Recep Tayyip Erdogan’s ambition that Turkey becomes a global power. The airline’s chairman Ahmet Bolat noted that “we are reinforcing our leading position in global aviation and contributing to the nation’s prominence as an aviation hub.” For manufacturers in the Airbus supply chain the multibillion-dollar deal represents thousands of jobs, and in the UK, the benefits will run into the billions, as Rolls Royce will be making the engines and other stakeholders in the country providing parts.

The US National Highway Traffic Safety Administration has advised Tesla to recall more than two million EVs after its driver assistance system was found to be partly defective; this recall covers most of the Teslas ever sold since 2015, when this tech was first introduced. Tesla confirmed that it would send a software update “over the air” to fix the issue. Autopilot is meant to help with steering, acceleration and braking – but, despite the name, the car still requires driver input. However, the NHTSA two-year investigation, involving nine hundred and fifty-six crashes, found that “the prominence and scope of the feature’s controls may not be sufficient to prevent driver misuse”. According to the recall notice, the company did not concur with the agency’s analysis but agreed to add new features to resolve the concerns, including additional checks on turning on the self-driving features. Goldman Sachs analysts estimated this month that Tesla’s most advanced Autopilot offering, full self-driving, could end up generating more than US$ 50 billion a year in revenue by 2030, up from US$ 1 billion-US$ 3 billion presently. In the US, the full-self driving package costs US$ 12k, as well as a US$ 0.2k monthly subscription fee.

In the middle of a “streamlining” process, Nationwide has warned the possibility of five hundred staff being retrenched, indicating that it expects about two hundred to leave as it will seek to find people new roles. Confirming that redundancies will not impact “customer-facing colleagues”’, the Swindon-based finance company said the redundancy consultation aims to improve efficiency and direct investment into other areas of the business. A day earlier, it announced that it was rescinding its “work anywhere policy” and has advised staff to return to the office for at least two days a week, from early next year.

Only two months after filing for US bankruptcy, Smile Direct Club, founded in 2014, has closed its business, leaving many of its customers still requiring ongoing treatment; it claims that it has “improved more than two million smiles and lives”. The orthodontics company is best known for selling clear aligners for about US$ 2.3k, without the need to visit a dentist. Traditional dentistry sees “train-track” braces and clear aligners being fitted by dentists and orthodontists themselves, after an in-person consultation, but the US disruptor offered the same service cheaper and the fact they could take the moulds for their aligners themselves at home. Furthermore, the procedure only took four to six months – a much shorter period. Now the problem facing existing customers is future service because it appears that its customer support line will no longer be available, despite the fact that they may need check-ins or adjustments for their aligners; it does advise that if treatment is needed, they should contact their local dentists!  The company, which never made a profit, was once valued at US$ 8.9 billion but is now estimated to have US$ 900 million of debt.

Having already laid off eight hundred staff already in 2023, US toy giant Hasbro plans a further staff reduction of 1.1k – equating to almost 20% of its workforce – in a bid to save US$ 300 million. The maker of Transformers action figures, the Dungeons & Dragons fantasy game and Monopoly indicates that the cuts are down to weaker sales in the build-up to Christmas. Its CEO Chris Cocks noted that “market headwinds… have proven to be stronger and more persistent than planned.” Hasbro is not the only toy company to be suffering, but like others in the sector, it is struggling with a slowdown in sales after a surge during the pandemic when some parents bought toys to keep their children busy.

Having sued Google in 2020 for unlawfully making its app store dominant over rivals, Fortnite has won a US court battle against the tech giant, with a jury deciding that the search giant had operated an illegal monopoly; Epic won on all counts, with the court indicating that it would start considering the issue of compensation next month. It is estimated that hundreds of millions of people have had to use the store to install apps for smartphones, powered by Google’s Android software. Android powers roughly 70% of smartphones globally, and according to Epic games, more than 95% of Android apps are distributed through the Play Store. Although the store is not as profitable for the tech giant as its search business, the platform gives Google access to billions of mobile phones and tablets. The case also challenged transaction fees of up to 30% that Google imposes on Android app developers, and how the tech giant ties together its Play Store and billing service, which means developers must use both to have their apps in the store.

Mainly attributable to returning striking workers, both in the car industry and Hollywood, November US jobs growth was stronger, at 199k, helping to put jobless number down to 3.7% – the lowest since July 2023. Although this is welcome news for jobseekers, the stronger than expected job gains are food for thought for the Federal Reserve, which is still trying to cool the economy to reduce inflation. Furthermore, the report showed average hourly pay ticking up 0.4% from October – and 4.0% on the year which many think at this rate, it still shows that the Fed has got its job cut out to finally get on top of inflation and return it to its longstanding 2.0% target. There is no doubt that consumer spending continues to defy traditional economic theory and that the main driver behind this is the ongoing strong labour market. It is not so long ago that economists were spouting that pushing up interest rates, would result in an inevitable economic recession, with higher borrowing costs forcing firms and households to slow spending dramatically. History is telling another story. The Labor Department confirmed that the monthly average number of new jobs over the past twelve months has been 240k – or nearly 1.7 million in the period. On an annual basis, job growth is actually softening, but is obviously standing up well in an environment of slowing global growth and turbulent economic times, including record high interest rates.

An investor group, Arkhouse Management and Brigade Capital Management, has offered to pay US$ 21 for each share of Macy’s that they do not already own – this is 20.8% higher than its closing price last Friday; earlier in the year, they were hovering around the US$ 11 level. Shares of the US department store have surged on hopes of a US$ 5.8 billion buyout deal. Macy’s, parent of Bloomingdale’s and makeup firm Bluemercury, operates more than seven hundred and twenty stores in the US. There is no doubt that the retailer has seen better times and in June, it cut its annual profit and sales forecast, whilst nine months sales to October came in 9.0% lower compared to 2022.

Republican Senator Rick Scott has requested the US government to investigate claims that Chinese garlic is unsafe, citing unsanitary production methods. Previously China has been accused of “dumping” garlic on to the market, at below-cost price. The country is the world’s biggest exporter of fresh and chilled garlic, with the US being a major consumer. Over the past thirty years, it has levied heavy tariffs on Chinese imports so as to “level the playing field”, when it comes to prices, with Donald Trump lifting them further in 2019. Senator Scott also highlights “a severe public health concern over the quality and safety of garlic grown in foreign countries – most notably, garlic grown in Communist China” – which, he says, have been “well documented” in online videos, cooking blogs and documentaries, including growing garlic in sewage.

The former head of a branch of The Bank of China has been jailed for life, after being convicted of embezzling US$ 325 million in one of the country’s biggest corruption cases. Xu Guojun was the head of a branch in Southern China from 1993 to 2001 and took advantage of loopholes in the lender’s fund management system to obtain false loans, along with two accomplices. He had fled to the US in 2001 but was forcibly repatriated two years ago, and now has also been deprived of political rights for life, with all his assets being confiscated. This case is the latest development in President Xi Jinping’s anti-corruption programme, that is focussed on the country’s US$ 60 trillion financial industry. He is on record on the need to crack down on the “hedonistic” lifestyles of bankers, and it seems that he is keen to weed out corruption in this sector. In October, Liu Liange, a former chairman of the Bank of China was arrested over suspicion of bribery and giving illegal loans; a month earlier, former chairman of China Life Insurance Wang Bin was sentenced to life in prison without parole for bribery.

Javier Milei, the newly appointed president of Argentine, has indicated that he will have to make significant public sector spending cuts to stabilise the economy and that “there is no alternative to a shock adjustment.” The libertarian economist warns that there is no alternative to this action to fix the country’s worst economic crisis in decades of boom-bust cycles, including inflation heading towards 150%. His other warning was that the economy would worsen in the short-term, saying “there is no money.” He has a difficult job to pull the country, (with 40% of its population living under the poverty line), back to some form of economic normalcy. He has inherited a country with a US$ 100 billion debt “bomb”, net foreign reserves at a negative US$ 10 billion, inflation at 143% and still moving quickly north, an inevitable and imminent sharp devaluation of the peso, and a recession on the short-term horizon.

Prime Minister Justin Trudeau’s positive immigration strategy has worked well to date and has aided economic growth, as well as reducing the ongoing problem of an ageing population. With the high cost of living and rental shortages, things are beginning to change and now there is the problem of rising emigration numbers; although relatively low numbers currently, there are concerns that it may diminish Canada’s position as a favourite destination, including with Arabs, Indians and Chinese. In H1, 42k left the country, compared to 263k entering over that period, with official data showing the numbers in 2022 and 2021 were 94k and 86k. Over the past eight years, some 2.5 million have been granted permanent residency, but emigration as a percentage of Canada’s overall population currently stands at about 0.09% – having touched a 0.2% high in the mid 1990s. On average in Canada, about 60% of household income would be needed to cover home ownership costs, but this rises to 80% and 98% in Toronto and Vancouver. Last month, Trudeau’s government capped its target for new residents at a half million per year from 2025 onwards to ease pressure on the housing market.

Having launched in Melbourne in 1972, and having rebranded to Chemist Warehouse in 2000, the pharmacy chain has opened hundreds of outlets and over the fifty-one years in business has remained a private entity. This week, it has been announced that it has agreed with Sigma Healthcare not only to create the biggest pharmacy company in Australia but also to be one of the country’s biggest retail companies in Australia, (with a total value of US$ 5.77 billion). The deal, signed last Monday, confirmed that the parent company of Chemist Warehouse, CW Group Holdings, had entered into a merger agreement with Sigma Healthcare, to create “a leading healthcare wholesaler, distributor and retail pharmacy franchisor”. The conglomerate will encompass the whole pharm sector from product creation to selling them instore.

There are now around six hundred Chemist Warehouse stores in four countries, with the majority of them in Australia, forty-two in New Zealand, and six each in Ireland and China. In addition, it owns twenty-one stores under the My Chemist brand and 17 Ultra Beauty stores, located within select Chemist Warehouse stores. It is also part-owner of a number of brands it stocks in its stores, including Bondi Protein Co, Goat Soap, Barely Intimate Skincare, Bambi Mini and the Wagner supplement brand. In addition, not only does Sigma own four different pharmacy brands – Amcal, Discount Drug Stores, Guardian and PharmaSave – with four hundred pharmacies operating under those brands, it also operates another eight hundred pharmacies around Australia. It also has its own brands and private labels, including Amcal-branded items including pain relief, lozenges, vitamins and cold and flu tablets, as well as part-owning specific brands sold at its stores, including Beauty Theory (which sells items like bobby pins and hairbrushes) and Pharmacy Care (which sells skincare, pain relief, baby products and health devices like blood pressure monitors and thermometers). It also owns three of the nine distribution centres that it operates in the country, as well as making its own products, for internal and external sale. When the deal was signed, Sigma estimated that the total sales of products to Chemist Warehouse would generate a minimum of US$ 2.0 billion in revenue in the first year of the contract alone.

In order to overhaul a “broken” migration system, the Australian government indicated that it would tighten visa rules for international students and low-skilled workers that could halve its migrant intake over the next two years., and “bring migration numbers back to normal.”  The new rules would see international students needing to secure higher ratings on English tests and there would be more scrutiny on a student’s second visa application that would prolong their stay. The decision comes after net immigration was expected to have peaked at a record 510k last year, but that it would fall to about 250k over the next two years. the increase in net overseas migration in 2022-23 was mostly driven by international students. The government also intends to “lift the standards” for international students and education providers to ensure that those who come to study do not become “permanently temporary”.

Last Sunday, the Australian Treasurer indicated that foreign buyers of existing homes will have to pay triple the fees on purchases, partly aimed at increasing the supply of affordable housing. Jim Chalmers added “higher fees for the purchase of established homes, increased penalties for those that leave properties vacant, and strengthened compliance activity will help ensure foreign investment in residential property is in our national interest.” Furthermore, Albanese’s centre-left Labour government would also cut application fees for foreign investment in “build to rent” projects to encourage construction of more homes. It is estimated that the changes, just announced, will generate around US$ 300 million the government could invest in priority areas like housing. Only last year, the Treasurer took another strike at overseas buyers after doubling the fees for foreign investors buying assets in the country, which the government said would generate US$ 305 million in extra revenue over four years. Australian property prices are among the highest in the world, with the trend set to continue, with rising demand outstripping supply.

The UK’s Payment Systems Regulator has proposed a cap on fees that credit card firms, including Mastercard and Visa, charge retailers for payments between the EU and the UK. The payments watchdog estimates that the fees, which can get passed on to consumers, cost UK firms up to US$ 250 million in 2022.  The industry regulator opines that some credit card firms have probably raised fees to an “unduly high level” since Brexit. The EU bloc has a cap on so-called “cross-border interchange fees”, which retailers pay when customers in the UK buy from the European trading bloc. This was the same in the UK pre-Brexit but since then, it appears that Mastercard and Visa have “significantly raised” the fees charged to retailers in the UK. The watchdog has proposed an initial, time-limited, cap of 0.2% for debit card transactions, and 0.3% for credit cards, for transactions made online at UK businesses – in line with the EU cap.

The Halifax’s House Price Index has noted house prices rising 0.5% between October and November, but at US$ 355k, the average British home was worth 1.0% less than it was in November 2022. It noted that “the resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand,” as property prices having “held up better than expected.” With mortgage rates starting to come off historic highs, and inflation levels slowly heading south, this could result in a rise in consumer confidence, and an improving picture on affordability for homebuyers. There is a good chance that house prices will weaken in 2023, as the knock-on impact of the fourteen rate hikes, over the previous two years filter through to the market. Next year, sellers may be forced to price their homes more competitively to secure a sale, while mortgage rates are expected to ease further. Other possible sellers may adopt a wait and see approach and put buying plans on hold to see what happens to mortgage rates in the longer term.

On a regional basis, the South-East saw November prices down 5.7% on the year by US$ 28.4k to US$ 468.6k. Not surprisingly, London retains its position for the highest average house prices at US$ 657.4k, despite posting a 3.8% price decline. Northern Ireland recorded the strongest performing UK region, with house prices up 2.3% to US$ 237.7k, whilst in Scotland, house prices were largely flat over the year, but in Wales they fell by 1.5%, where the average house cost US$ 270.4k in November.

Latest data from the ONS, pay growth, excluding bonuses, eased to 7.3% in the quarter ending October – an indicator that earnings are actually slowing but are still outpacing inflation; that being the case, it is likely that the BoE’s next move will be to start shaving rates, from the current 5.25% mark, starting in Q1 2024. For the seventeenth consecutive month, the number of people on payrolls, with November posting a 45k reduction. Despite these falls, overall vacancies totalled 949k – still “well above pre-pandemic levels”. Although inflation has fallen to 4.6%, it is still more than double the BoE’s 2.0% target.

A combination of bad weather and higher interest rates, the UK economy shrank unexpectedly 0.3%, following a 0.2% expansion the previous month. A 0.1% dip was expected, but the services, manufacturing and construction sectors all contracted, with retail and tourism being hit by severe weather in October as Storm Babet lashed the UK. The UK economy has been stagnating and Prime Minister Rishi Sunak has promised to speed up growth, but no marked improvement is expected until January 2025, by which time he could well be out of office. The BoE governor, Andrew Bailey, has expressed his concern, (yet again), over the UK economy’s potential to grow, noting “there’s no doubt it’s lower than it has been in much of my working life.” On Wednesday, the Resolution Foundation suggested that Britain was a “stagnation nation” due to poor productivity and a lack of investment in things like skills; it noted that the UK growth had only been 0.5% over the past eighteen months – the weakest rate outside of a recession on record.

Now in its third month of conflict, one side effect of the devastation is that its economy will contract by 3.7% from a growth projection of 3.2% prior to the start of the war. The World Bank estimation is that the decline will equate to about US$ 1.5 billion, in nominal GDP, for 2023 alone. There is widespread concern that there will be long term damage to its economy and, to all intents and purposes, the Palestinian economy has been at a “near-complete standstill” since the conflict broke out in October. To make matters worse, H1 growth slowed to 3.0% annually, largely due to the waning post-pandemic recovery. Gaza’s economy alone has been experiencing a deep contraction, having shrunk by 4.4%, on the year, in H1, driven mainly by a large decline in the agricultural, forestry and fishing sectors, a result of additional Israeli restrictions on the sale of Gazan products into the occupied West Bank since August 2022. As of the second half of November, about 60% of information and communications technology infrastructure, at least 60% of health and education centres and 70% of commerce-related infrastructure had been damaged or destroyed in Gaza. Furthermore, almost 50% of all primary, secondary and tertiary roads are damaged or destroyed, and more than half a million people are homeless as a result of the conflict. It will obviously take years for the poverty-stricken economy to recover, with the ongoing bombing of Gaza becoming much more than a humanitarian crisis.

At Tuesday’s UN General Assembly calling for an immediate ceasefire in Gaza was passed by one hundred and fifty-three member states of the one hundred and ninety-three member bloc. The US was one of ten members to vote against the resolution and the UK one of twenty-three who abstained, and with the death toll now topping 18k, and rising – Shame on you! How many more people will have to die and how much further devastation is needed for a change in your attitude? Come Judgement Day, some stakeholders, will surely pay a high price for either their action or inaction. The question to everyone in the world that sees what is going on is a simple Are We Human?

This Is Really Happening!                                                           08 December 2023

The real estate and properties transactions totalled US$ 1.32 billion during the week ending 08 December 2023. The sum of transactions was 357 plots, sold for US$ 594 million, and 2,113 apartments and villas, selling for US$ 1.32 billion. The top three transactions were all for plots of land, the first in Al Thanyah Fifth for US$ 73 million, the second in Saih Shuaib 2 for US$ 26 million and in Saih Shuaib 3 for US$ 23 million. Wadi Al Safa 2 recorded the most transactions, with two hundred and thirteen sales, worth US$ 52 million, followed by twenty-three sales, in Madinat Al Hind 4 for US$ 10 million, and twenty sales in Palm Jabal Ali, valued at US$ 185 million. The top three transfers for apartments and villas were all apartments two in Al Wasl both for US$ 37 million each, and one in Palm Jumeriah sold for US$ 24 million. The mortgaged properties for the week reached US$ 896 million, with the highest being for land in Palm Jumeirah for US$ 57 million; one hundred and sixty-two properties were granted between first-degree relatives, worth US$ 175 million.

Bugatti Residences by Binghatti is a new hyper tower under development by Binghatti Developers, located in Business Bay. The mansions and penthouses have unique lateral layouts, excellent ceiling heights and natural light with sweeping terraces. Bugatti Residences by Binghatti was designed with 182 bespoke units, each designed with a unique layout. The project features Sky Mansion penthouses with access to car lifts for residents to display their automobiles in their residences. The Bugatti branded development will also feature a communal ‘French Riviera’ inspired urban beach club, pools, a spa, gym, 24/7 security and a dedicated concierge team.

A collaboration between Franck Muller and London Gate will mark the Swiss luxury watchmaker first entrée into the world of branded residences. An announcement this week sees Dubai set not only to get its first residential clock tower but also the world’s tallest one, at 450 mt – it will also become the world’s tallest residential tower and branded residential tower. The tower is named Aeternitas after the horologist’s watch of the same name; this watch is the most complicated in the world, with thirty-six complications and 1.5k components. The luxury residential project will be officially unveiled next month, and residents can expect a 2026 handover. London Gate has also posted three recent sold-out projects – Maya V, Nadine I and II.

Earlier in the year, Select Group acquired the Pentominium Tower – located in Dubai Marina – in an auction, with the building set to become the world’s tallest residential skyscraper. Following financial problems, the building was acquired for US$ 100 million, following an auction through the Dubai Courts approved administration process via Emirates Auction; the real estate developer won the bidding process that comprised forty-six bids. Although no details were made available, it will be taller than the current global “leaders” – Central Park Tower, 111 West, Park Avenue 432 and Dubai’s Marina 101, (at 1.394k ft/425 mt high). Select Group has appointed engineering consultancy WSP, architectural firm Woods Bagot, and interior design firm Mitchell & Eades for the development of the tower.

In Q1, Aqua Properties expects to deliver more than five hundred residential and commercial units as well as launching two projects worth US$ 817 million that will include a fifty-storey-plus tower on SZR and another, encompassing 300 sq ft in Arjan. Currently, the Dubai-based company is overseeing three ongoing projects and notes that it is benefitting from Dubai’s distinctive market dynamics, influenced by cash transactions.

Although Q3 global super-prime residential sales actually dipped 2.4% on the year, the latest Knight Frank report notes that five of the twelve markets surveyed saw volumes rise; in the period, the number of units sold was nine lower at three hundred and sixty-two. The survey noted that, “strong sales volumes in 2021 were flattered to an extent by delayed completions in 2020. As we move into 2024, the tailwind from new build sales will weaken as the lower volume of new projects starts through the pandemic begins to be felt.” The volume of super-prime homes sold in Dubai, numbered two hundred and seventy-seven in the first nine months of the year. Homes priced at over US$ 10 million, totalled US$ 1.59 billion during Q3, with the emirate again leading the global survey, as it has since Q4 2022.

The UBS Billionaire Ambitions Report 2023 reported that five billionaires moved to the UAE in 2023, as two more joined the billionaire club as the wealth of the UHNWIs having grown immensely in the past couple of years, driven by marked expansion in the key strategic sectors such as real estate, travel and tourism, retail and overall economy as well. Their total wealth escalated 157% to US$ 99.4 billion, as the local economy grew strongly, with the 2022 GDP 7.6% higher on the year. The UAE, with seventeen, has the second number of billionaires behind Israel’s twenty-six in the MEA region, which is home to sixty-three billionaires, (nine higher on the year). It is ahead of countries such as Saudi Arabia (6), South Africa (5), Egypt (4) and Nigeria (3). On a global scale, the number of billionaires rose 7.0% over the twelve months to 06 April 2023, to 2,544, with total wealth up 9.0% to US$ 12 trillion, led by Europe’s billionaires for the first time in the history of the study. The billionaire community remains smaller than at its 2021 peak.

Meanwhile, New World Wealth has posted that 1.5k millionaires had relocated from the UK to Dubai in the past decade, with a further two hundred and fifty relocating this year. The Henley Private Wealth Migration Report 2023 expects 4.5k millionaires will relocate to the UAE this year, making the country with the second highest migration after Australia.

On Monday, Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum opened the four-day 44th edition of Big 5 Global, the largest and most influential construction industry event across MEA and South Asia. The event had 2.2k exhibitors and attracted 68k visitors from one hundred and fifty countries. Big 5 Global spans the whole gamut of activities of the construction industry across dedicated sectors and eight specialised events, with many live demos, product launches and high-profile business opportunities. The Crown Prince noted that Dubai had emerged as a platform for sustainability and innovation, thanks to the array of events it hosts annually, and highlighted the importance of the exhibition at a time when the world is increasingly turning to advanced technologies for designing smart buildings.

A major announcement at Dubai’s COP28 was that fifty oil companies, (including Aramco, BP, Petrobras, Shell and TotalEnergies), representing almost 50% of global production, have pledged to reach near-zero methane emissions, and end routine flaring in their operations, by 2030; environmental groups are calling it a “smokescreen”. If this indeed were happen, it is estimated that future warming will be reduced by 0.1 degrees Celsius – equating to how much the planet would warm every five years. Sultan Al Jaber, COP28’s president, as well as head of the Abu Dhabi National Oil Co., has always insisted his background would allow him to bring oil companies to the negotiating table, stressing that having the industry’s buy-in is crucial to drastically slashing the world’s greenhouse emissions by nearly half in seven years to limit global warming to the 1.5 degrees Celsius target.

For months leading up to COP28, there was speculation of action on methane. Not only do methane leaks, along with flaring, which is burning of excess methane, and venting of the gas, all contribute to climate change, but these problems can largely be solved with current technologies and changes to operations. Indeed, oil and gas companies could have taken such measures years ago but largely have not, instead focusing more on expanding production than focusing on the by-product of it. Methane has caused about 50% of the world’s warming since pre-industrial times, with it escaping from oil and gas drilling, and is only about 23% of the world’s methane emissions, with agriculture and waste being bigger culprits. This announcement does not address the oil and natural gas being burned off by the end users, so-called Scope 3 emissions, (for example, motorists in their cars or power plants powering cities); the president did note that oil and gas companies needed to do more to research solutions to Scope 3 emissions.

As part of COP28, global leaders joined in committing to tripling global nuclear capacity by 2050, as part of the transition to net zero, endorsing the Declaration to Triple Nuclear Energy Capacity by 2050. Nine Heads of State attended the ceremony, with declaration endorsements from twenty-one countries including Canada, Czechia, Ghana, Finland, Hungary, Japan, Moldova, Mongolia, Morocco, Netherlands, Poland, Republic of Korea, Romania, Slovakia, Slovenia, Ukraine, UAE, USA and the UK. The Declaration recognises the importance of nuclear energy in achieving global net-zero greenhouse gas emissions, with nuclear already the second-largest source of clean, dispatchable baseload power globally, and the largest source of clean electricity for OECD nations. Global energy systems account for almost 70% of total carbon emissions, with power production generating almost 30% of total emissions.

During the COP28 UN climate summit, he UAE Banks Federation, which represents fifty-six lenders in the country, pledged US$ 272 billion, targeted at fulfilling the country’s ambitions of reaching its goal of net zero by 2050. UAE Central Bank Governor Khaled Balama commented that the move “underscores the significant efforts in the UAE and globally towards sustainable finance mobilisation”. Eleven UAE banks were highlighted during the announcement, including First Abu Dhabi Bank, Mashreq Bank, Abu Dhabi Commercial Bank, Emirates NBD, Dubai Islamic Bank, RAK Bank, National Bank of Fujairah and Abu Dhabi Islamic Bank. The IMF supremo, Kristalina Georgieva, spoke of the need for governments to remove fossil fuel subsidies, which reached US$ 7.1 trillion in 2022 but this can only be done “if we build social protection” for the most vulnerable people in societies. She also called for higher pricing on carbon, which would be “the biggest possible incentive for decarbonisation”. It was agreed that there was an urgent need to direct more financing towards emerging economies and developing countries.

In the first five days of COP28, the UAE launched ‘ALTÉRRA’, a climate investment fund with an incentive capital of US$ 30.0 billion, focussing on attracting and stimulating private financing, as well the allocation of US$ 200 million of special drawing rights to the Resilience and Sustainability Trust and US$ 150 million for water security. The World Bank added a further US$ 9.0 billion to finance climate-related projects with other multilateral development banks posting an additional US$ 22.6 billion increase in support for climate action. US$ 3.5 billion worth of international pledges were also announced to renew the resources of the Green Climate Fund, along with US$ 134 million, US$ 129 million and US$ 31 million for the Adaption Fund, Least Developed Countries Fund and Special Climate Change Fund.

