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Ain’t Got No!                                                                                     23 December 2021

For the past week, ending 23 December, Dubai Land Department recorded a total of 1,685 real estate and properties transactions, with a gross value of US$ 2.02 billion. It confirmed that 1,137 villas/apartments were sold for US$ 763 million, and 177 plots for US$ 586 million over the week. The top three land transactions were for two plots of land in Al Hebiah Fifth, worth US$ 207 million and US$ 72 million, followed by one for US$ 40 million in Palm Jumeirah. The most popular locations in terms of volume and value were Jebel Ali First, with 40 transactions, totalling US$ 31 million, followed by Wadi Al Safa 5, with 37 sales transactions, worth US$ 49 million, and Hadaeq Sheikh Mohammed Bin Rashid, with 19 sales transactions worth US$ 90 million. Mortgaged properties for the week totalled US$ 447 million and 79 properties were granted between first-degree relatives worth US$ 49 million.

On Monday, 20 December, there had been 246 sales transactions, worth US$ 166 million, and mortgage deals of US 41 million, in addition to ten gift transactions amounting to US$ 5 million. Data released by Dubai Land Department also confirmed that the sales covered 223 villas and apartments, worth US$ 137 million, and 23 land plots at US$ 29 million. The mortgages included 38 villas and apartments, worth US$ 30 million, and 18 land plots valued at US$ 11 million, bringing Monday’s total realty transactions to US$ 212 million.

Dubai is expected to record property sales transactions worth over US$ 40.9 billion this year, more than double of the US$ 19.75 billion in 2020; by mid-December, the Dubai Land Department estimates there had been more than 57.5k transactions, worth US$ 38.8 billion. Transaction volumes are expected to remain high in H1 before stabilising for the rest of 2022. Some would say that 2020 was a year of decline and reflection, followed by a year of recovery and sustained growth, with 2022 a year of consolidation and mature expansion. There is no doubt that Dubai is probably considered one of – if not – the safest city in the world and this unique selling point is an important driver that will keep the emirate’s realty bubbling, as an increasing number of international buyers see the emirate as an investment haven.

According to FAM Properties, Dubai rents will continue to rise next year, with strong demand especially in the high-end and beachfront properties, included newly handed over projects in Bvlgari Resort & Residence and the Palm. Asteco estimated that, in Q3, apartment and villa rental rates continued their upward trend rising by 3% and 6% respectively, with annual increases of 19% and 3%. Coldwell Banker UAE “anticipate a moderate rise in the overall market in 2022, especially in prime apartment builds providing high-quality units, modern amenities and services”. Although the consultancy notes a steady rental rise in rents for villas and gated communities it considers that apartment buildings, not in communities, particularly the older properties situated in old Dubai may not do as well and may see rents drop in 2022.

Last Friday, Dubai Harbour welcomed the 252 mt AIDAbella and the 323 mt Costa Firenze – arriving on its maiden voyage to Dubai – inspired by the Italian Florentine Renaissance, with an interior intended to evoke classic Italian streets and town squares. The two cruise ships, with 2.5k passengers and 1.9k crew, berthed at Dubai Harbour’s twin cruise terminals. Capable of processing over 3.2k passengers an hour, it is also the largest standalone dedicated twin cruise terminal centre in the eastern hemisphere.The terminals are located on a pier stretch of over 910 mt and can accommodate a complete passenger turnaround of two cruise ships simultaneously.Al Shamal Holding, a one-person company with limited liability formed five years ago, is the owner and manager of Dubai Harbour, with plans to make it an exceptional seafront district. Dubai’s 2021-2022 season, which commenced in October, is expected to welcome 126 ship and over 500k cruise visitors – a huge bonus for the Dubai’s tourism sector.

The Dubai World Trade Centre has become the latest government asset to be remodelled as a new economic sector to be a comprehensive zone and regulator for virtual assets and crypto, including digital assets, products, operators and exchanges. It will hook up with private sector companies, and other Dubai stakeholders, to create a global hub, whilst enforcing rigorous standards for investor protection, Anti Money Laundering (AML), Combating the Financing of Terrorism (CFT) compliance and cross border deal flow tracing. The WTC will not only provide and oversee a new world-class regulatory framework of Virtual Asset legislative and enforcement policies, but also deliver and oversee an excellent regulatory framework of Virtual Asset legislative and enforcement policies. The Authority has also signed a cooperation agreement with Binance, the world’s leading blockchain and cryptocurrency infrastructure provider, to establish a new international Virtual Asset ecosystem.

This week, the RTA’s  108th Open Auction for Distinctive Vehicle Number Plates raised US$ 10 million. The top five numbers of the one hundred fancy plates on offer – Q22, Z31, V10000, W500 and O66666 – raised US$ 1.36 million, US$ 768k, US$ 251k, US$ 229k and US$ 229k respectively.

As a positive indicator that the airport’s and tourism industry’s numbers are rising quicker than expected is the fact that they will exceed pre-pandemic levels in the remaining few weeks of 2021. DXB’s Terminal 3 is expected to handle more than 1.6 million passengers in the final two weeks of the year, after exceeding one million in October and one million a week in November. Following the reopening of the final phase of Concourse A at Terminal 3 in DXB, the world’s busiest airport, by international traffic, is now operating at its full capacity. Meanwhile, Emirates, the main user of DXB, has restored 90% of its network and is on track to reach 70% of its pre-pandemic capacity by the end of the year. It is expected that 2021 annual passenger traffic will reach 28.7 million by 31 December and this figure will almost double to 57 million in 2022.

The DHL Global Connectedness Index ranked the UAE fourth most globalised country, (out of 169 nations) and the number one ME country, ahead of Qatar 31st Bahrain 39th, Saudi Arabia 42nd, Lebanon 54th, Kuwait 56th and Jordan 61^st. The Netherlands, Singapore and Belgium were ranked the top three.  Along with Mexico, the Netherlands, Sierra Leone and Vietnam, the UAE was one of the five countries that have stood out for their strong or rising global connectedness over the past two decades.  The index measures globalisation, based on four main pillars – the flows of international trade, capital, information and people – as well as tracking both the size of countries’ international flows relative to their domestic activity and their geographic reach around the world. The country performed well in trade, (scoring 83 out of 100) and 73 out of 100 on both information flows and people flows. Overall, the report did note that the pandemic had caused a “modest” decline in global connectedness in 2020, followed by clear signs of recovery in 2021. International movement of people was hit the hardest, and they are on track to recover the slowest, whilst international travel remained more than 80% down in the first half of 2021.

To ensure the adoption of best practices in real estate financing and risk management, the UAE Central Bank has drawn up tighter regulations. The new enhancements require banks to review and improve their internal policies to enhance sound underwriting, valuation and general risk management; the main aim is to supervise local banks’ exposure in this field. Banks will be given a year to enhance their policies and procedures to be in line with the new amendments.

Dubai Islamic Bank has launched a “fun” digital offering, named Rabbit, targeting more technology-savvy millennials and helping the unbanked in the UAE, and other heavily populated markets, in which the UAE’s biggest Sharia-compliant lender operates, to get access to the formal financial system. Such countries include Indonesia, Pakistan and Kenya where DIB will work with regulators to introduce their new app, which is available in Apple and Android stores. It was initially launched with a current account, globally accepted debit card, and payments and money transfer transfers, with credit card being introduced later.

The DFM opened on Sunday, 19 December, up 153 points (5.9%) on the previous week, shed 81 points (2.7%) to close the week, on Thursday 23 December, at 3,145. Emaar Properties, US$ 0.05 higher the previous week, closed, US$ 0.14 lower, at US$ 1.19. Emirates NBD and Damac started the previous week on US$ 3.79 and US$ 0.38 and closed on US$ 3.69 and US$ 0.38. On Thursday, 23 December, 58 million shares changed hands, with a value of US$ 41 million, compared to 208 million shares, with a value of US$ 130 million, on 16 December.

