Take A Chance On Me!

Last year, Dubai International Convention and Exhibition Centre hosted more than three million delegates and attendees at various events and trade shows; this was an 11% annual hike in footfall that saw 51.7k exhibitor companies from 185 countries. The MICE sector (meetings, incentives, conferences and exhibitions) is proving an important driver in the growth of the emirate’s hospitality sector.

The 24th Arabian Travel Market will open next week which will see the event attended by 2.6k exhibitors and 30k visitors. The 4-day event, one of the largest of its kind in the world, will give a much needed boost to both the hospitality and retail sectors.

Latest data from Reidin-GCP seems to support that, after a 3-year decline, there has been a significant improvement in the local real estate sector, with activity and prices in most areas on the rise, including Springs / Meadows recording year on year Q1 gains of 6%. This in direct contrast to earlier reports that the market was still in a down cycle and there was little hope of a pick up until later in the year at the earliest.

Al Hamad Group (the major investor) and Schon Properties have signed a JV to establish a massive iSuites US$ 870 million hospitality project in Dubai Investments Park. The 21-building development, to be constructed by Al Hamad’s Dubai Civil Engineering, will see the building of 2.55k hotel apartments on a single site and be ready in time for Expo 2020. The complex will also include 125k sq ft of shopping space, 52 restaurants, with a man-made beach and a lagoon.

Azizi Developments has appointed Belhasa Projects to build three residential towers, housing 1.9k apartments, in Dubai Healthcare City. This is part of the developer’s strategy to launch 50 new projects this year alone.

According to JLL’s latest report, Dubai’s current retail supply of 3.4 million sq mt of gross leasable area has expanded by 17% over the past three years and is expected to grow to 4.1 million sq mt by 2020. There is a possibility that some of the proposed mega malls may be cut back or put on the back burner in the wake of a troubled retail sector. However, despite the slowdown, rents have yet to move southwards, remaining flat and unchanged.

The foundation stone for Lulu’s US$ 272 million Silicon Mall was laid this week by HH Sheikh Ahmed bin Saeed Al Maktoum. The development, encompassing 2.3 million sq ft and hosting 300 stores and 50 food outlets, will be ready by 2020.

In an agreement with Dubai Wholesale City, Enviroserve UAE is investing US$ 33 million to build a 228k sq ft Swiss-designed waste disposal plant specifically for unwanted electronics and electric equipment. Phase 1 of the development will see 39k tonnes of waste being processed. Such a facility is long needed as data suggests that each UAE resident will produce 16.2 kg of e-waste every year and that such waste in the GCC will grow 50% to 900k tonnes by 2020.

The 3-year old DEWA drinking water company, Mai Dubai, is slowly picking up market share in the country but is still some way off the industry leader, Masafi which accounts for 27% of the total supply. The company is investing US$ 163 million that will see it more than treble its current output to 50 million units by 2020.

It has been reported that the Gargash family has acquired a 100% stake in Gargash Enterprises LLC for an undisclosed sum. The Dubai company is the world’s largest independent distributor for Mercedes Benz vehicles.

Dubai-based Altitude Mask has signed up both footballer Gareth Bale and boxer Anthony Joshua as brand ambassadors for its innovative state of the art resistance masks; online prices range between US$ 100 – US$ 112. Developed and marketed in Dubai, they boost oxygen intake whilst enhancing endurance and fitness levels.

The new US$ 16 million Centre Point Warehouse facility in Dubai South is now operational. The Dubai-based logistics company is expecting to post a further US$ 14 million boost in revenue this year.

Nautica products are back for Dubai shoppers, following a deal with new partner, Apparel Group. The New York fashion chain has relaunched this week in its Dubai Mall store and has currently 12 stores in the region, with a further 18 expected over the next five years.

Although no data was readily available, it seems that Emirates traffic to US destinations has been badly hit by President Trump’s travel ban on six Muslim countries and the on board electronics restriction. Accordingly, the airline has cut certain flights to five of their twelve US destinations. Some of the resulting slack has been taken up by Chinese traffic that has seen recent double-digit growth.

As part of its 2017 expansion plans, DP World is expected to invest US$ 1.2 billion in various locations, including here in the UAE, Africa (Egypt and Rwanda), Canada, Greece, Kazakhstan, and South America.

There is talk that Dubai is in the market for future financing, possibly utilising sukuks rather than more traditional vehicles such as bonds, banks etc. The money would be used to plug its 2017 budget deficit expected tome in at US$ 680 million.

The latest WTO report shows that the UAE is now ranked 19th in a list of the world’s top exporters, with a total value of US$ 266 billion – a 2% decline over the previous year. The world body still has concerns about political and further economic problems but is expecting a global improvement in 2017.

It has not been a good four months for traditional local media. At the end of last year, the last edition of 7 Days was printed and now there are reports that The National is cutting jobs as revenue slides. The slowdown in the market and the impact of low oil prices has now claimed its third casualty – Dubai-based TV station City 7.

A new Standard & Poor’s report indicates that the 29 listed insurers in the country continue in the black having turned profitable in 2016, after losses in prior years. The insurers, which represent 46% of total gross premiums in the UAE, posted a cumulative 2016 profit of US$ 247 million following a US$ 42 million deficit a year earlier. The main drivers behind this turnaround are the introduction of compulsory medical insurance and increases from both the motor and property sectors.

Nasdaq Dubai announced that Saudi’s Islamic Development Bank has issued its eighth sukuk on the local bourse; the US$ 1.25 billion bond brings the bank’s total to US$ 9.8 billion. Its listing total has now reached US$ 53.8 billion (the highest of any similarglobal bourse), with the latest issue being a US$ 500 million bond from Dar Al-Arkan; this brings the total listing for the Saudi-based construction firm  to US$ 1.35 billion.

Emirates NBD posted a 4.0% hike in Q1 profits to US$ 510 million, although total income slipped 3.0% to US$ 981 million. Dubai’s largest bank has managed to reduce its impairment charges by 22.9% to US$ 174 million and its general and administrative costs by a credible 11.0% to US$ 305 million.

In a similar vein, its sister bank, Emirates Islamic, posted a 1.8% rise in total income to US$ 198 million whilst profit almost quintupled to US$ 60 million from US$ 12 million a year earlier. The main drivers were impairment charges falling 48.7% to US$ 37 million and operating expenses down some 18% – with 300 staff retrenched throughout 2016. (Last year total provisions for bank loans throughout the country jumped 7.8% to US$ 21.4 billion – these Q1 figures from the two banks indicate somewhat of an improvement in the situation).

However, CBD posted a 33.5% decline in year on year Q1 profit to US$ 44 million although operating income actually increased 9.0% to US$ 171 million. The main drag factor was a 91.2% surge in net impairments to US$ 66 million, as its non-performing loan ratio nudged marginally higher to 7.1%.

As expected, Emaar declared a 15% cash dividend for 2016, equating to US$ 292 million with the developer having posted a US$ 1.4 billion profit. It also reported that it has a US$ 11.7 billion project backlog including its Dubai Hills Estate JV with Meraas, encompassing 11 million sq mt, as well as an extensive land bank which now stands at 24 million sq m, in the UAE, with a global total of 190 million sq mt. Not content with the two residential towers, Emaar is to build a third within its Downtown Views II project overlooking the Burj Khalifa.

Emaar Malls also announced a 10% cash dividend totalling US$ 355 million; the shopping mall and retail business arm of Emaar Properties had posted a US$ 511 million profit last year, on revenue of US$ 879 million.

The DFM opened Sunday at 3509 and, having shed 57 points the previous week, continued its losing way – down another 39 points to end the week 1.1% lower by Thursday (20 April) at 3470. Volumes were again disappointingly low, closing on Thursday at 278 million shares, valued at US$ 97 million, (cf 336 million shares for US$ 106 million, the previous Thursday). Emaar Properties regained some of the previous week’s loss up US$ 0.04 to US$ 2.02, but Arabtec remained in the doldrums down US$ 0.01 at US$ 0.24.

By Thursday, Brent Crude had shed much of its recent gains, down US$ 3.27 (5.9%) to close on US$ 52.59, with gold creeping lower (US$ 6) at US$ 1,284 by 20 April 2017.

Vijay Mallya has been bailed in London after a US$ 812k bond was posted after his arrest on Tuesday. The disgraced Indian tycoon reportedly owes banks US$ 750 million and was arrested following a request from Indian authorities (who had already cancelled his passport last April). He made his original fortune from the Kingfisher beer brand and then later expanded his empire into aviation and Formula 1 racing.

It would be interesting to ascertain the amount of UK tax Starbucks will pay after its 900 outlets posted an annual 6% fall in revenue to US$ 470 million, with profits tanking 60.8% to US$ 17 million. The usual suspects are again in play for these disappointing results – Brexit, terrorism threats and the fall in sterling.

Two of the UK’s leading retailers are to close further stores this year. Debenhams plans to close 10 of its 176 outlets, along with its DHL-run Northampton distribution centre and ten small in-house warehouses. Although it plans to open 36 new stores – all but two will be food-only – M&S will close six shops of its 344 portfolio; the company also has 615 food outlets operating in the country.

Notwithstanding all its negative publicity, United posted dismal Q1 results with the airline’s profit sinking 69% to US$ 96 million, although revenue edged 3% higher to US$ 8.42 billion. The troubled airline was badly hit by operating costs up 8%, driven by a 28% surge in fuel costs and maintenance/ repairs up by 13%.

Following last week’s mostly favourable results from the three of the US major financial institutions, Bank of America followed suit. The country’s second largest bank posted a 44.0% hike in Q1 profit to US$ 4.35 billion, as revenue increased by 7.0% to US$ 22.25 billion.

Based on recent events, it seems that the 23-year old media and content company Vice could be valued at US$ 5.5 billion. The last time, in 2015, the Canadian company went to market for financing – with Disney spending US$ 400 million for an almost 10% share – the company had a US$ 4.2 billion valuation. Now it is looking for a further US$ 500 million tranche with a possibility that Disney may be considering a 100% buy-out.

Having acquired Weetabix in 2012, China’s second largest food company, Bright Food Group, has sold the brand to Post Holdings for US$ 1.8 billion. This traditional cereal has failed to impress the Chinese public and has made no inroads; indeed 83.8% of its total US$ 433 million 2016 revenue emanated from its home base in the UK.

Weak Q1 sales were reported by two major global consumer companies. Unilever posted a revenue figure of US$ 14.0 billion whilst rival Nestle posted a growth of less than 1% to US$20.7 billion. The Swiss conglomerate blamed currency fluctuations and the sale of an ice cream business for the disappointing turnover.  However, if still expects to reach its up to 4% target figure by year end.

Last season, the 20 English Premier League clubs posted a 10% hike in revenue to US$ 4.5 billion but still turned in a pre-tax loss of US$ 139 million, according to a recent Deloitte study. The main cost drivers saw both wage bills and other operating costs increasing – by 15.0% to US$ 2.9 billion and 12.5% to US$ 1.1 billion respectively. The two Manchester clubs accounted for half of the total revenue increase, with United generating a US$ 650 million revenue stream making it the world’s highest revenue-generating club.

Silvio Berlusconi has sold his AC Milan football team for US$ 627 million to a Chinese consortium. The new owners have committed a further US$ 297 3-year million investment in the team that the former playboy prime minister of Italy bought in 1986.