On the perimeter of COP28, UAE President His Highness Sheikh Mohamed bin Zayed and leaders of Brazil and Paraguay, Luiz Inácio Lula da Silva and Santiago Peña, witnessed the signing of a joint declaration for cooperation on the Bi-Oceanic Corridor which aims to enhance regional integration and logistical efficiency between the UAE, Brazil, Paraguay, Argentina, and Chile. It also focuses on attracting investments and generating investment opportunities in Latin America through the corridor, thereby expanding regional trade; it also aims to increase the flow of agricultural products to Pacific Ocean ports and boost regional trade and tourism.

It is reported that a Ceps – comprehensive economic partnership agreement- will soon be signed between the UAE and Colombia, (the fourth largest economy in South America), which would be the first ever between a GCC state and a South American nation. A joint statement has been signed, confirming the conclusion of negotiations and that terms have been finalised to boost bilateral trade and investment flows. When finalised, the Cepa will remove or reduce tariffs on the majority of product lines, eliminate unnecessary barriers to trade, improve market access and deepen collaboration across energy, environment, digital trade, financial services, telecommunications, hospitality, tourism, infrastructure, agriculture and food production. Last year, non-oil trade with Colombia exceeded US$ 380 million which jumped 120% in H1 to hit US$ 389 million, accounting for 49% of Colombia’s trade with Gulf states. Having already signed six Cepas – with India, Israel, Turkey, Indonesia, Cambodia and Georgia – the UAE is working to sign a further twenty as it seeks to attract more investment and to diversify its economy.

Although 0.7 lower on the month, the country’s November S&P Global PMI came in at 57.0 – an indicator that UAE’s economy continues to strengthen, driven by a marked improvement in demand, as new orders/inventories rose sharply. It was noted that the growth momentum across the private sector non-oil economy drove “a marked increase in purchasing activity” last month amid healthy demand conditions. There was inevitable pressure on supply chains and material prices, as the economic upturn led to the biggest expansion in inventory levels for close to six years. S&P Global Market Intelligence noted that “the strong run of demand growth in the UAE non-oil economy sparked a rapid increase in input buying during November, as firms looked to ensure they were in a good position to take advantage of growth opportunities.” New orders continued to grow last month on increased demand, new clients, project inquiries and marketing efforts, whilst output levels also rose. The increase in purchase prices was the second quickest since in twelve months. It was noted that “the build-up of competition was likely a key factor behind stock-building efforts, with businesses wary of falling behind in a fast-growing economy.”

Yesterday was the first day of trading on the DFM for Dubai Taxi Company, (DTC), whose share value started on US$ 0.504, (AED 1.85), and ended the day 19.5% higher on US$ 0.602, (AED 2.21).  At 10.00am, the company was valued at US$ 1.26 billion and seven hours later at over US$ 1.50 billion. The DFM applied no price limits on the shares during the first day of trading. By the end of the week, it had softened to US$ 0.590, (AED 2.15).

The DFM opened, a day later than normal because of the National Day holidays, on Tuesday, 05 December 2023, 7 points (0.1%) lower the previous fortnight, fell 34 points (0.9%) to close the trading week on 3,954, by Friday 08 December 2023. Emaar Properties, US$ 0.34 higher the previous five weeks, was down US$ 0.05, closing on US$ 2.01 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.69, US$ 4.77, US$ 1.51, and US$ 0.40 and closed on US$ 0.68, US$ 4.74, US$ 1.53 and US$ 0.38. On 08 December, trading was at 103 million shares, with a value of US$ 65 million, compared to 75 million shares, with a value of US$ 57 million, on 01 December 2023.

By Friday, 08 December 2023, Brent, US$ 13.72 lower (14.8%) the previous six weeks, shed US$ 368 (4.7%) to close on US$ 75.42. Gold, US$ 135 (6.9%) higher the previous three weeks, lost US$ 79 (3.8%) to trade at US$ 2,013 by 08 December 2023.

Monday saw gold reach new highs driven by many factors including being seen as a “safe  haven” after the start of the Israel-Gaza war, and comments by the Federal Reserve’s Jerome Powell that its rate policy was now “well into restrictive territory” – which has been seen by many analysts that rates were now high enough to cool the economy and stabilise prices, reducing the chances of further hikes. The market is looking at possible rate cuts starting in March 2024, and if that were to happen, gold may fly 10% higher in a matter of weeks.

At the same time, Bitcoin has joined the celebrations, reaching its highest level earlier in the week to over US$ 42k – its highest level in nineteen months. If US regulators were to approve new kinds of trading products linked to Bitcoin, then this cryptocurrency can only go in one direction – and that is north.

OPEC, whose main objective is to regulate the supply of oil to the world market, accounts for almost 40% of global crude oil production share, as well as owning almost 80% of global crude oil reserves; it also accounts for 16% of the world’s natural gas production. There are fifteen member countries of Opec – Algeria, Angola, Congo, Ecuador, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.

In 2016, OPEC signed an agreement with ten other oil producers to create OPEC+; they were Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. Over the weekend, Brazilian President Luiz Inacio Lula da Silva, in Dubai for COP28, said Brazil will never join the OPEC+ group of oil-producing nations as a full member and instead will only seek to participate as an observer. However, its energy minister Alexandre Silveira told the Opec meeting that his country would join the charter from next year. That being the case, it would add a further 4.0 million bpd which would then take Opec’s market share to around 50% of total global production.

 

There are worrying concerns within the Opec cartel that it is losing its influence in the market. Despite the strong post-pandemic demand rebound, surprisingly  2023 production levels are expected to be lower than in 2014, the year when prices slumped, with its total output almost three million bpd less than it was nine years ago. A structural change may just turn the tables if Brazil, which would become the fourth largest Opec producer, enters the cartel and taking its share hovering around 50%. Petrobras’ chief executive, Jean Paul Prates, noted that Opec “is aware that Brazil can’t be subject to quotas as it has a publicly traded company”; the Brazilian energy giant has raised its five year spend by 31%, on the previous period, to US$ 102 billion. The political significance and symbolism are yet more important, as it would be the second of the original five Brics (Brazil, Russia, India, China and South Africa), noting the UAE, Saudi Arabia and Iran were also invited in August, to join the bloc.

Last year’s figures, listed below, show the top ten global oil producers which account for 74% of daily production levels. Five of this group are members of Opec, with Russia being a member of Opec+.

	Country	Million bpd	Global Share
	United States	20.30	21%
	Saudi Arabia	12.44	13%
	Russia	10.13	10%
	Canada	5.83	6%
	Iraq	4.61	5%
	China	4.45	5%
	United Arab Emirates	4.23	4%
	Iran	3.67	4%
	Brazil	3.17	3%
	Kuwait	3.01	3%
	Total top 10	71.83	74%
	World total	97.70

Indicating that it would serve the interest of the global economy, Saudi Crown Prince and Russian President Vladimir Putin have urged all Opec+ nations to join the bloc’s agreement on output cuts. Thursday’s joint statement noted the two countries’ indicating that it was important to boost cooperation in oil and gas, including in equipment supplies. At the previous week’s Opec+ meeting, Saudi Arabia had agreed to extend voluntary oil output cuts of one million bpd into the first quarter, while Russia said it would continue to curb oil exports by 300k bpd, and additionally reduce its fuel exports by 200k bpd in Q1. Eight of the bloc’s members came in with total curbs of  2.2 million bpd. OPEC+’s output of some 43 million bpd already reflects cuts of about five million bpd aimed at supporting prices and stabilising the market.

According to IATA, next year, the global airline industry’s revenue is set to grow by 7.6% to US$ 964 billion, on the back of increasing demand, with net profit climbing over 10.0% to US$ 25.7 billion; expenses are expected to increase by 6.9% to US$ 914 billion. Operating profits are forecast to increase 21.1% to US$ 49.3 billion, with cargo volumes expected to increase by 5.1% to 61 million tonnes. Other figures show that 2024 will return better numbers than pre-pandemic  levels, including a 3.1% rise in flights to 40.1 million, the load factor nudging 0.6% higher to 82.6%, and passenger revenue at US$ 717 billion – up 12.0%. Airlines are expected to consume ninety-nine billion gallons of fuel in 2024 and produce a worrying nine hundred and thirty-nine tonnes of carbon dioxide emissions. IATA did conclude that industry profitability is fragile and could be impacted by external factors such as global economic developments, wars, supply-chain disruption and regulatory risks.

It has taken Tesla four years to deliver its first long-delayed Cybertruck since Elon Musk’s November 2019 announcement. The vehicle has a lower range, (547 km from 804 km), and higher prices, (50% higher) than initially formulated and promised by him. In 2019, he had said that the Cybertruck would retail at US$ 40k, with the new price of the three variants ranging from US$ 61k to US$ 100k. A promotional video shows the vehicle towing a Porsche 911 and beating another gasoline-powered 911 in a short race. Tesla needs a successful launch of the Cybertruck to boost its revenue stream, which has been impacted in an environment of softening EV demand and rising competition. It is two years behind the market and has a lot to do to catch up, with its competitors. Rivian Automotive’s R1T has a starting price of US$ 73k, whilst Ford’s F-150 Lightning starts at about US$ 50k and GM’s larger and more powerful Hummer EV costs more than US$ 96k. Another concern for Tesla is that it will take the EV maker at least eighteen months to ramp up production to make a marked cash flow contributor, by which time it could be making 250k trucks a year.

Consumer champion Justin Gutmann estimates that 28.2 million UK mobile phone contracts could be affected from 2007, and has filed a legal claim, of up to US$ 3.8 billion for 4.8 million users, seeking damages against Vodafone, EE, Three and O2 for overcharging customers for phones beyond the end of their contract. The “Loyalty Penalty Claim” – which is being filed with the Competition Appeal Tribunal – is being brought on behalf of consumers who bought contracts made up of a mobile phone and services like data, call minutes, and texts. The plaintiff expects that if the claim is successful, someone who had contracts, with just one of the mobile operators, could get more than US$ 2.3k. It seems that the cost of repayment during the minimum term of the contract – which is typically 24 months – included both the cost of the mobile and the use of services, but that they continued to charge for the mobile even though it had been paid off. Furthermore, they were also charged more than a new customer on, for example, a Sim-only deal.

In a bid to slash costs and improve its bottom line, Swedish music-streaming giant Spotify is set to cut its payroll by 1.5k, (about 17% of its total staff). Chief executive, Daniel Eck, commented that “substantial action to right size our costs” was needed for the company to meet its objectives, and that “to be blunt, many smart, talented and hard-working people will be departing us.” This decision follows the company cutting staff earlier in the year and it announcing its first quarterly profit for more than a year – at US$ 70 million in Q3 – helped by price rises and higher subscriber numbers. Spotify has seen user numbers grow by 74.2%, to 601 million, over the past three years and is well on its 2030 target of one million.

McDonald’s will introduce CosMc’s, its new restaurant idea, which aims to take on Starbucks in its market segment. The pilot store will be in Chicago, opening this month, with a further ten opening in 2024; by the end of 2027, it is expected that 10K stored will be open, many of which will be in China. It will serve items such as Churro Frappe – churros are a kind of Spanish doughnut – and S’Mores Cold Brew – s’mores are biscuits, chocolate and marshmallows, along with a reduced McDonald’s menu including the likes of Egg McMuffins. It already has a coffee and snack chain called McCafe, and that only serves coffee and sweets. It also revealed plans to launch nine hundred restaurants in the US, 1.9k internationally, where it operates its own restaurants, and 7.0k in its international licensed markets – 50% of which will be in China. The company expects China, currently its second biggest market, to soon become its number one.

It can only be the US when the former head of Abercrombie & Fitch is suing the firm for refusing to cover his legal fees after he was accused of running a sex trafficking operation. Mike Jeffries has taken this action after a recent lawsuit alleged the US retailer had funded a “criminal enterprise”, run by Jeffries, with allegations that he had exploited young men for sex as CEO over two decades. The lawsuit claims that as CEO, A&F offered to indemnify him for any claims arising out of his position with the company, including any threatened, asserted, pending or completed claim “whether civil, criminal, administrative” or other. The company rejected his claim for legal fees. He had stepped down in 2014, with a US$ 25 million retirement package, (part of which has now been suspended), having transformed A&F from a failing heritage outfitter into a multi-billion-dollar teen retailer.

There are reports that Saudi Arabia is to offer tax incentives, including a thirty-year exemption for corporate income tax, for foreign companies that locate their regional headquarters in the kingdom. The zero per cent rate will apply for income tax of the regional entity and for the withholding tax on approved activities. Almost two years ago, it had announced plans to stop awarding government contracts to companies whose regional headquarters were not located in the kingdom by 01 January 2024. There is no doubt that these incentives will go a long way for Crown Prince Mohammed bin Salman to wean the economy off oil, by creating new industries whilst generating jobs for Saudis.

Prime Minister Giorgia Meloni has decided to pull Italy out of China’s flagship Belt and Road Initiative, with her administration notifying Beijing that it would cease participating in the BRI ahead of a 31 December deadline; it only signed up to the deal four years ago, amid much criticism from its allies, including the US.  Italy had been the only major western country to sign to the US$ 1 trillion trade and infrastructure project launched by Chinese President Xi Jinping in 2013. Only a fraction of the US$ 21.5 billion worth of investment in Italy, promised by Mr Xi in 2019, has materialised. Italian exports to China have risen 26.1% between 2019 and 2022 to US$ 21.5 billion, whilst imports are 81.4% higher at US$ 61.9 billion.

Last month, a budget crisis exploded when Germany’s constitutional court declared the government’s budget illegal for breaking German laws against taking on new debt, resulting in the urgent need for a revised – and legal – 2024 national budget. To meet the 01 January deadline, parliament will have to approve a package that will balance the budget known as the schwarze Null, or black zero; this ensures that that any budget deficit cannot be higher than 0.35% of the country’s economic output. The government had planned to use emergency debt left over from the pandemic, to spend on Germany’s shift to green energy instead, but this has been declared illegal by the country’s constitutional court. There is an estimated shortfall of US$ 65 billion for 2023, and over US$ 18 billion for next year. A ruse that could be used to get the budget passed is to declare 2023 an emergency year because of the energy crisis, brought on by the Russians invading the Ukraine; this will be challenged again in court and there is every chance the conservatives would win again. To the casual observer, there can only be three solutions to the problem, and they would be tax rises, spending cuts or more debt. But the conundrum is that there are three minority parties – the centre-left SPD, the Greens and small-state liberal FDP – with different agenda, all haggling at a common solution.

Moody’s has cut its outlook on the Chinese and has posted that it would lower the government’s debt to negative, from stable, raising increased concerns about the problems facing the country, mainly its mounting debt pile. The government has refuted this claim, and has plans to ramp up stimulus spending, in the face of soaring youth unemployment, weaker global demand hitting its manufacturing industry and the property sector sinking even further; several of the larger construction companies are facing insolvency and have stopped building, leaving customers stranded. On top of that, local governments are facing the ramifications of borrowing billions to build infrastructure and relying on land sales to bring in revenue, are also under strain. China’s finance ministry said the country’s long-term prospects had not changed and it expected to be able to manage the impact of the property sector slowdown. The latest economic data points to a country that is used to annual growth levels of 8%+, now facing growth slowing to 5.4% this year; the IMF has forecast that China’s economic growth could be in the region of 3.5% by 2028. If that were to happen, the global economy will be impacted more so in regions such as sub-Saharan Africa which had seen an influx of Chinese investment.

The British Retail Consortium has indicated that, in 2022, 19% of purchases were made with notes and coins, as cash use grew for the first time in a decade. The figures come as the financial regulator is set to consult on a plan to help people access cash, and that banks could be fined if money cannot be withdrawn or deposited, and that free withdrawals and deposits will need to be available within one mile for people living in urban areas. Until 2015, notes and coins were used in more than 50% of transactions and, while card use now dominates, cash still had its benefits. UK Finance said nearly twenty-two million people only used cash once a month or not at all last year. However, about five million people still rely on cash and there has been pressure to ensure access is still available as bank branches and ATMs shut. The latest development has been ‘blamed’ on the cost-of-living pressures.

There was some surprise to see that TIME’s Person of the Year for 2023 is Taylor Swift, further cementing her status as a pop culture juggernaut. (This is the same magazine that in the past has given the likes of Adolf Hitler and Joseph Stalin the same accolade). In 2017, she appeared on the POTY cover as part of The Silence Breakers that included Ashley Judd, Susan Fowler, Adama Iwu and Isabel Pascual. This year, she made history with a record-breaking global tour and became the first female artist to have twelve chart-topping albums. Her “Anti-Hero” singer’s sell-out live tour has been so popular that it is estimated its impact on economic growth is considerable bearing in mind that it grossed US$ 2.2 billion and generated US$ 4.6 billion worth of consumer spending. The Wall Street Journal has reported that the entire US leg of her Eras stadium tour could have a US$ 5.7 billion boost on the nation’s economy. It appears that hotel prices triple, with 100% occupancy levels, in every city she appears. It is reported that over twenty-two million fans virtually queued for the Singapore tickets, with Forbes estimating that for each stop on this tour, she personally earns up to US$ 13 million, and that her net wealth stands at US$ 1.1 billion. There are university courses – Swiftonomics – which study the economic impact of her work and charitable donations. No doubt that she wakes up most days pinching herself wondering if This Is Really Happening!

There’s Something In The Air!                                                 01 December 2023

The week’s real estate and properties transactions totalled US$ 2.26 billion, during the week ending 01 December 2023. The sum of transactions was 422 plots, sold for US$ 801 million, and 1,380 apartments and villas, selling for US$ 880 million. The top three transactions were all for plots of land, the first in Hadaeq Sheikh Mohammed Bin Rashid for US$ 34 million, the second in Al Barsha South Fourth for US$ 20 million and Palm Jumeirah for US$ 19 million. Wadi Al Safa 2 recorded the most transactions, with one hundred and twenty-six sales, worth US$ 34 million, followed by ninety-six sales, in Madinat Al Mataar for US$ 50 million, and forty-eight sales in Palm Jabal Ali, valued at US$ 357 million. The top three transfers for apartments and villas were for a villa in Al Qusais Industrial Second for US$ 75 million, an apartment in Island 2, sold for US$ 16 million, and an apartment in Um Suqaim First for US$ 16 million. The mortgaged properties for the week reached US$ 379 million, with the highest being for land in Palm Jumeirah for US$ 41 million; one hundred and fifty-six properties were granted between first-degree relatives worth US$ 201 million.

A development, located on a new island at Jumeirah Beachfront, Umm Suqeim 2, will house three Las Vegas hotel brands – MGM, Bellagio and Aria. Encompassing over 3.5 million sq mt, the US$ 1.2 billion waterfront project, called ‘The Island’, is slated for a H2 2028 completion; property developer Wasl has awarded the main contract to China State Construction Engineering Corporation Ltd Middle East. The development will comprise 1k hotel rooms/ apartments and ten villas along with F&B outlets, indoor and outdoor pools, business lounge, water fountains and artificial waterfalls. It will feature a 110 mt tall entertainment tower in the centre of the island, seating three hundred guests for the best view of shows in 3D, and a beach club.  Furthermore, an eight hundred seat theatre will host shows, conferences, festivals and weddings. Another amenity is a beach club that offers “maritime leisure services”. A 1.2 km corniche, around the project, will have cafés, restaurants and retail stores, including a so-called ‘Cave of Wonders’ will feature sports and games for children and their families. There is every confidence that this resort will appeal to both local and visiting UHNWIs for many reasons including unique entertainment facilities and potential gaming facilities.

HH Sheikh Mohammed bin Rashid announced an extension to the Metro network – the Blue Line will include fourteen new stations and add 30 km to the Metro network, of which 15.5 km will be underground. The project, which is part of The Dubai 2040 Urban Master Plan, located in the north-east of the emirate, will ease traffic congestion and establish a direct link with Dubai International Airport. The RTA noted that the Blue Line will connect five principal urban regions of Dubai – Bur Dubai/Deira, Downtown/Business Bay, Dubai Silicon Oasis, Dubai Marina/JBR and Expo City Dubai. Comprising two main routes, starting with connections from the Red and Green Lines – the former starting at in Al Jaddaf at the Creek Interchange Station, with the Green Line crossing Dubai Creek on a 1.3km bridge. On completion, the network will be 131km long and encompass seventy-eight stations, served by one hundred and sixty-eight trains. The project is scheduled to be finished in 2029, coinciding with the twentieth anniversary of the Dubai Metro. Costing an estimated US$ 4.90 billion, the project is projected to yield a benefit-cost ratio of 2.60 (US$ 2.60 in benefits for every US$ 1 spent), with total anticipated benefits exceeding US$ 14.40 billion by 2040. Benefits will see traffic congestion on its routes reduced by 20% and increase the value of land and properties near stations by up to 25%. By 2030, it will serve an estimated 200k passengers every day, with an hourly capacity of about 56k passengers in both directions, at a service interval of about 1.5 minutes.

Since its 2008 establishment, the Knowledge and Human Development Authority has seen the size of Dubai’s private school sector more than double from 156.5k, in the 2007-2008 academic year, to its current 365.6k students; over the same period the number of schools has increased by 61.8% to two hundred and twenty, with five new establishments opening in the 2023-2024 year and student numbers 12.0% higher. It is also reported that the quality of education has improved in similar manner – in the last academic year, 77.0% of students were enrolled in schools rated “Good or better”, compared to just 30% in 2008-2009.  The emirate’s private schools offer seventeen different curricula, with the main ones being UK-based, Indian curriculum, US curriculum and the International Baccalaureate accounting foe 36%, 26%, 15% and 7% respectively.

DHCC posted a 12.0% growth hike last year, with latest figures indicating that the sector contributed US$ 763 million to the emirate’s GDP. Since its establishment in 2002, it has expanded to its present size of four hundred and eighty-one facilities, with nineteen having expanded their operations last year. These included the ground-breaking of Prime Hospital, the expansion of Moorfields Eye Hospital and the opening of Kandinsky Clinic, Dubai’s first Russian facility. With the 2021 introduction of C37, the country’s first private medical workspace – fully managed and operated by the authority – was meant for UAE-based or visiting doctors looking for an independent, part-time practice solution to enable healthcare beyond borders. In the past twelve months the number of practicing doctors has tripled to twenty-eight, including fourteen international specialists who performed over 5.6k procedures. It has also partnered with Dubai SME to assist with the emirate’s aim to promote Emirati entrepreneurs. This year the Dubai Health Care Authority, the governing body of the DHCC, partnered with KLAIM and Jade Healthcare Consultancy to enhance performance and streamline operations for its business partners. The DHCC also noted that one hundred and thirty international related medical companies have their regional offices in the free zone.

DEWA has given the green light to Acwa Power, which has a 26.95% stake in the project, to start commercial operations for the final 600 MW phase of the total 2.4k MW power capacity of the Hassyan plant, which was converted to run only on natural gas instead of clean coal last year. The US$ 3.2 billion project, which aims to avoid about thirty million tonnes of carbon dioxide emissions by 2030, supports the Dubai Clean Energy Strategy 2020 and the Net Zero Carbon Emissions Strategy 2050 to provide 100% of Dubai’s total power capacity from clean energy sources by then.  The complex entails a water desalination project, with a production capacity of 120 million imperial gallons a day, using reverse osmosis technology – with Acwa the pre-preferred bidder to develop and operate the first phase. Dubai is also constructing the 5 GW Mohammed bin Rashid Al Maktoum Solar Park to increase its clean energy capacity. The federal government has confirmed plans to invest up to US$ 54 billion by 2030 to ensure energy demand is met while sustaining economic growth.

There is no doubt that Emirates is none too happy with Rolls Royce, with its President, Tim Clark urging the UK company to go “back to basics” and focus on the performance of its engines. Earlier in the week, RR’s CEO Tufan Erginbilgic laid out plans to quadruple profits and to revive its flagging fortunes, including a sharp increase in profit margins and “value-driven pricing,” suggesting higher servicing bills to increase civil engine profit margins to 15% – 17%.

At the Dubai Air Show, last month, the airline’s supremo, who criticised Rolls over pricing and the performance of its largest engine, appeared non-plussed, adding “if you have an engine … not performing as it should do, your costs are going to rise. But your ability to extract value from the client is going to fall simply because the client won’t accept non-performance.” The company has acknowledged that the downtime on the XWB-97 engine is greater than expected but has denied suggestions by Clark that the performance level equates to being “defective”. Emirates is still interested in ordering the A350-1000, dependent on progress on downtime, with RR saying that the problem of durability was specific to the XWB-97 engine used on the A350-1000, (and only in challenging climates), adding that it was working with Airbus “to improve that engine to a great level”. However, the EK President commented that “we were ready on the -1000, adding the engine stand-off had “opened the door” to reviving the Boeing 777-8 as a passenger variant as well as a freighter.

DP World’s Jebel Ali Free Zone has successfully completed Phase 1 of Jafza Logistics Park. Encompassing an area of 562.5k sq ft, the multi-tenant warehousing facility, developed in collaboration with Group AMANA, comprises a variety of facilities, such as ‘Grade-A’ Dry Pharma storage units, temperature-controlled warehouses, and office space. The second phase, which will add another 250k sq ft of Grade A storage facilities, is scheduled for completion by Q1 2025. The facility was designed with sustainability in mind, and it utilises precast concrete elements and off-site construction techniques to reduce its environmental impact.

DP World Australia’s executive vice president, Nicolaj Noes, confirmed that the personal data of some current and former employees was compromised following a major data breach incident, earlier in the month, that closed operations at four major Australian ports for more than three days. The firm did not reveal the number of its employees’ records that were affected by the cyber-attack but confirmed that their customers were not impacted. The company is responsible for 40% of Australia’s maritime freight, and the outage resulted in a backlog of 30.1k shipping containers stacked up at its depots around the country. Despite speculation that Russian cyber criminals were responsible for the attack that crippled the ports operator, authorities were still investigating to determine the culprit. DP World Australia has not received a ransom demand from the group responsible for the hack to date. The incident remains under investigation by the Department of Home Affairs, with the company having been working closely with a number of government agencies, including the Australian Cyber Security Centre and the Australian Federal Police.