By Thursday, 23 December, Brent, US$ 0.94 (1.2%) lower the previous week, gained US$ 1.75 (2.3%), to close on US$ 76.10. Gold, up US$ 18 (5.2%) the previous week gained US$ 7 (0.4%), to close Thursday 23 December on US$ 1,810. 

Boeing and Airbus have joined forces and have called on the US government to delay the rollout of new 5G phone services, warning that the technology could have “an enormous negative impact on the aviation industry.” With deployment of 5G services scheduled to start, within two weeks, there are concerns that C-Band spectrum 5G wireless could interfere with aircraft electronics and that “5G interference could adversely affect the ability of aircraft to safely operate.” Industry research found that if the Federal Aviation Administration’s 5G rules had been in effect in 2019, about 345k passenger flights and 5.4k cargo flights would have faced delays, diversions or cancellations. This month, the FAA issued airworthiness directives warning 5G interference could result in flight diversions; there are calls for a further delay in its implementation but, according to the US wireless communications industry pushing back deployment one year would reduce economic growth by US$ 50 billion.

With his company valued at US$ 1 billion plus, and himself being the world’s richest person, Elon Musk has declared that he “will pay more taxes than any American in history this year”; he confirmed earlier in the week that he would be paying more than US$ 11 billion in taxes this year. Days earlier, Democratic US Senator Elizabeth Warren said that the Tesla founder, and major shareholder, should pay taxes and stop “freeloading off everyone else” after Time magazine named him its “person of the year”. Since the beginning of November, Musk has sold nearly US$ 14 billion worth of Tesla shares.

According to PitchBook Data, it is estimated that venture capital funds have poured about US$ 30 billion into crypto, or more than in all previous years combined for the little more than a decade-old technology. Over the past three years, this has grown from US$ 8 billion, over which time period, Bitcoin has climbed by more than 1.3k%. The US$ 30 billion tally includes fundraising rounds raised by the likes of Robinhood Markets and Revolut, and US venture capital transactions investment, with some US$ 7.2 billion in deals, four times the previous record set in 2018.

It seems that investors are funding anything and everything, including former niche sectors such as NFTs (non-fungible tokens). Dapper Labs, the NFT platform behind CryptoKitties, raised US$ 350 million in March from investors that included basketball legend Michael Jordan, pushing its valuation to US$ 2.5 billion. Crypto derivatives exchange FTX closed a  US$ 1 billion Series B funding round in July that pushed its valuation to US$ 18 billion. Last month, crypto payments infrastructure provider MoonPay, closed a US$ 555 million round, increasing its valuation to US$ 3.4 billion, whilst Sky Mavis, the developer of Axie Infinity, raised more than US$ 150 million, at a US$ 3 billion valuation, in October for the crypto-based online game.

Staggering figures from the US Secret Service indicate that a minimum of US$ 100 billion has been stolen from relief programs, (estimated to be in the region of US$ 3.4 trillion), established to assist businesses and people who lost their jobs due to the pandemic. The agency reckons that it has more than nine hundred active criminal investigations into pandemic fraud and that the figure does not include those already prosecuted by the Justice Department. In addition, the US Labor Department reported about US$ 87 billion in unemployment benefits could have been paid improperly, with a significant portion attributable to fraud. The Secret Service said it has seized more than US$ 1.2 billion while investigating unemployment insurance and loan fraud and has returned more than US$ 2.3 billion of fraudulently obtained funds by working with financial partners and states to reverse transactions. In the initial stages, the Secret Service confirmed that its focus was on fraud related to personal protective equipment, (maybe they could have helped the UK government, with reports that some were “filling their boots”, at the expense of the taxpayer).

UK’s Financial Conduct Authority has fined HSBC US$ 85 million for failings in its anti-money laundering processes over an eight-year period up to 31 March 2018. The watchdog reported that the bank had made a string of failings, including inadequate monitoring of money laundering and terrorist financing scenarios until 2014, and poor risk assessment of “new scenarios” after 2016. HSBC was also found to have had inappropriate testing and did not check the accuracy and completeness of data in monitoring systems. Like it seems in similar cases, many banks get a “discount” if they do not dispute the findings; in this case, it resulted in its penalty being deducted from US$ 120 million.

Covering about half of fares – including season tickets on most commuter routes – regulated rail fares in England will rise by 3.8% from March. This will be the biggest annual increase in nine years, with fare rises normally based on the preceding July’s Retail Prices Index measure of inflation plus 1%, but this time the Department of Transport has capped the increase to 3.8%. This would see Brighton to London and Liverpool to Manchester fares rise by US$ 257 to US$ 7,025 and by US$ 139 to U$ 3,795 respectively. During the pandemic, government support to keep rail services running topped US$ 18.65 billion.

Like Evergrande, which has around US$ 300 billion of debt, another of China’s bigger property developers has unveiled plans to restructure its debts, after defaulting on billions of dollars of bonds, with an added problem that it may have been duped out of US$ 313 million by Wingskengo, a BVI investment management. China Fortune Land Development had appointed Wingskengo, to earn annual returns of between 7% to 10%, and in turn they advised the Chinese developer to transfer the money to China Create Capital. Now it has advised the Shanghai Stock Exchange, (on which its shares are traded), and the police, that it has “lost contact” with the wealth manager that has US$ 313 million of its money. To add further misery to its long-suffering shareholders, its share value has lost more than 70% of their value this year, having defaulted on billions of dollars of bond debt in 2021 alone. However, it is reported that earlier in the month it had agreed a debt restructuring scheme with a group of creditors. Like other debt-laden developers, they were badly impacted when Chinese authorities launched a sweeping crackdown on excessive borrowing in the sector last year. Another developer, Kaisa, with a US$ 12 billion offshore debt, missed a US$ 400 million repayment last week.

Having been kicked off the New York Stock Exchange, like a growing number of other US-listed Chinese firms, China Mobile aims to raise up to US$ 8.8 billion when it lists its shares on the Shanghai bourse. The world’s largest mobile phone company joins its smaller rivals – China Telecom and China Unicom – which have already made the move back to their home country; all three were delisted from the New York Stock Exchange after a Trump-era decision to restrict investment in Chinese technology companies. A week after its New York listing was pulled, when Americans were banned from investing in the firm, Chinese artificial intelligence start-up SenseTime relaunched its US$ 767 million Hong Kong share sale. Although denied by the company, US regulators have accused it of developing facial recognition software to determine people’s ethnicity, with a focus on identifying ethnic Uyghurs. Following the announcement after the US market watchdog had unveiled tough new rules for Chinese firms that list in America, Chinese ride hailing giant Didi Global said it planned to take its shares off the New York Stock Exchange and move its listing to Hong Kong.

According to Cloudflare, an IT security company, TikTok is the world’s most popular online destination taking over from Google. One of the main drivers behind the change was the Covid pandemic, as lockdowns meant people were stuck at home and looking for entertainment. By July this year, the Chinese app had been downloaded more than three billion times and has now more than one billion active users. Owned by Bytedance, the social network is called Douyin in its home country, and runs on a different network, to comply with China’s censorship regulations. As one of the only globally successful Chinese apps, many countries’ politicians and regulators have raised concerns about security and privacy, and last year TikTok was forced to deny it was controlled by the Chinese government.