After being run by a gang of charlatans for so many years, it is no wonder that major companies are keeping their distance from FIFA. With the World Cup in Russia just over a year away, the world body is finding it difficult to find sponsors, with only 10 of the possible 34 deals signed up. Over the past three years, as the FIFA brand became so toxic, sponsors such as Emirates, Castrol, Continental Tyres, Johnson & Johnson and Sony have given FIFA their red cards. It seems that  there have been only three new sponsors – two from China (electronics group, Hisense and Wanda), along with Russia’s Alfa-Bank.

The Brazilian Supreme Court has claimed that there was illegal profiteering from builders and politicians arising from the construction of football stadia for the 2014 World Cup. Following a plea bargaining by Odebrecht executives, it is alleged that there were irregularities in the bidding for six stadia including the iconic Maracana; the cost of renovation at the Rio venue should have been US$ 225 million but the final bill was 40% higher at US$ 315 million. In Sao Paulo, the cost of work at the Corinthians stadium was four times higher than originally planned. (Odebrecht is the continent’s largest construction company and last year, agreed to pay US$ 3.5 billion to authorities in Brazil, Switzerland and the US after admitting using bribery to secure other major contracts).

China’s Q1 figures surprised the market as the economy expanded by an impressive 6.9%, driven by demand for new property and public infrastructure spending; the figures came a month after the National Bureau of Statistics had cut its 2017 growth target to 6.5%. February retail sales also jumped 10.9%, indicating a move up for domestic consumption. However, the country is still bedevilled by debt which accounts for over 250% of GDP and the problem will continue to deteriorate unless the government take furtive action; this will entail cutting back on growth, a move that may not be good news for the Chinese leaders.

After surging to 71 in March, then nearing a twelve year high, the NAHB/Wells Fargo Housing Market Index dropped 3 points to 68 this month. Despite this blip, the US housing market is still in robust health and the demand for housing continues upwards, despite rising building material costs and higher regulatory expenses.

The latest IMF forecasts paint a promising picture for the global economy with 2017 growth four notches higher than last year’s 3.5%, driven by “a long awaited cyclical recovery in manufacturing and trade”. The UK’s expected growth rate of 2.0% will be the best of any of the other major economies barring the US. For a welcome change, not one of the world’s leading economies, including Brazil and Russia, are expected to post falls in economic activity over the next two years.

The February seasonally adjusted eurozone trade balance beat market expectations coming in at US$ 20.6 billion, up US$ 3.8 billion from a month earlier; exports nudged 0.4% higher with imports falling 1.7%. March returns indicate year on year increases in both imports (5%) and exports (4%). Eurozone inflation, at 1.5%, slowed to a three-month low in March, following a 2.0% increase the previous month. This figure is almost in sync with the ECB’s 2% target.

UK employment figures in February showed a 39k increase thus maintaining annual growth at 1%, with the unemployment rate unmoved at 4.7% – its joint lowest level in 42 years – and almost in line with the Bank of England’s 4.5% equilibrium rate of unemployment. It is expected that consumer spending growth (now at 2.3%) will continue to be subdued even though the labour market continues to tighten.

In a move that surprised the market, Theresa May called an 08 June general election which saw sterling move higher, touching 1.29 to the US$, and the FTSE 100 diving the other way, losing US$ 58 billion. By Wednesday, the main stock market had eroded all of its 2017 gains and was trading at 7114, having started the year on 7142.

With the opposition labour party in complete disarray, there is every chance that the Conservatives will return with a bigger majority, which in turn should give the May administration more leverage in Brexit discussions. However, the good lady may rue this decision and regret asking the electorate To Take A Chance On Me!

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In The Summertime

Chestertons reported a marked improvement in the local realty sector, with off plan sales up 45%, an overall Q1 transactional activity higher by 25% and a 4% hike in the number of transactions for ready property. There was a 31% quarter on quarter rise in the value of transactions to US$ 3.3 billion, 45% of which were made up of off plan purchases. The company estimates that 16k units were added to the total number of Dubai residences last year, with a slightly lower figure of 15k expected for 2017.

JLL report minimal Q1 rental changes and expect no recovery in Dubai property prices over the next six months. It estimates that only 2.6k units were handed over in the first three months of the year, with that number expected  to rise to just 14k for the whole year. That being the case, there will be only a 2.9% increase in the emirate’s total real estate portfolio to 489k units. With Dubai’s population at 2.76 million – up 10.4% from the 2.50 million recorded only eleven months ago – and set to expand to 5.2 million by 2030, it seems logical that current future supply is going to be well short of future demand.

There is no doubt that Azizi Developments are on a roll. Having recently purchased 186 plots at Meydan One, the company has two contracts, totalling US$ 463 million, to build 35 apartment blocks there. Phase 1 construction work, to be carried out by KCC Engineering Construction and Maintenance and Actco General Contracting, will comprise 18 low to medium rise buildings, with 2.3k apartments.

Towers Technology Contracting Co has been awarded a US$ 16 million Dubailand contract by Damac to carry out work on the main structure works of Akoya Oxygen villas at Mulberry cluster.

Seven Tides is set to develop a luxury resort on one of its islands in The World archipelago, located in the South American cluster. The developer has already started work on one of the islands, closest to the Dubai shoreline, with plans to build 60 low-rise villas.

After a blip in February, doom and gloom returned to the hospitality sector, with all main year on year indicators heading south. Average daily rates, revenue per available room and occupancy all plummeted by 10.0% to US$ 206, 11.0% to US$ 178 and 1.3% to 86.3%. One of the main drivers is the fact that supply – at 6.0% – is increasing at a faster rate than the 4.6% demand – and the problem could be exacerbated with many new hotels due to open in the coming months.

Despite these figures, AccorHotels is planning to almost double the number of rooms in its UAE portfolio from 8k to 15k over the next twelve months. Currently, the French hotel operator has 38 properties, with 23 of them located in Dubai. It is also rebranding and refurbishing the Yassat Gloria into a 5-star Mercure Dubai Barsha Heights Hotel Suites and Apartments which would make the 1k-key property the largest Mercure hotel in the world.

According to the developer, Damac Towers by Paramount Hotels & Resorts, originally due to open in 2015, is now 85% complete. The US$ 1 billion project comprises four towers, taller than 250 mt, and covering 2 million sq ft. One tower will house an 800-key, 5-star hotel to be operated by Paramount Hotels & Resorts, whilst the other three will have over 1.1k luxury serviced apartments under the Damac Maison brand.

Meraas has announced its intention to establish four hotel brands – Evado, MQ, Re Vera and Vivas – which will range from boutique to upper midscale grading. The developer expects that these will open next year, nearby to Ain Dubai (its landmark Ferris wheel) on the US$ 1.16 billion Blue Waters Island development.

It is reported that the Al Fardan Group has spent US$ 136 million to acquire the 47-storey Carlton Downtown Hotel (formerly known as the Warwick Hotel). This will be the third property to be operated by Carlton Hotel Management in Dubai whilst it also owns and operates Marriott Executive Apartments, Villa Rotana and Four Points by Sheraton in Dubai.

United Engineering Construction was awarded a US$ 1.7 billion contract to construct Nakheel’s Deira Mall, due for completion by 2020. The huge four million sq ft development will be the focal point of the developer’s ambitious 15.3 sq km waterfront city – Deira Islands – which will eventually be home to 250k people. On top of this contract, Nakheel plans to increase the value of its construction tenders by 20% to US$ 3.3 billion, including US$ 1.4 billion for Deira Boulevard.

Nakheel’s fifth community retail centre, Jumeirah Islands Pavilion, opened this week to service 8k residents of the 767 luxury villas and mansions, along with 246 duplex apartments, living in and around the US$ 123 million local community.

A Carrefour hypermarket will replace the closed HyperPanda outlet in Dubai Festival City and will open in May. The chain, which posted a 6.2% hike in Q1 revenue to US$ 22.7 billion, is now the second largest global retailer in the world behind Wal-Mart. MAF has the exclusive rights to operate the French supermarket brand in 38 countries, with 23 such stores operating in the UAE. (Interestingly, its owner, Majid Al Futtaim, has been ranked second in the latest Forbes list of the world’s richest Arabs with a value of US$ 10.6 billion).

According to JLL, Dubai office vacancy rates are in the region of 14%, with a trend for tenants to search for cheaper options. For the next nine months, it is expected that a further 235k sq mt of gross leasable area will be added, with 25.5% of the total expected in JLT.

DP World is in discussions with Egypt’s General Authority for Investment and Free Zones to expand the capacity of Sokhna port. This is just one of the port operator’s 77 operating marine and inland terminals in over 40 countries.

State-owed P&O Ports has been awarded a 30-year concession to manage and develop the Bosasso port in Puntland, Somalia. The total project costs is US$ 336 million, with development in two stages – the first including a new 450m quay, dredging and reclamation work.

Rotary Engineering of Fujairah has won the Enoc contract to build twelve storage tanks that will help its refinery capacity increase by more than 50% to 210k bpd. This is part of the oil company’s US$ 1 billion Jebel Ali expansion plan that will also see storage of jet fuel, naphtha and petrol blends rising to 450k cubic mt.

Dubai’s non-oil private sector continues to improve and is in its best position in over two years. The Q1 Emirates NBD Economy Tracker Index posted a March 56.6 reading (56.2 a month earlier), driven by increases in new orders, employment and stocks of purchases.

With its 21st season closing earlier in the week, Dubai’s Global Village posted record attendances of 5.6 million guests over the 156-day event. During that time, it is estimated that total business transactions for the 10k exhibitors topped US$ 627 million.

Following its acquisition of Souq.com, Amazon is looking to establish a permanent Dubai operation which will require office and logistics space to run the company’s regional operations.

Dubai Islamic Bank has had success in the English courts defending a US$ 2.5 billion claim brought against it by Argentine firm, Plantation Holdings. The case involved a 20 million sq ft of land in Dubai with claims of breaches of contract and of the bank’s duties as mortgagee. As a result of a complex financing fraud, the bank took over security of the project, as part of a US$ 625 million debt.

Dubai Investments’ shareholders approved a 12% 2016 cash dividend, along with a 5% bonus share issue, which brings the total payout to US$ 188 million, of which US$ 132 million applies to the dividend. The company reported a 9.9% hike in profits last year to US$ 332 million.

Dubai Aerospace Enterprise posted a 67.4% fall in 2016 net income to US$ 54 million, although revenue was 22.0% higher at US$ 418 million. Last year, the company, whose major shareholder is the Investment Corporation of Dubai, divested itself of the engineering services provider StandardAero and invested over US$ 1 billion acquiring more aircraft for leasing; the company now has 112 planes, with a total value of US$ 5.1 billion.

UAE’s largest Islamic financial institution, Dubai Islamic Bank reported a 4.0% increase in Q1 net profit to US$ 283 million, as income surged 12.9% to US$ 646 million. All other indicators headed north – net operating revenue, net financing assets and total assets were up by 6.5% to US$ 490 million, 5.7% to US$ 33.1 billion and 6.9% to US$ 50.9 billion respectively.

Dubai’s third biggest bank, Mashreq, posted a 2.7% hike in Q1 profits to US$ 149 million, driven by a 15% reduction in impairment provisions. There were slight declines in both in total assets (by 1.7% to US$ 32.9 billion) and customer deposits which fell to US$ 20.9 billion.

The DFM opened Sunday at 3566 and shed 57 points to end the week 1.6% lower by Thursday (13 April) at 3509. Volumes were again disappointingly low, closing on Thursday at 336 million shares, valued at US$ 106 million, (cf 266 million shares for US$ 88 million, the previous Thursday). Emaar Properties fell US$ 0.06 to US$ 1.98, with Arabtec also in negative territory, down US$ 0.01 at US$ 0.25.