The firm expects there will be further freight delays as industrial action continues at its Melbourne, Sydney, Brisbane and Fremantle operations, with one forty-eight-hour work stoppage planned for next week, which had been planned before the cyber-attack. The strike is over pay and rosters under DP World’s proposed enterprise bargaining agreement, with the Maritime Union of Australia attributing the strike to negotiations with the company breaking down. Undoubtedly, the planned industrial action would result in major supply shocks to the national supply chain, and it is likely that there will be some delays to freight arriving in time for Christmas as a result of the ongoing dispute.

Yesterday, countries at COP28 Countries formally approved a deal on a new climate disaster fund, with it being adopted following the opening ceremony at Expo City Dubai. It will launch a fund to help vulnerable nations cope with the cost of climate-driven damage from drought, floods and rising seas. The UAE will contribute US$ 100 million to the fund, which is seen as an important milestone in delivering for vulnerable communities and building resilience for people suffering the devastating impacts of climate change. 

Announced at COP28, the emirate’s government has launched the Dubai Reef project, spanning some 600 sq mt and aiming to increase coral reefs by 400k cu mt and increasing sea life eightfold. It is hoped that the project will help boost food security, improve the sustainability of fishermen’s livelihoods and enhance eco-tourism. Other aims are to reduce carbon emissions, (with an estimated capacity to capture more than seven million tonnes of carbon annually) and increase marine biodiversity. It will be a PPP model (public private partnership), with the government contributing 10% and that a further 50% has already been committed. It will begin in Q4 2024 and is scheduled for completion within four years.

Dubai Holding, when signing the UAE Climate Responsible Companies Pledge in collaboration with the Ministry of Climate Change and Environment, announced its participation as Principal Pathway Partner at the twenty-eighth meeting of the United Nations Climate Change Conference (COP28). The signing was also an indicator of the global investment company’s commitment to the UAE’s Net Zero 2050 initiative. During the thirteen days of the annual meeting, Dubai Holding will host a series of events to showcase sustainable technologies and help develop impactful long-term solutions that support the global climate agenda. It has also developed a group-wide decarbonisation roadmap towards Net Zero 2050, supported by interim targets up to 2030.

The two-day Dubai COP28, that opened yesterday, 28 November, could well have been the world’s last opportunity to rectify its climate course and the need to redesign the global energy system has become critical. There is no doubt that progress has been slow when it is reported that only 7% of the global energy system comprises wind/solar energy and only 2% of vehicles are EV. Furthermore about 50% of the global population lack access to affordable energy and that the decarbonisation rate has been far too sluggish. The Dubai Future Forum saw over 2.5k global experts, from more than one hundred leading global entities, as well as global leaders, ministers, CEOs and policy makers listening to one hundred and fifty climate experts.

It was announced that UAE nationals, who started work “for the first time” from 31 October  will be covered under the new pension law on condition that they are employed by entities linked to the General Pension and Social Security Authority (GPSSA), which includes federal and government sector firms in the UAE, apart from those in Abu Dhabi and Sharjah, and all affiliated private firms in the UAE, apart from Abu Dhabi. Current employees will continue to be covered under Federal Law No. (7) of 1999 on Pension and Social Security.

After a price fall last month, the UAE Fuel Price Committee again decreased all retail fuel prices again for December. 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 December retail prices all head south:

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

• Super 98: US$ 0.807, from US$ 0.826 in November (down by 2.30%) and 1.2% lower YTD

• Special 95: US$ 0.777, from US$ 0.796 in November (drop of 2.39%), down 6.18%, YTD

• Diesel: US$ 0.869, from US$ 0.932 in November (down by 6.76%), 3.01% lower over the first eleven months of the year

• E-plus 91: US$ 0.755, from US$ 0.777 in November (decline of 2.8%), up 6.94% YTD

In response to a significant oversubscription, Dubai Taxi Company has increased the number of shares offered in the UAE retail offer of its IPO by 12.495 million to 74.970 million. The initial offering size, equating to 24.99% of the company’s total issued share capital, remains unchanged – only the retail tranche will increase by 2% to 12% of the total offer, equating to US$ 37.9 million, based on the announced price range of US$ 0.504 per share. The IPO raised US$ 327 million and valued the company at US$ 1.25 billion. The subscription period for the Offering closed on Tuesday for UAE retail investors and Wednesday for qualified investors. The only surprise was that the sale garnered US$ 40.87 billion and was oversubscribed by 130 times – the highest over-subscription level achieved by an IPO on the DFM. Investors who subscribed through the First Tranche, “UAE Retail Offering”, will receive an SMS confirmation of their respective allocation next Tuesday, with refunds due to commence from the same date.

The DFM opened on Monday, 27 November 2023, 3 points (0.1%) lower the previous week, dipped 4 points (0.1%) to close the trading week on 3,988, by Friday 01 December 2023. Emaar Properties, US$ 0.21 higher the previous four weeks, was up US$ 0.13, closing on US$ 2.06 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.69, US$ 4.92, US$ 1.51, and US$ 0.39 and closed on US$ 0.69, US$ 4.77, US$ 1.51  and US$ 0.40. On 01 December, trading was at 75 million shares, with a value of US$ 57 million, compared to 49 million shares, with a value of US$ 27 million, on 24 November 2023.

The bourse had opened the year on 3,438 and, having closed on 30 November at 3992, was 449 points (16.1%) higher, YTD. Emaar started the year with a 01 January 2023 opening figure of US$ 1.60, to close the first eleven months at US$ 2.07. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.59, US$ 3.54, US$ 1.55 and US$ 0.41 and closed YTD at US$ 0.69, US$ 4.80, US$ 1.50 and US$ 0.40.   On 30 November, trading was at 139 million shares, with a value of US$ 164 million, compared to 66 million shares, with a value of US$ 18 million, on 31 December 2022.

By Friday, 01 December 2023, Brent, US$ 12.38 lower (13.3%) the previous five weeks, shed US$ 1.34 (1.7%) to close on US$ 79.10. Gold, US$ 57 (2.1%) higher the previous fortnight, climbed US$ 88 (4.4%) to trade at US$ 2,092 by 01 December 2023.

Brent started the year on US$ 85.91 and shed US$ 5.24 (5.5%), to close 30 November 2023 on US$ 85.36. Meanwhile, the yellow metal opened 2023 trading at US$ 1,830 and gained US$ 211 (11.5%) to close YTD on US$ 2,041.  

Latest reports indicate that, for Q1 2024, the UAE will implement additional volume. cuts of 163k bpd to bring production totals of 2.912 million bpd, in addition to the voluntary reduction of 144k bpd, previously announced in April 2023, but ends this month. Opec+ also noted these cuts will be amended subject to market conditions so as to keep the market in some state of equilibrium.

Saudi Arabia’s Public Investment Fund (which has more than US$ 700 billion in funds) has agreed to buy a 10% stake in Heathrow airport from Spanish infrastructure giant Ferrovial. Another 15% in its parent company, FGP Topco, will be sold to France-based private equity fund Ardian. Other stakeholders in FGP Topco include Qatar Investment Authority, Caisse de dépôt et placement du Québec, Singapore’s GIC, Australian Retirement Trust, China Investment Corporation and Universities Superannuation Scheme. LHR has been badly impacted by soaring interest rates because of its significant debt and it appears that management wanted to increase average charge per passenger by 26.7% to US$ 50.75; however, the Civil Aviation Authority has said charges will fall to US$ 32.28, and “remain broadly flat” until the end of 2026.

Starting in 2024, new US legislation will define a “foreign entity of concern” as a company headquartered in or owned or controlled by China, Russia, Iran or North Korea in a bid to keeping Chinese components out of electric cars sold in the country. Any company in which the government of these countries holds 25% or more of a board’s seats, voting rights or shares would fall under the rules. Furthermore, the restrictions will expand to cars that contain critical materials extracted, processed or recycled by such an entity. As from next year, the law will also ban cars from eligibility for tax credits if they contain battery components manufactured or assembled by a “foreign entity of concern”. By 2025, the restrictions will expand to cars that contain critical materials extracted, processed or recycled by such an entity. To further help the local EV market, legislators had already introduced a US$ 7.5k tax incentive for every vehicle made in the country; only about 20% of electric vehicles for sale in the US currently qualify for the tax credit. Chinese firms currently produce the vast majority of electric car batteries and the minerals used in them; it is estimated that the White House has already expended nearly US$ 100 billion in private investment of electric cars.

Tesla, currently in negotiations with the IF Metall union over a collective bargaining agreement, has sued the Swedish Transport Agency after postal workers, in support of the workers, stopped delivering licence plates connected to the US EV company. About one hundred and thirty staff at Tesla’s Swedish repair shops have been on strike since 27 October, demanding an agreement to guarantee “good wages, good pensions and good insurance for staff”, which now involves eight other unions, including postal, taking their own actions, targeting Tesla, in sympathy with the repair workers; for example, dockworkers have stopped unloading Tesla cars. On Monday, Tesla filed a lawsuit accusing the Transport Agency of unfairly targeting Tesla by not fulfilling the deliveries of the registration plates and demanded access to the plates – a request which was granted that forces the authority to get the plates to Tesla within seven days or face a fine.

After failing to gain an appropriate market share, Beijing-based ByteDance has confirmed that it will significantly downsize its gaming business, along with job cuts, numbering in the hundreds. Having launched Nuverse in 2019, the firm, which also owns popular social network TikTok, entered the gaming market to compete with industry leader Tencent. Although not confirmed, it seems that games with active players, such as Crystal of Atlan and Earth, and Revival, will continue, whilst titles, not yet launched, will be shut down in December. Having failed to build up production capacity, and despite acquiring external studios such as C4games. it now seems that the white flag is being waved and that it is edging out of the very competitive video gaming sector. The global video game market, of which Tencent is the world’s biggest gaming company in terms of revenue, was estimated to be worth US$ 217.0 billion in 2022.

The embattled Metro Bank has announced shareholders are to vote later whether to back a rescue deal aimed at securing the bank’s future. It does seem that the shareholders would agree to a deal – to raise extra funds from investors and refinance debt – which was struck last month but if the deal is rejected, Metro has warned it might be deemed “unviable” by the Bank of England and put into a process for managing failed banks; the bank’s bondholders accepted the deal last month even though they are set to lose 40% of their value. The deal sees Colombian billionaire Jaime Gilinski Bacal becoming Metro’s controlling shareholder with a 53% stake, after his firm, Spaldy Investments, put US$ 129 billion into the bank. The deal includes US$ 410 million in new funding and the refinancing of US$ 757 million of debt. Metro now has 2.7 million customers and holds almost US$ 19.0 billion worth of deposits in seventy-six branches.

Barclays has decided to cut its payroll numbers of 22.3k, by nine hundred, in order to reduce overheads and to “simplify the business”, with the Unite union commenting that the “disgraceful” move in the lead-up to Christmas would boost the bank’s “massive profits”; the bank reported Q3 pre-tax profits of US$ 2.42 billion. Jobs will go across several back-office divisions, including compliance, finance, legal, policy, IT and risk. Last month, chief executive CS Venkatakrishnan said that the bank saw “further opportunities to enhance returns for shareholders through cost efficiencies and disciplined capital allocation across the group”. In recent years, the bank has closed almost two hundred branches, citing the fact that only 10% of transactions were now taking place face-to-face. It is reported that Lloyds is another major bank considering retrenchments, with up to 2.5k positions at risk.

Warmer weather and slowing US retail sales were the main drivers behind Dr Martens issued a warnings report that its earnings will fall below expectations. Because the bootmaker posted that two of its major US wholesalers had reduced its orders, shares plunged nearly 25%. In H1, the firm’s global profits sank by 55% to US$ 33 million, with its chief executive, Kenny Wilson, saying trading in H2 had been “mixed”; it expected its full-year revenues to decline by a “high single-digit percentage”. In 2021, its shares were first listed on the London Stock Exchange at US$ 4.68 – yesterday, it was trading at US$ 1.09.

A class action in the US is suing Cristiano Ronaldo for damages of “a sum exceeding” US$ 1.0 billion for his involvement with Binance’s first CR7 collection of NFTs in which he said would reward fans “for all the years of support”; “CR7” refers to the footballer’s initials and his iconic shirt number. In a social media video, announcing the partnership, Ronaldo told would-be investors “we are going to change the NFT game and take football to the next level”. The cheapest NFT from the collection was priced at US$ 77 when it went on sale in November 2022 – today it is priced at about US$ 1. It is alleged that the footballer’s promotion of Binance led to a “500% increase in searches” for the Caymans Island’s crypto exchange. Furthermore, his presence also led people to use the firm to invest in “unregistered securities” – such as Binance’s BNB cryptocurrency; that being the case – and according to the SEC – these assets can be considered securities and any person endorsing them must adhere to US law. The SEC chair Gary Gensler previously noted that celebrities must “disclose to the public from whom and how much you are getting paid to promote investment in securities”. The class action suit was filed a week after the US Justice Department ordered the firm to pay US$ 4.3 billion in penalties. Major League Baseball, Formula 1 and Mercedes-Benz are all also facing class action lawsuits, filed on the same day, over their promotion of failed crypto-exchange FTX.

This week, the granddaughter of the founder of Wilko’s, which collapsed into administration last August and leaving 12k jobless, faced questions by MPs on the Business and Trade Committee about the failure of the business. Lissa Wilkinson cited that the fallout from last year’s mini budget was one of the factors behind the retailer’s demise. which she claimed significantly increased the interest rate on a loan with Australia’s Macquarie that Wilko was trying to secure. Its former chief executive, Mark Jackson, only appointed in December 2022, noted that another of the main causes was that the company failed was because it stayed open during Covid. During that period, it continued to pay workers, and did not take advantage of  the furlough scheme, and paid landlords in full – unlike 90% of other retailers. At the beginning of the year, it had a cash balance of US$ 127 million – twelve months later this had declined to US$ 73 million, with Wilko’s posting a US$ 48 million loss; that year, the company paid the family a US$ 3.8 million dividend, paid to a company which is controlled by series of family trusts.

Canadian billionaire Doug Putman also appeared before the committee detailing how he wanted to acquire about three hundred of the four hundred shops that could have saved over 10k jobs. The owner of HMV was disappointed that firms, including some landlords, had been “super inflexible” and made a deal “literally impossible”, commenting that “I would say everyone just got a little bit greedy and unfortunately weren’t thinking about the 10k-plus jobs that would have been saved.” Eventually, the owner of Poundland took over the leases of seventy-one Wilko stores and rebranded them, while discount chain B&M also took over more than fifty shops. CDS Superstores, which owns The Range retailer, bought Wilko’s name and website andis opening five Wilko stores before Christmas.

There are concerns in China after officials launched an investigation into the workings of Zhongzhi Enterprise Group, one of the country’s biggest shadow banks, which has lent billions to real estate firms, many of which are struggling, as the housing sector self-implodes. The bank’s asset management arm has reportedly handled more than US$ 139 billion and last week announced that it was insolvent, with authorities investigating “suspected illegal crimes” against the firm and have already taken “criminal coercive measures” against “many suspects”. The entity has a negative equity figure of US$ 26.0 billion – US$ 38 billion in assets, compared to US$ 64 billion in liabilities. Historically, informal banking has always taken place in China’s economy but with the shadow banking industry falling outside the regulators’ remit, it has been badly impacted by a severe credit crunch. This “industry” is valued at US$ 3.0 trillion and has relied on providing the once booming housing sector with much needed capital at much higher rates and less onerous conditions. In booming times, all things work well – investors get high returns for providing high risk funds to developers that would be unable to access funding from the “normal” banks. It was a win win for all concerned, as property prices move higher – the opposite when the industry turns which it has done so dramatically. Worryingly, there are reports that embattled property developers currently owe Chinese banks money worth as much as 30% of the banks’ assets, bearing in mind that China’s property sector makes up a third of its economic output.

According to Nationwide, November UK house prices nudged 0.2% higher amid “encouraging signs”, noting that financial markets estimated interest rates had peaked and would start to come down. Although property values have risen over the past three months, last month were 2% lower on the year. However, it did warn that it would be unrealistic to think rates, currently at 5.25%, would fall significantly, anytime in the near future. The average price of a UK home is now US$ 328.3k – more than US$ 50.8k higher than at the pandemic peak. Today, 01 December, the average two-year fixed mortgage rate was 6.04% while the average five-year deal is 5.65%, with figures from the BoE showing that the number of mortgages approved for home buyers picked up in October to 47,4k, from an eight-month low of 43.3k recorded in the previous month.

BoE governor, Andrew Bailey, has again cautioned that UK interest rates – currently at a fifteen-year 5.25% high – will not be cut in the “foreseeable future” and that he was concerned about the economy’s growth and that “there’s no doubt it’s lower than it has been in much of my working life”. He has only reiterated the government’s position that its growth forecasts have been slashed, in part due to high inflation and interest rates. (If only the Governor, and his cohorts, had not vacillated in 2021 and hiked rates when inflation started to take hold). Inflation has slowly headed south – mainly because of a fall in energy prices – and although touching 4.6% in October, it is still more than double the Bank’s 2.0% target, with a caveat that lowering inflation further would be “hard work”. There is no doubt many agree with a House of Lords committee report that reforms were needed to improve the institution’s performance and accountability.

Despite recent low growth forecasts, prime minister Sunak has noted that an influx of US$ 37.28 billion of new investment can be seen as a “huge vote of confidence” in the UK economy. Although the previous week’s Autumn Statement was meant mainly for the ‘domestic market’, last Monday he hosted a group of leading business figures at Hampton Court to highlight foreign firms’ plans to invest in the UK. The government said it had been a “historic” event, which celebrated the UK’s track record in innovation, “from the steam train to quantum computing”, with the day’s activities being followed by dinner with Charles lll at Buckingham Palace. Some of those attendees included Blackstone’s chief executive, Stephen Schwarzman, Goldman Sach’s David Solomon and Jamie Dimon at JP Morgan Chase. Some projects confirmed include Australia’s IFM Investors’ US$ 12.63 billion into infrastructure and energy projects, BioNTech’s commitment to build a new lab in Cambridge, a US$ 8.84 billion boost to the amount Spain’s Iberdrola is investing in UK electricity transmission and distribution, Australia’s Aware Super’s US$ 6.3 billion spend in a range of businesses, (including the energy transition and affordable housing), and Microsoft’s US$ 3.16 billion in AI infrastructure.

Zurich tied with Singapore as the world’s most expensive city in 2023, according to The Economist Intelligence Unit’s Cost of Living survey. The main driver, behind the hike in prices of goods and commodities, has been the continuing, (but slowing), cost of living crisis, with the survey noting that the rise was at 7.4% – slightly down on the year but still well up on historic levels. The top ten most expensive cities were:

2023 Ranking             City                 2022 Ranking 

1                      Zurich                         6

1                      Singapore                   1   

3                      New York                    1

3                      Geneva                        7

5                      Hong Kong                 4

6                      Los Angeles                4

7                      Paris                            9

8                      Tel Aviv                       3

8                      Copenhagen               10

10                    San Francisco             8

Zurich moved to joint top spot largely because of the strength of the Swiss franc and high prices for groceries, household goods and recreation. Globally, utility prices witnessed the slowest inflation of the ten categories covered in the survey. Grocery, on the other hand, saw the fastest pace of price growth, with food inflation moving higher for various reasons, including the increasing frequency of extreme weather events impacting harvests, supply issues and rising operational costs. On average, Asia continues to see relatively low-price increases, with four Chinese cities– Nanjing, Wuxi, Dalian and Beijing – along with Osaka and Tokyo being among the biggest movers down the ranking this year.

Earlier in the month, the company, Lighter Than Air Research, founded by Google co-founder, revealed Pathfinder 1, a prototype electric airship. It is set to revolutionise climate-friendly air travel and accelerate Sergey Brin’s humanitarian work. The 122 mt long airship is double the size of the current holder of the world’s longest aircraft – the Boeing 747-8. It appears that the company’s aim is to repurpose these colossal airships into cargo vessels, which will be safer, stronger and more efficient than any of its predecessors. Eco-friendly airships are special flying machines filled with gas, like helium, and unlike planes, they float using the gas inside their flexible envelope, not wings. Advanced technology makes airships more useful for cargo transport and surveillance, sparking renewed interest in these unique flying vessels. The Google co-founder is keen to create a fleet of airships for disaster relief in areas with damaged infrastructure. There’s Something In The Air!

Everything Is Just A Mess!                                                                    24 November 2023

The week’s 2,421 real estate and properties transactions totalled US$ 2.45 billion, during the week ending 24 November 2023. The sum of transactions was 384 plots, sold for US$ 692 million, and 1,468 apartments and villas, selling for US$ 921 million. The top three transactions were all for plots of land, the first in Business Bay for US$ 38 million, the second in Wadi Al Safa 5 for US$ 24 million and Warsan Fourth for US$ 15 million. Wadi Al Safa 2 recorded the most transactions, with one hundred and thirty sales, worth US$ 19 million, followed by forty-three sales, in Saih Shuaib 1 for US$ 21 million, and forty sales in Palm Jabal Ali, valued at US$ 267 million. The top three transfers for apartments and villas were for a villa in Palm Jumeirah for US$ 11 million, an apartment in Palm Jumeirah, sold for US$ 9 million, and an apartment in Al Merkadh for US$ 9 million. The mortgaged properties for the week reached US$ 809 million; one hundred and thirty-nine properties were granted between first-degree relatives worth US$ 138 million.

Jumeirah Golf Estates, rated among the top ten lifestyle estates in the world, is home to a recent US$ 82 million sale of a plot of land. This latest transaction is a reflection of the growing demand for upmarket golf course communities, within both the local and global realty sectors. JGE boasts two golf courses, (including the Earth course which last week hosted the final tournament of the acclaimed DP World Tour Championship, and has over 1.5k villas, townhouses and apartments). Dubai ranked first in Knight Frank’s list of the world’s top luxury real estate markets in 2023, accounting for 17% of the segment’s total sales globally.

Following in the footsteps of the D penthouse in One Hyde Park, London, at US$ 237 million and the Odeon Tower penthouse in Monaco, at US$ 440 million, the two most expensive in the world, the Palm Jumeirah Como Residences penthouse apartment from Nakheel at US$ 136 million, becomes the most expensive penthouse ever built and sold in Dubai – and the third in the world. This transaction has surpassed the recent two Dubai deals – US$ 114 million for an apartment in Marsa Al Arab and US$ 112 million for one in Bulgari Light House. The Como Residences penthouse will encompass 21.9k sq ft and compromise a 5 B/R luxury apartment, including among its countless amenities, exclusive access via a private elevator, and has a state-of-the-art home automation system.

According to a report from Prime by Betterhomes, October transactions witnessed the highest number of secondary luxury transactions recorded so far in 2023, with secondary sales more than trebling on the month from sixty-seven to two hundred and seventy-seven; off-plan sales fell from eighty-four in January to October’s figure of twenty-two. Value-wise, Oqood transactions stood at US$ 280 million, while secondary transactions stood at US$ 1.84 billion. Dubai’s climb to its leading position, in the global luxury real estate market, has been abetted by several factors including visa reforms, entrepreneurial incentives, its speedy response post pandemic, cultural advancements and progressive government reforms. In October, the leading three locations in the luxury property sector were Palm Jumeirah, MBR City and Palm Jebel Ali; the flip side saw Bluewaters Island, Business Bay, and Damac Hills posting a dip in transaction activity. H & H, Omniyat, and Majid Al Futtaim retained their positions as top luxury developers this year, with notable projects such as Baccarat Downtown, Orla Infinity, and Lanai Island & Serenity. Notably, the branded residential market had an 80%, year on year surge in sales, with over 2k units launched in 2023, as average prices climbed by 33% to US$ 1.14k per sq ft for branded residences since December 2022.

It took only four hours for Wasl to sell out the first phase of its new Hillside Residences project; subsequently, the developer launched the second phase of the project on the same day. Hillside Residences features a collection of eight hundred and nineteen units, ranging from 1 B/R to 4 B/R, including two-bedroom duplexes, three-bedroom duplexes, penthouses, and four-bedroom duplex penthouses. The large real estate management and development company has located the development within the Wasl Gate master development, located in Jebel Ali.

In the aftermath of last week’s Dubai Air Show 2023, it has been reported that it had been its largest ever edition. During the five-day event, there were more than US 101 billion in deals and a 30% hike in footfall to 135k attendees, that reinforced Dubai’s global position as a crucial hub for the aerospace and defence sectors. The next edition will take place in November 2025 at Dubai World Central Al Maktoum airport.

In the first nine-month period, Dubai Customs has seen a 13% jump in transactions to 21.6 million. Latest figures seem to indicate that the targets set out in Dubai’s economic agenda D33, which seeks to double foreign trade and establish new trade routes, connecting Dubai with four hundred additional cities worldwide, are online. Customs declarations constituted 87% of the total customs transactions. By the end of Q3 2023, Dubai Customs had processed approximately 18.8 million customs declarations, 13.2% higher on the year. The main goal for Dubai Customs is to position Dubai as one of the top four global financial hubs, fostering economic productivity through innovation and digital integration.

The number of business licences, linked to creative activities registered in the country, reached 932k by the end of H1, with the government’s strategy to attract more businesses and boost the economy.  At the fifth meeting of the economic integration committee, chaired by Abdulla bin Touq, the Minister of Economy noted that the country had established itself as a leading global financial hub “that offers all enablers for success for the business sector, investors, and start-ups from around the world.” In recent times, the government has introduced 100% foreign ownership of companies, along with reducing visa restrictions, providing various incentives for SMEs and introducing laws to improve transparency for investors. It also aims to attract US$ 150 billion in FDI by 2030, and eventually reach US$ 272 trillion, (AED 1 trillion) by 2051.

Dubai Chamber of Commerce has achieved a 42.9% growth in memberships to 48.6k in the nine months to 30 September 2023. This reflects the continuing enhancement of Dubai’s reputation on the global state and the growing attraction of Dubai as a business hub. Over the period, the total value of exports and re-exports of member companies topped US$ 57.22 billion, with 544.8k certificates of origin issued. On top of that, 3.2k ATA Carnets were issued and received for goods and commodities, with a combined value of US$ 899 million, during the nine-month period, compared to 2.9k ATA Carnets, with a value of around US$ 409 million during the same period in 2022. Abdul Aziz Abdulla Al Ghurair, chairman of Dubai Chambers, commented that “we will continue to work in tandem with the government as we advance on our journey towards the objectives of the Dubai Economic Agenda (D33).” The Chamber also acts as a conduit between the business community and the government, with the forty-six country-specific business councils and one hundred and five sector-specific business groups that currently operate under the chamber’s umbrella.