The UK Supreme Court has overturned a Court of Appeal verdict that prevents Venezuelan President Nicolás Maduro from accessing US$ 1.95 billion  of gold stored with the Bank of England. The ruling means that only opposition leader Juan Guaidó, who the UK considers as the legitimate leader, can decide what happens to the gold. In a highly controversial 2018 poll, boycotted by the Opposition, Maduro was re-elected to a further six-year term. He has been blamed for mismanaging the country’s economy, highlighted by soaring unemployment, a much devalued bolívar, a failed public service and rising poverty. The country has been sanctioned by a group of nations, including the US, UK, EU, Canada, Switzerland, Panama and Mexico since 2014 over corruption, human rights violations and the suppression of democracy.

With output tanking by 28.7% to 75.8k units in November, UK car production hit its lowest level since 1984, as the effects of the pandemic continue to savage the industry. Calling the figures “worrying”, the Society of Motor Manufacturers and Traders blamed a continuing shortage of semiconductors, which will “likely to affect the sector throughout next year”, and also noted that the start of full Brexit customs, on 01 January, controls could also hit firms,

marking the fifth consecutive month of decline. Electric, plug-in hybrid and hybrid cars accounted for 32.7% of all cars made last month, with battery electric vehicle output expanding 52.9% to 10.4k units, hitting a new high of 13.7% of all production.

The Q3 UK economy grew at a slower pace than first estimated, with updated data showing a 0.2% to 1.1%, blaming weaker consumer spending, and the impact of energy companies going out of business. Latest figures still show the economy is 1.5% down on the pre-pandemic levels and some commentators note that things may become worse as this data precedes the onset of the Omicron variant. Furthermore, business investment also fell by 2.5% in Q3 and was nearly 12% below its pre-pandemic level. UK’s recovery to its pre-pandemic economy remained behind most G20 nations, including France, Germany and the US, in inflation-adjusted terms.

Rishi Sunak’s latest US$ 1.33 billion assistance package is aimed at those businesses impacted by the rise in Covid case. They include the leisure and hospitality sector, which has witnessed a slump in bookings and a marked reduction in footfall, to the tune of up to US$ 8k per premise which will cost the government an estimated US$ 909 million; theatres and museums get a miserly US$ 40 million. The Chancellor has also set money aside to assist firms, with less than 250 employees, with the cost of sick pay for Covid-related absences by reintroducing the Statutory Sick Pay Rebate Scheme. Businesses, other than hospitality and, can apply for some of the funding under the Additional Restrictions Grant, which has been topped up with US$ 136 million. Although he opined that the new measures announced were comparable to the grants that were on offer when businesses were fully closed earlier this year, many analysts consider that the assistance falls well short of actual requirements.

Banque du Liban Governor Riad Salameh has indicated that Lebanon will need to receive between US$ 12 billion – US$ 15 billion from its partners to kickstart its economic recovery and shore up fast-diminishing foreign currency reserves.  The World Bank describes the current unprecedented economic crisis in the country as one of the worst in modern times, as more than 80% of the population live in poverty and the Lebanese pound has lost more than 90% of its black-market value. Since 1997, the pound has been officially pegged at 1.5k to the greenback; at the beginning of the month, it traded for nearly 30k to the dollar on the black market earlier this month in a record low. The Governor said “our quota in the IMF is US$ 4 billion” and “if countries add to it, we could reach US$ 12 billion to US$ 15 billion, an amount that could help start Lebanon’s recovery and restore confidence.” Before the onset of the current crisis in 2019, the country’s mandatory reserves stood at US$ 32 billion; now it is at US$ 12.5 billion. Discussions with the IMF, that started last year, have been relaunched in recent weeks.

Despite mounting inflationary pressure, now at over 21%, and a currency that is going down the toilet, trading at below 15 lira to the greenback, Turkey – or seemingly Recep Tayyip Erdogan – has cut interest rates again for the fourth straight month. With the currency sinking a further 5.7% on the news, the President announced a 50% hike in the country’s minimum wage to US$ 275 to alleviate some of the economic pain that his policies are causing to a majority of Turks. Wishing for a high growth, low interest-rate environment, the President, in contrast to a raft of economic experts, believes that lower rates will stimulate the economy, create jobs and fuel investment in the country because it keeps borrowing costs low. The only problem is that the exact opposite is occurring, despite high economic growth in an emerging market. The measures are intended to mitigate retail investors’ demand for dollars and bring to an end three months of turmoil for the nation’s currency. The lira has lost more than half of its value against the US dollar since September, with declines gaining pace after Mr Erdogan last month unveiled an economic model that relies on lower borrowing costs and a cheaper currency.

This week, the president pulled the proverbial rabbit out of his hat, announcing that his government will make up for losses incurred by holders of lira deposits should the lira’s declines, against hard currencies, exceed interest rates promised by banks; he also introduced a new programme that will protect lira balances from future adverse exchange fluctuations, noting that “from now on, none of our citizens will need to switch their deposits from the Turkish lira to foreign currencies because of their concerns that the exchange rate fluctuations might wipe out gains from interest payments”. He also commented that “Turkey has neither the intention nor the need to take the slightest step back from the free-market economy and the foreign-exchange regime”. Some of the other steps include:

• the authorities will offer non-deliverable forwards to help exporters mitigate foreign-exchange risks emanating from the elevated levels of volatility
• withholding tax for investments in lira notes issued by the government will be reduced to 0% from 10%
• the government will match 30% of all contributions made by private-sector workers to the optional pension system, up from the current level of 25%

Faced by two contrasting problems – the highest inflation rate in decade, at 5.1%, and the threat of the rapid spread of the new Omicron variant – the Bank of England raised base rates from 0.1% to 0.25%; this will inevitably lead to a slowing of consumer spending. The BoE, which for so long had reckoned that the higher inflation figures were “temporary” and would revert to its 2.0% target, have yet again got their forecasting horribly wrong and finally had to raise rates to tackle strong inflationary pressures building up in the economy; it now expects that inflation will top 6.0% early in 2022, with a rise in gas prices playing an important role in driving the figure higher. There are some analysts who consider that the bank’s move will do little to reducing inflation, as many of the rising costs are attributed to global factors, outside its control, with it noting that “consumer price inflation in advanced economies has risen by more than expected.”

In a bid to assist low-income countries still suffering from the impact of the pandemic, the IMF has approved the extension of US$ 115 million in debt relief to 25 eligible nations from 11 January to 13 April 2022. This was the fifth – and final – tranche of a two-year debt service relief from the Catastrophe Containment and Relief Trust and brings the total to US$ 964 million. It is estimated that the pandemic fall-out has caused more economic damage than that of the 2008 GFC, particularly in Africa and South Asia. There is no doubt that the subsequent ongoing global economic recovery has been highly uneven, with the emerging markets/low income countries suffering the worst and this will continue with the world economy forecast to  sustain as much as US$ 5.3 trillion in losses over the next five years. In 2020, global debt surged to US$ 226 trillion, 28% higher on the year, to 256% of GDP; it was the largest one-year debt surge since WWII. Both emerging markets and low-income countries are also facing elevated debt ratios driven by the large fall in nominal GDP in 2020. Not only do they have to face record-high public and private debt levels, low-income countries have limited resources to deal with new virus mutations, restricted access to funding, higher borrowing costs and rising inflation. The end result is that the poverty levels are rising at an alarming rate and as we approach 2021, a growing number of the world’s population Ain’t Got No!