By Thursday, Brent Crude continued to regain recent losses, being up US$ 0.97 (1.8%) to close on US$ 55.86, with gold higher (US$ 37) at US$ 1,290 by 13 April 2017.

On Tuesday, Toshiba finally posted its long awaited nine months’ unaudited results to 31 December 2016, indicating a US$ 4.9 billion loss, with the company warning that its future survival was at risk; there is a chance that this deficit could more than double by the 31 March year end as its write-downs from its US nuclear unit Westinghouse Electric become clearer. It is reported that Broadcom, Foxconn and Hynix are interested in the company’s memory chip business that could be valued at US$ 27.6 billion, whilst Turkey’s Vestel is in discussions relating to the sale of its television division.

BMW recorded its best ever March figure, with a year on year jump of 5.9% to 225k vehicles, as Q1 sales increased to 587k units. Of that total, 503k came from the BMW brand, with the balance emanating from its ancillary brands, including the Mini and Rolls Royce.

With its former disgraced chief, John Stumpf, returning US$ 28 million and Carrie Tolstedt, head of the Community Bank division, losing US$ 47 million of share options, Wells Fargo has reclaimed a further US$ 75 million following the scandal, involving two million fake accounts; in total the two, who had resigned, have now repaid US$ 136 million. US authorities fined the bank US$ 185 million, for “widespread illegal activity” and it also had to pay customers a further US$ 110 million to settle various lawsuits. Nevertheless the bank still reported flat Q1 profit at US$ 5.5 billion.

JP Morgan Chase had a stellar Q1, with profits 17.3% higher at US$ 6.45 billion as revenue climbed 6.0% to US$ 24.7 billion, driven by higher interest rates, increased trading activity and a 28.0% fall in provisions for credit losses to US$ 1.3 billion. There were similar results from Citi, with a 17.0% lift in profits to US$ 4.1 billion, as revenue edged 3% higher to US$ 18.1 billion.

The BBC has been busy investigating two possible financial scandals. The first involves Shell’s activity in Nigeria some seven years ago, where it is claimed that top executives were aware of money being paid to the government being passed to a convicted money launderer; former oil minister, Dan Etete, then allegedly used these funds to pay political bribes. The case involved an oil field, with estimated reserves of nine billion barrels, for which Shell and the Italian oil company ENI acquired rights, having paid US$ 1.3 billion to the government; over US$ 1 billion was then forwarded to Malabu, a company controlled by Mr Etete.

The other implicates the Bank of England who reportedly pressured commercial banks back in 2008 to move their Libor rates down. In a recording, it seems a senior Barclays manager instructed a Libor submitter to lower his Libor rates, claiming that there was “some very serious pressure from the UK government and the Bank of England about pushing our Libors lower.”

The Chief Executive of Barclays, Jes Staley is in trouble for trying to discover the identity of a whistleblower, within the bank, via its internal investigation term. Barclays’ deputy chairman has investigated the case, following which the CE will lose his annual bonus, totalling US$ 1.6 million, and be issued a formal written reprimand for making “an honest but serious mistake”. Regulators are now looking at the case and they will probably take more extreme action, as whistelblowers need to be encouraged as a key element in the war against corruption – and not picked on and hounded by the likes of Mr Staley.

UK’s largest retailer, Tesco recorded its first increase of 4.3% in annual sales (at US$ 62.3 billion) for seven years, as operating profit surged 30.0% to US$ 1.6 billion. However, because of other factors, including a US$ 161 million fine (in relation to its 2014 profits scandal) by the Serious Fraud Office and other probes, pre-tax profits fell 28.0% to US$ 180 million.

The UK High Street is set to lose another famous brand, as the 133-year Jaeger goes into administration. The fashion chain has 46 stores and 63 concessions and there has been no buyer at a selling price of US$ 37 million – an indicator of the dismal trading conditions, especially since the fall in sterling.

The first ever rail freight service between UK and China left Essex this week on a 17-day, 7.5k km journey ending in Zhejiang province. The DP World locomotive, carrying 30 containers, is expected to arrive on 27 April; the operators claim that the cost is cheaper than air and quicker than sea.

The March UK inflation rate remained at 2.3%, month on month, but is significantly higher than the 0.5% rate of March 2016, resulting from the fall in sterling and higher fuel costs. With this level above the Bank of England’s 2.0% target, it seems likely that a rate hike is on the cards despite wage growth remaining weak, having slowed to 2.1% over the past quarter. With spending power also dipping, it was no surprise to see retail sales falling the most in over six years.

Latest reports show that Australian home prices – in their five biggest cities – continue to head northwards, with an average 3.8% increase already this year; both Sydney (with 5.6%) and Melbourne’s 4.6% both now defying gravity. Only Perth, with a 2.5% fall, was in negative territory. It is inevitable that prices are far too high for the Australian economy and it is highly likely that the property bubble will start deflating later in the year, as rising mortgage rates and increased supply start to hit home.

The Bank of Japan confirmed the continuance of its massive QE programme, as the economy still only shows a moderate recovery; the stimulus package is set to continue until the country’s inflation level nears 2%. Its February trade surplus stood at US$ 25.4 billion, slightly less than market expectations but showed a 18.2% hike over the year. However, there was marked weakening in the country’s current economic assessment that fell to 47.4 in March – lower than the 49.8 forecast and down on the previous month’ return of 48.6.

There was some positive new emanating from two leading global authorities. The WTO forecast a rebound in global trade by 2.4% this year (1.3% in 2016) and between 2.1% – 4.0% in 2018 but warned that that this could be undermined if certain countries curtailed trade for political and their own national interests. Other potential hurdles could result from higher interest rates and tighter fiscal policies.

IMF’s Christine Lagarde is bullish on the global recovery with the one proviso – the shadow of protectionism rearing its ugly head. After six years of sluggish growth, momentum is gathering with stronger manufacturing activity, more jobs, higher incomes and greater prosperity for the global economy. (However, weak productivity is still a universal drag factor with the French chief indicating that if growth had followed its pre-GFC levels, the overall GDP in advanced economies would be a significant 5% higher).

This year, Dubai has moved inexorably between a late winter and an early summer. One can only hope that both the global and local economies move likewise and the inevitable turnaround occurs earlier than many analysts expect. This year, Dubai could be the place to be In The Summertime.

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Only Fools Rush In

The latest CBRE report paints a dismal picture of the Dubai housing market with a Q1 1.0% contraction in quarter on quarter rentals, as the equilibrium between increasing supply and restrained demand widens. Even more sobering is the latest outlook from Cluttons with sales prices in certain locations plummeting, including a 12-month 25% slump for Burj Khalifa apartments, followed by falls for Hattan villas at The Lakes (13.5%) and Arabian Ranches (12.6%), with Palm Jumeirah villas and apartments down by 12.3% and 11.0% for the year. Overall villa prices have slipped 6.8% with apartment values faring worse – down 8.5% over the past twelve months. If you want to find reasons for the disappointing numbers, look no further than Brexit, Donald Trump, oil prices and a sluggish global economy.

Meanwhile Core Savills noted a price decline in prime Dubai locations, whilst the more affordable areas nudged higher. One significant point made was that the property consultancy now expects 2017 deliveries to come in at 18k units – somewhat lower than their earlier 36k forecast (Q1 saw only 3.1k released onto the market). There were mixed results ranging from 7% falls in Jumeirah Village, in contrast to 5% year on year growth in the Meadows and The Springs.  Rentals seemed to fall across the board with little prospect of any improvement until 2018; apartments saw decreases of 7% in The Views and Discovery Gardens, 5% in The Greens and 4% on The Palm, with villas there down by 9%.

There will be similar reports out in the coming weeks. No doubt their  historic findings will all differ and that begs the question – if they cannot produce accurate historic data, how can the general public rely on their forecasting?

Dubai Land Department recorded impressive increases in both the number and value of Q1 real estate transactions – by 45.0% to 20k and 40.8% to US$ 21.0 billion, compared to the same period in 2016.

Last year overseas investors, from outside the Arab region, cut back on their spending in Dubai realty – down 41.0% to US$ 12.0 billion – with the number of non-GCC investors down 35.0% to 22.8k. The three main investing countries were all down – India by 42.3% to US$ 3.3 billion, Saudi Arabia by 15.7% to US$ 2.2 billion and UK by 46.7% to US$ 1.6 billion.

However, Dubai’s commercial sector has by and large weathered the storm, with the average Q1 rental price in prime areas remaining firm at US$ 523 per sq mt. Secondary rentals have softened, with marginal 1% falls to US$ 291 per sq mt.

Azizi Developments have awarded Belhasa Projects the tender to build three residential towers (2*20 floors and the other 18-storey) in Dubai Healthcare City. This development, encompassing 1.9k  units, follows an earlier one that brings the developer’s total spend in this particular cluster to US$ 436 million.

Dubai Properties has announced the first phase of the launch of Mudon Views which will comprise a range of 1-3 bedroom units in two buildings.

AccorHotels’ latest brand, MGallery, will open on The Palm Jumeirah this summer. The 255-room Retreat Palm Dubai – MGallery By Sofitel is the first such property in the ME and will be a wellness resort, with the emphasis on healthy food, along with its own lifestyle consultants and nutritionists. This will become the Palm’s 13th hotel, following Friday’s opening of The Viceroy Palm Jumeirah Dubai; a further 22 are under construction.

The newest addition to the Rotana portfolio will be the 54-storey Sabah Rotana in Sufouh Gardens, in conjunction with RSG International. The five star hotel and serviced apartments, with 534 keys, 220 of which will be for the hotel, will open in Q2 2020.

Nakheel has awarded a US$ 37 million contract to Al Ghurair Contracting and Engineering Works LLC to construct their second hotel in Dragon City. The 304-key, 8-floor Premier Inn, the latest in the developer’s 16-hotel portfolio, will be ready by 2019.

The design of the focal point of Expo 2020 was unveiled this week. Al Wasl (the former name for Dubai, with an English translation of “connection”) Plaza, 150 mt in diameter, will be the centre point of the 4.4km site and connect the three thematic districts – Mobility, Opportunity and Sustainability. The plaza will have a 65mt high domed trellis which will act as an immersive 360-degree projection surface.

According to the Dubai Chamber of Commerce, on-line shopping accounts for just 3% of the emirate’s total retail spend but a double digit annual growth is on the cards for the coming years. At a CAGR (compound annual growth rate) of 4.9%, the country’s total retail sector will top US$ 71.0 billion, from its 2016 total of US$ 56.6 billion, by 2020. Last year saw a further 250k sq mt of retail space added – its biggest total since 2010 – whilst estimates are for an additional 750k sq mt over the next two years.

Tuesday saw the opening of the five-day World Retail Congress in Dubai, attended by some 1.5k delegates. With the sector having a tough time, as traditional outlets continue to lose an increasing amount of business to e-commerce sites, the 11th annual meeting will have a lot to discuss.

Orbi, a development between SEGA Holdings Co and BBC Worldwide, is set to open in City Centre Mirdif. The MAF Group has established the new multi-sensory recreational facility and interactive nature project which will feature a custom built theatre and innovative audio visual technology.

Dubai Mall will be home to Apple’s third UAE store (and second in Dubai), in addition to its two retail outlets at Dubai International’s Terminal 3.