Alvarez & Marsal has estimated that the Q3 aggregate net profit of the country’s ten leading banks increased by 5.6% to US$ 5.50 billion, driven by lower impairment charges and a steady increase in net interest income. Q3 total net interest income grew 5.5%, on the quarter, as total interest income for the period rose 11.4%. Other factors to consider include high oil prices, foreign capital inflows, higher interest rates and moderate credit, demand amid rising interest rates. More of the same is expected in Q4. Aggregate deposits grew rose 3.9%, at a faster rate than the 2.4% loan growth, with the loan-to-deposit ratio dipping 1.1% to 75.2%. The ten banks covered in the survey include First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Mashreq Bank, Abu Dhabi Islamic Bank, Commercial Bank of Dubai, National Bank of Fujairah, National Bank of Ras Al Khaimah and Sharjah Islamic Bank.

The Central Bank of the UAE has approved Al Ansari Digital Pay’s application for a store value facilities and retail payment service provider license. By Q2 2024, the subsidiary of Al Ansari Financial Services hopes to have introduced a digital wallet that stores users’ credit/debit card information that links it to a payment gateway to allow purchases at a point of sale; it can be used to receive their salaries, remit money domestically and abroad, settle bills, and access digitally enabled services by using a personal QR code, a dedicated app or their phone number. Rashed Al Ansari, group chief executive, noted that with “a consumer base exceeding four million customers, we are confident that this initiative will significantly benefit a large segment of consumers across the UAE.” A report by UK-based price comparison website Money.co.uk indicates that the UAE is the eighth most cashless society in the world.

After eighteen months as chief executive of Shuaa Capital, Fawad Khan has stepped down from the position, citing “personal reasons”, and “will serve his notice period of three months with Shuaa, providing support and ensuring smooth continuity of business activities”. He had been with the firm for six years and took over the top position replacing Jassim Alseddiqi who then moved “upstairs” to take a board position and become MD. In August, Alseddiqi, still one of the bank’s top shareholders, repositioned his stake in the Shuaa, as he noted that significant change was taking place that will make way for new shareholders in the company that manages US$ 5 billion in assets. The Dubai-based investment bank has appointed Wafik Ben Mansour, as acting chief executive, “to lead the next phase of Shuaa capital’s optimisation process to create a growth platform and capitalise on market opportunities in the UAE and wider region.” Formerly a managing director at Credit Suisse for fifteen years, Mr Ben Mansour joined Shuaa in May this year to lead the company’s advisory and capital markets platform. Since reaching its height of managing some US$ 13 million assets under management, it has gone through a business transformation over the past few years, with the outgoing chief executive reportedly indicating that Shuaa aims to double its AUMs to US$ 10 billion in the next five years as well as evaluating several investment deals across the broader GCC.

The Investment Corporation of Dubai posted a record 91% hike in H1 net profit to US$ 7.71 billion, with banking/financial services and transportation’s contributions soaring by US$ 2.23 billion and US$ 2.10 billion. Although real estate and hospitality activities also moved higher, lower commodity prices reduced profitability in oil/gas and aluminium production. Net profit, attributable to the equity holder, came in at US$ 6.16 billion, as assets and liabilities both moving north – by 6.5% to US$ 341.14 billion, (mainly down to the growth of banking assets), and to US$ 265.53 billion, (attributable to higher banking customer deposit). The Group’s share of equity was 4.2% higher to a new record of US$ 61.50 billion. Its MD, Mohammed Ibrahim Al Shaibani, commented that “the Group clearly benefited from the strong economic momentum the emirate is experiencing thanks to the vision and anticipation from the leadership. Looking forward, the proven agility of our businesses and strength of the Group’s financial position will help weather the uncertain global economic outlook. We remain confident in the Group’s ability to identify new investment opportunities and expand its commercial activities.” ICD, established in 2006, is the principal investment arm of the Government of Dubai, and manages a broad portfolio of assets, both locally and internationally, across a wide spectrum of sectors that support Dubai’s dynamic economy.

At next week’s COP28, the Dubai Financial Market will debut a pilot programme for trading carbon credits, which will enhance the bourse’s position as a major player in the sector; it could become a leading regulated platform to assist UAE’s aim to become net zero by 2050, with project capital raising and carbon credit trading. It will assist companies manage unavoidable and residual carbon emissions by providing an integrated platform to explore the trading and use of carbon credits, with each one offsetting one ton of CO2 equivalent emissions.

The Dubai Financial Market, Nasdaq Dubai and Shanghai Stock Exchange have signed a Memorandum of Understanding to strengthen ties between the capital markets of Dubai and China. Some of the benefits, emanating from this agreement, include the exchange of knowledge, expertise, and information as well as to enhancing efficiency and transparency in both markets. Both bourses will jointly explore to develop products, introduce companies and issuers to the advantages of each market and provide them with access to growth opportunities and services.

Last week, the Dubai Taxi Company announced details of its IPO – this week, it issued an announcement relating to the price range for the sale of its shares, at between US$ 0.495, (AED 1.80) and US$ 0.504, (AED1.85) per share, implying a market capitalisation of up to US$ 1.25 billion, (AED 4.6 billion). 624.75 million shares will be offered, equivalent to 24.99% of DTC’s total issued share capital. The IPO subscription period starts on Tuesday and is expected to close on 28 November for UAE Retail Investors and on 29 November for Qualified Investors, with the final offer price being determined through a book-building process. Trading is expected to start on the DFM on 07 December.

The DFM opened on Monday, 20 November 2023, 383 points (10.6%) higher the previous fortnight, dipped 3 points (0.1%) to close the trading week on 3,992, by Friday 24 November 2023. Emaar Properties, US$ 0.21 higher the previous three weeks, was flat, closing on US$ 1.93 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 4.93, US$ 1.49, and US$ 0.39 and closed on US$ 0.69, US$ 4.92, US$ 1.51 and US$ 0.39. On 24 November, trading was at 49 million shares, with a value of US$ 27 million, compared to 72 million shares, with a value of US$ 96 million, on 17 November 2023.

By Friday, 17 November 2023, Brent, US$ 11.64 lower (12.5%) the previous four weeks, shed US$ 0.74 (1.1%) to close on US$ 80.44. Gold, US$ 40 (2.1%) higher the previous week, gained US$ 17 (1.1%) to trade at US$ 2,004 by 24 November 2023.

Citing that it had lost confidence in his ability to lead OpenAI, last Saturday, the board ousted Sam Altman as its head. It noted that he had not been “consistently candid with his communications, hindering its ability to exercise its responsibilities”, and commented that it was grateful for Mr Altman’s contributions but that members believed new leadership was necessary. Mr Altman had not only been the face of the firm’s rise but was seen by many as the face of the industry more widely. The former executive did indicate that he will have “more to say about what’s next later”, and that there will be great interest in what direction he takes in the future. Hours after his dismissal, Open AI co-founder and president Greg Boardman, posted that “I’m super proud of what we’ve all built together since starting in my apartment eight years ago”. Just weeks ago, OpenAI was reportedly in talks to sell shares in the company to investors at a price that would value it at more than US$ 80 billion. OpenAI named ex-Twitch boss Emmett Shear as interim CEO. By Monday, Microsoft Chief Executive Satya Nadella said in posts on X that Altman would become CEO of a new research group inside the software maker, along with other departing OpenAI colleagues, such as outgoing President Greg Brockman who quit following Altman’s ouster. All changed by Wednesday after AI announced that it had reached an agreement for Sam Altman to return as CEO four days after his ouster. With his return, AI agreed in principle to partly reconstitute the board of directors that had dismissed him, and that former Salesforce co-CEO Bret Taylor and former US Treasury Secretary Larry Summers would join Quora CEO and current director Adam D’Angelo.

Changpeng Zhao has resigned as the chief executive of Binance after pleading guilty to money laundering violations, with the US Justice Department confirming that the world’s largest crypto exchange would have to pay US$ 4.3 billion in penalties and forfeitures. The firm, registered in the Cayman Islands, was accused of enabling “nearly $900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk”, and had helped users bypass sanctions across the world. Indeed, the exchange had facilitated the movement of funds for criminals and terrorists, including direct transfers of approximately US$ 106 million in bitcoin to Binance.com wallets from Hydra, a popular Russian darknet marketplace, and nearly US$ 900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk. Zhao’s guilty plea follows the conviction of Sam Bankman Fried, the CEO of FTX, another massive cryptocurrency exchange, in a high-profile trial last month. Many would question how Binance is still in existence and why nobody has been incarcerated.

Following the recent US-Sino meeting, between Joe Biden and Xi Jinping, computer chipmaker Broadcom has completed its US$ 69.0 billion acquisition of cloud computing firm VMware; this followed close scrutiny be several global regulators before China finally rubber-stamped the agreement. Both companies, based in California, have had to clear the deal with legislators in Australia, Brazil, Canada, China, the European Union, Israel, Japan, South Africa, South Korea, Taiwan, and the UK. Broadcom designs, develops and supplies semiconductor chips, while it also offers infrastructure software solutions, with VMware developing virtualisation software which allows a user to run a virtual computer on a physical computer to increase the efficiency of the computer system. What could become “the world’s leading infrastructure technology company” hopes to create private and hybrid cloud environments where users can run “apps anywhere”.

Following allegations of sex trafficking, Abercrombie & Fitch has confirmed that it has stopped additional retirement income, estimated at around an annual US$ 1.0 million, to its former boss Mike Jeffries. A BBC Panorama investigation found a highly organised network used a middleman to recruit men for events around the world with Mike Jeffries and his British partner Matthew Smith. Court papers allege that it is likely more than one hundred men were sexually abused by Mr Jeffries while he was chief executive and that young men were manipulated “under the guise of providing them with the modelling opportunity of their dreams – becoming an Abercrombie model”. A&F has been accused in a civil lawsuit of funding a “criminal enterprise” led by the two men between 1992 and 2014, and that corporate money and resources were used to “facilitate” a “sex-trafficking venture”.

Judges at the UK Supreme Court have unanimously dismissed an appeal, with the decision that Deliveroo riders did not have an “employment relationship” with the food courier company and were not entitled to compulsory collective bargaining. There has been a long-running dispute, which began when a union tried to represent a group of riders over pay and conditions. The Independent Workers Union of Great Britain which brought the case, said the ruling was a disappointment. The case follows a number of claims brought by workers in the so-called “gig” economy in recent years, demanding rights such as holiday pay, the minimum wage and pensions contributions. The end result is that riders, hired by Deliveroo, cannot be represented by a trade union for the purposes of collective bargaining,

Nissan has announced that its new electric Qashqai and Juke models will be made at its Sunderland site and its commitment to make future electric versions of its two best selling cars – the new electric Qashqai and Juke models – which will help preserve 6k jobs. The investment is thought to be in the region of US$ 1.25 billion and will be supported by a government contribution from the Automotive Transformation Fund. Its location is close to the China-owned AESC battery plant, with Nissan being its only customer; this plant was expanded last year, with help from a US$ 125 million investment from the ATF and Sunderland Council. Post-Brexit trading rules, due to take effect in January next year, will trigger a 10% tariff on cars sold between the UK and the EU unless carmakers have sourced 45% of their components by value from the UK or EU. The battery plant next to Nissan’s Sunderland factory is the only one currently producing batteries for electric cars in the UK but Tata, the owner of Jaguar Land Rover, plans to build a US$ 5.0 billion factory in Somerset, with production due to start in 2026. (However, this week saw the OBR slash its forecast for the number of electric cars to be sold in the UK in 2027 from 67% to 38% of total sales).

This week, Carnival UK has been accused of planning to make over nine hundred staff redundant if they were unwilling to accept new terms and conditions. The owner of P&O Cruises and Cunard has reportedly notified authorities of the “fire and rehire” plan one day after beginning talks with union members. (This comes a year after a separate company, P&O Ferries, owned by DP World, became involved in a similar dispute with the Nautilus union, after sacking eight hundred of its workers, replacing them with foreign agency workers).It seems that the company has notified authorities that it wishes to change employment terms and conditions for crew across ten vessels, including P&O Cruises’ ships, as well as those working on ships such at the Queen Elizabeth and the Queen Mary 2. Unbeknown to the union, the company had submitted Form HR1, a document outlining its redundancy plans to the UK government, with it only finding out details on 22 November, even though negotiations had started eight days earlier. Nautilus has requested the company to withdraw the threat of “fire and rehire”, and engage in meaningful negotiations, and has complained that Carnival UK effectively “wants to enforce a cut in 20% of their working days”, which amounts to a drop from two hundred and forty-three days worked per year, to two hundred days, leading to a drop in income. Late today, following urgent discussions, Carnival UK withdrew the threat to use this controversial strategy known as “fire-and-rehire” in negotiations over the pay and conditions and that they would work “co-operatively towards a negotiated settlement”.

Carnival can only be thankful that Grant Shapps, appointed Secretary of State for Defence in August, is no longer the UK Transport Secretary. In the past four years, and before being appointed  he had been Home Secretary, Business Secretary, and Energy Security Secretary, when he ran the Transport ministry, he was also highly critical of P&O’s management and modus operandi but when he tried to force legislation through, aimed almost entirely at P&O, it was rejected by the industry, with even the man himself belatedly commenting that his original plan to legislate for shipping companies to pay the minimum wage was not feasible.

After a tumultuous three-year reign as chief executive of the Australian telecom giant Optus, Kelly Bayer Rosmarin has resigned with the telecom’s latest network outage last week the ‘straw that broke the camel’s back’; this resulted in 40%, (around ten million), of Australians without direct links for over twelve hours. Ms Bayer Rosmarin had faced criticism over her response to the incident, including at a Senate hearing on Friday, where the Minister for Cyber Security said the firm had “effectively left the window open” for data to be stolen. This follows a major data breach in September 2022, with the company fighting a class action lawsuit from more than 100k current and former customers over the data breach. She will be replaced by chief financial officer Michael Venter while the Singaporean firm searches for a replacement.

Seek’s latest report points to a possible dramatic fall in Australian employment growth going into 2024, as job ads dipped 5% last month and are 19.9% lower on the year. The biggest falls were noted in Victoria, (down by 26.5%), NSW, (24.6%), and the ACT (21.1%), as the hospitality sector was conspicuous by reporting the largest falls, followed by design/architecture and retail. This was despite the fact that the upcoming peak summer is fast approaching – normally the best time for the hospitality sector. The agency noted that “perhaps employers have begun winding up their hiring activity early for the year,” but that “despite the proximity to the busy summer season, hospitality and tourism recorded the greatest drop in ad volume, likely due to inflation and the rising cost of living putting continued pressure on businesses.” Other than hospitality, the biggest job ad declines in October were in design and architecture (8.1%), retail (7.7%), call centres and customer service (6.6%), advertising, arts and the media (6.4%), and banking and financial services (6.3%). A further sign of possible job weakness was that applications per job rose again in September by 4.1% and were 81.1% higher than a year earlier, as more people chase fewer job vacancies.

Data from the Australian Retailers Association, in partnership with Roy Morgan, shows that Black Friday and Cyber Monday sales are expected to account for more than 25% of all holiday purchases this year; for many discretionary retailers, up to two-thirds of their profit is made during the peak Christmas trading period. It forecasts shoppers will spend US$ 4.19 billion across the four-day Black Friday/Cyber Monday weekend (24-27 November) – 3.0% higher on the year. Although the retail event is colloquially dubbed ‘Black Friday’ (and falls on 24 November this year), most stores have been starting their sales much earlier recently — sometimes as early as July. The ARA notes that although Black Friday will provide a boost for the retail sector, overall Christmas trading will be subdued. The survey also notes that for many discretionary retailers, up to two-thirds of their profit is made during the peak Christmas trading period, but top lines could be impacted by consumer spend weakening and under pressure because of the high cost of living; consumer sentiment dipped 2.6 points to 79.9 points. It also noted that in 2022, Australians spent US$ 461 per person on Christmas gifting – this year, it is estimated that this will be lower at US$ 427.

Recent times have seen Spanish tax authorities clamping down on famous names around the interpretation of non-dom status. Four years after her ex-partner, Barcelona footballer Gerard Piqué, was fined US$ 2.3 million by the Spanish national court for evading tax between 2008 and 2010, Colombian pop star Shakira has reached a deal with Spanish prosecutors to settle a tax fraud case. The singer settled out of court, (hours before the case was to start), paying a US$ 8.2 million fine – prosecutors had wanted to jail her for eight years and fine her US$ 26.1 million, if found guilty. The case centred around where Shakira was living between 2012 and 2014, with Shakira disagreeing with authorities who alleged that she was living in Spain – under it laws, people who spend more than six months in the country are considered residents for tax purposes. Prosecutors issued a document which claimed that she bought a house in Barcelona in 2012, which became a family home for her and her then-partner, Gerard Piqué. Her lawyers have said that up until 2014 most of her income came from international tours and she spent long chunks of time outside of Spain. Shakira declared Spain to be her place of residence for tax purposes in 2015 and claimed that she had paid US$ 18.8 million in tax and had no outstanding debts.

Another week and another 5% hike by Turkey’s central bank, lifting its main interest rate to 40%, as part of a concerted campaign to tackle soaring inflation which reached 61.3% last month. Although inflation is expected to rise even further, to a possible 75% over the next six months, some analysts have opined rates were approaching the level required to start lowering inflation. Up to his re-election last May, President Recep Tayyip Erdogan had flown in the face of traditional economic theory by lowering interest rates, (as most of the world pushed interest rates higher), arguing that higher rates would cause prices to rise. However, since then he has changed tack, allowing the central bank to push rates higher – under the tutelage of its new governor, Hafize Gaye Erkan, appointed last June, rates have risen from 8.5% to its current 40% level. She commented that “the pace of monetary tightening will slow down, and the tightening cycle will be completed in a short period of time,” and that interest rates would stay at a high level for “as long as needed to ensure sustained price stability”.

Despite the Chancellor, Jeremy Hunt, cutting tax for both business and individuals, his Autumn Statement still sees the overall the burden remaining at its highest since 1948, mainly because tax thresholds are still frozen until 2028; this is because any pay rise will usually result in increased tax, (by dragging people into a higher tax bracket), which puts more into the public coffers. Surprisingly, the Office for Budget Responsibility confirmed that by 2028, a truly astonishing US$ 57.51 billion will be raised by the freezes in just one year! The Chancellor was able to “play” with a “windfall” US$ 33.76 billion improvement in the public finances because of higher tax receipts, most of which was expended on a bigger-than-expected US$ 11.25 billion National Insurance cut and an US$ 13.75 billion tax cut for business investment.

More importantly, the ONS has upgraded its 2024 inflation forecast which has more than trebled from its earlier 0.9% to 2.8%, whilst the UK economy will grow much more slowly than expected in the next two years, with living standards also not expected to return to pre-pandemic levels until 2027-28. This time last year, the BoE and the ONS were two of many institutions pointing to a 2023 UK recession, so an actual 0.6% growth this year is praiseworthy. However, the watchdog has already slashed its two-year forecast by 1.1% for each year to 1.8% and 2.5%. It also noted that UK living standards, as measured by households’ real disposable income, were expected to be 3.5% lower in 2024-25 than their pre-pandemic level, before returning to normal several years later – this decline is the largest reduction in real living standards since records started in the 1950s. When it comes to the UK economy, it seems that Everything Is Just A Mess!

Puppet On A String!                                                                    17 November 2023

The week’s 2,421 real estate and properties transactions totalled US$ 2.54 billion, during the week ending 17 November 2023. The sum of transactions was 492 plots, sold for US$ 1.30 billion, and 1,924 apartments and villas, selling for US$ 1.24 billion. The top three transactions were all for plots of land, the first in Mohammed bin Rashid Gardens for US$ 55 million, and two plots in Wadi Al Safa 3 for US$ 39 million and US$ 36 million. Me’aisem Second recorded the most transactions, with one hundred and one sales, worth US$ 283 million, followed by eighty sales, in Wadi Al Safa 2 for US$ 39 million, and seventy-nine sales in Palm Jabal Ali valued at US$ 542 million. The top three transfers for apartments and villas were for a villa in Island 2 for US$ 39 million, another in Business Bay, sold for US$ 14 million, and an apartment in Me’aisem First for US$ 10 million. The mortgaged properties for the week reached US$ 384 million; one hundred and forty-three properties were granted between first-degree relatives worth US$ 193 million.

Danube Properties has launched a thirty-nine floor tower, Sportz, with 1.1k apartments in Dubai Sports City, and its first ready-to-move-in project, Eleganz, (with two hundred and fifty-nine apartments and townhouses), at the Jumeirah Village Circle. The former is Danube’s twenty-seventh project and twelfth to be launched since January 2022. Sportz by Danube features an Olympic-sized lap pool, trampoline area, table tennis, wall climbing, and a sky jogging track. In addition to this, Sportz will also offer mentoring and coaching as one of the amenities. Both projects will have smart and sustainable homes and will consume less energy – in line with the UAE’s commitment to sustainability ahead of COP28 – and include a contract offering a 1% per month repayment plan. The developer expects to deliver two other projects – Jewelz and Olivz – by the end of the year. This will bring the developer’s project to 14.9k units, spread across twenty-seven projects, with a combined development value of US$ 4.22 billion.

Citi Developers’ latest launch is Aveline Residences, located in Jumeirah Village Circle and slated for completion by Q2 2026. The development comprises two hundred and sixty-three apartments, ranging from studios, (454 sq ft), to 1, 2 and 3 B/R (1,392 sq ft). The developer has introduced a flexible payment plan – a 10% booking instalment, 10% on SPA, 30 days after booking, 1% for thirty months, and 50% upon handover.

Effective 11 November, the new brand identity ‘Dubai Health’ replaced ‘Dubai Academic Health Corporation’ in a move approved by Dubai Crown Prince, Sheikh Hamdan bin Mohammed, in line with the vision of His Highness Sheikh Mohammed bin Rashid. (DAHC was established as per Law No (13) of 2021 issued by the Dubai Ruler). Responsible for six hospitals, twenty-six ambulatory health centres and twenty medical fitness centres, its main aim is to enhance the quality of patient care in the city, whilst consolidating Dubai’s leadership in advancing healthcare excellence across the domains of health, education and research. Sheikh Hamdan also directed the transformation of Dubai into a leading global model for advancing human health by providing highly efficient medical services and adhering to best international practices in healthcare.

Last Friday, DP World Australia was hit by a cyber security incident that disrupted movement of goods for three days, coming back online on Monday. Although services were resumed, the port operator noted that it was still in the process of investigating the disruption and guarding its systems against cyber-attacks and added that investigations and ongoing remediation work were likely to continue for some time. The firm manages around 40% of goods entering and leaving the country. At the time, a spokesman for the Dubai-based global port operator posted that “our teams are working diligently to contain the situation and determine the impact on our systems and data. To safeguard our employees, clients and our networks, we have restricted access to our Australian port operations while we continue our investigation.” DP World Australia, part of Dubai’s state-owned ports giant DP World, operates four container terminals in Australia in Melbourne, Sydney, Brisbane and in Fremantle. The parent company employs more than 7k people in the Asia Pacific region and has ports and terminals in eighteen locations. No such attack comes at the right time but to add to its woes, the port operator has also been embroiled with union troubles disrupting its normal working routines.

On Monday, HH Sheikh Mohammed bin Rashid, inaugurated the eighteenth edition of the Dubai Air Show under the banner ‘The Future of the Aerospace Industry’, which closed today. The five-day event gave all stakeholders the opportunity to gather, discus future trends and further opportunities in the aviation, space and defence industries. Over the course of the week, many orders were made.

Emirates opened the show with a US$ 52 billion Boeing order for ninety-five wide-body aircraft, comprising fifty-five Boeing 777-9s, thirty-five 777-8s, and five 787s. It also ordered the engines to power the new additions to its fleet – two hundred and two GE9X engines to power the additional 777X aircraft ordere, taking its total GE9X engine order to four hundred and sixty units. (The carrier is still awaiting some one hundred and fifteen 777-9s from a previous order, with the first batch due to arrive in 2025). The first 777-8 is not expected in Dubai until 2030).

The world’s biggest long-haul airline, ordered an additional fifteen Airbus A350-900s, valued at US$ 6.0 billion. Sheikh Ahmed bin Saeed noted that “we plan to deploy our A350s to serve a range of new markets including long-haul missions of up to 15 hours flying time from Dubai.” The order for the A350-900s came after differences between Emirates and engine-maker Rolls Royce stood in the way of a deal for the larger A350-1000 model. The airline was seeking guarantees from the UK manufacturer on the maintenance cost of the engines for the A350-1000 and their performance in harsh desert conditions.

Meanwhile, flydubai has placed its first wide-body order for thirty Boeing 787-9s, valued at US$ 11.0 billion), diversifying its current fleet of all-Boeing 737 aircraft; delivery will start in 2026. (Flydubai currently operates a single fleet-type of eighty Boeing 737s aircraft and has an order backlog of more than one hundred and thirty 737 MAX aircraft to be delivered by 2035).

Jordan’s state airline Royal Jordanian Airlines placed an order for six Boeing 787-9 Dreamliners as it seeks to grow its long-haul operations.

SunExpress Airlines announced a Boeing deal to buy up to ninety aircraft, becoming the first to announce a deal at the Air Show. The Turkish-German carrier placed forty-five firm orders, (twenty-eight MAX-8s and seventeen MAX-10s), five options and forty purchase rights. Already operating a 44 fleet of A220-300s, Air Baltic ordered thirty similar aircraft which will make it the largest A220 customer in Europe.

Ethiopian Airlines placed an order for eleven Airbus A350-900s, and for sixty-seven Boeing planes, as it aims to become one of the top twenty leading airlines globally by 2035, but cementing its current position as the largest operator of the aircraft in Africa.

The UAE’s Tawazun Council signed eleven deals, worth US$ 1.88 billion, of which local companies snared US$ 1.33 billion of the total, including US$ 900 million to ‘Black Diamond’ company, to procure an air defence system, along with further deals with Advanced Integrated Systems, (for aircraft maintenance services), Earth Company (ammunition), and Trust International Group (UAV systems), valued at US$ 200 million, US$ 160 million and US$ 48 million respectively. It also awarded three international contracts worth US$ 558 million – Raytheon (ammunition), Italy’s Leonardo (aircraft maintenance) and China’s CATIC (ammunition), worth US$ 381 million, US$ 57 million and US$ 120 million.