Glory Days!                                                                                         16 December 2021

Latest data from the Dubai Land Department confirms that property sales transactions surged 88.4% annually in the first eleven months of the year, as the UAE’s economy has seen a strong post-pandemic recovery. The 55.6k transactions, valued at US$ 36.9 billion, have made this the best year since 2014, with the main drivers supporting the recovery including Expo 2020 Dubai, new measures by the government, including the expansion of the golden visa scheme and visas for retirees, and the roll out of mass inoculations. On a month-on-month base, Mo’asher, Dubai’s official monthly house price index rose 2.12%, and the general consensus is that prices will continue higher into the new year, albeit at a slower pace.Qantas Toyota

According to Valustrat, the UAE property market prices will continue their upward trend into next year, attributable to many factors, including supportive economic reforms and an accelerated vaccination programme. Furthermore, there will be an expected surge of international investors, looking to buy in the emirate, whilst developers will still be offering attractive packages, and mortgage rates, will continue at record lows, even though they may nudge marginally higher off their record lows in 2022. However, it did note that the price increase “is sustainable but it will only be toned down by the fact we have a lot of supply coming in, particularly in the apartment submarket”, citing that developers are expected to deliver up to 60k units in 2022. A Knight Frank study last month reported that Dubai residential property prices were 21.0% higher at US$ 336 per sq ft in the first ten months of the year.

Although Dubai’s November IHS market PMI remained flat, month on month, at 54.5, its non-oil economy continued its upward trend, with the joint-strongest improvement in operating conditions since October 2019. The positive data was attributable to a pick-up in new business, (on the back of higher tourism numbers and easing of restrictions), and a rebound in international travel, linked to Expo 2020 Dubai; by 05 December, more than 5.6 million visitors had visited the Expo site, (28% of the total emanating from overseas). All three monitored sectors – travel/tourism, wholesale and retail – showed improvements, whilst output expanded, as companies reduced their charges to attract more customers. Driven by higher demand, businesses also increased their input purchases.

For the first ten months of the year, Dubai welcomed 4.88 million visitors, including over one million in October; during that period, the hospitality sector sold 9.4 million room nights, compared to seven million room nights in the same period in 2019, also driven by a robust domestic tourism market and the knock-on effects of Expo 2020 Dubai. The latest tourism figures were released at the second bi-annual City Briefing of 2021, held by the Department of Economy and Tourism, attended by over 1.1k representatives from the sector, to provide stakeholders with key updates on the tourism sector’s growth and insights into current and future strategies and global marketing campaigns. In an October YTD study, occupancy was at almost 64%, while the length of stay showed a 12.2% increase from 4.1 nights to 4.6 nights. During this period, there were 24.74 million occupied rooms nights across the emirate at an average daily rate of US$ 105, with room inventory 6% higher than in 2019.

Today, Emirates received their 153th and the final and the 251^st Airbus A380 ever to be built. Although several other carriers have already stopped using the Jumbo, which started commercial flights in 2007, the Dubai airline looks set to continue using it for many years to come. It is still the world’s largest passenger jet, with a standard configuration for 545 passengers; it has an 80 mt wingspan and a maximum take-off weight of 560 tonnes.

Based on financials, reputation, company’s age, value of projects completed and projects under construction, Forbes Middle East has unveiled its “Top 50 Real Estate Developers In MENA 2021” list. To nobody’s surprise, Emaar Properties, with total assets valued at US$ 34 billion, led the field, followed by Abu Dhabi-based Aldar Properties, with US$ 11.3 billion total assets as of September 2021. Seventeen of the fifty developers (and four in the top five) were based in the UAE, with Saudi Arabia, Egypt, Kuwait and Qatar – with numbers of eleven, seven, six and three making the top five.

The UAE nudged one place higher to 23^rd in the IMD World Competitiveness Centre’s World Talent Report 2021; it maintained its top position in the Arab world and second in the Mena, behind Israel’s 22^nd position. The survey focuses on three factors – investment and development, appeal and readiness. The country was ranked first in readiness of skilled labour, competent senior managers and student mobility inbound and appeal for zero personal income tax sub-indexes.

The latest Kearney’s Global Retail Development Index of thirty-five emerging markets has listed the UAE’s retail sector fourteenth. It bases its findings on a set of twenty-six factors and four key variables to determine markets that are growing, attractive, and relatively risk free. It noted that this was due to many factors, including its resilience during the pandemic, a raft of progressive government reforms and rapid digitalisation. With cash payments rapidly becoming a thing of the past, retailers have embraced technology adopting digital payment technologies such as mobile wallets and mobile payment apps. The consultancy also observed that the retail sector had benefitted from the general ease of doing business in the country, as well strong government support for start-ups and SMEs, which in turn encourage FDI. Another factor driving the sector forward is that the UAE is the regional leader when it comes to on-line spending at US$ 2.6k, compared to the global average of US$ 1.2k and the Mena average of US$ 629.

The Dubai Supreme Council of Energy confirms that the emirate has reduced its carbon emissions by 33% last year, more than double the 16% target of the Dubai Carbon Abatement Strategy 2021. These latest figures indicate that Dubai is well on its own way to becoming a carbon-neutral economy by 2050. This is part of the strategy of HH Sheikh Mohammed bin Rashid Al Maktoum to make Dubai a global hub for the green economy and sustainable development. Under the auspices of DSCE, there are other entities all working together to achieve the Ruler’s 2050 target. They include the Dubai Clean Energy Strategy 2050, the Dubai Net Zero Emissions Strategy 2050, (to provide 100% of energy from clean energy sources by 2050), and the Dubai Demand Side Management Strategy, which aims to reduce electricity and water demand by 30% by 2030.

Latest National Emergency Crisis and Disaster Management Authority guidelines confirm that a Hosn Green Pass and a negative PCR test, with 96-hour validity, will be mandatory for all those attending events this holiday season; it also has introduced an 80% capacity limit for all Christmas and New Year parties in the country, as well as 1.5 mt physical distancing guidelines being in place, except for members of one family  who are allowed to be be seated without adhering to social distancing protocols. 

DP World is again in the news, this time signing an agreement with the Government of the Democratic Republic of the Congo for the development of the country’s first deep-sea port at Banana. Earlier in the year, there was a signing of a term sheet, summarising the agreed amendments to the initial contract signed in 2018. The world’s leading provider of smart logistics plans to begin the port’s construction within twelve months, initially developing a 600 mt quay, with an 18 mt draft, capable of handling the largest vessels in operation. It will have a container handling capacity of about 450k TEUs (20-foot equivalent units) per year, and a 30-hectare yard to store containers.  Its development will be a boon for the local economy, attracting direct calls from larger vessels from Asia and Europe.

At the Central Bank’s fifth board meeting of the year, it was decided that local banks will be closely monitored in relation to internal policies regarding loans and management of real estate risk exposure. The aim of the exercise is to “improve identification, benchmarking and oversight of real estate exposure.” The meeting also discussed a proposal for conducting a study on a job nationalisation programme and Emiratisation of leading professions by qualified UAE citizens in the banking and insurance sectors. It also approved the Retail Payment System, the Large-Value Payment Systems (LVPS) and Card Schemes Regulation and approved amendments to the licensing and monitoring of exchange business. The meeting approved updates and amendments to the Targeted Economic Support Scheme (TESS) to contain the repercussion of COVID-19 and decided to extend capital buffer and stable funding relief for a further six months to 30 June 2022.

An unnamed bank has been fined over US$ 5 million by the Central Bank of the UAE for failing to comply with the anti-money laundering and combatting the financing of terrorism and illegal organisations (AML/CFT) regulations; the watchdog also took administrative measures against the bank for not adhering to the country’s banking norms. This follows on from the Central Bank tightening up regulations and imposing financial sanctions on six exchange houses operating and also fined them for violating AML and CFT laws.

Pursuant to Article 14 of the Federal Decree Law No. (20) of 2018 on Anti Money Laundering and Combatting the Financing of Terrorism and Financing of Illegal Organisations, the Central Bank imposed financial sanctions totalling almost US$ 100k on six Hawala providers operating in the country. The six companies were each fined almost US$ 14k each for failing to provide timely registrations on the GoAML reporting system.