It is reported that Dubai is ranked 7th of worldwide cities attracting foreign investment, with a total of US$ 9.9 billion. With 247 new investment projects last year, the city is ranked third, behind London and Singapore, for the total number of new initiatives. 59% of the projects were financed from the US, UK, India, Germany and Italy.

Despite the doom and gloom merchants thinking otherwise, there is no doubt that the local economy is picking up momentum as the UAE’s March PMI rises two notches to 56.2 – its highest level in 19 months. Factors behind the uptick include a record rise in stocks of purchases, along with notable increases in output and new orders.

Having opened an office in Qatar a decade ago, Sotheby’s has finally a presence in Dubai. The London-based auction house has followed its rival Christie’s to the city. It is hoping that this move may improve its financial position that has seen 2016 revenue and profits both dipping – by 18.1% to US$ 335 million and 30.3% to US$ 99 million respectively.

Following last month’s resignation of its long-standing chairman, Mohammed Abdullah Al Gergawi, it is reported that both its Chief Executive, Fadel Al Ali, and vice chairman and managing director, Ahmad Bin Byat, have left Dubai Holding, the Ruler’s investment vehicle. The newly appointed chairman, Abdulla Al Habbai, will be in charge of managing a massive US$ 35 billion asset portfolio in more than 20 countries.

It seems that Damac’s move to establish its own mortgage department has already paid dividends, with the developer announcing that US$ 163 million of facilitating financing for its own properties has occurred to date. Damac is the first luxury developer to introduce this one stop shop imitative to support its client base.

Having made a US$ 200 million 2016 loss, and ending the year with a negative cash flow of US$ 83 million, the embattled Dubai contractor, Drake & Scull, has embarked on a capital raising exercise. Over the coming weeks, it hopes to generate a much needed US$ 245 million from a US$ 136 million cash injection from Tabarak International, US$ 82 million from a development sale to Omniyat and a US$ 27 million rights issue.

Marka is one of the last Dubai-listed companies to announce their 2016 results, posting an annual loss of US$ 41 million, driven by debt service levels and impairment charges related to goodwill. Annual revenue at the country’s first retail-focused listed company, with 47 mixed-use outlets, surged nearly 37% to US$ 80 million.

The DFM opened Sunday at 3480 and recovered, gaining 86 points to end the week 2.5% higher by Thursday (30 March 2017) at 3566. Volumes were again relatively low, closing on Thursday at 266 million shares, valued at US$ 88 million, (cf 147 million shares for US$ 72 million, the previous Thursday). Emaar Properties gained US$ 0.06 to US$ 2.04, with Arabtec also in front, up US$ 0.02 at US$ 0.26. For the month of March, the bourse shed 4.1% to 3480, with Emaar US$ 0.05 lower at US$ 1.98 and Arabtec by US$ 0.01 to US$ 0.24.

By Thursday, Brent Crude continued to regain recent losses, being up US$ 1.93 (3.6%) to close on US$ 54.89, with gold higher (US$ 8) at US$ 1,253 by 06 April 2017. For the month, both Brent and gold fell – by 5.4% to US$ 53.53 and US$ 2 to US$ 1,252.

An indicator that the production cuts agreed by producers are beginning to take effect sees crude stockpiles declining. An ongoing overhang of some 285 million barrels has seen flat oil prices but a recent Morgan Stanley report has indicated that such stockpiles have fallen by 72 million barrels so far in 2017. With the likes of Iraq and Russia well on track to meeting their quota cuts of 210k bpd and 300k bpd, it seems that prices will continue their upward trend which have surged more than 20% since mid-November.

Tesla announced that its latest quarterly vehicles deliveries topped 25k – a 70% jump on Q1 2016 – and comes after a Q4 9.0% fall because of production problems. The 14-year old electric car company is set for a bumper twelve months, as it will soon launch its mass car Model 3 that will sell at US$ 35k – half the price of its current SUV Model X and sporty saloon Model S. Interestingly, Tesla’s market value, at US$ 49 billion, has overtaken both Ford’s US$ 46 billion and GM.

With its parent company L’Oreal putting it up for sale, it seems that Goldman Sachs is considering to acquire The Body Shop in a US$ 750 million sale. There are several other parties, including Advent International, Apax Partners, Carlyle and CVC Capital Partners, interested in the company, founded by Anita Roddick in 1976 and sold to the French retailer in 2006 for US$ 812 million.

It is reported that Canada’s SNC-Lavalin Group is in the market to acquire the UK’s WS Atkins for US$ 2.6 billion, equating to US$ 2.60 per share – a 35.1% premium on Friday’s closing price of US$ 1.93. Although the UK’s engineering and consultancy firm has a long history with Dubai (and best known for its work on the iconic Burj Al Arab), 50% of its revenue is generated in Europe.

With Apple indicating that it would start developing its own chip technology, shares in the UK’s Imagination Technologies slumped 67.4%, resulting in its market value falling to US$ 312 million. Over 50% of the UK company’s revenue is derived from Apple’s royalty payments.

When its US$ 4.5 billion acquisition of Yahoo is finalised, Verizon Communications will create a new company called Oath along with its AOL operations. It will be interesting to see whether this combination can actually sell more digital ads.

As if Toshiba has not enough trouble on its plate and now it has been forced to buy the 40% of the UK nuclear energy company, NuGen, that it does not already own from French utility company, Engie. With all its problems from Westinghouse in the US, the South Korean company will now face difficulties with the UK project in West Cumbria that will probably face delays and maybe cancellation.

JAB Holdings, owner of Krispy Kreme Doughnuts and Kenco Coffee, has agreed to pay US$ 7.5 billion for control of 36-year old Panera Bread, the US bakery and sandwich chain. Following the biggest ever restaurant deal, Panera’s share value jumped 14%.

After Unilever rejected a February US$ 143 billion takeover offer by Kraft, the Dutch-British consumer products conglomerate has surprisingly announced the sale of its margarine sector. In a further bid to placate its shareholders, the company will increase its dividend payout by 12% and also launch a US$ 5.5 billion share buy-back later in the year.

Boeing has finalised a US$ 4 billion deal with Iran’s Aseman Airlines for 30 737 Max aircraft, including purchase rights for a further 30. This is the second deal that the company has made with Iranian interests, following its US$ 16.6 billion sale of 80 passenger planes to Iran Air last December.

Credit Suisse officials are helping European authorities investigating tax evasion, currently involving five countries – Australia, France, Germany. the Netherlands and the UK – and a massive 55k accounts held by the Swiss bank. To date, Dutch prosecutors have seized US$ millions in assets, including cash, gold and paintings, whilst investigating up to 3.8k accounts.

President Jacob Zuma has upset the markets with his dismissal of Finance Minister Pravin Gordhan that led to the rand dropping 5%. Apart from trying to rein in rampant corruption, the South African finance chief had continued to resist Zuma, keeping a vigilant and tight watch on public expenditure. The inevitable consequence sees the economy downgraded to junk status by S&P.

The eurozone continues to see unemployment rates dropping, with January’s 9.5% recording its lowest level since May 2009. Germany’s rate of 3.9% is impressive when compared to say Greece’s 23.1% and Spain’s 18.0%. (Germany continues to be the standout performer of the bloc with latest data indicating that its rate of economic expansion has hit a 70-month high).

There was also good news from the IHS Markit’s March’s manufacturing Purchasing Managers’ Index up 8 notches to 56.2, month on month.  Overall the eurozone private sector recorded its fastest expansion in almost six years with Germany, whose final composite output index was up from 56.1 to 57.1 continuing to be the leading member of the bloc in February.

In the likely event of negotiations between its creditors (the eurozone and the IMF) failing, Greece has requested an urgent summit to try and break the months’ long deadlock. The main problems centre around debt relief (again), further pension reductions and budget targets. This has led to a delay in an installment of a US$ 92 billion payout originally agreed in 2015. In short, the IMF is for even more debt relief for the beleaguered country and is reluctant to continue with this third tranche. The eurozone wants monetary participation from the world body and is against any future debt relief.

February new orders for manufactured goods continue their recent upward momentum, with the US Commerce Department posting a 1.0% increase led by a 1.8% hike in durable goods orders. Meanwhile the trade deficit narrowed by 7.6% to US$ 44.8 billion, as February imports fell 1.8% to US$ 236.4 billion, month on month, and exports nudged 0.2% higher to US$ 192.9 billion. Based on current data, it is expected that there will be annualised gains in real exports of 3.0% and 2.0% for real imports, resulting in an expected 1.7% overall GDP growth this year.

Employment in the private sector was on the rise with an 8.3% month on month increase to 263k in March the biggest monthly gain in over two years. The US unemployment rate dropped to its lowest level since May 2007, as it fell to just 4.5. With any figure below 5% considered “full employment”, a slowdown in payroll growth is almost a given and this may preclude a further Fed rate in June.

If you get caught in the latest scam doing the rounds, you definitely need your head examining. Using a fake Dubai Financial Services Authority’s letterhead, any person sending a US$ 4k “activation fee”, to a UK contact, will receive a payment of US$ 7.9 million (in sterling). Just like recent Ponzi schemes in the country, people get sucked in far too easily – and unfortunately, to their cost, Only Fools Rush In!

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Doesn’t Anybody Stay Together Anymore?

The pile foundations for the world’s tallest tower have been completed and soon the structures for the Tower at Dubai Creek Harbour will become visible. Completion date will occur before the start of Dubai Expo in October 2020.

After several false starts, it seems that the US$ 44 million Dubai Frame will eventually open later this year, after new bright-gold cladding, on its bridge, replaced the original planned exterior. Work on this project originally started in 2013.

Following months of disappointing data, local hotels reported a 6.0% year on year jump in February occupancy levels to 84.0% – its highest February level in nine years. Average daily rates also headed north 1.4%, up for the month to US$ 195, with revenue per available room 7.5% higher at US$ 163. This month, Dubai joined the ranks of Las Vegas (with 152k rooms), Orlando (150k), (Paris 140k) and Barcelona (120k) as its hotel room portfolio topped 100k.

Next week, Dubai will host 14k cosmetic agents – 13k from the US-based Forever Living and 1k from the China’s Nu-Skin (the same company that brought over 14.k staff here in 2014). The nine-day visit to the emirate is set to generate at least US$ 65 million for the local economy.

The Saudi Savola Group has decided to close its flagship HyperPanda hypermarket which was one of the first outlets to open in Dubai Festival City eleven years ago. This comes after one of the largest food and retail group in the Kingdom reported its first quarterly loss (US$ 257 million) in eight years and closed 51 smaller stores in the country. The Dubai store will have faced mounting problems resulting from several factors, including a slowing economy, reduced consumer disposable income, a strong US$ and the growth of e-commerce.

After three months of rises, petrol prices are set to fall in April with Special 95 retailing 4.2% lower at US$ 0.501 per litre.

Dubai International recorded an 8.8% hike in February passenger numbers to 6.95 million (YTD 9.3% higher at 15.0 million). Cargo traffic was down on the month – 1.9% lower at 193k tonnes but still 0.8% higher YTD at 401k tonnes.

February saw Dubai’s year on year inflation rate top 4.20% (and 0.40% month on month), driven by marked rises in miscellaneous goods, transportation and clothing/footwear of 16.9%, 11.1% and 8.0% respectively.