Other deals signed at the Air Show include:

• Emirates signing agreements worth more than US$ 1.5 billion with major industry players such as Honeywell, Collins Aerospace, Pratt & Whitney, Safran, Lufthansa Technik, OEM Services, Gameco, Haeco at alia
• Sikorsky, the aviation unit of US major Lockheed Martin, signing a partnership with the UAE’s military maintenance company Ammroc
• UAE’s Edge Group also signing multiple deals, including a US$ 300 million defence deal with the UAE Armed Forces and a collaboration with Italy’s Leonardo, along with US$ 1.12 billion and US$ 133 million deals with the Ministry of Defence

Emirates also signed several contracts, totalling US$ 1.2 billion, with French aerospace company Safran, that makes cover products for its new aircraft seats to wheels. Included in the total was US$ 1.0 billion for business, premium economy and economy class seats on Emirates’ new A350 and 777X-9 jets and its existing Boeing 777-300 fleet. It signed a ten-year agreement with Safran Aerosystems covering repair and maintenance for Boeing 777 safety and cabin systems components.

Spanning over one million sq mt, Emirates announced that it would be investing US$ 950 million to build the largest and most advanced engineering facility to be operated by any airline which will be able to support the carrier’s aircraft fleet and operating requirements “into the 2040s”. Located at Dubai World Central, the new facility “will enable Emirates to be entirely self-sufficient when it comes to maintenance, repairs, overhaul and all engineering requirements for our aircraft fleet.” According to Sheikh Ahmed bin Saeed, it will also “create thousands of skilled technical jobs and add value to Dubai’s economy.”  Construction work on Phase 1 is expected to begin next year and be completed in 2027, and will comprise eight maintenance hangars and 1 paint hangar – all capable of handling any size of commercial aircraft up to Code F (A380) – an engine run-up facility, some twenty support workshops, massive storage facilities, and administration offices. Spare capacity could potentially be offered to other airlines as well.

flydubai announced plans to invest US$ 190 million for a purpose-built MRO facility in Dubai South. The construction of the new hangar and workshop will commence next year and is expected to conclude by Q4 2026. The carrier’s chairman, Sheikh Ahmed bin Saeed Al Maktoum, noted that the “milestone” brings the airline “greater control over its maintenance requirements as it continues to grow its fleet”. Its CEO, Ghaith Al Ghaith added how “Dubai has emerged as a thriving aviation hub that fosters connectivity, innovation, growth and setting benchmarks for the global aviation industry”. The carrier has built a team of over four hundred and fifty skilled engineers working in Line Maintenance, Technical Services, Materials and Workshops, with a further two hundred and thirty engineers joining over the next twelve months.

Air Chateau International has signed a preliminary agreement with Archer Aviation to Invest US$ 500 million to purchase up to one hundred of the next-generation aircraft. The Dubai-based private heliport operator, which is planning to run a ME air taxi network, will use Archer’s Midnight electric vertical take-off and landing aircraft. This is the Californian company’s second foray in the UAE – last month, it announced a partnership with the Abu Dhabi Investment Office to start all-electric air taxi operations in the UAE by 2026.

With Q3 passenger numbers posting a 39.3% annual increase to 22.9 million – the highest quarterly return since pre-pandemic 2019 – DXB is expecting to welcome 22.3 million in Q4 to bring the 2023 total to an expected 86.8 million. In the first nine months of the year, India was the airport’s top country destination with 8.9 million passengers followed by Saudi Arabia, (4.8 million), the UK (4.4 million), Pakistan (3.1 million), the US (2.7 million) and Russia (1.8 million). The top four cities by traffic were London (2.7 million passengers), Riyadh (1.9 million), Mumbai (1.8 million) and Jeddah (1.7 million).

In the nine-month period, DXB’s baggage handling system processed a total of 57.5 million bags, (6.1% higher than 2019 baggage volume), with a success rate of 99.8%, equating to a rate of 2.5 mishandled bags per 1k passengers. In terms of baggage delivery on arrival, 91% of all baggage was delivered within forty-five minutes of arrival.

Most European airports should take note that the world’s busiest airport has an average waiting time at passport control queues less than eleven minutes for 96.4% of the arriving passengers and 95.1% of passengers queued for less than six minutes at departure passport control. The average queue times at security-checks on departure was less than four minutes for 98.4% of total passengers. Q3 cargo rose 12.3%, year-on-year, to reach 446.4k tonnes, whilst the first nine months witnessed a 1.0% dip to 1.3 million tonnes of cargo. Q3 flight movements jumped 5.1% to reach 106k and for the first nine months. DXB handled 308k in total flight movements – up 25.2% year-on-year.

Dubai Police have busted an “international syndicate” of forty-three cybercriminals, involved in hacking into CEOs’ emails and then sending out mails to branch managers to dupe them into transferring money from their accounts; an estimated US$ 46 million was involved. Many of the gang live outside the UAE and international arrest warrants have been issued against twenty of them, living in various countries, including France, Hong Kong and Singapore. Operation ‘Monopoly’ managed to trace the gang’s movements and modus operandi which was to transfer funds from one account to another before withdrawing it via intermediaries. The money was then deposited in cash vaults of money holding and transport companies. Police investigations discovered that two companies, located in Asia, were individually scammed, by sums of US$ 27 million and US$ 19 million. Both sets of money were transferred to Dubai banks. The first case started when a senior company official logged a complaint that its CEO‘s email had been hacked and the accounts manager had been instructed to transfer the money to a Dubai-based bank. While investigating the second case, the police found the gang had hacked into the electronic communications of another company, outside the UAE, and embezzled US$ 17 million. Having tracked the money trail, the police lured the suspects to the UAE, where they were arrested, with authorities confiscating luxury cars and expensive artworks.

Having been converted into a public joint stock company, last Sunday, by a decree from HH Sheikh Mohammed bin Rashid, Dubai Taxi will go ahead with an IPO, becoming the fifth government entity to do so. The issue will involve 624.75 million shares, equating to 24.99% of the share capital. Just after the pandemic, the Dubai government announced that it was considering a series of public offerings, and that it would list ten entities on the Dubai Financial Market to increase liquidity in the equity market and boost the bourse’s market capitalisation to US$ 817.8 billion, (AED 3.0 trillion). Four government entities that have already taken “the plunge” include DEWA, Empower, Salik and Tecom Group. The Crown Prince also approved the Board of Directors of the Dubai Taxi Company, with Abdul Mohsin Ibrahim Younis, as the Chairman, Ahmed Ali Al Kaabi, Vice Chairman, Shehab Hamad Abu Shehab, Youssef Ahmed bin Ghalaita, Dr Hanan Sulaiman Al Suwaidi, Abdulla Mohammed bin Damithan, and Issa Abdullah bin Natouf.

Shuaa Capital’s board has approved the liquidation of its Nasdaq-listed special purpose acquisition company because of the uncertainty in the global economy and “not to proceed further with finding a target entity considering current market conditions”. The Dubai-based investment bank had listed its Shuaa Partners Acquisition Corp l on Nasdaq in March last year.

Salik posted increases in both Q3 revenue and profit – by 14.0% to US$ 139 million and by 6.3% to US$ 69 million; its revenue-generating trips grew about 15.0% to US$ 30 million. The Dubai toll operator saw finance costs jump 117% to US$ 17 million, with depreciation/amortisation costs up 5.0% to US$ 6 million; it also incurred a Q3 concession fee expense of nearly US$ 30 million. Although nine-month revenue was 11% higher on the year, net profit declined 23% to US$ 219 million, Having gone public in September 2022, Salik’s usage revenue represents about 87% of its revenue; since July 2022, it has been operating as a separate legal entity from the RTA, via a forty-nine-year concession agreement. The government still retains 75.1% of the utility, after it divested 24.9%, (equivalent to 1.867 billion shares at US$ 0.545 – AED 2.00 – per share), raising US$ 1.02 billion at the time.

In line with other Dubai-based developers, Deyaar posted impressive Q3 increases in revenue and net profit – by 50% on the year to US$ 85 million and 327% to US$ 32 million – driven by higher revenue on the back of Dubai’s buoyant property market. There was also a marked rise in property development revenue to US$ 91 million. Its CEO, Saeed Al Qatami, noted that “this achievement is fuelled by the recognition of revenue from Tria and Mesk, coupled with accelerated construction progress in Regalia. Furthermore, the complete portfolio sale of Noor and Mesk has significantly bolstered our financial standing.” Its nine-month profit was 130% higher at US$ 65 million, with revenue up 63% to US$ 263 million. The developer, majority-owned by Dubai Islamic Bank, posted a 1.0% rise in assets to US$ 1.69 billion.

Dubai Investments has reported a 45.2% annual decline in nine-month net profit of US$ 223 million, with total income for the period also lower by 8.3% at US$ 817 million; total assets reached US$ 5.74 billion as at 30 September, whilst total shareholder equity increased to US$ 3.58 billion. The result for the current period is significantly higher by around 61%, if adjusted for the one-off  2022 US$ 267 million gain on divestment of DI’s 50% share in Emicool. It is reported that the Danah Bay development in Al Marjan Island, Ras Al Khaimah is progressing well, with the launch of the residential tower expected soon.

The DFM opened on Monday, 13 November 2023, 355 points (9.0%) higher the previous fortnight, gained 26 points (0.7%) to close the trading week on 3,995, by Friday 17 November 2023. Emaar Properties, US$ 0.15 higher the previous fortnight, gained US$ 0.06 to close on US$ 1.93 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 4.81, US$ 1.51, and US$ 0.37 and closed on US$ 0.68, US$ 4.93, US$ 1.49 and US$ 0.39. On 17 November, trading was at 72 million shares, with a value of US$ 62 million, compared to 111 million shares, with a value of US$ 96 million, on 10 November 2023.

By Friday, 17 November 2023, Brent, US$ 10.93 lower (11.8%) the previous three weeks, shed US$ 0.71 (0.9%) to close on US$ 81.30. Gold, US$ 73 (0.8%) lower the previous fortnight, gained US$ 40 (2.1%) to trade at US$ 1,983 by 17 November 2023.

Riyadh Air was widely expected to place a large order for narrow-bodied jets at the Dubai Air Show but  decided to delay its decision until later. In March, the Saudi carrier already made an order for seventy-two 787s and posted that “by the end of this year, you will see Riyadh Air has made two very large orders within its first nine months and it will give an indication of the fleet size that will take us to connecting one hundred and ten cities by 2030.” The carrier plans to connect the Saudi capital with “all the major cities” and some of the secondary destinations in Europe, as well as the major cities in north-eastern America and Canada, most of the Far East Asian capital cities, Central Asian cities, the Indian subcontinent, the Gulf and Saudi cities by 2030.

Even though the case is eight years old, Samsung Electronics Executive Chairman Jay Y Lee had his final day in court today over accounting fraud and stock price manipulation charges involving an US$ 8 billion merger of two Samsung affiliates – Samsung C&T and Cheil Industries – in 2015. Prosecutors allege that Lee, and other executives, were actively involved in stock price manipulation for personal gain, at the expense of minority interests; last year, he was pardoned for an earlier, separate conviction. Lee has form, having after being convicted of bribing former South Korean President Park Geun-hye and went to jail for a total of eighteen months over the four years 2017-2021; he was subsequently paroled in 2021 and pardoned in 2022.

Six years ago, Body Shop was bought by Natura in a US$ 1.1 billion deal and now it has been acquired by global private equity group Aurelius, from the Brazilian cosmetics group at 25% of that price because the chain wants “to simplify and refocus its operations”. Anita Roddick had founded the company in 1976, which stood out from the rest of the industry because of its ethical stance and that its key product lines included body scrubs, white musk perfume and fruit-scented shower gels with all-natural ingredients. In 2006, the chain was sold to L’Oréal for US$ 815 million. Although Natura redesigned its stores and introduced a refills service, it failed to turn around its finances because of a lack of innovation and catch-up by other players in the market, along with consumers trading down to more affordable retailers. The fact that the new owners already have investments in fashion and sportswear brands, including Footasylum, may improve Body Shop’s marketing strategy.

Founded thirty years ago, by Angus Thirlwell and Peter Harris, Hotel Chocolat has been acquired by Mars, with each of the cofounders, (with a 27% individual stake), in line for US$ 180 million after agreeing to sell the British business to the US company for US$ 664 million. Both will invest some of this money into Hotel Chocolat, with Thirlwell staying on as chief executive. Mars has commented that there were “absolutely no plans” to change any of the company’s recipes and had no plans to sell Mars confectionery in Hotel Chocolat shops.  It has around one hundred and twenty-four shops in the UK, and some others overseas, including Ireland and Gibraltar. In September 2022, it closed its five US shops, but continues to sell online, focusing on its Velvetiser hot chocolate-maker. It has had a partnership in Japan to open stores there, but the deal turned sour costing Hotel Chocolat US$ 27 million. However, another recent deal there sees a JV with Tokyo’s Eat Creator Corporation to set up twenty-one Hotel Chocolat shops.

Last month, Carlsberg finally terminated its business in Russia some twenty months after western sanctions were first imposed, with the boss of Carlsberg, Jacob Aarup-Andersen, posting that the Kremlin had “stolen our business in Russia”. The Danish brewer had remained open with the aim of trying to sell the business but, in July, the Russian state seized control of Baltika. This week there are reports that the boss of Carlsberg’s Russian business and a top manager have been arrested, accused of fraud, alleging that the accused had acquired intellectual property rights for the companies Carlsberg Kazakhstan and Vista BWay Co, which previously belonged to Baltika, “through deception”; Carlsberg branded the allegations fake, saying “ it is appalling that the efforts of the Russian state to justify their illegal takeover of our business in Russia has now evolved into targeting innocent employees.”

For many years,  Avon, the one hundred and thirty-seven-year old retailer, that had relied on an army of door-to-door sales reps to sell its beauty products, has finally decided to open physical stores in the UK. It seems that the pandemic accelerated a move to online sales and that an increasing number of women wanted to “touch and experience” the products they were buying. The UK stores, expected to open over the next two months, would be based in “neighbourhood communities” rather than on traditional High Streets, and would be “mini beauty boutiques” showcasing a selection from Avon’s range. The company is also expanding its presence in Superdrug stores, following a tie-up in September which saw Avon products sold in selected branches of the pharmacy chain. No details on numbers and locations have been made readily available. Readers may be surprised to learn that its “Ding dong, Avon calling!” doorstep slogan has not been used since 1967.

Moody’s downgraded its outlook on US credit ratings from ‘stable’ to ‘negative’, based mainly on the country’s “very large” fiscal deficits and weakening debt affordability, with one of the main drivers being “continued political polarisation within the US Congress raises the risk that successive governments will not be able to reach consensus on a fiscal plan to slow the decline in debt affordability,” However, the ratings agency affirmed the US’s long-term issuer and senior unsecured ratings at “Aaa”, citing credit and economic strengths, but noted that the downside risk to the US fiscal strength had increased. Fitch had also downgraded ratings – from AAA to AA+, noting that the country’s ballooning fiscal deficits, and an “erosion of governance”, had led to repeated debt limit clashes over the past two decades. S&P has had an AA+ rating for the country since 2011.

In the US, the Labor Department posted that October price increases over the previous twelve months had dipped 0.5% to 3.2% on the month – and although housing costs headed higher, this was more than offset by lower energy costs. Although the price index – which measures prices of a basket of items – was unchanged, prices rose 0.2% when food and energy prices were stripped out. These latest figures are a possible indicator that the Federal Reserve will probably not be raising rates again in the foreseeable future even though housing costs, which accounted for 70% of inflation last month, have risen 6.7% in the year to October.

The Office for National Statistics noted that there had been signs of the UK job market slowing, despite wages having risen faster, (at an annual Q3 7.7% rate), than inflation by the most for two years. Official figures showed that wage rises are starting to slow in some industries, with the unemployment rate flat at 4.2%, as the number of job vacancies continue to fall. In the quarter to October, the estimated number of vacancies in the UK fell 5.7% to 957k – the sixteenth consecutive month of falls. Although inflation is beginning to slow, after two years of prices of goods such as food and energy rising much faster than wages, consumers are increasingly being squeezed by higher interest rates which have driven up the cost of mortgages and other loans. Latest figures show that regular pay – which excludes bonuses – rose by 1% in Q3 after taking inflation into account – the largest increase since Q3 2021, with average weekly earnings  estimated to be US$ 776 for regular pay in September, and US$ 841 for total pay (which includes bonuses).

The ONS also posted that the October volume of products sold fell by 0.3% to the lowest level since February 2021 noting that petrol and diesel sales may have been “affected by increasing fuel prices”. It is obvious that consumer spending is still being impacted by rising living costs, and the poor weather, (including Storm Babet), last month was also a driver in the surprising dip in sales. In the month, there were demand falls for fuel (2.0%), alcohol (4.2%), tobacco (10.4%), household goods and clothes. It does seem that shoppers “were buying cheaper products and prioritising important items”.

It is expected that Jeremy Hunt’s Autumn Statement will include millions of dollars in funding for companies wanting to manufacture batteries for electric vehicles, and that the Chancellor will pledge more subsidies and grants to EV manufacturers. To date, the existing US$ 1.5 billion Automotive Transformation Fund has helped to lure Nissan and Tata to the UK, who have already taken most of that money. The main thrust of this year’s Statement will be at stimulating the economy, including growth in advanced manufacturing. Growing the economy comes with two problems – continuing inflated input prices and financial costs allied with weaker consumer demand. It is a shoo-in that the government will continuing “full expensing”, and it is also widely expected to extend – or possibly make permanent – a tax break that allows firms to offset 100% of the money they spend on new machinery and equipment against their profits. Currently, the annual cost of this particular measure is put at around US$ 12.4 billion, with some of that balance being offset by a boost to the economy. What is sure that the more any entity invests in capex, the less tax it will pay. Even more certain is that business investment in the UK – as a percentage of national income – has lagged behind most other developed countries for many years.

When he was running the UK, David Cameron took it on himself to appoint Australian financier Lex Greensill, as an unpaid advisor, who had access to eleven government departments and was even apparently allowed unlimited access to 10 Downing Street. He was the Prime Minister for over six years until he resigned in July 2016, following the debacle of the Brexit vote; three months later, he resigned as an MP. In 2018, Cameron became an advisor to Greensill Capital and held share options in the company reportedly worth as much as US$ 60 million as well as being paid over US$1 million each year for twenty-five days’ work per year. A Panorama investigation concluded that overall, through a combination of his salary and share sales, Cameron earned around US$ 10 million before tax for thirty months’ part-time work. In 2019, Cameron arranged for a private meeting between Greensill and the then Secretary of State for Health and Social Care, the disgraced Matt Hancock; during his tenure, several NHS trusts went on to use Greensill Capital’s Earnd app. A year later, Cameron lobbied for the government to bend the rules to allow it to receive Covid Corporate Financing loans, but Chancellor Rishi Sunak declined to help the Australian. Not to be beaten, Cameron then held an unheard of ten virtual meetings with two permanent secretaries to try to obtain money for Greensill. The government-owned British Business Bank  lent Greensill up to US$ 500 million, through a different scheme, leading to a potential US$ 416 million loss to the taxpayer. His firm collapsed in 2021, with billions of dollars missing; criminal inquiries, into alleged fraud, are ongoing in Germany and Switzerland, where Lord Cameron’s ex(?) friend and employer has been named as a suspect. This week, the UK public breathed a sigh of relief when it was announced that David Cameron was not to become the Chancellor of the Exchequer, but a little concerned and greatly puzzled that, particularly after his much-criticised role in Libya, he had been set loose on the world stage, as the New Foreign Secretary. Many are now discussing whether Rishi Sunak or David Cameron is the Puppet On A String!

Pulling Rabbits Out Of A Hat!                                      10 November 2023

The week’s 1,782 real estate and properties transactions totalled US$ 2.02 billion, during the week ending 10 November 2023. The sum of transactions was 396 plots, sold for US$ 1.09 billion, and 1,386 apartments and villas, selling for US$ 929 million. The top three transactions were all for plots of land, the first in Me’aisem Second for US$ 34 million, Al Safouh Second for US$ 26 million and in Wadi Al Safa 2 for US$ 24 million. Wadi Al Safa 2 recorded the most transactions, with seventy-nine sales, worth US$ 146 million, followed by seventy-three sales, in Palm Jabal Ali, for US$ 441 million, and sixty-one sales in Me’aisem Second valued at US$ 202 million. The top three transfers for apartments and villas were for a villa in Dubai Marina for US$ 98 million, another in Palm Jumeirah, sold for US$ 14 million, and an apartment in Me’aisem First for US$ 12 million. The mortgaged properties for the week reached US$ 507 million; one hundred and forty-two properties were granted between first-degree relatives worth US$ 272 million.

Knight Frank’s latest report points to a 5% property price rise in Dubai’s prime market, (including The Palm Jumeirah, Emirates Hills and Jumeirah Bay Island), next year, driven by supply limitations and resurgence in demand from key source markets such as China and India; prices in other segments of the residential market are projected to grow at 3.5%. To this observer, it seems far too conservative and will only occur if regional troubles escalate. Dubai’s prime markets are responsible for 4.8% of transactions by the total value in the first nine months of 2023. In Q3, average residential property prices expanded 19% on an annual basis and 5% on the quarter, with villa and apartment annual prices up 18% and 19%; since Q1 2020, the cumulative increase has hit 30%.

In the six months to 30 September, the ready homes market and off plan sales almost ran in tandem – 51.2:48.8 – (US$ 28.58 billion:US$ 27.25 billion). In Q3, segment-wise, Jumeirah Islands posted a 73% annual price hike at US$ 730 per sq ft – the strongest growth for villas. Meanwhile, for apartments, Dubai South led the field with growth of 73% followed by Jumeirah Lakes Towers (67%) and Umm Suqeim Third, (37%); on a quarterly basis, prices were up 33% in Dubai South.

The study also noted that currently, there were 77.9k homes (excluding branded residences) under construction, scheduled for delivery by the end of 2028, with an annual average of approximately 13k homes over the next six years, considerably below historical completion rates. However, this figure will be supplemented by a raft of new launches, with many of them handed over within a thirty-month period. Previous blogs have indicated that by the end of 2023, Dubai will have a portfolio of some 800k housing units and an expected population of some 3.65 million – an increase of around 100k this year; the ratio of apartments to villas is in the region of 85:15. A quick estimate would see the approximate household size being 4.56 people per household, with recent trends showing that this ratio is declining. That being the case, and assuming the size drops to 4.35 and the population grows at a conservative 3% over the next decade, to 4.9 million, the number of units in 2033 should be 1.126 million; this equates to an extra 326k units or 32.6k a year. However, the population growth estimate could be on the low side, bearing in mind that pre-Covid, Dubai’s population was growing at annual double-digit rates.

Official data reports that residential transactions in Dubai, in the ten months to 31 October, reached 93.6k and has already surpassed 2022’s record total transactions of 92.2k for the twelve months. The month of October saw a 23.6% decline in the number of transactions tom 6.4k; although secondary market transactions grew 29.5%, off-plan deals fell by 57.2%.

Meanwhile Valustrat posted that its Q3 property index, (VPI), reached its highest quarterly capital gains in a decade; it grew a record 6.1%, on the quarter, and 15.1% higher on the year, to reach 96.6 points. Villa valuations surpassed peaks seen in 2014 by 2.6%, with villa prices increasing over the twelve months, by 19.8% and 7.6% on the quarter to reach 123.6 VPI points. The leading four performers were Palm Jumeirah (9.5%), Jumeirah Islands (9.5%), Dubai Hills Estate (9.3%), and Mudon (9.0%). The VPI for apartments also posted record capital gains, up 4.8% on the quarter, and 11.0% on the year, to reach 79.7 points – 29.2% below peaks of 2014. The highest quarterly performers were Discovery Gardens (7.5%), The Greens (7.3%), Palm Jumeirah (6.7%), and Dubailand Residence Complex (6.6%).

Dubai’s average residential prices increased by 19.1%in the year to October 2023, marginally down from the 19.6% rate of growth registered a month earlier. Over the same period, average apartment and villa prices rose by 18.7% and 21.4%, respectively. In October 2023, average apartment prices stood at US$ 372 per sq ft, and average villa prices stood at US$ 449 per sq ft. Although the average apartment sales rates per sq ft still sit at 8.3% below the 2014 high, a number of communities have already topped their 2014 levels. On the other hand, the average villa sales rates have surpassed their 2014 figures by 14.1%. In the apartment segment of the market, Downtown Dubai recorded the highest sales rate at US$ 681 per sq ft, whereas, in the villa segment of the market, Palm Jumeirah recorded the highest sales rate at US$ 1,396 per sq ft.

In line with recent months there has been a slowdown in growth rates exemplified by October’s annual rise of 19.7% compared to 20.6% a month earlier. Over this period, average apartment rents rose by 19.9%, and average villa rents grew by 18.0%. As at October 2023, the average yearly apartment and villa asking rents stood at US$ 30.0k and US$ 88.0k respectively. The highest yearly apartment and villa rents were respectively found in Palm Jumeirah, with average rents at US$ 69.8k, and in Al Barari, where average rents reached US$ 298.9k.

There is no doubt that Dubai residential property prices have a long way to go before they catch up with other major global cities. Q3 was the eleventh consecutive quarter of growth in the sector and there are many analysts that see no immediate end to this trend; the fact that supply is still lagging behind demand is another reason for price growth to continue. Knight Frank has calculated that US$ 1 million will buy the following sq mt pf prime property:

•                                                                                                                                                                     Monaco                    17 sq mt                                            
• New York                    33 sq mt
• Singapore                    34 sq mt
• London                        34 sq mt
• Sydney                        44 sq mt
• Shanghai                     44 sq mt
• Tokyo                          60 sq mt
• Berlin                          70 sq mt
• Dubai                          105 sq mt

The 64-storey, 302 mt, Wasl Tower, set to be completed by Q3 2024, will be one of the world’s tallest buildings to use ceramic fins as a renewable means to achieve energy efficiency. As a matter of coincidence, 2023 is UAE’s Year of Sustainability and the upcoming global climate summit COP 28 will be held in Dubai later in the month. Noting that the construction sector drives over 33% of global annual greenhouse gas emissions, Wasl Tower’s CEO commented that the building “represents our continuous efforts to innovate and create smarter, more sustainable developments that meet the evolving needs of people and the UAE’s climate goals.” The new building further enhances Dubai’s credentials as a global leader in adopting state-of-the-art sustainability solutions in the construction sector. The building will fulfil contemporary requirements for safety, sustainability and energy efficiency, with the ceramic fins providing shade, boost wind-induced cooling and indirectly channel daylight deep into the building’s interior. The massive mixed-use project, spanning a built-up area of around 167.8k sq mt, will feature apartments, offices, restaurants, a luxurious 259-key Mandarin Oriental hotel and a swimming pool.