Emirates Central Cooling Systems Corporation, the world’s largest District Cooling Services provider, becomes the fourth government and state-owned company that will be listed on the DFM. This is part of the strategy of Dubai’s Securities and Exchange Higher Committee to increase the size of the Dubai stock market in the emirate to US$ 817 billion. The company, established in 2003, is an enabler to the realtor sector and currently has a 79% market share in Dubai’s District Cooling market. Serving 140k corporate and individual consumers, it has 84 plant rooms and a network extending over 350 kilometres, with a cooling capacity of more than 1.64 million refrigeration tons.

The DFM opened on Sunday, 12 December, 287 points (8.5%) lower the previous fortnight, gained 153 points (5.9%) to close the week, on Thursday 09 December at 3,226. Emaar Properties, US$ 0.11 lower the previous fortnight, closed, up US$ 0.05, at US$ 1.33. Emirates NBD and Damac started the previous week on US$ 3.60 and US$ 0.38 and closed on US$ 3.79 and US$ 0.38. On Thursday, 16 December, 208 million shares changed hands, with a value of US$ 130 million, compared to 297 million shares, with a value of US$ 115 million, on 09 December.

By Thursday, 16 December, Brent, US$ 4.49 (1.8%) higher the previous week, shed US$ 0.94 (1.2%), to close on US$ 74.35. Gold, US$ 97 (5.2%) lower the previous fortnight gained US$ 18 (1.0%), to close Thursday 16 December on US$ 1,803. 

Over the next eight years, Toyota is planning to invest US$ 70 billion to electrify its automobiles by 2030, half of it to develop a battery electric vehicle (BEV) line-up. The carmaker estimates that BEV cars will only account for about a third of production, (equating to 3.5 million vehicles), come 2030. This is a lot lower than most other competitors such as VW which has predicted that 50% of its global vehicle sales will be battery-powered cars by that date. However, Toyota is still looking at a multi-pronged, carbon-reduction strategy that also includes hybrid cars and hydrogen-powered vehicles. Last month, the Japanese company did not sign a pledge, signed by six major carmakers, to phase out fossil fuel cars by 2040, arguing that some countries would not be ready to transition to green cars by that date.

In a major blow to Boeing, Qantas has announced that it will switch its domestic fleet of planes to Airbus from Boeing and had agreed to buy forty Airbus jets, with the option to purchase a further ninety-four aircraft. Deliveries of the new planes, which will lower carbon emissions, are due to start in mid-2023 and continue over the next decade to replace the airline’s ageing fleet of Boeing jets. This is yet another hit for Boeing, after yesterday’s announcement that Singapore Airlines had signed a provisional deal to buy seven A350 freighters. However, Boeing can glean some comfort from the demise of the Airbus A380 which has struggled since its 2007 launch to gain traction in the big jet market. Over the past fifteen years, Boeing was working on its long-range versions of its economical twin-engine 777 – and developing the 787 Dreamliner. In the end, it has become the most technically advanced commercial jet in history of aircraft and was much more efficient than previous models, using less fuel and cheaper to run.

The Australian carrier indicated that it would make a fiscal H1 (to 31 December) loss of US$ 790 million, having been savaged more than most airlines by months of coronavirus lockdowns”. Noting that this period had been the worst half year of the entire pandemic, Qantas had been operating at only 30% capacity, with most Australian states in lockdown. The airline has significantly reduced costs and added to its miscellaneous income figure by selling land near Sydney Airport for US$ 411 million.

Companies pay a lot of money to have their products appearing in films or on popular TV shows. One such company is Peloton Interactive, Inc, an American exercise equipment and media company, with one of its main products being internet-connected stationary bicycles and treadmills. It appears that the company had approved an appearance on a ‘Sex and the City’ reboot by a Peloton instructor Jess King, who plays Allegra, the trainer for Mr Big, one of the show’s favourite characters., The company was unaware of the plot before the show aired, with the main theme being Mr Big having a heart attack and dying (on screen) after working out on a Peloton exercise bike. The share price in Peloton nose-dived after the show was aired in the US. There is every possibility that because Peloton was unaware of the script beforehand, and because its stock prices took a substantial dive, there could be grounds for legal action against HBO.

The football world has been slow to enter the virtual world, with only twenty-four different clubs, in the five major European leagues, having launched or are considering fan tokens. A BBC study estimates that more than US$ 350 million has been spent on the virtual currencies and buying controversial crypto “fan tokens”. The eight EPL clubs mainly offer tokens similar to a club-specific crypto-currency – virtual coins can be bought and sold and their values rise and fall, depending on supply and demand. Some clubs, including Manchester City among others, also sell digital collectibles known as NFTs (non-fungible tokens). It seems that tech company Socios is involved with some of the clubs and is responsible for organising the initial sale, and subsequent trading, of the virtual coins. Buyers must first convert their money into the company’s own crypto-currency, Chiliz. and those hoping to cash in on the “cryptoboom” may be disappointed, as the value of many fan tokens has decreased since they were initially sold by the clubs. It is interesting to note although Manchester City and Lazio generated the most sales, they are the two that have fallen most in value – by 50% and 70% respectively, whilst the tokens of Inter Milan and Turkish outfit Trabzonspor have increased in value more than Bitcoin over the past twelve months. This market is not only volatile and unregulated, but also distorted as clubs hold on to most tokens, on average controlling 80% of the supply; the value of tokens held by the top thirteen clubs together exceeds US$ 1.36 billion – but individual buyers currently hold only US$ 270 million worth.

With coffee prices touching ten-year highs, some Brazilian coffee experts are looking at annual production levels of around 66 million bags which would see a three million bag surplus in global inventory levels; if this were the case, then prices may dip below the US$ 2 mark. There are others who are less optimistic and estimating arabica production in the region of 36 million bags and the total crop, (including the Robusta variety) to come in at 55 million bags. Brazil has had a bad year after a drought and later frosts ruined as much as 20% of the country’s coffee trees. Fortunately, following the bad weather, rains followed which produced flowering which indicates future cherries for picking; although the flowering was widespread, the conversion to fruit was below normal. Nobody really knows how many trees have been damaged and it will be the end of January before a realistic crop figure is known.

Claiming that Steve Easterbrook had hid and lied about sexual relationships with three staff members, McDonald’s has settled a lawsuit with its former CEO, who has returned equity awards and cash worth over US$ 105 million, which he had received in a severance package in 2019. (That is a lot of burgers). He had been terminated that year failing to uphold the firm’s values and fulfil his responsibilities, having admitted to having had a consensual relationship with one employee. At the time, McDonald’s said Mr Easterbrook had “violated company policy” and shown “poor judgement”. Investigators also found messages showing that he approved a grant of company shares worth hundreds of thousands of dollars to one of the employees “shortly after their first sexual encounter”.

In a belated bid to curb the power of big tech companies, such as Google and Facebook, the EU is taking steps to prevent them from abusing their market power by ensuring a higher degree of competition in the sector. One way to do this is to allow new players to enter the market more easily but MEPs also want to end anti-competitive practices within the sector. There is the feeling that the current law has been somewhat of a failure because it was “always running behind companies like Apple, Google or Facebook”, but the new law will change the burden of proof; it will stop companies from prohibiting or favouring a particular service, while also preventing interoperability between different rival platforms. Penalties of up to 10% of turnover could be levied for defaults or, in the case of systematic rule violations, could be enforced divesting part of the company’s assets. The providers argue that the new regulations would curb innovation.

On Tuesday, the Turkish lira slumped by nearly 7% to a new record low of just under 15 lira to the greenback amid fears that there will be further imminent rate cuts by the central bank. President Recep Tayyip Erdogan has pushed the central bank to keep cutting rates, despite surging inflation, and today’s 1.0% cut to 14% is the fourth 1.0% reduction since September. Although many economists disagree with his policy, the president continues to argue that lower interest rates will boost Turkish exports, investment and jobs. However, Turkey is now paying the price for this apparent misguided approach as the country’s November inflation rate topped 21.7%.