The federal government has spent US$ 8.1 billion in the first nine months of 2016, equivalent to 61.2% of the approved annual budget of US$ 13.2 billion. The three largest recipients, accounting for 68% of total spend, were general public service (US$ 2.8 billion), public order / safety affairs – US$ 1.7 billion – and education with US$ 1.0 billion.

The proposed US$ 8 billion merger between United Arab Shipping Company and the German Hapag-Lloyd has hit a problem, as some banks want assurances that Qatar Investment Authority will remain UASC’s leading shareholder and not try and divest some of its investment in the future. If that were to happen, there is every likelihood that rival shipping companies would acquire these shares.

Following last week’s news that Amazon had a US$ 580 million bid on the table to take over Dubai-based Souq.com, Emaar Malls surprised the market with a US$ 800 million counter offer. However, this move was blocked since the American company had an “exclusivity” clause which would prevent any other dealings from interested parties whilst sales discussions were still in progress. It is reported that Tiger Global Management, already a major shareholder in the Dubai e-commerce leader, led the drive from Amazon’s side.

Nasdaq Dubai cemented its place as a leading global market with its total sukuk listing now at US$ 49.3 billion, following the Indonesian government listing a further two, totalling US$ 3 billion. The two main contributors to this impressive total are Indonesia (US$ 11.5 billion) and Saudi’s Islamic Development Bank’s US$ 8.5 billion.

Latest audited accounts from Drake & Scull indicate a US$ 200 million 2016loss and a negative US$ 90 million cash balance. The civil contracting company’s auditors, PwC have reported “a material uncertainty exists that may cast doubt on the group’s ability to continue as a going concern”.

Du has announced a US$ 262 million H2 2016 dividend, equating to US$ 0.057 per share, bringing the annual pay-out for the year to US$ 0.093. The telecom also reported a 12.0% surge in its mobile subscribers to 8.65 million.

The DFM opened Sunday at 3520 and shed a further 40 points to end the week 1.1% down by Thursday (30 March 2017) at 3480. Volumes were again disappointingly low, closing on Thursday at 147 million shares, valued at US$ 72 million, (cf 153 million shares for US$ 63 million, the previous Thursday). Emaar Properties gained US$ 0.01 to US$ 1.98, with Arabtec again flat at US$ 0.24.

By Thursday, Brent Crude had regained some of its recent losses, being up US$ 2.40 (4.7%) to close on US$ 52.96, with gold flat, down 0.2% (US$ 2) to US$ 1,245 by 30 March 2017.

At their Sunday meeting in Kuwait, a joint committee of ministers from OPEC and non-OPEC oil producers recommended a further 6-month extension of the 1.8 million bpd output cut agreed last December.

Canadian interests have been involved in two recent major energy sales. Earlier in the month, Royal Dutch Shell sold its Alberta fields and processing centres to Canadian Natural Resources Ltd for US$ 9.5 billion. This week, Cenovus Energy Inc paid ConocoPhillips US$ 13.3 billion for its Canadian holdings, thus doubling its reserves and production.

It is reported that Westinghouse Electric Co, the US-based nuclear developer owned by Toshiba, is filing for protection under Chapter 11 of the US Bankruptcy Code. The company’s two plants in Georgia and South Carolina have been beset by massive cost overruns that have sent the company spiraling into huge losses; any move into administration will help the South Korean conglomerate from hemorrhaging further money. With total 2016 losses expected to top US$ 9 billion, no wonder an investor told this week’s shareholders’ meeting that “Toshiba is now a laughing stock around the world”.

Chinese Tencent has acquired 5% of Tesla shares for a reported US$ 1.8 billion which makes the Chinese internet giant the electric car maker’s fifth largest shareholder. The company also raised a further U$ 1.4 billion earlier in the month, as it finances the introduction of the long-awaited Model 3. The Chinese suiter is keen to develop AI for use in future driverless vehicles.

Wells Fargo, already suffering from the fallout from last year’s fake accounts scandal, became the third US bank to post diminishing Q3 profits which came in 2.8% lower at US$ 5.5 billion. Earlier, JP Morgan posted a 7.6% slump to US$ 6.3 billion whilst Citigroup fared even worse, down 10.5% to US$ 3.8 billion.

The money spent in the Australian tourism sector rose by 5.6% to top AUD 100 billion (US$ 76.6 billion) for the first time, with 39% of the total derived from overseas visitors and the balance from home-based tourists. The oversea market, which climbed 7.1%, is dominated by visitors from China, UK, USA, New Zealand and Japan; the hospitality sector reported that there was an 11% jump in foreign holiday makers to 28.8 million.

Retail sales in Japan have been disappointing with growth of a miserly 0.1% being recorded, although February monthly sales were 0.2% higher. However, sales for larger retailers were even worse – sinking 2.7%.

The March flash survey data from HIS Markit saw the composite output index up seven notches to 56.7 – the eurozone’s highest private investment level in almost six years. There were also welcome (and unexpected) PMI increases in both services to 56.5 and manufacturing at 56.2. Such figures would indicate the bloc’s Q1 growth at 0.6%. There were also February falls in both growth rates for total credit to euro area residents from January’s 4.6% to 4.3% and to general government from 10.5% to 9.8%, month on month.

Despite political hiccoughs, Trump’s administration is churning out favourable economic data. US manufactured durable goods surged a further 1.7% in February, following January’s revised 2.3%, driven by an increase in transportation equipment of 4.3% whilst orders for non-defence aircraft and parts surged by 47.6%. Furthermore new home sales jumped 6.1%, equating to an annual rate of 592k – their highest level in nearly eight years.  March consumer confidence jumped 9.5% to 125.6 – well above analysts’ expectations of 113.8; this was at its highest level since December 2000.

Having already invested over US$ 50 billion in the UK, Qatar seem to have no qualms about Brexit and will invest a further US$ 6.3 billion mainly in the transport, property and digital technology sectors. Among its current portfolio are Harrods, London’s Olympic Village and The Shard (95%), along with stakes in the Milford Haven LNG terminal and Canary Wharf. Qatar has also a 20% stake in London’s Heathrow, whose shareholders recently approved a further US$ 810 million investment in the aging airport.

As expected, EU regulators have blocked the proposed US$ 31 billion merger between the London Stock Exchange and Deutsche Boerse on “competition grounds”. It was no coincidence that the announcement came just hours before the UK Brexit letter was delivered. In another Brexit-related story, Lloyd’s of London has decided to open a new subsidiary in Brussels to ensure that it holds onto its European business which accounts for 11% of turnover.

This week, Theresa May forwarded the Article 50 notification, a six-page letter, to the EU, giving notice that the UK is intending to withdraw from the bloc. The Brussels mandarins will start realising (and worrying) that the Brits may not be the only one leaving. Doesn’t Anybody Stay Together Anymore?

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Joker In The Pack

This week, HH Sheikh Mohammad Bin Rashid Al Maktoum launched a mega tourism and leisure project.  MGM Resorts International has been selected by wasl Hospitality and Leisure to develop and operate a “premier destination resort” on a 26 acre integrated island, close to Burj Al Arab. The development will include 1k rooms with ten villas and introduce the first MGM Hotel, MGM Residences along with a Bellagio Hotel to the region. The island, with a 1.2km corniche surround, will have all the usual retail and eating outlets.

Spread over 3.5 million square metres of area, Nakheel has awarded a US$ 50 million contract to Parkway International Contracting LLC to build its 375-key hotel, adjacent to Ibn Battuta Mall. The Avani hotel, to be managed by Thailand’s Minor Hotel Group, is part of a US$ 65 million project.

The Royal Bay project on Palm Jumeirah is 80% complete and will be completed by the end of the year, according to developer Azizi. The 90-unit building will include one-two bedroom units as well as two penthouses. The developer is planning a further 50 new developments this year!

Over the next four years, Paris Gallery plans to open 30 new regional stores that would see a 34.9% increase in outlets to 86 and in the number of its employees by 45.7% to 5.1k, with a projected retail area of 3.2 million sq mt.

Monday witnessed the opening of the US$ 326 million phase 2 of the Mohammed bin Rashid Al Maktoum Solar Park; the 200 MgW plant covers an area of 4.5k sq km and includes 2.3 million photovoltaic panels. The four-phase development is set to pump out 1k MgW on completion in 2020, with both phases 3 and 4 already awarded to a consortium headed by Masdar.

It was no surprise to see Dubai being ranked as the most popular choice for global companies setting up regional MENA HQs. Market research firm, Informineo, estimated that there was a 17% hike in the number of companies setting up in the region in 2016, with Dubai ahead of the likes of Johannesburg, Casablanca and Nairobi.

It is reported that the saga of Dubai-based online retailer Souq.com being acquired by Amazon.com may be coming to an end, with an agreement confirming the 100% takeover. No finances were available but it will probably be around the US$ 600k mark. A surprise last minute US$ 800million bid by Emaar Malls may spook the potential US investor.

The launch of the US$ 1 billon Noon.com will probably take place next month, following three months of beta-testing the ecommerce site. The venture between Mohammed Alabbar and Saudi Arabia’s Public Investment Fund will offer millions of items, from a wide selection range, including a focus on fashion, for online sale which will include a three hour, door-to-door delivery service and even an attractive returns policy.

Embattled Drake & Scull has sold its share for US$ 82 million in the One Palm project to its JV partner, Omniyat Properties. The development, due for completion next year, will house 90 apartments (at a starting price of US$ 3.8 million, up to US$ 54 million for a penthouse).

Dubai’s tourism sector reported a 12 per cent year-on-year growth in visitor numbers over the first two months of 2017, with over three million people visiting Dubai. The growth was driven by significant increases from the Chinese and Russian sectors.

HH Sheikh Mohammed bin Rashid Al Maktoum has inaugurated the first happiness council in the world which will launch a yearly Global Happiness report. The Dubai Ruler also announced a 13-member council in the same week as International Happiness Day.

There was more news on the workings of the new VAT legislation, due to come into force on 01 January 2018 – this may be delayed because it is expected that all six GCC countries want to go “live” at the same time. The Ministry of Finance has set a US$ 100k minimum revenue threshold and any business with revenue less than that, or any company that offers services or goods that are non-taxable, need not register; however, those companies with a threshold of between US$ 50k and US$ 100k will have the option to register in October, if they so desire.

The VAT law has yet to be enacted by the UAE government but a 5% charge will be levied on all supplies of goods and services unless either zero-rated or exempted. To date, no notice of what is and what is not taxable has been given.

The Board of Commercial Bank of Dubai has approved a US$ 0.055 2016 dividend totalling US$ 153 million, as well as the go-ahead to update the bank’s US$ 3 billion medium-term note programme. However, it rejected moves to allow GCC nationals to own a percentage of the bank’s equity (not exceeding 40%) and to increase its capital by a further 5%.

Damac Properties’ shareholders will also benefit with the announcement of a 25% 2016 cash dividend, costing the company US$ 412 million

Gems Education announced that its H1 revenue had jumped 15.5% to US$ 539 million on the back of a rise in student numbers and a jump in average revenue per student. (The number of students in private education is at a record level of 265k and the growth is set to continue, with a further 20 private schools to open this year alone).

Dubai World is one of four suiters bidding for a 67% stake in Greece’s second largest port, Thessaloniki, along with others from Germany, Japan and Philippines. The company is also in discussions with the Panamanian government about establishing a presence in the Canal area.

Largely because of the acquisitions of Jebel Ali Free Zone and its new Canadian terminal, DP World posted increases in both 2016 revenue and profit – by 5.0% to US$ 4.16 billion and an impressive 28.0% to US$ 1.13 billion respectively. Gross volumes, in a difficult trading environment, rose by 3.2%. A dividend of US$ 0.38 (up from US$ 0.30 in 2015) was declared.