Vincitore Realty unveiled Vincitore Aqua Dimore —its sixth project in Dubai – with a US$ 327 million development value which it hopes to redefine affordable luxury and help attract more buyers and investors to the market. The project offers the luxury of aqua resort living in one’s own branded residence – that buyers can avail with an affordable price. It will encompass branded designer apartments, ranging from Palatial Studio, 1 BR, 2 BR and 3 BR, with designer private pool; completion is slated for Q4 2026. Prices of apartments start from US$ 189k for a studio, with a 1% monthly payment plan available; the developer also offers an 8.0% guaranteed net return on investment for the first three years.

The fact that the six GCC states have unanimously approved a regional unified tourism visa will add another positive driver for Dubai’s hospitality sector which will greatly benefit from this initiative; it is expected to become operational by 2025. The decision is expected to streamline travel logistics and underpins the “continuous communication and co-ordination” between the GCC states and will obviously facilitate the movement of residents and tourists around the bloc. It will also provide a boost to the tourism sector. At the same meeting, it was agreed to introduce the electronic linking of traffic offences between GCC states and to prepare a comprehensive strategy to combat illegal drugs.

October’s seasonally adjusted S&P Global PMI shows that business activity in Dubai’s non-oil private sector economy improved further, rising 1.3 to 57.4, as business optimism soared, and sales hit a four-year high. New business intakes increased at their quickest rate in over four years, encompassing most key sectors, specifically among wholesale and retail companies, as well as travel and tourism service providers. Economic activity was driven by surging market demand and growing confidence, as there was a faster increase in new business volumes, with businesses surveyed reporting new clients and an improvement in market demand. New order inflows will continue to grow and drive activity expansion, as companies also increased their inventories build-up, whilst there was only a slight rise in October employment.

HH Sheikh Mohammed has approved both Dubai’s budgets, for 2024 – 2026, and also Law No 20 of 2023 for the general budget for the fiscal year 2024; the emirate’s three-year budget sees expenditure totalling US$ 67.19 billion and for next year US$ 21.55 billion. It plans to raise public revenue of US$ 24.69 billion in 2024, of which US$ 23.19 billion has been allocated to the budget and US$ 1.50 billion to the general reserve. The budget indicates Dubai’s aim to stimulate the macroeconomy and support the objectives of the Dubai Strategic Plan 2030 development project, as well as the Dubai Economic Agenda D33. The Media Office also noted that the three-year budget has several targets including “to boost entrepreneurship, attract more foreign investment, promote social welfare, support fields like space research, digitisation and artificial intelligence, and consolidate the emirate’s position as a “land of opportunity and innovation”. The Crown Prince, Sheikh Hamdan bin Mohammed, commented that “the financial sustainability, competitiveness and transparency embedded in this budget will make Dubai even more appealing to investors and businesses from across the world seeking new opportunities.”

Budget expenditure has been allocated:

• 42% – infrastructure, (including roads, tunnels, bridges, transport, sewage stations, parks, renewable energy sources and waste treatment facilities)
• 34% – social development, (including health, education, scientific research, housing, care for needy families and women and children, reading, translation and programming initiatives, development of youth and sports, care for senior citizens and retirees, and care for people of determination)
• 19% – the security, justice and safety sector
• 5% – supporting the public services sector, government excellence, creativity, innovation and scientific research to develop performance and foster a culture of excellence, innovation and creativity

It is hoped that the establishment of a general reserve from annual revenues will top US$ 5.60 billion for the three years 2024-2026, with an expectation that the operating surplus would equate to 3.3% of Dubai’s GDP, during the three-year financial plan.

The UAE’s Vice President and Ruler of Dubai has unveiled a ten-point document with an ambitious plan to develop the country’s economy making it the best in the world. The guiding principles of the ‘Economic Principles of UAE’, are to present the country as an integrated economy backed by a fully developed digital infrastructure, secure systems and adaptable legislation. The ten principles cover:

• Globally open free-market economy
• Attracting top talent
• Digital economy
• Nurturing the youth
• Sustainable and balanced economy
• Strong and stable financial system
• Strong and fair legislative environment
• Transparency and laws
• Strong banking sector
• Transport and logistics infrastructure

Following directives from Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed, the DFF and the Dubai Centre for Artificial Intelligence have been tasked to organise the Global Prompt Engineering Championship in May 2024. The two-day event, to be held at the Museum of the Future, will be the largest challenge of its kind to leverage the power of Generative AI, and will feature a prize pool of US$ 272k (AED 1 million); it will include three main categories – literature, art and coding. It is expected that such an event will enhance Dubai as a destination for Generative AI talent and for entrepreneurs, as well as a centre for developing a new generation of innovations associated with prompt engineering. The Crown Prince reiterated the emirate’s commitment to nurture an exceptional programming community which will include attracting top talent and experts to drive innovation.

At yesterday’s Executive Council meeting, its chairman, Sheikh Hamdan bin Mohammed approved several transformative initiatives to stimulate the emirate’s economy, including incentives targeted at doubling the contribution of industrial and agricultural technology sectors to Dubai’s economy by 2033, as well as plans to progressively phase out single-use plastics by 2026. He reiterated the pivotal role of a diversified economy in achieving the ambitious objectives outlined in the Dubai Economic Agenda D33, which seeks to propel Dubai into the ranks of the world’s top three cities by 2033. He commented that “these steps represent significant measures to expand the contribution of agriculture to Dubai’s diverse economy by doubling the size of the sector. We call on investors, experts and innovators to join our global platform for research, development and innovation.”

Next week sees Dubai World Trade Centre once again being the location for the twenty-fifth Water, Energy, Technology and Environment exhibition, and Dubai Solar Show, organised by DEWA under the directives of HH Sheikh Mohammed. WETEX and DSS 2023, running from 15 – 17 November, will host twenty-four international pavilions from sixteen countries, as well as seventy-five sponsors and thirty-seven partners and supporting associations.

UAE authorities have issued guidelines relating to the importance of complying with anti-money laundering regulations and the need to combat the use of unlicensed virtual asset service providers. The main targets will not only be the financial institutions but also the general public being told why compliance is so important when it comes to AML and the negative impact it can have on both the local and global economies. Not only will VASPs, operating without a licence, face civil and criminal penalties but also all parties dealing with them. The guidelines were drawn up by the National Anti-Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organisations Committee (NAMLCFTC).

Following increased demand, the Mohammed Bin Rashid Aerospace Hub announced the expansion of three new facilities:

aerospace supply chain           includes a 22k sq mt expansion for use by engine shops, component and landing gear MROs and workshop solutions for SMEs

suppliers complex                   a second landslide facility to the first vertical aerospace complex in the region will add 13k sq mt of light industrial space to enable aerospace companies, mainly SMEs and start-ups to set up their facilities easily and quickly

line maintenance units           the second phase will feature an airside plot which supports airside operators, including FBOs, to have direct access to clients; it will feature nine units that offer one-stop-optimal aviation-related solutions, such as maintenance warehouse facilities, tooling and engineering

All the above facilities are slated for completion starting in Q4 2024, with 70% of the area pre-leased by global companies attracted by MBRAH from abroad.

According to the travel analysis company ForwardKeys, the UAE ranked eighth among the top ten tourism destinations globally that have seen the strongest growth in international visitors in 2023, as compared to pre-pandemic 2019.  From the list, it can be seen that the “sun and sea” destinations were favoured – the Dominican Republic, Colombia, Mexico and Greece. The report confirmed that international tourism continues to recover after the pandemic, but data indicated that globally, tourist arrivals showed “significant differences” between regions, with Africa and the ME being the only worldwide switching from recovery to growth in Q4; YTD, international tourist arrivals were 14% below pre-pandemic levels, but are set to grow 2% this quarter. With Saudi Arabia fifth, UAE eighth and Egypt tenth on the list, the region was well represented. The UAE posted YTD international tourist arrivals 14% below pre-pandemic levels, which are expected to grow 2% in Q4. On a global scale, numbers are 27% shy on 2019 but are expected to be nearer 13% below pre-pandemic returns by the end of this year – with one caveat, that the current crisis involving Israel does not spill over.

The Emirates Group has posted its best ever six-month financial results for fiscal H1 ending 30 September, with net profit 138% higher, at US$ 2.75 billion, driven by a 20% hike in revenue to US$ 18.34 billion, attributable to strong demand for air transport across the world, since the last pandemic travel restrictions were lifted. It also reported an EBITDA of US$ 5.61 billion, a significant 34.6% uptick compared to H1 2022. Its cash position stood US$ 11.63 billion, marginally higher than the 31 March balance, whilst it has repaid US$ 2.50 billion of its Covid-related loans, as well as a 2022-23 dividend payment US$ 1.23 billion, (AED 4.5 billion), to its owner. Its payroll has increased by 6.0% to 109k, with both Emirates and dnata have ongoing recruitment drives to support their future requirements. The carrier’s chairman, Sheikh Ahmed bin Saeed, posted that “this is a tremendous achievement that speaks to the talent and commitment within the organisation, the strength of our business model, and power of Dubai’s vision and policies that has enabled the creation of a strong, resilient, and progressive aviation sector.” He also noted that “for the second half of 2023-24, we expect customer demand across our business divisions to remain healthy and we will stay agile in how we deploy our resources in this dynamic marketplace. At the same time, we are keeping a close watch on headwinds such as rising fuel prices, the strengthening US dollar, inflationary costs, and geo-politics.”

The airline profit rose 135% to a new record of US$ 2.56 billion, as revenue, including other operating income, of US$ 16.21 billion was up 18.8% on the year. Passenger numbers were 31.0% higher at 26.1 million, compared to H1 2022. Despite an overall softening in the global cargo market, Emirates Skycargo uplifted 1.35 million tonnes in H1 – 11.0% higher than a year earlier.

The government has announced that its fifth auction of Islamic Treasury Sukuks was 5.2 times oversubscribed, with bids received for the US$ 409 million, (AED 1.5 billion) issue, totalling US$ 1.57 billion, (AED 5.77 billion). As with the previous four auctions this year, there were two tranches – two-year and three-year – with a spread of 4 to 11 bps over US Treasuries with similar maturities.

An unnamed money exchange operating in the UAE has been fined US$ 1.30 million over its “weak compliance framework” to prevent money laundering and the financing of terrorism. Evidently it failed to have the “required risk analysis” and due diligence policies and procedures in place. The Central Bank of the UAE imposed the financial sanction as per the federal law.

DEWA reported an 8.0% increase in Q3 net profit, to US$ 910 million, driven by an increase in demand for the utility’s electricity, water and cooling services, and despite its finance costs doubling to US$ 134 million; revenue rose more than 10% to US$ 2.57 billion. In the nine-month period, profit fell by 4% to about US$ 1.63 billion, while revenue gained more than 7%. The public utility is expected to pay out its US$ 845 million H2 dividend next April. MD, Saeed Al Tayer, commented that “DEWA’s shareholder strategy is focused on delivering consistent returns, upholding [the] highest environmental, social, and governance (ESG) standards and delivering sustainable growth.” In Q3, total power generation was up 9.3% to nearly 19 terawatt-hours, and water desalination, at 38.7 billion imperial gallons, was 5% higher; by the end of September, it served more than 1.2 million customers.

Emaar Properties posted a 42% hike in nine-month net profit to US$ 2.23 billion, as revenue dipped 3.0% to US$ 5.01 billion, whilst group property sales posted a 16.0% increase to US$ 8.47 billion. By the end of the period, Emaar’s revenue backlog topped nearly US$ 19.0 billion. In June, its long-term issuer credit rating was upgraded one notch to ‘BBB’ by S&P Global Rating.

Meanwhile, its majority-owned subsidiary, Emaar Development, posted property sales of US$ 7.87 billion – 25% higher on the year; the unit, which specialises in build-to-sell property development business, recorded revenue figures of US$ 2.01 billion, with EBITDA 36% higher at US$ 1.23 billion. Its shopping mall, retail, and commercial leasing operations posted a revenue of US$ 1.17 billion, with its mall assets recording an average 97% occupancy rate. Recurring revenue from malls, hospitality, leisure, entertainment, and commercial leasing rose 26% annually to US$ 1.85 billion. Emaar’s hospitality, leisure, and entertainment divisions generated a 22% rise in revenue to US$ 681 million, attributable to a steady recovery in the tourism sector and strong domestic spending. Emaar’s UAE hotels, including those under management, reported an average 70% occupancy in the period. Emaar’s international real estate operations, which represent more than 11% of Emaar’s total revenue, recorded property sales of US$ 599 illion with revenue totalling US$ 572 million during the period, mainly driven by operations in Egypt and India.

Al Ansari Financial Services announced a US$ 106 million profit for the first nine months of 2023, with the Group operating income 1.5% higher at US$ 235 million, helped by a 10% increase in demand across all other products and services. As indicated last week, a US$ 82 million, (AED 300 million), dividend was approved, in line with the commitment posted in its IPO earlier in the year which equates to a 7.0% dividend yield. A further similar amount will be paid in April. Group CEO, Rashed A Al Ansari noted that “we take great pride in outperforming the market across all our products and offerings, as well as in our unwavering commitment to achieving our growth targets.”

Aramex posted Q3 declines in both revenue and net profit by 5.6% to US$ 368 million and by 76.0% to short of US$ 3 million respectively, largely attributable to soaring interest rates, (accounting for almost 50% of the decline in net income), forex fluctuations and a slowing global economy. Operating profit was 12.0% lower at US$ 12 million. For the first nine months of the year saw revenue falling 5.0% to US$ 1.13 billion and net profit 60.0% lower at US$ 14 million. Aramex’s international express business posted a 4.0% annual rise in revenue to US$ 140 million, despite a 5.0% decline in shipment volumes due to the slowdown in retail activity; gross profit came in 20.0% higher to US$ 50 million.

The DFM opened on Monday, 06 November 2023, 143 points higher the previous week, gained 212 points (4.8%) to close the trading week on 3,969, by Friday 10 November 2023. Emaar Properties, US$ 0.14 higher the previous week, gained US$ 0.01 to close on US$ 1.87 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 4.80, US$ 1.48, and US$ 0.37 and closed on US$ 0.65, US$ 4.81, US$ 1.51 and US$ 0.37. On 10 November, trading was at 111 million shares, with a value of US$ 96 million, compared to 112 million shares, with a value of US$ 69 million, on 03 November 2023.

By Friday, 10 November 2023, Brent, US$ 7.08 lower (7.7%) the previous fortnight, shed US$ 3.85 (4.6%) to close on US$ 81.30. Gold, US$ 16 (0.8%) lower the previous week, shed US$ 57 (2.9%) to trade at US$ 1,943 by 10 November 2023.

With an order backlog approaching 8k commercial planes at the end of Q3, Airbus posted a 12% rise in revenue to US$ 15.89 billion, with Q3 profit 21% higher at US$ 862 million, on the back of increased demand and a hike in jet deliveries; adjusted profit before interest and tax rose 21% on an annual basis to US$ 1.08 billion. For the first nine months of the year, although revenue was 12% higher, at US$ 45.41 billion, net profit dipped 9% to US$ 2.49 billion, with its gross commercial aircraft orders totalling 1.28k, 49.5% higher compared to the same period in 2022. It delivered 488 commercial aircraft during the period, up 11.6%, comprising 41 A220s, 391 A320 Family, 20 A330s and 36 A350s. Airbus Helicopters posted a 22.4% decline in net orders to 191 units, with defence and space division’s order value climbing 6.2% to US$ 9.07 billion. Guillaume Faury, chief executive of Airbus, commented that “we continue to make progress on our operational plan in a global environment that has become increasingly complex,” and that “we expect the supply chain to remain challenging as we progress on the production ramp-up.”

Ryanair posted a near 60% hike in H1 profits to US$ 2.18 billion, driven by an 11% rise in passenger numbers, to 105.4 million, and a 24% hike in average fares, to US$ 58. The no-frills carrier’s chief executive, Michael O’Leary, noted that this was “due to a very strong Easter and record summer traffic”, despite higher fuel costs. The airline sees fares rising by “mid-teens percentage” during Q4 and prior to Christmas. It expects full year profits to hover around US$ 2.0 billion – an indicator that many airlines tend to lose money over the winter period.

Last January, Greenpeace managed to board a Shell production vessel near the Canary Islands to protest oil drilling and travelled on it as far as Norway. This week, the tech giant filed a US$ 2.1 million claim in damages in what it said was boarding a moving vessel at sea was “unlawful and extremely dangerous.” Shell is seeking damages that include costs related to shipping delays and expenses for extra security, as well as legal costs. There are reports that Shell offered to reduce its damage claim to US$ 1.4 million if Greenpeace’s activists agree not to protest again at any of Shell’s oil and gas infrastructure at sea or in port.

If British Steel’s plans to close its Scunthorpe blast furnaces go through, there is the possibility that up to 2k will lose their jobs; China’s Jingye Group wants to introduce two electric furnaces, (one at Scunthorpe and the other in Teesside), to transform the company into a “green and sustainable company”. A US$ 620 million, (GBP 500), taxpayer rescue package – similar to the one availed to Tata – may save jobs. However, blast furnace plants are not economic – reportedly losing US$ 1.24 million a day – and are not “green” and could be unsustainable on both financial and environmental grounds. Electric arc furnaces are mostly used to melt down and repurpose scrap steel, and the finished product is not the same grade of steel as that produced in blast furnaces and is not suitable for all industrial uses. Its main advantage appears to be that they run at lower temperatures and can use electricity generated by renewables.

Alleging tax evasion, an Italian judge has ordered the seizure of US$ 840 million from Airbnb, over tax evasion, with claims that the short-term rental firm failed to collect tax from landlords of around US$ 3.95 billion of rental income; landlords in Italy are required to pay a 21% tax on their earnings. It is also reported that three former managers, who held managerial roles at Airbnb from 2017 to 2021, were also under investigation. The US  giant, which has operated in the country for the past fifteen years, commented that it had been trying since June to resolve the issue and that “we are confident that we have acted in full compliance with the law and intend to exercise our rights with respect to this issue.” In recent years, Italian authorities have increased scrutiny of the tax practices of major companies like Airbnb and have also launched tax-related inquiries against Netflix and Meta. It is estimated that if authorities could collect the “missing tax” from landlords, it could add US$ 1.09 billion to public funds.

In 2016, the EC decided Apple had received unfair preferential treatment from the Irish government, allowing it to pay a much lower rate of tax than other companies, commenting that this constituted illegal aid given to the tech giant by the Irish state; the figure that Apple is claiming not to pay is estimated at US$ 13.88 billion.  This was overturned on appeal. Three years ago, a ruling which found Apple had been given illegal tax breaks by the Irish government was overturned, but a year later, the lower court, known as the General Court, ruled that the EC’s decision that Apple should pay back taxes was legally flawed and should be set aside, but that ruling itself could now be overturned after the latest twist. This week, Advocate General Giovanni Pitruzzella, at the Court of Justice, said the case should be reviewed again. The argument was that a series of legal errors had been made and the ruling in Apple’s favour had failed “to assess correctly the substance and consequences of certain methodological errors that, according to the Commission decision, vitiated the tax rulings”. The Irish government had argued that Apple should not have to repay the back taxes, deeming that its loss was worth it to make the country an attractive home for large companies – the country is Apple’s base for the EMEA. The battle goes on.

San Francisco is the location of a court battle between the maker of the popular video game Fortnite and Google which is accused of acting as a monophyly by charging 30% commission on in-app purchases on Google Play store. The tech giant refutes such claims, saying that it competes with Apple, and that there was an abundance of ways to download apps on Android phones. Epic argued that Google has “eliminated competition in the distribution of Android apps using myriad contractual and technical barriers.” On the other side of the country, in Washington, the US Justice Department is accusing Google of holding an illegal monopoly over search. In 2020, Fortnite was pulled from Google Play and the App Store on the grounds that they considered charges to be “taxes” on developers.

Data by CoinGecko has indicated that global assets invested in exchange-traded funds, tied to the spot price of bitcoin, now total US$ 4.16 billion, of which seven spot bitcoin ETFs, that had been launched in Canada since 2021, account for US$ 2.0 billion of the total; the largest of the ETFs, at US$ 819 million, is Canada’s Purpose Bitcoin ETF. There is some reticence among US legislators about ETFs and to date only those tied to future contracts, are allowed; the largest is ProShares Bitcoin Strategy which has about US$ 1.2 billion in assets. The SEC has so far denied all spot bitcoin ETF applications, saying applicants have not shown they can protect investors from market manipulation. Germany started the ball rolling in Europe in June 2020, with ETC Group Physical Bitcoin, now the second d largest ever launched with a value of US$ 802 million. Europe has seven other ETFs, mostly incorporated in tax havens such as Jersey, the Cayman Islands and Liechtenstein, with much smaller products traded in Brazil and Australia.

The so-called “King of Crypto”, 31-year-old Sam Bankman-Fried, who once ran one of the world’s biggest cryptocurrency exchanges, has been found guilty of seven counts of fraud and money laundering by a New York court and now faces decades of incarceration. He was arrested late last year, after his cryptocurrency exchange FTX went bankrupt, with a reported US$ 8.0 billion worth of customers’ funds missing. FTX was once valued at US$ 32.0 billion. The jury found him guilty of lying to investors and lenders and stealing billions of dollars from FTX, helping to precipitate its collapse. The prosecution presented evidence that Bankman-Fried’s crypto trading firm Alameda Research received deposits on behalf of FTX customers from the early days of the exchange, when traditional banks were unwilling to let it open an account. Instead of safeguarding those funds, as Bankman-Fried repeatedly pledged to do in public, he used the money to repay Alameda lenders, buy property and make investments and political donations.

On Wednesday, some ten million Australians, 40% of the population, could not use smartphones, broadband internet or landlines for much of the day. The problem was an outage at Optus that started at 4.00 am, with services only being restored at 5.30 pm, during which time payment, transport and health systems were thrown into chaos. Communications Minister Michelle Rowland commented that no cause of the failure was given but “it has occurred deep within the network (and) it has wide ramifications across mobile, fixed, and broadband services for Optus customers”, and added that “customers are clearly frustrated about it and Optus should respond to that accordingly.” Optus, owned by Singapore Telecommunications, reported one of the country’s biggest cyber breaches fourteen months ago, and with this latest incident questions are being asked about the fragility of the country’s core infrastructure. After this debacle, the Albanese government will have to look closely to ensure that if this sort of outage occurs again, the infrastructure across multiple private companies can cope.

There will not be too many tears shed for the ex-boss of NatWest, Dame Alison Rose, will lose out on a US$ 9.3 million payout after she had not been given “good leaver” status after she had  admitted to discussing the closure of Nigel Farage’s bank account. If she had, Dame Alison would have been entitled to receive the entire amount which, after including her yearly salary, would have exceeded US$ 12 million; she will receive her US$ 3 million fixed pay package, but will not benefit from share awards and bonuses she had previously been entitled to. The UK government used to be a majority shareholder in the bank but since 2022 now has a 38% stake. Paying out huge sums for not doing your job properly will impact the UK taxpayer, with NatWest agreeing to a maximum US$ 482k towards her legal costs.

In the UK, the number of people falling behind on their mortgage payments in Q3 increased 18% to 88.0k, compared to the same period in 2022, with the number among landlords almost doubling. The number of homeowners in arrears was up 7% in Q3 on the year. It is obvious that soaring interest rates are the main reason behind these figures. Surprisingly, it is reported that the number where payments have fallen behind still represent just 1% of the 8.8 million outstanding mortgages; it seems that those in distress tend to pay their mortgages ahead of other liabilities or expenses. However, with an estimated 1.6 million mortgage payers expected to be paying more in 2023, after their fixed rates become variable, there will be more arrears.

Latest UK GDP figures indicated that September’s GDP was 0.2% higher, but over Q3, growth was at zero. In September, the services sector was the largest upward contributor to the economy, nudging up 0.2%, with consumer-facing services down 0.2% in September and 0.7% lower in August, with declines noted in health, management consultancy and commercial property rentals; these were offset by growth in engineering, car sales and machinery leasing. According to the BoE, which correctly forecast (for a change) stagflation in the period, is now expecting much of the same in Q4. Such figures may see no further interest rate hikes, but there is a slight possibility of recession – if not, then the country will be in a state of stagflation well into 2024. There is no doubt that the country is in disarray, (as is the Sunak government), and  later in the month, Jeremy Hunt, the Chancellor will deliver his Autumn Statement and, on 22  November, in a last ditch move to save the economy, he will have to be seen more than Pulling Rabbits Out Of A Hat!

Looking Down The Barrel Of A Gun!                                      03 November 2023

The 1,655 real estate and properties transactions totalled US$ 3.19 billion, during the week ending 03 November 2023. The sum of transactions was 277 plots, sold for US$ 1.40 billion, and 1,378 apartments and villas, selling for US$ 981 million. The top three transactions were all for plots of land, the first two in Madinat Dubai Almelaheyah, sold for US$ 138 million and for US$ 95 million, and the third in Burj Khalifa for US$ 49 million. Palm Jumeirah recorded the most transactions, with ninety-two sales, worth US$ 586 million, followed by forty-six sales, in Madinat Hind 4, for US$ 22 million, and thirty-one sales in Zaabeel First valued at US$ 45 million. The top three transfers for apartments and villas were all for apartments, the first in Palm Jumeirah, sold for US$ 31 million, and two apartments in Zaabeel First for US$ 29 million and US$ 28 million. The mortgaged properties for the week reached US$ 638 million, with the highest being for land in Business Bay for US$ 102 million; one hundred and twenty-eight properties were granted between first-degree relatives worth US$ 170 million.

Abu Dhabi’s biggest developer has successfully launched onto the Dubai property sector and phase 1 of Haven by Aldar, comprising 468 units, was sold out. It has subsequently launched phase 2 and has already sold 786 villas, generating US$ 845 million in sales. The final phase of Haven, which includes further villas, townhouses, and apartments, will launch for sale in Q1 2024. Handover will commence in Q3 2027. Aldar Properties posted that UAE nationals accounted for 23% of all sales, with expat residents and overseas buyers accounting for the balance; 499% of buyers were over the age of forty-five. The Abu Dhabi interloper has agreed a JV with Dubai Holding to build three new residential communities to be developed in the emirate.