One of the few ‘benefits’ of the 20%+ inflation figures, and the record low lira rates, is the 59% November hike, to 178.8k, in Turkish house sales to foreigners to a record level, bringing in US$ 8.5 billion in foreign exchange, as a lira slump – down at under 15 lira to the greenback, made purchases significantly cheaper for those buying with hard currency. Many Turks see housing as a means of defence against inflation. 7.4k homes were sold to foreigners last month – the highest monthly level since the data series began in 2013; the highest number of foreign buyers were Iranian citizens, followed by Iraqis and Russians.

Official Japanese statistics have been called into doubt, with news that the government overstated construction orders data received from builders for years. The admission by Prime Minister Fumio Kishida, which will undoubtedly dent the credibility of official data widely used by investors and economists, came after the Japanese leader commented after it had been reported that the Ministry of Land, Infrastructure, Transport and Tourism had been “rewriting” data received from about 12k select companies since 2013 at a pace of about 10k entries per year. Kishida said “improvements” had been made to the figures since January 2020 and that there was no direct impact on GDP data for the fiscal years 2020 and 2021.

Lawmakers in Zhejiang are facing a new Covid 19 outbreak which has seen over twenty listed companies suspending operations in one of China’s biggest manufacturing hubs, halting production of goods from batteries to textile dyes and plastics. The Chinese province accounts for around US$ 1.02 trillion, (6%) of China’s GDP and is a manufacturing hub for exports. Tens of thousands of Zhejiang residents are in quarantine, with the outbreak in three cities – Ningbo, Shaoxing and Hangzhou – developing at a “relatively rapid” speed.

Data from the Australian Tax Office reports that 782 companies paid zero tax in the fiscal year ending 30 June 2020, with the agency noting evidence of profit shifting and continuing to battle large companies over unpaid taxes; the proportion of all entities with nil tax payable decreased from 36% in 2013-14 to 33%. For that tax year, the ATO issued US$ 2.25 billion in tax bills against large companies, of which US$1.79 billion is under dispute. It noted a significant increase in Australian public companies that paid nil tax, with service industries, transport and financial asset investing sectors badly impacted by pandemic lockdowns. There was increased concern about some companies who were seen to be mis-pricing loans and shifting income into low-tax jurisdictions such as Singapore, with funds being shifted offshore and not subject to Australian tax.

The ATO examined 2.4k tax-paying companies of which 1.4k were foreign-owned with an income of over US$ 72 million, 513 were Australian public entities with an income of US$ 72 million or more, and 479 Australian-owned resident private companies with an income of US$ 144 million or more. It found that 1.6k paid tax, 0.4k incurred an accounting loss, 0.2k used prior year losses and 0.8k did not pay any tax. Of the US$ 1.79 billion in disputed tax bills for 2021 have already been paid to the ATO under a 50:50 arrangement. Despite the progress being made, there are still disputes from previous years – 2020, US$ 1.07 billion from twenty-three different taxpayers, and 2019 US$ 720 million from thirteen.

For much of H2, the Australian dollar had been ‘range bound’ and has hovered around the US$ 0.72 and US$ 0.74 levels; over the past five weeks, the dollar has declined from US$ 0.75 to its current level of hovering around US$ 0.70; earlier in the year, it was trading at nearly US$ 0.80. The currency has always punched above its weight and although it is minute by global standards, it is one of the most traded in the international market. It is estimated that if the Australian currency declines 10%, then all things being equal, imported prices rise 10%, and they are about 20% of the CPI, so spread over a year, it would add 2% to prices; the lower the value of the dollar, the higher the price of imports and the higher the level of inflation. The question is not if the RBA is going to raise rates but more of when?

US November inflation figures hit a forty-year high, with latest figures showing prices up 6.8% on the year; on the month, they rose at the slower rate of 0.8%. compared to October’s 0.9%. Rising prices, including petrol, rent and the cost of second-hand cars, have impacted more on the lower income bracket. It is apparent that one of the main drivers behind the high inflation figure is President Biden’s previous spending programmes, designed to offer support amid the Covid pandemic. With many analysts arguing that further spending could make inflation worse, the US leader will have problems passing his new US$ 1.4 trillion social spending bill through both chambers. Another driver would be the lingering aftereffects of Covid and the fact that it has yet to be brought under full control, effecting the supply chain and the labour market. The US administration has pledged to tackle rising inflation and one factor that could greatly help is if the Federal Reserve moved a little quicker to reduce the monthly bond-buying support, allied with an interest rate hike.

At this week’s policy meeting, the US Federal Reserve surprised the market by declaring that it will quicken the pace at which it is pulling back its support for the post-pandemic US economy. The Fed will shrink its monthly bond purchases at twice the pace it previously announced, citing the original reasons for such purchases are no longer valid at a time when inflation is touching forty-year highs and unemployment declining. In other words, interest rates are set to move higher early next year, with two more rises before the end of 2022. Obviously, this will have an impact on rates here in Dubai.

Latest UK figures show there was a fall in unemployment among 16–24-year-olds, another group hit hard by the pandemic; the unemployment rate among that sector had now recovered to pre-pandemic levels at 11.3% – down from a high of 14.8% in the 2020 September quarter. After a marked slump during the pandemic, the number of people in part-time work jumped to 8.07 million, in the three months to October, (compared to 7.7 million in the May quarter). Data shows that the total of employees on payroll continued to grow strongly into November. Meanwhile job vacancies again moved higher– at 1.22 million, 54.9% higher than before the pandemic. – but the rate of growth slowing. However, the data was collected before the onset of the Omicron variant which some fear may lead to restrictions in some sectors. In November, UK employers added 257k staff to their payrolls, whilst unemployment nudged 0.3% higher to 4.3%.

In what is considered to be the first post-Brexit deal negotiated from scratch and not “rolled over” from trade terms that the country enjoyed while in the EU, the UK has signed a free trade deal with Australia which it says will benefit consumers and businesses. Not only will it unlock US$ 13.8 billion of additional trade. while ending tariffs on all UK exports, but a bigger boost will be the fact that it provides a gateway into the fast-growing Indo-Pacific region and would boost the UK’s bid to join the Trans-Pacific Partnership, one of the largest free trade areas in the world. The deal is due to come into force in 2022.

In a deal that sees his master recordings and publishing rights for his life’s work being sold to Sony, 20-time Grammy winner, Bruce Springsteen, has received US$ 500 million. Sony will have ownership of his twenty studio albums, including classics like ‘Born To Run’, The River and Born In The USA. Last year, it is estimated that his music generated about US$ 15 million in revenue. Last May, Sony reported that it had spent US$ 1.4 billion in acquisitions over the previous six months, including a multi-million-dollar deal to obtain the rights to Paul Simon’s back catalogue but it would appear that Springsteen’s deal would be the most expensive so far. For the 72-year old genuine rock star, famous for his four-hour live shows, there is no doubt that the future holds plenty more Glory Days!

Ready For The Weekend!                                                     09 December 2021

Last month, Dubai registered an 80.4% jump in sales to 7.0k deals, worth US$ 4.89 billion, making it the best November, in terms of total sales, for eight years.; it was also 45% higher than the November 2019 return, occurring before the onset of the Covid-19 pandemic. Property Finder also commented that “the data clearly shows that investors and consumers are confident in Dubai’s future, which is reinforced by proactive government initiatives, attractive real estate projects and the vision of the city.” The split percentage of all property transactions was 54:46 between secondary or ready property, (3.2k properties, valued at US$ 1.86 billion), and off-plan property, (3.8k, worth US$ 3.03 billion). The consultancy also noted that Expo 2020 may have had a positive impact on sales and that “it is interesting to note that November 2021 had the highest number of sales transactions since Expo 2020 was announced in December 2013.” By the end of November, Dubai had recorded 55.7k sales transactions worth US$ 36.89 billion – up 88.4%, compared with the whole of 2020; even without December, this is already the highest yearly sales figure since 2014.

Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid, issued a directive that sees tenants, who are rebuilding or renovating their properties in Al Quoz Creative Zone, being exempted from paying rents for up to two years. This is part of the strategy to transform the development project into a comprehensive creative hub with the aim of attracting global talent. It also runs in tandem with the emirate’s ambition to become an international cultural destination and the global capital of the creative economy by 2025. A dedicated platform, called the Creatives’ Journey, has been introduced to support the business operations of creatives and provide a single window to get licences for their projects within a few minutes. The plan also seeks to provide soft-mobility solutions for the people in the zone and to develop transport infrastructure between the free zone and Al Safa Metro Station. To date, Dubai Culture has awarded 4.5k certificates of accreditation to creatives and artists of different nationalities.

HH Sheikh Hamdan bin Mohammed has advised that the Executive Council, of which he is the Chairman, is seeking to enable greater corporate social responsibility in private sector companies. One such policy plans to align CSR projects and contributions with the priorities set by the government, as well as to promote partnerships between the private, public, and non-profit sectors that will eventually positively impact the community. Dubai’s Crown Prince noted that “strong partnerships with the private sector, which is a strategic partner in our development journey, is vital to accelerate our development plans.”. The new policy introduced social responsibility policy, with the aim of raising the role of companies and private establishments in social and economic development and inspire private companies to contribute to the community.

Under the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, his son, Sheikh Maktoum announced the listing of TECOM on the Dubai Financial Market which is part of a strategy to increase the size of the DFM to US$ 817 million (AED 3 million). TECOM, with ten business communities in Dubai that offer state-of-the-art infrastructure, is a strategic business enabler that creates innovative business communities and thriving work environments. Its business communities include Dubai Internet City, Dubai Media City, Dubai Design District and Dubai Industrial Park.

After two months since its opening, Expo 2020 Dubai has recorded nearly 4.77 million visits, with virtual visits having reached 23.5 million.

This week, the UAE Railway Programme was launched in the presence of the country’s two leaders – HH Sheikh Mohammed bin Rashid Al Maktoum and HH Sheikh Mohamed bin Zayed Al Nahyan. The integrated programme comprises three key projects, viz., freight, (including the Etihad Rail freight services), passenger, (connecting eleven cities with travel between Abu Dhabi and Dubai taking forty minutes at speeds of 200 kph), and integration with a network of light rail facilitating transportation inside the seven emirates. By 2030, the number of passengers is expected to reach more than 36.5 million annually.

DP World and Emergent Cold Latin America, (Latin America’s newest temperature-controlled warehousing and logistics provider), will become partners to develop two temperature-controlled logistics facilities within DP World Caucedo (Dominican Republic), a world class logistics hub, and Duran Logistics Centre (Ecuador). These developments will provide both parties’ customers with a fully integrated supply chain solution and will see them both explore development activities in other DP World locations in Latin America.

Emirates Airline is expecting a busy week at the start of the holiday season and has advised its passengers to arrive early at the airport or opt for early check-in to avoid the peak holiday rush. The carrier estimates that this weekend it will carry 250k passengers and that passenger traffic at DXB’s Terminal 3 is forecast to be around 1.1 million over the next twelve days.

Over the next six months, Emirates Group is planning to hire five hundred IT professionals, covering a myriad of roles including cyber security, technical product management, DevOps, hybrid cloud, modern architecture, software engineering, service management, digital workplace, agile delivery and innovation. In September, the carrier announced that it would be hiring 3k cabin crew and 500 airport services over the ensuing six months; a month later a further 6k staff were to be added prior to the end of Q1 2022. Emirates is hoping to reach 70% of its pre-pandemic capacity by the end of December, having already restored 90% of its network.

Majid Al Futtaim Properties and Abu Dhabi’s biggest developer, Aldar Properties, has teamed up to create an online real estate platform for their businesses, at a time when new legal reforms are being implemented. Such amendments include changes to electronic transactions and trust services that give digital signatures the same weight as a handwritten signature. The agreement will see both parties work together to “enhance innovation, customer experience, digital transformation and sustainable practices in the real estate sector”. Dubai-based MAF owns and operates twenty-nine shopping malls, thirteen hotels and four mixed-use communities, whilst Aldar has developed a number of projects in Abu Dhabi, including on Yas Island, Al Raha and Saadiyat Island.

The latest Global Power City Index 2021, published by the Institute for Urban Strategies at the Mori Memorial Foundation, has seen Dubai move up three places to fourteenth. The city was ranked fifth globally for “cultural interaction”; this category measures leadership, tourist and cultural attractions, communication and visitor amenities. London came top overall and also in the “cultural interaction” category. The survey ranks more than forty major cities on aspects such as the economy, research and development, cultural interaction, livability, environment and accessibility. The Crown Prince, Sheikh Hamdan noted that “Dubai continues to be a global model for a vibrant creative economy.”

According to a white paper released by Dubai Chamber, over the past five years, the UAE has accounted for 74% of GCC investments in ASEAN markets. The study, examining the business and investment environment in the ASEAN region, and assessing prospects for expanding bilateral economic co-operation. It is estimated that the total value of funding from the GCC into the region was over US$ 13.3 billion. The findings of the report were further studied and analysed by public and private sector stakeholders at Expo 2020 Dubai for the inaugural two-day GBF ASEAN which closed today, 09 December 2021.

Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, has again confirmed that the well-publicised 70% discounted tax penalties do not apply to the actual tax but is a reduction in the penalties accrued over time. He also advised that those businesses who intend to avail the 70% discount on tax penalties must clear all their tax dues before that has accrued before June 28 and pay 30% of the penalty amount by the end of this month. VAT tax collection continues to rise on the back of new businesses and many enterprises previously below the taxable threshold, now being in the tax bracket.

BARQ EV, the first licensed drone delivery service provider in the UAE, broke two Guinness World Records, by executing the longest flight of a drone for the delivery service at 13.584 km, and the longest non-stop return flight for a drone at 18.065 km. The smart mobility solutions company, backed by Ahmad Al Mazrui, Abdullah Abu Sheikh and Mazen Al-Jubeir, will be launched in early 2022. They commented that the drone programme, introduced by the Crown Prince, Sheikh Hamdan, “seeks to improve people’s lives by reducing carbon emissions generated by traditional shipping and transportation methods and facilitating the movement of goods and materials. This way, it will contribute to positioning Dubai as one of the smartest cities in the world.” It is also an indicator that the emirate is fast becoming a centre of innovation and provides the ideal hub for start-ups specialising in innovation and technology

Last week, as the UAE celebrated its fiftieth anniversary, the United Nations Conference on Trade and Development released a report detailing the value of the country’s foreign trade since its 1971 inception. It noted that this has amounted to US$ 9.32 trillion and the country’s trade balance has recorded a surplus of nearly US$ 1.3 trillion over that period. Since 1971, the value of UAE’s foreign trade has increased 473 times from just US$ 1.15 billion to US$ 542.02 billion by the end of last year. During the fifty years, exports have increased 380 times, to US$ 319.3 billion, and imports 730 times to US$ 225.7 billion, whilst the cumulative balance of foreign direct investments jumped from US$ 7.8 million in 1971 to US$ 20.0 billion by the end of 2020.

Dubai stock exchanges will change their trading week to Monday-Friday, from 03 January, in line with the government’s new work system; trading hours will be between 10.00 to 15.00. This latest move will most probably benefit the DFM’s operations as it will bring it more in line with international financial markets, a factor that will enhance its competitiveness regionally and globally.