Utilising a UK-based startup Splyt Technologies Ltd, Dubai’s Careem has allied with China’s Yidao Yongche to share resources. This will see both companies sharing one common app that will enable customers to use either company’s services without downloading new software.

In line with the 2016 state-run initiative, Government Accelerators, it is estimated that 1k Emiratis have already been hired this year in various UAE financial institutions. Companies have been encouraged to support the Emiratisation drive and it seems that this number will increase over the coming months.

Dubai Holding, with an asset portfolio exceeding US$ 35 billion, has a new chairman, with Abdulla Al Habbai taking over form the departing Mohammed Al Gergawi. The new incumbent will remain as chairman of Meraas Holding.

Despite a loan default by its Nigerian subsidiary, S&P have maintained Etisalat’s AA-/Stable/A-1+ rating. Its investment is insignificant with the loan not guaranteed by the parent company and comes on the back of that country’s dire shortage of US$, a falling currency and an economic slump.

Emirates NBD Reit, the country’s second real estate investment trust, had its first day of trading on Nasdaq Dubai and closed on Thursday 5.4% up on its opening price at US$ 0.336.

On Wednesday, much-troubled Arabtec announced that it would issue 1.5 billion shares, with a par value of US$ 0.272, in a rights issue – this figure is 15.6% higher than its Tuesday’s closing price of US$ 0.236. Shareholders, who do not participate in the scheme, will see their share value being diluted by 24.53%.

The DFM opened Sunday at 3520 and ended the week 1.7% down by Thursday (23 March 2017) at 3461. Volumes weakened considerably over the week, closing on Thursday at 153 million shares, valued at US$ 63 million, (cf 592 million shares for US$ 181 million, the previous Thursday). Emaar Properties has had better weeks, shedding US$ 0.06 to US$ 1.98, with Arabtec flat at US$ 0.24.

By Thursday, Brent Crude was US$ 1.18 lower (2.3%) to close on US$ 50.56, with gold again taking advantage of a volatile week, up 1.6% (US$ 20) to US$ 1,247 by 23 March 2017.

It seems that Apple has not paid any New Zealand tax, totalling US$ 282 million, for more than a decade, despite posting sales in excess of US$ 3.1 billion. The tech firm claims that its tax is paid in the USA, as that is the jurisdiction where its products and services have been created.

India’s largest telecoms company will be created with the merger of Vodaphone and Idea Cellular that will capture 35% of the country’s market share, 41% of the sector’s revenue and 400 million customers. The UK company will own 45.1% of the entity, once it transfers 4.9% to its new partner for US$ 579 million.

Following in Lufthansa’s footsteps, BA is the latest airline to launch a new long haul budget airline. Based in Barcelona, Level, the airline’s fifth brand, will initially utilise two A-330s and Iberia crew for journeys to Buenos Aires, LA, Oakland and Punta Cana (Dominican Republic).

The airline was also in the news this week for less salubrious reasons and has had to pay the EC US$ 114 million in fines for being in an alleged air cargo cartel with ten other carriers. The total penalty came to US$ 848 million with Air France-KLM worst hit, by a US$ 340 million fine.

Having rejected an earlier US$ 22 billion offer from US industrial chemical conglomerate, PPG, it seems that AkzoNobel will be approached again with a better offer. The Dutch company, maker of Dulux and Hammerite paints, had earlier stated that the initial bid underestimated its real value. The company has just opened a US$ 119 million paint factory in the UK.

It is reported that two tobacco giants – Japan Tobacco International (owner of Benson & Hedges and Silk Cut) and L&B – are interested in acquiring an equity stake in cash and carry company, Palmer & Harvey. The UK private company, employing over 4k, with annual revenues in excess of US$ 5 billion, has concerns following Tesco’s proposed US$ 4.7 billion takeover of Booker.

An indicator that some growth is returning to the luxury goods market came with the news that Hermes had posted a 13.0% jump in its 2016 profits to US$ 1.2 billion; this comes a month after its nemesis LVMH also reported record profits. Coincidentally, on Thursday it was reported that the De Beers Group had acquired the remaining 50% stake from LVMH in De Beers Diamond Jewellers.

Another week and another South Korean family in trouble. This time four members of the Kyuk-ho “chaebol “  (dynasty), behind the US$ 81 billion Lotte Group, were in court on charges including embezzlement, tax evasion and fraud.

Lithuanian rogue, Evaldas Rimasauskas, is a clever person. Between 2013-2015, he managed to extract over US$ 100 million from two US tech firms in a polished phishing scam. These two unnamed and unwary victims were tricked into sending money into various Asian bank accounts, using a Latvian company with a bogus name identical to an Asian-based computer hardware manufacturer.

It seems that 17 UK-based banks could have been involved to the tune of US$ 738 million in a US$ 20.8 billion Russian money laundering scam, involving 96 countries, including the UAE. Allegations by The Guardian indicate that the money was moved out of Russia between 2010 – 2014. If true, it would not be the first time that the banks’ conduct has been found wanting – and it will be the customers who pick up the tab again for any fines levied.

Brazilian authorities have suspended 33 government officials relating to allegations that meat processors have been selling rotten beef and poultry for years, as three plants have been closed and a further 21 under scrutiny.  Among the companies under the spotlight are BRF, the leading global poultry producer and JBS, the world’s largest beef exporter; Brazil is the world’s leading red meat exporter.

There have been some disappointing economic data emanating from the eurozone, with a weakening of the trade surplus, by 32.0% to US$ 16.9 billion, as a result of exports lagging by 0.6% whilst imports jumped by 4.1%. Meanwhile January construction output was down 2.3%, month on month, driven by a 7.7% slump in civil engineering production. Inflation levels continue to move north, up two notches on the month, reaching 2.0% in February – and accelerating at its fastest level in over four years.

This week’s G20 finance ministers’ meeting failed to renew their long-standing free trade pledge – and just a year after it declared its promise to “resist all forms of protectionism”. This change has arisen because of President Trump’s approach that he believes in free trade but also in balanced trade, allied with his “America First” policy.

Poor old Donald Trump – he gets blamed when the stock markets either go up or down. On Tuesday, Wall Street had its worst trading day since his election, with the Dow dipping 1.14% to 20,668, the S&P 500 by 1.24% to 2344 and the Nasdaq falling 1.83% to 5794. The main driver was evidently whether he would be capable of delivering his promised tax cuts, especially as he having problems with his healthcare legislation.

As expected, the UK government announced that 29 March will be the start date for formal talks for the country to exit the EU. This is more than nine months since the Brexit referendum and now article 50 in the Lisbon treaty will see discussions start formally.

The UK economy still defies its many critics and will continue to grow this year despite inflation hitting 2.3% (and eroding disposable incomes) but helped by an increase in both exports and investment. The main drivers behind the high inflation figure come down to rising food and fuel prices, mainly as a result of a 13% fall in sterling following the Brexit referendum.

UK house prices continue to head north, albeit at a slower rate of 1.3% month on month, compared to 2.0% in February. On an annual basis, growth came in at 2.3%.

Still serving as a sitting MP (which some may think is a full-time job in itself) and “earning” US$ 94k plus expenses, former Chancellor of the Exchequer, George Osborne has just been appointed the editor of London’s Evening Standard. Furthermore he is thought to earn a further US$ 818k for advising fund management firm Blackrock for one day a week; he is also chairman of the Northern Powerhouse Partnership as well as a speaker at the Washington Speaker’s Bureau. In October alone it was reported that he picked up US$ 400k for speeches (including US$ 175k for two with JP Morgan). Of all the 625 MPs, the member from Tatton is unfortunately far from being the only Joker In The Pack

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All The Right Friends

HH Sheikh Mohammed bin Rashid Al Maktoum has laid the foundation stone for the Meydan One mega project, expected to be finished by 2020. The focal points of the project will be the world’s largest dancing water fountain, at 400m high and 100 mt wide, and the 30k sq mt mall, with a retractable roof. Meydan Mall One will have 529 outlets, including a 11.2k sq mt hypermarket and two major department stores, along with a variety of sports venues and a 1km ski slope – the longest indoor one in the world.

His son, Sheikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Dubai’s Crown Prince, has introduced a low-income housing policy. Its two main programmes will incorporate increased cooperation with developers to construct such units and a renovation of some of the emirate’s older areas to house this sector of the market.

This week, Sheikh Hamdan also visited the new SAP MENA HQ at which the software maker announced a US$ 200 million, five-year investment plan for the country. It also confirmed the establishment of its first SAP Cloud Data Centre and launched its first COIL (Co-Innovation Lab) in the UAE – its 15th such facility globally.

State-owned China Railway Engineering Corporation has opened a regional office in Dubai and, along with China State Construction Engineering Corporation, the emirate can boast that it hosts the world’s two biggest contractors – a sure testament that these players see a bright future in Dubai and the region.

Emaar has launched the sale of its Vida Residences Dubai Marina properties, comprising 360 1-4 bedroom units, located on floors 14-56 of the new tower. Residents will have access to the Vida Dubai Marina Hotel and Yacht Club.

The third phase of MAG 5 Boulevard community has been released this week, with prices starting at US$ 84k for studios to US$ 139k for 2-bedroom units. This is G5 Property Development’s first project in Dubai South and it expects phases 1 and 2 to be handed over by the end of 2018 and phase 3 in Q2 2019.

Deyaar is currently carrying out an estimated US$ 736 million amount of work at its four Dubai sites; these are the US$ 267 million Atria in Business Bay, the US$ 120 million triple tower Mont Rose in Barsha South, a US$ 114 million Barsha hotel and US$ 233 million on two Midtown projects. The developer also has about 5.7 million sq ft of potential new projects, comprising 3 million sq ft in various stages of design and 2.7 million sq ft at Dubai South.

STR’s February 2017 Pipeline Report indicates that Dubai has a total of 19.6k rooms and 64 projects in its hotel construction pipeline, whilst the total in the whole of the Middle East is 153.5k rooms and 540 properties.

No longer will the country’s bank notes originate from either the UK or France, as HH Sheikh Mohammed bin Rashid Al Maktoum opened the country’s first banknote printing plant, with the Dubal ruler handed the first note, bearing the number 1. Oumolat Security Printing hope that the company will win contracts to print notes for all the region’s central banks.

A Dutch transport company, 2getthere, has joined forces with Abu Dhabi’s United Technical Services to provide 25 vehicles to move passengers from Bluewaters Island to the Metro. These driverless vehicles will carry 24 passengers and run on a specially built 2.4km track, with an hourly capacity of 2.5k passengers. No financial information was available but the network will be operational by the end of 2018.

In association with both ConsenSys and IBM, Smart Dubai expects to go live early next year with several projects based on Blockchain technology. This is the focal point of last October’s Dubai Blockchain Strategy which aimed to ensure that all government entities would be using this technology by 2020. When fully implemented, it is expected to save an impressive 25 million annual productivity hours.

According to Mercer’s Quality of Living Survey, Dubai came in at a surprisingly low 74th, when it comes to global quality of living; however, it maintained its position as the leading country in the region. Vienna, Zurich and Auckland topped the survey of 231 cities, with Sana’a, Bangui and Baghdad bringing up the rear.