For the first nine months of the year, DLD posted that there had been significant 33.8% and 36.7% hikes in both transactions and values at 116.1k and US$ 117.08 billion compared to the same period in 2022. Some of the factors involved in these results include the emirate’s rising global profile, exceptional infrastructure and progressive government initiatives. There was also a 50.3% growth in value and a 33.3% upward movement in the number of investments to US$ 75.94 billion and 81.7k.

In the period, Al Barsha South Fourth was number one in the list of top locations based on transactions with 10.4k, followed by Dubai Marina (9.1k), Business Bay (7.4k), Wadi Al Safa 5 (5.6k), Al Mirkadh (5.5k), Al Thanyah 5 (5.4k), Burj Khalifa (5.2k), Al Khiran First (4.6k), Hadaeq Mohammed bin Rashid (4.2k), and Jebel Ali First (3.7k).

The top ten areas in terms of transactional value were Dubai Marina, (US$ 10.0 billion), Palm Jumeirah (US$ 7.77 billion), Jebel Ali Industrial First (US$ 7.61 billion), Wadi Al Safa 3 (US$ 6.90 billion), Business Bay (US$ 5.47 billion), Burj Khalifa (US$ 4.87 billion), El Merkadh (US$ 3.96 billion), Al Khairan First (US$ 3.76 billion), Hadaeq Mohammed bin Rashid (US$ 3.71 billion), and Jebel Ali First (US$ 3.52 billion).

When it comes to mortgages the top ten were Dubai Marina (1,186), Al Thanyah Fifth (879), Al Barsha South Fourth (879), Burj Khalifa (874), Jebel Ali First (789), Al Awir First (743), Hadaeq Mohammed bin Rashid (665), Business Bay (652), Wadi Al Safa 5 (629), and Palm Jumeirah (526).Value-wise, the top locations, in terms of the value of the mortgages, were Jebel Ali First (US$ 7.57 billion), Wadi Al Safa 3 (US$ 4.08 billion), Jebel Ali First (US$ 1.90 billion), Palm Jumeirah (US$ 1.90 billion), Dubai Marina (US$ 1.37 billion), Business Bay (US$ 1.12 billion), El Merkadh (US$ 940 million), Al Khairan (US$ 828 million), Al Barsha South Fourth (US$ 657 million) and Burj Khalifa.

Valustrat’s Q3 report noted that Dubai’s residential rents climbed 27.2%, on the year, and 2.1% on the month, with villa rentals 38.7% higher on the year. Villa rentals rose 38.7% annually but witnessed an insignificant change when compared to the previous quarter. Average annual rents for three-bedroom villas stood at US$ 85k, 4 B/R at US$ 104k, and 5 B/R villas at US$ 134k. Apartment rentals grew at the slower pace of 19.1% on the year and 3.6% on the quarter, with average rentals for studio, 1, 2 and 3 B/R apartments at US$ 14k, US$ 20k, US$ 30k and US$ 46k. It estimated that Q3 residential occupancy stood at 88.9%.

These figures were in contrast with CBRE which posted that, in the past twelve months, average Dubai residential prices were 19.6% higher, with average apartment and villa prices up by 19.7% and 18.9%. Along with a slowdown in selling prices, rentals also weakened with September posting a 20.6% return, down 1.1% on the month; (this is in line with an Allsopp & Allsopp report posting those rents had declined to 21.0% in Q3). The consultancy noted that in the first nine months of 2023, 27.1k units were delivered and that a further 34.7k were expected to be handed over by the end of the year. It was reported that Meydan One, Downtown Dubai and Business Bay accounted for 46.4% of all units already handed over this year. The Dubai Land Department posted that, in Q3, real estate transactions had grown 22.0% to 31.2k with a staggering 40.0% rise in value to US$ 26.58 billion.

ValuStrat also noted that Dubai office space grew 25.5%, with its VPI 7.3% higher on the quarter to 103 points, compared with a 100-point base in Q1 2015. The weighted average price for an office in Dubai was US$ 3,877 per sq mt, with double-digit annual growth in five major central business districts in Dubai – Jumeirah Lake Towers (37.2%), DIFC (33.7%), Business Bay (22.2%), Downtown Dubai (16.8%), and Barsha Heights (14.8%). The report also noted that valuations for shell and core Grade A office space grew 33.3% on the year, while the same classified Grade B growing 19.2%. Q3 returns saw office transitions, at 631, 9.0% higher on the year but 4.7% lower, on the quarter, with the median transacted price at US$ 3,035 per sq mt, up 28.4% annually and 9.1% on a quarterly basis.

According to proptech platform, Realiste AI, the five Dubai locations likely to show the highest price appreciation in Q4 are Bukadra Part 2, Sobha Hartland, Al Warsan First, Dubai Harbour and Al Kheeran with quarterly increases of 8.12%, 8.05%, 6.99%, 6.18% and 5.88%. The platform sees Bukadra Part 2 prices for a 1 B/R apartment rising to US$ 6,628 per sq mt.

Last week saw the start of Dubai’s new cruise season, as the liner Mein Schiff 2 was the emirate’s first arrival, with over one hundred and fifty cruise ships expected to call in Dubai at Mina Rashid and Dubai Harbour, over the next five months. Dubai will also host the Resilient Lady Ship, operated by Virgin Voyages, for the first time, with the vessel set to embark on two routes from the city this season. Last year, Dubai Harbour Cruise Terminal welcomed 300k passengers, and numbers are expected to jump 28% this season. Dubai is a member of the Cruise Arabia alliance, comprising three other key ports in the region, including Abu Dhabi, Bahrain and Oman, with the aim to promote the region as a cruise ship destination globally. Major cruise companies MSC Cruises, TUI Cruises, Aida Cruises, Costa Cruises and Ponant Cruises will operate cruises from Dubai, while cruise lines such as Cunard, P&O Cruises, Princess Cruises, Royal Caribbean Cruise Lines, Celebrity Cruises, Norwegian Cruises, Silversea Cruises, and Cordelia Cruises will also operate routes via the emirate. Dubai Harbour Cruise Terminal has twin terminals on a 910 mt pier and is capable of processing more than 3.2k passengers an hour. Mina Rashid can handle seven mega-cruise vessels or 25k passengers at once. The port’s Hamdan bin Mohammed Cruise Terminal, the world’s largest single covered cruise terminal facility, is capable of handling 14k passengers a day.

The eighteenth edition of the Dubai Air show is fast approaching – 13-17 November – which is expected to bring in a record number of 1.4k exhibitors, (including four hundred first timers and eighty plus start-ups), other global players and visitors. Despite the name, the event also represents the space and defence sectors. The regional airlines are fast recovering from the pandemic, with recent global figures standing at 96% of pre-Covid levels, whilst ME airlines posted a 27.3% increase in August traffic compared to a year earlier. Furthermore, Dubai Airports also posted a 49.0% increase in H1 passenger traffic at 41.6 million guests, with a 43% surge in Q1 passenger traffic.

On Wednesday, the Dubai Integrated Economic Zones Authority announced the launch of a venture capital fund worth US$ 136 million. Launched under the patronage of HH Sheikh Mohammed bin Rashid, and in the presence of his son, Sheikh Ahmed bin Mohammed, Second Deputy Ruler of Dubai, the fund is designed to finance technology start-ups and to support the economic objectives outlined in the Dubai Economic Agenda, D33. The fund is the first investment programme launched under the name of Oraseya Capital, the venture capital arm of DIEZ specialising in venture investment operations in start-ups.

Driven by strong non-oil sector growth, the country’s economy expanded by 3.7% in H1, according to the Minister of Economy Abdulla bin Touq, who added that although the figures were not as impressive as seen in H1 2022, it was still “robust growth against the backdrop of global and regional uncertainty”. Accounting for 71% of UAE’s GDP, the non-oil sector posted a “staggering” 5.9% H1 growth; Q1 saw a 4.5% rise to US$ 84.9 billion. The Minister also commented that, “the UAE’s economic growth is a testament to our resilience, diversification and commitment to openness and international co-operation.” He seems to be confident that the upward trend will continue into H1, with the UAE’s GDP estimated to expand by 3.6% for the year. Interestingly, he noted that “the policymakers are not facing a dilemma anymore – the classic trade-off between growth and inflation. What they’re facing is a ‘trilemma’ as they also have to worry about financial stability.” (The Trilemma theory posits that countries have three options for managing international monetary policy, but only one is achievable at a given time). There is no doubt that a range of government initiatives has allowed the UAE economy to spring back quicker than most global economies, all of which have been impacted by inflation, slowing global growth, geopolitical uncertainties, and rising interest rates.

A study by US News & World Reports notes that the UAE rates as the world’s second most stable country economically on the back of entrepreneurship opportunities, easy access to capital, availability of skilled labour force, agility to adapt, competitiveness and strong trade among.  It is only behind Switzerland and ahead of the likes of Canada, Germany, Japan, Sweden, Australia, Netherlands, Norway and Denmark. Apart from being the most competitive economy in the Arab world, its per capita GDP, at US$ 87.7k, is on par with top European countries; its total GDP stands at US$ 508.0 billion, with a 2030 target of US$ 817.4, (AED 3 .0 trillion). The country also has some of the world’s largest sovereign wealth funds such as Abu Dhabi Investment Authority, Mubadala, Investment Corporation of Dubai, Dubai World, ADQ and others, holding trillions of dollars’ worth of assets to provide cushion against economic volatility around the world.

With the US Federal Reserve Board announcing that there would be no change to its 5.40% Base Rate, applicable to the Overnight Deposit Facility, the Central Bank of the UAE has followed suit leaving its Base Rate applicable to the Overnight Deposit Facility, unchanged at the same rate. The local central bank also left the rate, applicable to borrowing short-term liquidity through all standing credit facilities, unchanged at 50bp above the Base Rate.

After rises over the past three months, the UAE Fuel Price Committee decreased all retail fuel prices. 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 November retail prices all head south:

• Super 98: US$ 0.826 – down by 11.9% on the month and up 4.2% YTD from US$ 0.793  
• Special 95: US$ 0.796 – down by 12.3% on the month and up 9.5% YTD from US$ 0.727
• Diesel: US$ 0.932 – down 4.2% on the month and up 4.0% YTD from US$ 0.896
• E-plus 91: US$ 0.777 – down by 12.5% on the month and up 10.1% YTD from US$ 0.706

A novel initiative, Dubai Programme for Gaming 2033, introduced by Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed, aims to enhance Dubai’s global position in the gaming industry world, with plans to make it one of the top ten cities in the sector and to generate 30k jobs over the next decade. By 2033, it is hoped that it will contribute up to US$ 1.0 billion to Dubai’s GDP. To help the process progress, it will offer support to developers, designers and programmers, as well as entrepreneurs and start-ups in creative industries, as well as to “establish an incubating environment for developers”. The country, along with Saudi Arabia, are in the forefront of the ME gaming industry which, according to the Future of Trade 2023 is projected to hit US$ 6.0 billion by 2027, compared to under US$ 3.0 billion in 2021, about double the figure from 2021. Overseen by the Dubai Future Foundation, the emirate’s new gaming programme will focus on three main areas – talent, content and technology. Yesterday, Sheikh Hamdan also approved the launch of another three new initiatives – the Metaverse Alliance, Metaverse Guidelines and Metaverse Pioneers as part of the Dubai Metaverse Strategy, which was launched in July 2022; it was hoping that this would create 40k new jobs and would add US$ 4.0 billion to the DDP by 2026. 

Because it failed to ensure that its systems were able to contain market abuse, FFA Private Bank was fined US$ 374k by the Dubai Financial Services Authority, DIFC’s regulator. The lender, which provides services across private wealth management, online trading and capital markets, was penalised because it had “inadequate systems and controls to identify, assess and report suspicious and potential market abuse between February 2018 and March 2021″.

National Bonds posted a 40k increase in its customer base and recorded significant growth in its investment portfolio by 9.0% to reach US$ 3.81 billion during H1. The country’s savings and investment company, which has seen the entity grow at an annual growth of 12.0%, offers a wide range of savings and investment solutions, that can help support their future financial goals, including building emergency funds and securing their children’s education. It also contributes to individual, corporate, and national growth, by offering diverse and inclusive regular savings solutions catering to both individual and corporate needs, such as “Tejouri Al Emarateyat”, a solution for Emirati Women, “Global Savings Club”, and “Golden Pension Plan” which caters to corporates, and “Second Salary” designed for individuals, all with the goal of fulfilling the retirement aspirations of both UAE Nationals and Expats.

Dubai Islamic Bank posted a H3 profit, almost 20% on the year, at almost US$ 449 million, helped by the growing local economy, with the country’s biggest Sharia-compliant lender reporting a 45.0% hike in revenue to US$ 1.23 billion. Its quarterly income from properties for development and sales more than doubled to US$ 218 million, with commissions, fees and foreign exchange income increasing by 16% to US$ 105 million. Over the first nine months of the year, total income and net profit both rose by 47% to US$ 3.96 billion and 16.0% to US$ 1.28 billion; operating expenses came in 13.0% high at US$ 615 million. By the end of September, the bank’s total customer deposits climbed 11 .0% to US$ 6.02 billion, with assets 8.7% higher at US$ 85.39 billion. In September, DIB confirmed it was acquiring a 20% stake in Turkey’s TOM Group of Companies.

Al Ansari Financial Services PJSC announced that it would pay an interim dividend payment of US$ 82 million equivalent to US$ 0.0109 per share, with a similar pay-out slated for April 2024. The latest cash distribution is in line with the group’s previously announced dividend policy. Rashed Ali Al Ansari, group chief executive officer of Al Ansari Financial Services, commented: “We are pleased to announce the distribution of our first proposed interim dividend payment of Dh300 million, in accordance with the vision of our Board of Directors and the subsequent approval of our shareholders. We believe that this approval reflects our commitment to ensuring consistent returns and long-term value for our shareholders.”

Emirates Central Cooling Systems Corporation PJSC posted its latest financials for Q3 showing an EBITDA of US$ 292 million on total revenue of US$ 619 million. For the first nine months of the year, both EBITDA and revenue posted improved results – by 7.5% and 9.0%. For the twelve months to 30 September, the figures were US$ 395 million and US$ 744 million – both up 9.5%. Last month, Empower paid out a US$ 116 million H1 cash dividend, in line with an IPO pledge that it would pay out US$ 232 million for the first two years of its DFM debut. Empower holds more than 80% of Dubai’s district cooling market, and in Q3, it added over ten new buildings to its portfolio with 70% of these being residential buildings, 20% commercial, and 10% mixed-use buildings.

e& announced its consolidated financial results for Q3 2023 reporting consolidated revenues of US$ 3.65 billion with a 3.3% year on year, increase while consolidated net profit was US$ 817 million. 

Emirates Integrated Telecommunications Company PJSC, the company known as du, posted a 57.7% hike in Q3 profits to US$ 148 million, with revenue nudging 3.7% higher at US$ 897 million; the main contributors were mobile services and fixed services both heading north – by 5.7% to US$ 416 million and by 5.3% to US$ 256 million. Partly due to lower hubbing and handset sales, other revenues dipped 1.5% to US$ 225 million. In Q3, the telecom’s 5G network reached a 98.5% coverage and over the period, it added 85.7k mobile customers, 32.2k post-paid and 53.5k prepaid, and 13.8k fixed customers. Double digit growth was seen in its major profitability KPIs – 13.8% on EBITDA, 65.1% of Operating Cash Flow and 57.7% on Net Profit.

Dubai Financial Market announced that its net profit increased by 109% to US$ 51 million in Q3. There was a notable increase in the number of trades, overall trade value, and an influx of new investors. YTD to September, DFM’s total consolidated revenue increased by 48% to US$ 96 million – US$ 58 million in operating income and US$ 38 million in investment returns and other income. Meanwhile, total expenses jumped 11.3% to US$ 45 million. The total number of trades increased to 1.43 million trades in the first nine months of 2023, representing a notable 37% increase in trading activity over the same period last year. Total trading value rose to US$ 21 billion, recording an increase of 13% over the same period last year. The DFM General Index also rose by 25% during this period, closing at 4,136.58. DFM’s market capitalisation rose to US$ 189.9 billion. In the nine months, there were 35.4k new investors to bring the total number to over one million, with institutional investors accounting for 56% of the trading value, with net purchases of US$ 420 million.

The DFM opened on Monday, 30 October 2023, 591 points lower the previous fortnight, gained 143 points (13.6%) to close the trading week on 3,787, by Friday 03 November 2023. Emaar Properties, US$ 0.47 lower the previous four weeks, gained US$ 0.14 to close on US$ 1.86 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.64, US$ 4.48, US$ 1.42, and US$ 0.35 and closed on US$ 0.65, US$ 4.80, US$ 1.48 and US$ 0.37. On 03 November, trading was at 112 million shares, with a value of US$ 69 million, compared to 158 million shares, with a value of US$ 76 million, on 27 October 2023.

The bourse had opened the year on 3,438 and, having closed on 31 October at 3,877, was 449 points (12.8%) higher. Emaar started the year with a 01 January 2023 opening figure of US$ 1.60, to close the first ten months at US$ 1.82. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.59, US$ 3.54, US$ 1.55 and US$ 0.41 and closed YTD at US$ 0.65, US$ 4.62, US$ 1.47 and US$ 0.36.   On 31 October, trading was at 157 million shares, with a value of US$ 100 million, compared to 66 million shares, with a value of US$ 18 million, on 31 December 2022. 85.15 2,000

By Friday, 03 November 2023, Brent, US$ 2.17 lower (2.4%) the previous week, shed US$ 4.91 (5.5%) to close on US$ 85.15. Gold, US$ 139 (6.2%) higher the previous fortnight, shed US$ 16 (0.8%) to US$ 2,000 by 03 November 2023.

Brent started the year on US$ 85.91 and shed US$ 0.55 (0.6%), to close 31 October 2023 on US$ 85.36. Meanwhile, the yellow metal opened 2023 trading at US$ 1,830 and gained US$ 157 (7.9%) to close YTD on US$ 1,987. 

Oil prices, which breached the $95 mark in September, have since pared some gains amid concerns over the global economy and rising crude supply from countries such as Iran and Venezuela. Despite the US sanctions, initiated in 2018, Iran has managed to push its daily production levels to 3.4 million bpd, and according to the country’s oil minister, Javad Owji, this could rise even further with higher investment in onshore and offshore oilfields. Opec, of which Iran is a member, noted that oil production rose 21.6% on the year to 3.1 million bpd by September 2023. But with its possible involvement in Hamas’s October attack on Israel, there is every chance that the Biden administration may enforce stronger sanctions on Tehran’s crude exports. If that were to happen and Iran’s crude exports are cut by say 600k bpd, the impact on an already undersupplied market will inevitably push prices well into the triple digit arena. If the unthinkable happened – and there is a blockade of the Gulf – then oil prices will escalate to unknown highs and the negative effect on the global economy would be immense.

In Q3, Maersk’s pre-tax profits fell to US$ 691 million, compared to US$ 9.1 billion on the year, as sales tanked 46.7% to US$ 12.1 billion. Because of lower freight rates and dipping demand, AP Moiler-Maersk is planning to cut 3.5k jobs with this coming after 6.5k were retrenched earlier in the year; this will result in the payroll dipping to below 100k. It expects the exercise will save US$ 745 million. The shipping company had seen recent quarterly profits down by 92% and commented that “worsening” prices for shipping by sea required further job cuts. AP Moiler-Maersk, one of the world’s biggest shipping firms, transports goods for major retailers such as Nike. The Danish company’s chief executive noted that “since the summer, we have seen overcapacity across most regions triggering price drops and no noticeable uptick in ship recycling or idling.” Many consider Maersk a bellwether for the global economy – if going well, there will always be strong demand, but the opposite applies when the economy is heading in the other direction.

Helped by rising energy prices, Shell posted impressive Q3 figures but they were lower on the quarter; reported earnings came in on US$ 6.2 billion, compared to US$ 9.4 billion a year earlier, but 23.0% higher on the quarter. The energy company also announced that it would return US$ 3.5 billion to shareholders through a share buyback programme, bringing the total payback for the year to US$ 23.0 billion. To some critics, it seems that Shell seem to be ploughing money into dividends, share buybacks, and new fossil fuel projects, and not enough to its employees, (with new plans to slash its employee numbers by 15%), and new fossil fuel projects.

Meanwhile BP reported lower than expected profits despite global oil prices on the move higher, with the US$ 3.3 billion Q3 profit well short of analyst’ expectations of some US$ 4.0 billion – and much lower than the US$ 8.1 billion return over the same period in 2022; however, it was US$ 0.7 billion higher on the quarter. The energy giant noted that although oil production was strong, gas trading had been weak in recent months. It did warn that the recent higher oil refining margins, seen recently across the oil and gas industry, would be “significantly lower” towards the end of 2023. The profit was also impacted by BP taking a US$ 540 million charge on three wind farm projects off the coast of New York. The UK’s government windfall tax policy has cost a further US$ 620 million, in the first nine months of 2023, bringing its total tax bill to US$ 1.35 billion, compared to US$ 700 million and US$ 2.2 billion.

In Q3, HSBC posted an impressive 93% hike in non-interest income to US$ 6.90 billion, mainly due to the non-recurrence of the impairment relating to the sale of its retail banking operations in France. Operating expenses climbed 2.0% on the year to US$ 800 million, attributable mainly to higher technology costs, the impact of rising inflation and an increase in performance-related pay accrual. Impairment charges included a US$ 500 million charge relating to the commercial property sector in mainland China. During the period, it attracted an additional US$ 34.0 billion of net new invested assets – a 12.0% increase on the year. Customer lending was flat at US$ 936 million, with customer deposits also largely unchanged at US$ 1.56 billion. With its third US$ 0.10 dividend, it has brought the total for the year to US$ 0.30 per share, as well as three share backs totalling US$ 7.0 billion.

The UK’s second biggest supermarket chain has claimed that some of its customers are returning to shop at Sainsbury’s after ditching the chain to shop with its cheaper rivals, Aldi and Lidl. It posted that grocery sales were up 10% in the six months to mid-September; (some of that increase must have emanated from inflation which pushed grocery prices as high as 15% during the year). However, Sainsbury’s profit before tax declined 27% to US$ 335 million, not helped by demand for clothing sales being hit by a cooler summer and a warm early autumn. Sainsbury’s said it had not gained more of an overall share of the market, but it did claim that it was the only big supermarket to be winning back customers and gaining spend from Aldi and Lidl. Whether its strategy to run an “Aldi price match” campaign has worked remains to be seen but full marks to the German rival retorting with “Shoppers know that the only place to get Aldi prices is at Aldi”. The Office for National Statistics posted that October food price inflation remained high at 12.2% on an annual basis but had been easing.

Apple has introduced two new computers, MacBook Pro and iMac, and the M3, M3 Pro and M3 Max chips to power them. At the launch event, for professional users, it demonstrated its new secure screen sharing feature that would let professional users work on their machines from remote locations. The tech giant noted that the M3 Max chip was aimed at AI developers, who need huge amounts of memory to develop chatbots and other models, and that the new chips would be the first for laptops and desktops that use three nanometre manufacturing technology, which will give the chips better performance for each watt of electricity used. The chipmaker remains unknown, but it probably is the Taiwan Semiconductor Manufacturing which uses the same technology to make chips for the top-end iPhone 15 models.

With winter approaching, it does seem that not only the weather but also the UK housing market is beginning to cool, as signalled by a further decline (4.6%) in September mortgage approvals to 43.3k – its lowest level in nine months. September net approvals for re-mortgaging fell 18.0% to 20.6k – its lowest level since January 1999. In September, the “effective” interest rate, the actual interest paid to lenders, on newly drawn mortgages rose by 1.9% to 5.01%. In the twenty-one months from December 2021 to August 2023, the Monetary Policy Committee has been responsible for rates to climb from just 0.1% to 5.25%; since then, they have not moved, with another month of no movement following yesterday’s BoE decision. It does seem that months of higher mortgage rates have finally had the desired effect, and if that is indeed the case, then the era of rising rates has ended – but the current high rates will remain in situ well into 2024.

Yesterday, the BoE  left rates on hold for the second time in a row at 5.25%, the highest level in fifteen years. Its governor, Andrew Bailey, warned that the economy was likely to see zero growth until 2025, while interest rates will remain high for longer or rise further; on the flip side, he did expect that inflation would fall sharply in the coming months. (Note the man has been wrong before). Latest  figures posted inflation at 6.7% in September, with expectations that it would dip to around 3.0% by mid 2024 before achieving its 2.0% target in 2025.

A sign that the US economy is slowing is that employers added just 150k jobs in October, attributable to the weight of strikes and high interest rates; the unemployment rate rose 0.1% to 3.9%, and it seems that the long streak of stronger-than-expected job gains may be over. Despite soaring interest rates, the main aims of which were to cool the economy and stabilise prices, the dilemma is that the job market continued to remain far more robust than expected with an average 250k monthly addition – with average hourly earnings 4.1% higher during the same period. One result of the October figure was that that it reduced the possibility of any further Fed rate hike this year.

With reports circulating that WeWork could file for bankruptcy within days, its shares tanked by over 50% on Wednesday. The troubled office-sharing firm was once seen as the answer to the future of the office but was impacted badly by the pandemic, as more people started working from home; earlier, it did itself no favour by self-inflicted problems including a disastrous 2019 attempt to sell shares to the public due to concerns about its debts, losses and management, and the ungainly exit of its co-founder. It has agreed with creditors to temporarily postpone payments for some of its debt. What was once a great ground shaking idea probably grew too quickly and was badly managed, taking on too much debt and opening too many sites at once. Lately, it has been a victim of rising interest rates, pushing up already bloated costs.  The firm, once valued at US$ 47 billion in early 2019, has now lost 98% of its stock market valuation over the past twelve months and is now Looking Down The Barrel Of  A Gun!

Toothless People!                                                                          27 October 2023

The 1,761 real estate and properties transactions totalled US$ 6.37 billion, during the week ending 27 October 2023. The sum of transactions was 265 plots, sold for US$ 774 million, and 1,496 apartments and villas, selling for US$ 1.01 billion. The top three transactions were all for plots of land, one in Al Yufrah 1, sold for US$ 20 million, the second in Al Hebiah Fourth for US$ 18 million and the third in Al Goze Second for US$ 17 million. Al Hebiah Fifth recorded the most transactions, with fifty-six sales, worth US$ 76 million, followed by fifty-one sales, in Madinat Hind 4, for US$ 28 million, and thirty-eight sales in Palm Jabal Ali, valued at US$ 244 million. The top three transfers for apartments and villas were for a villa in Marsa Dubai, sold for US$ 36 million, and two apartments in Palm Jumeirah for US$ 22 million and US$ 15 million. The mortgaged properties for the week reached US$ 4.43 billion, with the highest being for land in Jabal Ali Industrial First for US$ 3.76 billion; one hundred and four properties were granted between first-degree relatives worth US$ 154 million.