Dubai Investments has sold a group of ten warehousing facilities (with a built-up area of 1.2 million sq ft) to Arcapita for about US$ 150 million, bringing the Bahraini company’s total UAE portfolio to US$ 250 million.

Dubai Silicon Oasis Authority posted a 9.4% hike in 2016 recurring revenue to US$ 141 million as profit jumped 27.7% to US$ 64 million.  During the year, the number of operating companies rose 10.4% to 2.12k, of which 78.0% were in the IT sector.

On Wednesday, Panalpina, the leading global supply chain solutions provider, opened a 40k sq mt facility in Dubai South. This centre is the Swiss company’s largest logistics and manufacturing facility.

Dubai Aerospace Enterprise has purchased more  ATR 72-600 aircraft from GE Capital Aviation Services, bringing its total of owned and committed of this model to 57, and its total fleet portfolio to 126; these include 26 Boeing 737s, 14 777s, 3 A350s and 26 smaller Airbus aircraft. Its impressive client list includes the likes of Emirates, Oman Air, SAS and 29 other airlines.

Latest UAE figures, for the first nine months of 2016, show national non-oil commodity exports 5.7% higher at US$ 35.1 billion, with the figure for total foreign trade 2.8% up at US$ 221.7 billion. Of that total, imports, at US$ 141.9 billion, were 3.4% higher with reexported commodities 1.2% down, at US$ 44.7 billion. There was a slight 0.5% drop in Dubai’s 2016 non-oil foreign trade to US$ 347.7 billion, with the “usual suspects” – telecommunications, gold and diamonds – being the three most traded commodities.

Dubai-listed Shuaa Capital is to purchase two financial services firms – Integrated Capital and Integrated Securities – from its 48.3% major shareholder, Abu Dhabi Financial Group. No financial details have been released and the sale is subject to regulatory approval. Even though the firm is recovering from losses over the past two years of US$ 36 million and US$ 52 million, the market reacted favourably with its shares up 14.7% on the day to US$ 0.51. It is also reported that the Dubai company is in talks about a possible merger with Bahrain’s Global Finance House that would form an investment bank with US$ 3.7 billion of assets. (ADFG is the biggest shareholder of both companies).

Following the Fed’s much anticipated 0.25% rate hike, the UAE Central Bank followed suit by raising the Repo Rate, applicable to borrowing short-term liquidity from CBUAE against Certificates of Deposits, by 25 basis points to 1.25%.

With a US$ 100 million sukuk maturing next week, as well as another US$ 650 equivalent due in 2019, Damac is looking to banks for a US$-denominated sale; no figures were available. Also in the funding market, Majid Al Futtaim has obtained a US$ 1 billion syndicated loan – a five-year revolving credit facility. Some of the loan could be utilised to finance existing debt.

Al Mal Capital acquired a further tranche of Amanat Holding shares, equivalent to 1.56% of total capital, bringing its total portfolio to 214 million shares, or 8.55% equity share. Amanat reported a 24.1% fall in 2016 profits to US$ 10 million, with Q4 down 96.2%.

The DFM opened Sunday at 3520 and ended the week flat, down only 1 point, by Thursday (16 March 2017) at 3521. Volumes strengthened over the week, closing on Thursday at 592 million shares, valued at US$ 181 million, (cf 221 million shares for US$ 139 million, the previous Thursday). Emaar Properties regained half of its previous week’s loss, US$ 0.04 higher, to US$ 2.04, with Arabtec’s problems going from bad to worse, down US$ 0.01 at US$ 0.24; so far in 2017, it has lost 33.82% of its share value.

By Thursday, Brent Crude was US$ 0.45 lower (0.9%) to close on US$ 51.74, with gold heading in the opposite direction, up 2.0% (US$ 24) to US$ 1,227 by 16 March 2017.

The cost of moving away from fossil fuels to renewable energy does not come cheap as E.On has discovered. Over the past two years, the German energy giant has reported losses of US$ 6.7 billion and, more recently, in 2016, US$ 17.0 billion of which there was a US$ 13.8 billion impairment on the value of its power business Uniper and US$ 2.3 billion towards phasing out its nuclear energy programme.

The Scottish Wood Group has acquired Amec Foster Wheeler, a consultancy, engineering and project management services company, with 40K employees, for US$ 2.7 billion. The company, a big player in the energy sector accounting for more than 50% of its business, has been badly hit by falling oil prices.

One of UK’s biggest warehouse owners, Logicor, is considering a London stock market listing that would value the company at US$ 13.4 billion. The 5-year old firm, that is controlled by the private equity group, Blackstone, owns 600 warehouses and has Amazon as a major client.

As part of its US$ 2.4 billion investment plan, Vodaphone is expected to create 2.1k UK customer service jobs over the next two years.

China Investment Corporation has subscribed to about 10% of a US$ 1.3 billion Airbnb funding round – a probable precursor to a fully-fledged IPO by the end of the year; the nine-year old company could be valued on the other side of US$ 40 billion which compares favourably to the likes of Twitter at US$ 14.5 billion and Snapchat’s US$ 31 billion.

Toshiba has still not released their 2016 results, largely because of finalising its possible US$ 6.3 billion write-down in relation to its majority shareholding in the much-troubled US nuclear unit Westinghouse. This sector accounts for about a third of the Japanese conglomerate’s revenue but has not made a profit since 2013 and is experiencing huge cost over-runs. Now with some of its assets being worth a lot less than initially estimated, it is thought that the company, whose share value has halved since December, may want to exit.

A BBC investigation has found that some Eastern European lorry drivers, working for haulage companies that carry out contract work for major retailers,  live inside their cabs for months and earn as little as US$ 4 per hour (or US$ 512 per month). One of the retailers, Ikea, has expressed that it was “saddened by the testimonies” of the drivers. It is noted that Danish drivers would be earning at least four times this figure. So much for the EU ruling that a driver, posted temporarily away from home, should be ”guaranteed” the host nation’s ”minimum rates of pay” and conditions.

In a novel way – and a sign on how the financial world is changing – Elon Musk has promised the South Australian government that he could fix its power problems within 100 days; the Tesla boss has intimated that he could build and install a 100MWh battery farm which would see an end to the state’s recent blackouts.

Australian February employment figures were down on analysts’ expectations, with the jobless rate up two notches to 5.9%, including a 33.5k fall in the number of part-time workers. This resulted in the underemployment rate – people looking for more work – jumping to 8.7%, a record high equating to 1.1 million workers.

Charlotte Hogg made the simple mistake of not disclosing that her brother was a Barclays employee and this has cost her the job as the Bank of England’s deputy governor for markets and banking. For the past four years, she had been the central bank’s chief operating officer and it was felt by a Treasury Committee that because of this omission, she had fallen “short of the very high standards” required.

Latest figures from the UK indicate that house prices expanded at their fastest rate in twelve months in February.  The 0.6% hike (compared to 0.3% in January) took the average UK house price to US$ 361k, whilst the average house price growth came in at 2.4% – its lowest level since 2013.

There was mixed news on UK’s employment figures with the three months to January witnessing an unemployment level of 4.7% (1.58 million) – its lowest level since 1975; on the flip side, wage growth at 2.2% was down 0.4%, quarter on quarter, but this is still higher than the current 1.8% inflation level. This slightly disappointing figure was the catalyst for the Bank of England keeping rates unchanged at 0.25% at Thursday’s Monetary Policy Committee meeting but surprisingly the decision was not unanimous, with one member voting the other way. This was enough to push both sterling higher to US$ 1.236 and the FTSE 100 to a new record high of 7443.

With the US Department of Labour announcing that 235k new jobs (of which 58k were in the construction sector) were created last month, it put to bed any lingering doubts that the Fed would not hike rates this month. (This was duly done on Wednesday, with a 0.25% push to 0.75%). Furthermore, the unemployment rate slipped lower to 4.7% and over the past twelve months, 2 million jobs have been added to the country’s payroll.

Zhou Xiaochuan, governor of the Central Bank, has reiterated that Chinese corporate debt levels are too high. The government is aiming to introduce painful reforms and measures to curb debt and housing risks, following years of easy money. Whether this is done remains to be seen.

There were some favourable numbers coming out of China this week. For the first two months of the year, most indicators headed north including fixed asset investment at 8.9%, factory output (6.3%) and retail sales – 9.5%. After several years of tepid growth, 2016 private investment increased from 3.2% to 6.7%, year on year – an indicator that there could be a turnaround as private investment accounts for 60% of overall domestic investment. 2017 growth is expected to come in at 6.5%, down from last year’s 6.7% which was China’s slowest pace of expansion in 25 years.

The country’s administration is also keen to clamp down on the outflow of money – and what is known as “irrational investments” – which has been draining its forex reserves and this has been further exacerbated by a slowing and transforming economy. The government is advising companies to be more selective in the choice of overseas investments and the prices that are being paid; a classic example is the US$ 43 billion bid by ChemChina for Switzerland’s Syngenta.

Earlier in the week, the Saudi Deputy Crown Prince Mohammed bin Salman met with President Trump which was his first meeting with a senior diplomat from a Muslim majority country. Following the meeting, Prince Mohammed indicated his satisfaction “with the positive attitude and clarifications he heard from President Trump about his stance on Islam”. Furthermore, he considered him a true friend of Muslims, who will serve the Muslim World. Likewise, if and when the US President placates the likes of Vladimir Putin and Li Keqiang, the world will be in a better place as he reaches out to make All The Right Friends.

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Big Yellow Taxi

Work has started on an Al Futtaim 78.5k sq mt “smart mall”, part of phase 1 of the upcoming Wasl Gate development, located near the Ibn Battuta Mall.  With a 55k sq mt leasable space, it will have 100 outlets, with the anchor stores being the country’s 4th Ikea, covering 30k sq mt, and Ace (4k sq mt). The mall, with parking for 2k vehicles, will be completed within two years but the whole development, which will eventually have 25k residents and a 23 hectare central park, will be a15-year project.

Al Futtaim Carillion will be the main contractor for a US$ 600 million project to develop three Expo site districts, housing 136 pavilions. This is the first major contract awarded for the event, with a further US$ 2.4 billion of construction work still to be let.

It seems that work may have already started on the Hyperloop which will eventually cut the travelling time between Dubai and Abu Dhabi to just 12 minutes. The futuristic transport system uses magnets to levitate pods inside an almost 100% vacuum tube, so that speeds of over 1k kph can be reached. The US-based company estimates that it would save inter alia US$ 800 million in lost working hours but that seems to be a very conservative estimate.

Dubai’s first ever stone villas are to be built, with units ranging from 1 to 4 bedrooms, with starting prices at US$ 293k. Hajar Villas is a concept by developers, MAC Properties.

An agreement between Dubai Holding and Dubai Municipality will see the establishment of the region’s largest public park at 1.43 million sq mt. Increasing the emirate’s public space by 17%, the park will have a myriad of attractions, including 45 sports grounds, five major event arenas, 30 km of walkways, 20 km of jogging tracks, 14 km for cyclists and 7 km of nature trails. Work on the 318k sq mt phase 1 will commence this year.

DAFZA, which accounts for 9% of Dubai’s non-oil trade (US$30.0 billion), reported a 32% hike in multinational companies using the free zone in 2016. Almost half of that number emanates from three sectors – IT/telecoms account for 27% of the total, followed by consumer products (10%) and engineering/aviation contributing 9%.

It is estimated that the UAE maritime industry is worth US$ 16.3 billion, with Dubai the busiest Gulf port, as has been the case for over a century. With a 2 million sq ft freezone soon to open in Maritime City, and further expansion plans at Jebel Ali, this sector will continue to act as a lifeline for Dubai’s well-being. Currently, the sector adds 4.6% to the emirate’s GDP (equating to US$ 3.9 billion) – a figure that is set to show robust growth.

A big win this week for DP World with the announcement that The Alliance – comprising Hapag-Lloyd, K-Line, MOL, NYK Line and Yang Ming – has chosen to use their Southampton and London Gateway facilities on its transatlantic and Asia-Europe lines. This 5-group consortium accounts for 18% of the global container shipping fleet.

As economic indicators continue to head north, the Minister of Economy, HE Sultan bin Saeed Al Mansouri, has indicated that the UAE economy could grow by up to 4% this year. As prices continue to nudge higher, the country will benefit with 30% of the economy being reliant on the oil sector. In tandem, the non-oil sector will move higher as the economy stabilises and reaps the benefits of major Expo capital investment and improving indicators.

Etisalat reported that it would be spending more than US$ 817 million to develop the country’s infrastructure and expand mobile and fibre optic networks. The UAE boasts the highest fibre to the home (FTTH) penetration, at 93.7%, of any other country, whilst its 3G network coverage and 4G LTE are in excess of 99% and 95%.

To the surprise of some, the February Emirates NBD Purchasing Managers’ Index jumped 7 notches to 56 – its highest level in 18 months; the main drivers appear to be a marked expansion of output to 63 and inflows of new work at 59.9. With the economy picking up in Dubai’s non-oil private sector, companies have apparently been hiring and purchasing more. With oil prices creeping higher and the prospect of major Expo contracts in the offing, business confidence is looking up.

To ensure that UAE financial institutions have an adequate capital base, the Central Bank has issued new rules in line with the Basel Committee on Banking Supervision in Basel III. The regulations are complicated but banks have to ensure that their common equity Tier 1 is a minimum of 7.0% of their risk weighted assets and Tier 1 capital at least 8.5% of RWA. Even ratings agency, Fitch, said that the UAE banks were able to comfortably meet these new capital adequacy rates.

Emaar Properties’ shares plummeted 3.3% to US$ 2.02 on news that the developer was maintaining a 15% cash dividend, unchanged from 2015. The company is also to propose a share capital increase and a plan to introduce an employee sharing scheme at their upcoming AGM.

In contrast, Mashreq shareholders will be happy with a 40% (US$ 10.90) cash dividend, with the bank paying out a total of US$ 193 million, despite a 19.6% fall in 2016 profits to US$ 526 million.

The DFM opened Sunday at 3584 and sank even lower, 1.8% down on Thursday (09 March 2017) at 3520. Volumes still remain at low levels, closing the day at 221 million shares, valued at US$ 139 million, (cf 360 million shares for US$ 175 million, the previous Thursday). Emaar Properties traded US$ 0.08 lower, to US$ 2.00, with Arabtec, remaining flat at US$ 0.25.

By Thursday, Brent Crude was US$ 3.71 lower (6.4%) to close on US$ 52.19, with gold also heading down (US$ 30) to US$ 1,203 by 09 March 2017.

Wednesday had seen its price fall 5% – its largest one day drop in a year and this despite top oil ministers at a Houston meeting trying to reassure the world that their November output deal was working. Furthermore, a large build up in US crude inventories of 8.2 million barrels, along with reports of rebounding shale output, spooked the market. For the first time since 1979, Iran’s oil exports topped three million bpd, as its daily output heads towards four million bpd, with a five million target by 2021.

Analysts estimate that next year’s IPO could value Saudi Aramco as high as US$ 1.5 trillion, whilst Deputy Crown Prince Mohammed bin Salman is more bullish at US$ 2 trillion. Either way, it will be the world’s largest IPO, as the government sells 5% of the asset. The Saudi conglomerate has also agreed to pay Royal Dutch Shell US$ 2.2 billion, as it takes over full ownership of the Motiva Enterprises’ name and legal entity.

As January capacity showed a 3.3% seasonally adjusted increase, IATA reported that ME carriers’ cargo volumes were 8.4% higher. Although lower than the double digit growth, prevalent for the past decade, the figures were still higher than the 6.9% global average.

It has been reported that Uber has been using “dirty tricks” to fool authorities around the world to stop them closing the ride-hailing app in certain jurisdictions. The company used a program named Greyball that was able to help in discovering officials who were trying to clamp down on its activities so that ride-hailing service could take preventive measures. Days after defending the system earlier, Uber has now decided to ban the secret software.

GM announced details of the proposed sale of its loss-making Vauxhall/Opel operations to PSA, the French company, which owns Peugeot/Citroen. This could be bad news for the UK economy with 4.5k jobs in the balance at plants in Luton and Ellesmere Port. If the US$ 2.3 billion deal goes ahead, then PSA will overtake Renault to become Europe’s second largest car-maker behind the world leader, Volkswagen.

In Australia, the chief executives of the four major banks – ANZ, CBA, NAB and Westpac – have been hauled in front of a House of Representatives standing committee to explain why the banks had not passed on an August 2016 central bank interest rate cut. Much ducking and weaving is bound to ensue.

Troubled Deutsche Bank is making several strategic changes in an attempt to recover from its recent losses, including US$ 1.5 billion in 2016. These measures incorporate an US$ 8.5 billion rights issue (pricing the shares at US$ 12.31, a 39% discount on last Friday’s close), an IPO of a minority stake in its asset management business, possibly worth US$ 8.5 billion, and remerging its corporate finance business and trading activities.

Latest retail figures from the UK indicate that Aldi and Lidl recorded  12.0% and 9.1% year on year increases in February sales, compared to the overall market average of just 2.2%. The two German retailers now account for 12.3% of the country’s market share, with this set to grow again this year to the dismay of the traditional Big Four – Tesco, Asda, Sainsbury’s and Morrisons. The latter, the country’s fourth largest supermarket, and currently outperforming its three main rivals, has returned to sales growth for the first time in five years, with 2016 profits up 50% to US$ 395 million.

In 2012, Schlecker, the German retail pharmacy giant, with 50k employees, went bankrupt. Now its head, Anton Schlecker, has gone on trial, accused of syphoning off US$ 21 million for personal use, despite knowing that the company was going under.

In a proposed US$ 4.6 billion merger, Standard Life Plc is in discussions with Aberdeen Asset Management Plc that would see the new entity overseeing funds of over US$ 811 billion. If the deal were to go ahead, Standard Life investors would own 66.7% of the combined group, valued at US$ 13.4 billion.

Having acquired the UK tech firm, ARM Holdings, last year, for US$ 29.2 billion, it appears that Japan’s Softbank is to offload a 25% stake to a Saudi-backed investment group.

The third biggest cereal maker in the US, Post Holdings, whose brands include Golden Crisp and Cocoa Pebbles, is ready to pay US$ 1.8 billion to acquire Weetabix, the UK’s second biggest cereal maker after Kellogg’s. The only other company interested in the sale is its majority shareholder, China’s Bright Food.

The OECD is the latest global organisation that sees an improvement in the worldwide economy, indicating a “modest” recovery to 3.3% and 3.6% over the next two years. However, it warns that significant risks – including exchange rate volatility and external shocks – could pose problems in middle income and developing countries. Interestingly, its biggest adjustment was for the UK which should see growth up 0.4% to 1.6% this year; this is not as optimistic as Philip Hammond. In his Wednesday budget, the Chancellor reiterated that the economy had “continued to confound the commentators” and expected this year’s growth to reach 2.0%.

With the Australian mining boom a distant memory, it seems that agriculture is once again front stage. In Q4, there was an 8.3% growth in agriculture, forestry and fishing production, compared to 3.4% recorded by mining. It is estimated that the sector’s annual production will reach a record high of US$ 48.4 billion – nearly 18% higher than the five year average to 2016. Exports are expected to top US$ 37.0 billion.

Figures from Eurostat showed the eurozone economy finally stabilising in Q4, with 0.4% growth, the same as Q3 – and 1.7% on an annual basis. Both exports and imports recorded increases of 1.5% and 2.0% respectively. The 28-country EU economy also reported a 0.5% Q4 growth and 1.9% for the 12 months.

Germany is going through a rocky patch, with January factory orders recording their biggest fall in over eight years decreasing on the month by 7.4%; local orders plummeted by 10.5%, with foreign orders faring better but still down 4.9%. There is an obvious lag between the recent upbeat economic indicators and what is actually happening on the shop floor.

Dragged down by a poor performance from Airbus, France posted its biggest ever trade deficit in January. Following a 6.6% hike last year to US$ 50.8 billion, January saw a massive US$ 8.3 billion gap as the country’s exports fell 7.7%, whilst imports went in the other direction by 2.9%.

Brazil continues in the doldrums posting a worrying 3.6% GDP contraction last year, resulting in an economy that has slipped 8.0% over the past two years. Unemployment levels have soared by 76% since 2014, with the current rate at 12.6%, equating to 12.9 million. Investor confidence is at rock bottom, mainly because of rampant corruption, political scandals and lower commodity prices, allied with the global economic slowdown.

With the US weekly 25 February jobless application rate falling 19k to 223k, this was the country’s lowest number since 1973. – an indicator that the employment market is in rude health. Economists are happy with a figure of 300k – a level that is seen to be in line with a healthy labour sector. Initial reports are that in February, the economy generated 175k new jobs, compared to 225k a month earlier, and the unemployment rate edged lower to 4.7%.

However, January’s trade deficit widened by the most in nearly five years – by 9.5% to US$ 48.5 billion. Imports were 2.3% higher at US$ 65.6 billion, as exports rose at the lower rate of 0.6% to US$ 192.1 billion. It is expected that over the next quarter, exports will expand at a stronger rate.

Japan’s Q4 grew by 0.3% and only 1.2% on an annual basis but the economy has expanded for four straight quarters for the first time in over three years. The country’s current account surplus sank 88.9% to US$ 574 million, well down on the US$ 2.4 billion forecast. Annual exports and imports both rose – by 2.9% to US$ 48.4 billion and 10.0% to US$ 55.8 billion respectively – to give a trade deficit of US$ 7.4 billion. Overall bank lending was up 2.8%, compared to a year earlier, at US$ 4.48 trillion.

At Sunday’s National People’s Congress, Chinese Premier Li Keqiang introduced a raft of measures to attract increased overseas funding into the local economy. In future, more service industries, manufacturing and mining will be able to enter the Chinese market and be treated the same as domestic firms, when it comes to licence applications, government procuring etc. After a lull in foreign direct investment, which has seen India attracting more funds, inflows have improved, rising 4.1% last year to US$ 118 billion. This year’s growth is expected to come in at 6.5% down from 6.7% in 2016 which was the lowest return in over 25 years. The country is also having trouble maintaining the yuan at below 7 to the US$ and so far has expended over US$ 1 trillion in keeping the currency around that level. In February, it posted its first trade deficit – at US$ 9.2 billion – in three years, as imports jumped 38.1%, with exports falling by 1.3%.

A Singaporean study has concluded that a yellow taxi is safer to drive  than a blue one, with six fewer accidents per 1k taxis each month than their blue counterparts. The three-year study concluded that colour visibility plays an important role in traffic safety. On average, the country’s 12.5k blue taxis had 71.7 monthly accidents per 1k taxis per month, compared to 65.6 for their yellow equivalent vehicles. How long before the RTA change their vehicle colours from beige to yellow and we have a city of Big Yellow Taxis?

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