Another record for the Dubai real estate sector which posted its highest quarterly capital gains in a decade, attributable to ongoing higher property demand. The Q3 ValuStrat Price Index rose 6.1% in the quarter, with villas, once again, rising faster than apartments with returns of 7.6% and 4.8%; on an annual basis, the VPI was up 15.1% with villa and apartment prices up by 19.8% and 11.0%. In the villa segment, in the quarter, Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate and Mudon recorded the highest capital gains, whilst Discovery Gardens, The Greens, The Palm and Dubailand Residence Complex led the field for apartments. Prime property valuations rose by 16.5% annually and 6.6% on the quarter. The VPI for prime villas reached a new ten-year high, with capital gains of 20.2%, year on year, and 8.5% quarterly, as prime apartments rose by 13.6% and 5.2%.

In Q3, transactions were 17.7% higher, compared to a year earlier, at 11.3k, with a value of US$ 7.19 billion, with the average ticket size of ready-to-move-in properties dipping 1.4% to US$ 639k, while 41.5% of all ready home sales were priced less than US$ 272k. ValuStrat also noted that there were fifty-two homes sold for more than US$ 8.17 million, (AED 30 million); this was down on the sixty seven units sold in Q3 2022 – a sign perhaps of a supply shortage. In Q3, the average transacted price for ready units was US$ 3,836 per sq mt (US$ 356 per sq ft), 7.8% higher on the year. Jumeirah Village, Dubai Marina, Business Bay, Downtown Dubai and International City were the top five locations. The average ticket size for off-plan homes rose by 13.0% annually to US$ 681k, with average the transacted price for off-plan properties was at US$ 5,459 per sq mt. Most transactions of ready units took place in Jumeirah Village, Dubai Marina, Business Bay, Downtown Dubai and International City. Off-plan registrations rose 19.1% annually, equating to just over US$ 1 billion.

There will be no surprise to see that Q3 rentals continued to skyrocket – 27.2% higher on the year, with villa and apartment rents increasing by 38.7% and 19.1% on an annual basis. Total project completion in the nine months to 30 September was 21.5k apartments and 2.1k villas, well down on an earlier figure, based on developer completion schedule, of 53.7k for the whole year.

Office sales transactions grew by 9%, year on year, to 631. The median transacted price stood at US$ 3,035 a sq mt, up 28.4% annually, according to the report. Volume-wise, Business Bay and Jumeirah Lakes Tower accounted for 77.5% of sales volume at 44.5% and 33.0% respectively.

It is reported that this week, a penthouse on the Dubai Water Canal has been sold for US$ 50 million to a family office of a European billionaire. The penthouse is part of the ultra-luxury residential building One Canal, which has a development value of US$ 450 million. The 30k plus sq ft penthouse stands as a sky mansion, merging four rooftop units. The Fendi-branded project includes amenities like a dedicated gym, steam room, sauna, an exclusive rooftop garden accompanied by a pool, two additional private pools, high ceilings, and dual parking spaces. Interior design was carried out by Hirsch Bedner Associates, with the architecture executed by Shaun Killa, who had previously worked on the stunning Museum of the Future.

Azizi Developments has announced that its Pearl development, launched last February and completely sold out, is now 50% complete. Located in Al Furjan, Pearl will encompass one hundred and ninety-two studios and fifty-four 1 B/R apartments. Handover is slated for Q1 2024. Azizi currently has around 40k units under construction, located in several Dubai areas, that are projected to be delivered by 2027.

A report by Savills ranks Dubai seventh of fifty-two markets monitored when it comes to warehousing costs – an indicator that the emirate is increasing its importance and presence on the global logistics industry. Driven by strong demand for warehousing, amid limited supply, costs have skyrocketed so, that by 30 June, Dubai’s prime warehousing rents stood at US$ 20.48 per sq ft. Savills noted that growth in this sector benefits the Dubai economy by attracting investment, generating employment, and enhancing and diversifying its economic and international standing. In 2022, average, warehouse lease rates continued to escalate across Dubai, specifically Grade A rents in Al Quoz which increased by 57% during 2022, with all industrial submarkets in Dubai showing strong rent rises last year. Across the markets monitored, total costs­ – comprising rents, service charges, and taxes – for prime warehousing space grew 10.1% in the twelve months to June 2023. An earlier report noted that the demand for industrial and logistical space in Dubai saw its strongest-ever performance on record. The top six in this report were London (at US$ 42 per sq ft), LA (US$ 27), Sydney, Hong Kong, Northern New Jersey, and Tokyo.

Ahead of next year’s Arabian Travel Market, latest figures from Statista estimates that revenue in the global travel and tourism market will touch US$ 854.7 billion and, with a 4.42% CAGR, should top US$ 1.0 trillion by 2027. The 31st edition of ATM will take place at Dubai World Trade Centre, from 06 to 09 May 2024. Meanwhile, Allied Market Research valued the global business travel market at US$ 689.7 billion in 2021, predicting the segment to grow to US$ 2.1 trillion by 2031, with the global luxury travel market on course to pass US$ 440 billion by the end of this decade. The latest Economic Impact Assessment Annual Report also analysed the MICE segment which continues to benefit GCC countries such as the UAE; it did estimate that the DWTC’ generated a total economic output – across sixty-three large-scale events – exceeded US$ 3.5 billion last year.

International Container Logistics, a US$ 10 million, 49:51 JV between DP World and Russia’s nuclear agency Rosatom, is intended to develop container shipping through the Arctic, as part of an initiative heavily promoted by President Vladimir Putin, for what is known as the Northern Sea Route. He appears keen to progress with the Arctic corridor partly because of international sanctions cutting off trade links to the west. Thanks to global warming, and the subsequent melting of Arctic Sea, a route has opened up between Murmansk, near Russia’s border with Norway, to the Bering Strait near Alaska. The main aim of the project is to develop an additional trade route for maritime container transportation through the Northern Sea Route, starting with the design of infrastructure facilities and specifying the volume of investment needed.

A thirty-year concession agreement with the Tanzania Ports Authority sees DP World operating and modernising the multi-purpose Dar es Salaam Port and enhancing Tanzania’s connectivity with a much wider regional/global market. Its main aim is to optimise the Port’s operations by improving transport and logistics services throughout the country and its hinterland. The first phase of a multi-phase investment plan will see the Dubai port operator investing over US$ 250 million to upgrade the port, with the total spend eventually being around the US$ 1.0 billion mark. The initial benefits from this investment will see more Tanzanians having jobs and increased access to products and services. The Port will connect to the hinterland of sub-Saharan Africa through a network of roads, highways, railways and dedicated freight corridors and ports. Other investments will result in modernising the Port, and the introduction of temperature-controlled storage, (to enhance Tanzania’s agricultural sector), as well as greater connections to rail-linked logistics. Increased investment and enhanced efficiency will allow faster cargo clearing and improved cargo planning – strengthening Dar es Salaam’s critical role as the maritime gateway for green energy metals from the copper belt in Southern-Central Africa.

In order to avoid any harm to their reputation or financial position while a dispute is being considered, as well as to ensure the continuity of family businesses, a special committee has been established in Dubai. Sheikh Maktoum bin Mohammed bin Rashid has issued a resolution for the formation of a ‘Family Business and Family Ownership Disputes Settlement Committee’, which will also have financial experts, sitting with judges, to provide specialised judicial expertise. The Dubai government is keen to maintain the role of family businesses, as partners in the emirate’s economy, and to ensure that family disputes are speedily settled, whilst finding a balance between prompt justice and the preservation of the economic interests of these companies.

At last week’s GITEX Global, the Federal Tax Authority launched a new app – Tourist Refund – that makes claiming VAT refunds a lot easier, with all transactions now done digitally. Zahra Al Dahmani, director of the Taxpayer Services Department at FTA, commented that “tourists can download the app through FTA services provider firm Planet. When a tourist buys any item from the UAE store, the merchant scans the invoice and it will be recorded in the app. The newly launched application will have information on each transaction that was bought as well the amount of VAT the tourist can claim upon exiting the country.” On leaving, at the airport, the tourist will only have to show the invoices in the app to claim a refund by cash or credit card transfer. This will be welcome news for many of Dubai’s international visitors, of which there were 8.55 million in H1, and should add a boost for the emirate’s retail sector.

In data released by Abdulla bin Touq Al Marri, UAE’s Minister of Economy, 88% of the UAE’s imports come from and 94% of its non-oil exports go to Belt and Road countries. The H1 non-oil trade between the UAE and other partnering countries of China’s Belt and Road Initiative  totalled US$ 305 billion, accounting for 90% of the UAE’s non-oil trade during this period – a growth rate of 13%. In 2022, the trade volume between the UAE and Asia, Africa, and Europe amounted to about US$ 560 billion – 20% higher on the year. The Minister noted that China, India, Saudi Arabia, Iraq, Turkey, Japan, Oman, Kuwait, and Hong Kong are among the UAE’s top 10 trading partners. He also stressed that the country has been an active partner in BRI, since its 2013 launch, and has invested US$ 10 billion in the China-UAE investment fund to support the initiative’s projects in East Africa; it has also signed thirteen MoUs with China in 2018 to invest in various sectors in the UAE. According to the Minister there are “more than 4k Chinese companies operating in key sectors such as trade, logistics services, transport, financial and insurance activities, real estate, energy, and renewable energy.”

According to Kearney’s Global Cities Index, Dubai, ranking twenty-third, continues to hold its top spot in the MENA region. The GCI measures the capacity of a city to draw in, maintain, and produce global streams of capital, individuals, and ideas. The evaluation is based on five essential factors – Human Capital, Information Exchange, Cultural Experience, Political Engagement and Business Activity.

Dubai Silicon Oasis has received four awards from Financial Times’ fDi Magazine Global Free Zones of the Year Awards – Global Free Zone of the Year for SMEs, the Middle East Free Zone of the Year for SMEs, ranked fifth in the Top 10 Global Free Zones of the Year 2023, and an honourable mention for Catalysing R&D. The first accolade is an indicator of the free zone’s efforts to support and enable the success of its business community, with its Director-General noting that “this notable acknowledgement speaks volumes of our consistent efforts to build a thriving ecosystem for start-ups, SMEs, and multinational companies.”

The Central Bank posted that, in August, investments of banks operating in the UAE hit an all-time high, topping US$ 158.04 billion, as investments increased by 19.5% on the year from  US$ 133.46 billion in August 2022.  Bonds held until maturity accounted for the largest share of investments at 47% reaching US$ 75.20 billion, up 3.4% compared to July 2023. Banks’ investments in debt bonds accounted for 42.1%, totalling US$ 67.17 billion at the end of July 2023.

Mashreq posted a massive 89.3% hike in Q3 net profit to US$ 612 million, attributable to higher net interest income, which rose 60.0% on the year to US$ 545 million, and fees, commission and income from Islamic financing. Its nine-month net profit climbed 122%, year-on-year, to US$ 1.58 billion, as net interest income and income from Islamic financing rose 82% to more than US$ 1.52 billion; operating expenses rose 15% to US$ 627 million. Customer deposits during the nine-month period surged 21.4% on the year to US$ 36.18 billion, while loans and advances grew 8.7% to US$ 27.03 billion. The total assets of the bank increased 16.4% to US$ 59.48 billion. Dubai’s third largest bank is not the only financial institution to benefit, as the country’s banking sector continues to be well capitalised, with more than adequate liquidity buffers, along with UAE’s robust economy. Lenders in the UAE are also beneficiaries of higher interest rates amid relatively lower inflation in the region.

Emirates NBD posted a 38% rise in Q3 net profit, (attributable to equity holders), to US$ 1.42 billion, as net income 25% higher at US$ 1.74 billion, helped by a 48% boost in Islamic financing and investment products to US$ 354 million. Profit was further enhanced by a 59.6% decline in impairments to US$ 151 million. Dubai’s biggest bank by assets posted a nine-month profit increase of 92%, at US$ 4.77 billion, with impairments falling 54% to US$ 409 million. YTD, the bank saw gross loans 8.0% higher at US$ 134.60 billion, with both total assets and customer deposits heading north, rising by 16.0% to US$ 227.79 billion and US$ 155.31 billion respectively. As part of its strategy to increase its digital services through FinTech companies, it made an equity investment in Geneva-based digital trade finance platform Komgo.

Emirates Islamic posted its highest ever nine-month profit – up 56% to US$ 45 million – driven by higher funded and non-funded income. Q3 income grew 46% on the year to US$ 327 million which helped drive profit 23% higher to US$ 119 million reflecting the buoyant regional economy. Total assets increased to US$ 23.43 billion, with customer deposits 7.0% higher at US$ 16.62 billion, increasing 7.0% on the year. Q3 expenses increased 35%, year on year, as the bank invested for future growth.

DEWA announced a US4 845 million H1 dividend, equating to US$ 0.017 per share that was paid out yesterday via Dubai CSD. Saeed Mohammed Al Tayer, MD and CEO of DEWA, noted that, “we intend to continue to deliver on our growth trajectory, delivering robust cash generation, a strong balance sheet and exceptional returns to shareholders. “For our shareholders, this means that DEWA’s strategy is focused on ensuring consistency of returns, durability of growth, and compounding our growth value over time”.

The DFM opened on Monday, 23 October 2023, 413 points lower the previous fortnight, lost a further 178 points (4.5%) to close the trading week on 3,787, by Friday 27 October 2023. Emaar Properties, US$ 0.45 lower the previous three weeks, shed US$ 0.02 to close on US$ 1.72 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 4.51, US$ 1.44, and US$ 0.35 and closed on US$ 0.64, US$ 4.48, US$ 1.42 and US$ 0.35. On 27 October, trading was at 158 million shares, with a value of US$ 76 million, compared to 160 million shares, with a value of US$ 126 million, on 20 October 2023.

By Friday, 27 October 2023, Brent, US$ 7.78 higher (7.7%) the previous fortnight, shed US$ 2.17 (2.4%) to close on US$ 90.06. Gold, US$ 114 (6.2%) higher the previous week, gained US$ 25 (1.3%) to US$ 2,016 by 27 October 2023.  

What seems to be a surprise, it is reported that Akbar Al Baker, the long-standing Qatar Airways CEO is to step down effective 05 November. The announcement made by the airline’s Chairman Saad al Kaabi also confirmed that Badr Al Meer will be the company’s new CEO; his current position is as COO of Doha’s Hamad international airport. Al Baker, who became CEO in 1997, also lost his position as Qatar’s top tourism official; no reason was given for the decision.

Although revenue moved 13.0% higher, Q3 saw Boeing posting a US$ 1.6 billion net loss, driven by  higher costs at its defence unit, fewer deliveries of its best-selling 737 aircraft, due to supplier problems, and  a US$ 482 million loss on its Air Force One programme; this was an improvement on its US$ 3.3 billion deficit reported in Q3 2022 but it was Boeing’s  ninth consecutive money-losing quarter. However, it was still confident of its goal of US$ 3 billion to US$ 5 billion in free cash flow this year. Because of production quality problems at its biggest supplier Spirit AeroSystems, which makes fuselages for the highly sought narrow-body jets, it had to cut its 737 delivery target for this year, and now expects to deliver up to four hundred 737s by the end of 2023 – down from its initial estimate of four hundred and fifty; within two years, it hopes to push production levels up to just under sixty a month. By the end of this year, it expects to deliver up to eighty of its 787 Dreamliner. In Q3, it delivered one hundred and five planes – only seven lower compared to the same period a year earlier – whilst revenue rose 25% to US$ 7.9 billion, driven by higher 787 deliveries. The plane maker confirmed that it secured three hundred and ninety-eight net orders during the quarter, including one hundred and fifty 737 Max-10 planes for Ryanair, fifty 787 aircraft for United Airlines, and thirty-nine 787s for Saudia; its 5.1k plane backlog is valued at US$ 392 billion.

International Airline Group posted a record Q3 operating profit of US$ 1.79 billion, (and up 43% on the year), courtesy of a bumper summer of travel on its BA, Air Lingus and Iberian networks; the three of which saw revenue hikes of 20%, 16% and 19%. After tax profit came in on US$ 1.30 billion – 44% higher compared to Q3 2022. Over the period, IAG saw a 12.2% decrease in its gross debt to US$ 4.69 billion. There are some concerns that future demand may dip, as the rising cost of borrowing and continuing high interest rates may start to impact consumer spending on the likes of air travel.

Amazon posted that its Q3 net income increased by over 341% to US$ 9.9 billion, or US$ 0.94 a share, compared with US$ 2.9 billion, or US$ 0.28 a share; the figure was boosted by a pre-tax valuation gain of US$ 1.2 billion included in non-operating income from the common stock investment in electric vehicle maker Rivian Automotive. Revenue was 13% higher at US$ 143.1 billion – the twelfth consecutive quarter with more than US$ 100 billion in sales. Operating income more than quadrupled from US$ 2.5 billion to US$ 11.2 billion. Segment-wise, North America and ‘international’ contributed US$ 87.8 billion and US$ 32.1 billion, with increases of 11.4% and 16.0%.

Although its head of toymaker, Ynon Kreiz, has been calling for Mattel to invest in films and television shows – as a way to re-ignite growth which has been lacklustre across the industry – it is only now that the company can see what its first foray into films has done to its profits.

In Q3, Barbie billings jumped 16% on the year, driven by the success of the first ever film starring the doll, with Mattel indicating it had made inroads against its competitors and improving its profit margins; it expects that the net result of the film will have added US$ 125 million to its coffers. Despite the film’s box office success, with ticket sales in excess of US$ 1.4 billion – and its positive impact on profits – the company expects Q4 sales to be hit by reduced consumer spending and the waning impact of Barbie.

Arguing that although its hybrid cars produce far less pollution that petrol cars, it does not receive commensurate policy treatment, Toyota is lobbying the Modi government to cut taxes on such vehicles by as much as 20%. The problem for the world’s largest car maker is that the Indian administration seems hell bent on pushing sales of electric vehicles, offering companies millions of dollars in incentives to build EVs and batteries. It also taxes EVs at 5% while the levy on hybrids is as high as 43%, just below the 48% imposed on petrol cars; the Japanese company commented that the 5% differential does not truly reflect the reduced emissions and better fuel consumption hybrids offer. It argues that the tax differential over petrol cars should be as much as 11% for hybrids, to 37%, and 14%, to 34%, for flex-hybrids.

Alphabet, Google’s parent company, posted a 7.0% hike in Q3 net profit, to US$ 19.7 billion, driven by an increase in Search, YouTube and advertising divisions, as revenue climbed 11.0% to an impressive US$ 75.9 billion. Total revenue from the cloud business grew an annual 22.4% to over US$ 8.4 billion. Region-wise, the US and EMEA accounted for 76%, (US$ 59.0 billion), of the total revenue. YouTube added more than US$ 7.9 billion to Alphabet’s revenue – 12.4% higher on the year. However, the markets were none too happy, with its share value declining up to 6.0% in Monday’s after-hours trading to US$ 131 – investors were disappointed by the relatively weak performance at its Google cloud platform, with operating income of US$ 266 million.

Dozens of US states have taken Meta to court accusing the parent company of Facebook and Instagram of misleading the public. The company has been accused of using addictive features to “ensnare” users, while concealing the “substantial dangers” of its platforms, and that it had broken consumer protection laws by engaging in “deceptive” conduct. The New York Attorney General Letitia James, one of thirty-three attorneys general who signed the lawsuit, noted that “social media companies, including Meta, have contributed to a national youth mental health crisis and they must be held accountable,” Meta, and other social media companies, already face hundreds of lawsuits in the US filed by families, young people and school districts over the impact on mental health. Whilst some studies do suggest that Facebook’s growth is not linked to psychological harm, there are others that have found spending long periods of time on social media can have a detrimental impact on young peoples’ mental health. The states are seeking financial damages and a halt to Meta’s alleged harmful practices.

There are reports that Chinese authorities have initiated an investigation into Taiwan-based iPhone-maker Foxconn, (the biggest maker of iPhones), in two provinces – Henan and Hubei. Foxconn’s founder Terry Gou is running as an independent candidate in Taiwan’s January 2024 presidential election which is expected to have a significant influence on Taiwan’s relationship with China, given tensions between them have ratcheted up in the past year. The jury is out, with some analysts opining that Foxconn is being investigated because Mr Gou is running for the presidency, whilst China’s Global Times, unsurprisingly, said the investigation “is normal and legitimate, as any company goes through tax inspections”. Although he has positioned himself, as an alternative to the incumbent Democratic Progressive Party, which is seen as hostile to Beijing, he has resigned his seat on the Foxconn last month, but still retains a 12.5% stake in the company.

This week, Turkey’s central bank raised interest rates by a further 5.0% to 35.0% in what could be a belated bid to try and curb inflation that is fast approaching 70%, from its current 62% level; in June, interest rates stood at 8.5%. The Monetary Policy Committee stated that “monetary tightening will be further strengthened as much as needed in a timely and gradual manner until a significant improvement in inflation outlook is achieved”; it also pointed to that its monetary transmission mechanism would be strengthened through “additional steps to increase the share of Turkish lira deposits”.

With UK interest rates currently at 5.25%, their highest rate in fifteen years, with the subsequent rise in mortgage rates – for example, an average two-year fixed rate is 6.24% – that impacted many of 70% of home-owners, who have mortgages. Over the past twelve months, house prices have started to decline with Halifax forecasting a 4.7% annual fall this year, and by 2.4% in 2024, before moving higher in 2025. Despite the falling prices, they are still US$ 48.5k higher than at the peak of the pandemic. According to the UK House Price Index, the average UK property price, based on completed transactions, is almost the same as in August 2022, at US$ 353k.

There was a marked 0.9% decline in September’s euro area annual inflation rate to 4.3% – more than a half less than the 9.9% posted this time last year. The EU annual inflation fared even better down 1.0% on the month and 6.0% lower on the year to 4.9%. The lowest annual rates were registered in the Netherlands (-0.3%), Denmark (0.6%) and Belgium (0.7%), with the highest seen in Hungary (12.2%), Romania (9.2%) and Slovakia (9.0%). On the month, September annual inflation fell in twenty-one Member States, remained stable in one and rose in five. The highest contribution to the annual euro area inflation rate came from services (+2.05%), followed by food, alcohol & tobacco (+1.78%), non-energy industrial goods (+1.06%) and energy.

Noting that some of the world’s mega-wealthy are paying little or no tax, the EU Tax Observatory has posted that billionaires should face a minimum tax rate, suggested at a minimum 2%, which would raise US$ 250 billion every year. Some of 2.5k global billionaires, with a combined wealth of US$ 13.0 trillion, use complex business structures for avoidance.

The report noted that the automatic sharing of the wealthy’s account information across more than one hundred countries had significantly reduced offshore tax evasion, but how billionaires were able to get away with paying tax rates equal to 0% or 0.5% of their wealth “due to the frequent use of shell companies to avoid income taxation”. The report commended a 2021 agreement between one hundred and forty countries to ensure companies pay at least 15% in corporation tax but noted the plan had been “dramatically weakened” since then by a “growing list of loopholes”. An example of the unfairness – and perhaps stupidity – was Warren Buffet commenting that after a series of tax changes in 2013, he conceded that even though his tax rate had risen he was still paying a lower percentage than his secretary. Elon Musk, owner of X, formerly Twitter and co-founder and leader of Tesla and SpaceX, is currently the world’s richest man, according to Forbes, with a fortune of US$ 225 billion.

On an official four-day visit to the US, Australian Prime Minister, Anthony Albanese has not only met President Joe Biden but also Microsoft supremo, Brad Smith. Whilst in Washington, he announced a mega US$ 3.2 billion investment by the tech giant which will work with Australia’s online security agency on the cyber-shield project. The plan involves work with the Australian Signals Directorate — the national agency responsible for cybersecurity and online warfare — to build the cyber shield, dubbed MACS; it will involve expanding infrastructure and skills, with a focus on cloud technology and AI. Microsoft said it would have a focus on “defending against sophisticated nation-state cyber threats”, with Albanese noting that the plan was “aimed at strengthening Australia”, and it would make it “the world’s most cyber-secure nation” by 2030. Microsoft will also build nine new data centre sites – to add to the existing twenty – in Sydney, Canberra and Melbourne, as it prepares for demand for cloud services to almost double by 2026. The company has also promised a new “Datacentre Academy” with TAFE NSW to train two hundred people by the end of 2025 and to support other programs to deliver digital skills training to three hundred thousand Australians. In Q4, the US tech giant posted 8.3% and 20.0% increases in revenue and profit to US$ 56.19 billion and US$ 20.08 billion – perhaps a gentle reminder to Australians that Microsoft is a successful business and there is no such thing as a free lunch!

First introduced in 2014, when the UK was part of the EU, the cap on bankers’ bonuses will be lifted as from 31 October. It had been designed to curb excessive risk-taking in the financial services industry in the wake of the 2008 GFC, by limiting how much extra variable pay employees of banks, building societies and investment firms could receive: the maximum was twice their basic salary. Since its introduction, banks have compensated for lower bonuses by increasing basic salaries, to make sure they could still compete with other financial centres, such as New York and Singapore, in attracting the top talent. After a four-month consultation between the Prudential Regulation Authority and the Financial Conduct Authority noted that the policy had had “unintended consequences”, and there was also less room to vary employee pay due to “material poor performance or misconduct”. The new regulations will be able to claw back any bonuses when bankers have been found to have taken undue risk.

Having seen many recent global bank profits skyrocket this year, there are many analysts that would say that much of the “icing on the cake” comes from them posting higher profits due to rising interest rates, as customers pay more to borrow cash for mortgages, loans and credit cards. It seems that, in many cases, banks are raising borrowing rates much faster than they are its savings rates, particularly for easy access accounts, now paying an average 3.21%. To some, it looks a case of banks are “filling their boots” for their staff bonuses and shareholders’ dividends at the expense of their customers. In July, the UK Financial Conduct Authority introduced new measures warned that banks would face “robust action” for offering unjustifiably low savings rates to customers at a time when borrowing rates hasd risen sharply. To date, it seems that the banking watchdog has yet to bear its teeth.. Toothless People!