The DFM opened on Sunday, 05 December, 287 points (8.5%) lower the previous fortnight and gained 153 points (5.9%) to close the week, on Thursday 09 December at 3,226. Emaar Properties, US$ 0.11 lower the previous fortnight, closed, up US$ 0.05, at US$ 1.33. Emirates NBD and Damac started the previous week on US$ 3.60 and US$ 0.38 and closed on US$ 3.79 and US$ 0.38. On Thursday, 09 December, 297 million shares changed hands, with a value of US$ 115 million, compared to 365 million shares, with a value of US$ 271 million, on 02 December.

By Thursday, 09 December, Brent, US$ 11.87 (1.8%) lower the previous three weeks, rose  US$ 4.49 (6.3%), to close on US$ 75.29. Gold, US$ 97 (5.2%) lower the previous fortnight shed US$ 12 (0.7%), to close Thursday 09 December on US$ 1,785. 

One of the most expensive cases in legal history concluded this week, with the jury rejecting claims that the late Dave Kleiman was a former business partner of Craig Wright, a computer scientist, who has always asserted that he invented Bitcoin. Also known as Satoshi Nakamoto, he has won a court case allowing him to keep 1.1 million coins, worth over US$ 50 billion. The Kleiman heirs have always maintained that the claimant, a computer security expert who died in 2013, had worked with Mr Wright to create and mine the first Bitcoin in existence in 2008, and that he had stolen it. The Miami jury in the civil lawsuit cleared Mr Wright on nearly all issues brought by the Kleiman family but they will receive US$ 100 million for intellectual property infringement.

TikTok has become the second fastest-ever expanding social media with the one billion user number recently been reached. This has been done in 5.1 years, only surpassed by Facebook Messenger taking just 4.9 years to hit this target. Other apps have taken longer to top one billion users – WeChat, Facebook, Instagram and WhatsApp (7, 7.7, 8.5 and 8.7 years). TikTok, known then as Douyin, started life in China in September 2016.

Following heavy political pressure, Didi Global has decided to remove its shares off the New York Stock Exchange and move them to Hong Kong. The Chinese ride-hailing giant made its US debut in July, after raising US$ 4.4 billion in its IPO, but at almost the same time that Beijing announced a crackdown on technology companies listing overseas, with the internet regulator ordering online stores not to offer Didi’s app, saying it illegally collected users’ personal data. To make matters worse for the Chinese tech company, it has also come under pressure from regulators in the US and Europe, as US regulators unveiled tough new rules for Chinese firms that list in America.

For apparently violating EU Competition rules, Italy’s anti-trust authority kas fined Amazon US$ 1.3 billion accusing the company of exploiting its dominant position against independent sellers on its website. European governments appear to be taking early action against the tech giants if they step out of line. Italy’s AGCM authority has claimed that Amazon has required that third-party sellers use Fulfilment by Amazon, which gives it a double whammy of damaging competitors and strengthening its own position. It also prevents third-party sellers from gaining access to Amazon’s Prime loyalty program, “which makes it easier to sell to the more than seven million most-loyal and highest-spending consumers”.

Five years ago, Lego built its first Asian factory in China and has announced that its second one will be a US$ 1 billion investment in Vietnam to keep up with growing demand for its products in Asia, where it has witnessed double digit growth since 2019. Construction of the toymaker’s first carbon neutral factory, (with solar panels on its roof), will start next year, with production slated to commence in 2024; 4k jobs are expected to be created over the next fifteen years. Lego also notes that building production plants, close to key markets, “provides the flexibility to respond quickly to shifts in local consumer demand, shortens the supply chain, and reduces the environmental impact of shipping long distances.”

Utilising Japanese bullet train technology and European high-speed network expertise, HS2 has signed a US$ 2.6 billion contract with Hitachi and Alstom to build fifty-four of the fastest trains in the UK, creating some 2.5k. jobs. The controversial high-speed network, with links between London, the Midlands, and the North of England, will have trains that can travel at 225 mph, with production starting at Newton Aycliffe, County Durham, and be finished at Alstom’s Derby and Crewe sites. It could take five years before the first train rolls off the production line. Each train will be around 200 mt long, with the option to couple two units together to create a 400 mt long train with up to 1.1k seats.

There are reports that the Chinese property giant Evergrande Group could default on its latest debt repayment, with the markets not impressed as its share value tanked 20% on Monday. There are also contagion concerns of the knock-on impact on other shares, especially in property and banking sectors, which witnessed similar falls on Monday. With total liabilities, both in China and overseas, Evergrande commented that it could not guarantee “to perform its financial obligations”, following a US$ 260 million demand for payment. Even if the company were to soon fail, it will take years for the mess to be cleared. Matters did not improve on Monday, when smaller property developer Sunshine 100 China Holdings defaulted on a US$ 170 million debt payment “owing to liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment and the real estate industry”.

Today, 09 December, Fitch Ratings downgraded the Evergrande Group and its subsidiaries from C to RD (restricted default), confirming that they were defaulters, as the grace period to make two coupon payments, (US$ 645 million, 13% bonds and US$ 590 million, 13.75% bonds), had expired on Monday. Evergrande, China’s second-largest property company by sales, has more than $300 billion of debt and is considered the world’s most indebted developer. The Shenzhen-based conglomerate owns more than 1.3k projects in 280 or more cities in China, whilst its Hong Kong-listed property services arm has about 2.8k projects in more than 310 Chinese cities The company is also involved in electric vehicles, finance, healthcare and cultural tourism.

The luxury department store group Selfridges, which has twenty-five outlets in the UK, Ireland, Netherlands and Canada, has been sold to the Thai conglomerate, Central Group for US$ 5.3 billion. Founded in 1908, by retail magnate Harry Gordon Selfridge, the iconic brand had a flagship store in London’s Oxford Street that used to boast one hundred stores, including a library and shooting range. Selfridges, owned by Canada’s Weston family since 2003, was put up for sale in June, a few months after the death of Galen Weston. The new Thai owner has over 3.7k global shops, from supermarkets to electronics outlets, and department stores in Europe. Latest figures to February 2020 show that Selfridges had revenues of US$ 2.65 billion but this sales figure will have declined somewhat when the latest figures are released.

Last Saturday, Bitcoin plunged, to as low as US$ 42.3k, along with other cryptocurrencies – an obvious sign of the risk aversion sweeping across financial markets, as spiking inflation is ensuring that banks are finally beginning to tighten monetary policy and reduce liquidity. With Ether, the second largest token, tanking 17.4%, the end result saw the overall crypto sector shedding 20% to a cumulative US$ 2.2 trillion. It is estimated that on Saturday, 04 December, about US$ 2.4 billion of crypto exposure, both long and short, was liquidated. The Omicron variant has spooked the markets, as the danger of another lockdown looms and how the jittery global economies react.

The head of the Dutch central bank, and an ECB policymaker, Klaas Knot, commented that if inflation were to continue to be higher than the bank’s base case scenario next year, there could be increases in interest rates in 2023. However, it does seem that the consensus is that the current elevated inflation rate, which stood at a record high 4.9% in November, is still considered “to be largely a temporary phenomenon;” the ECB’s target is at a much lower 2.0%. At next week’s policy meeting, it is highly likely that the plug will be pulled on its US$ 2.09 trillion emergency stimulus scheme, and as per the bank’s policy any interest rate increase would only come “shortly after” quantitative easing ends. However, the decision to raise rates this month hangs in the balance, given the new variant, with some arguing that more details on its possible impact on the economy are needed before proceeding.

At last month’s BoE meeting, only two of the nine members of the Monetary Policy Committee voted for an immediate UK rate hike and there were strong indicators then that December would be the time to do so. However, the arrival of the Omicron coronavirus variant, which could slow the UK economy, may put any immediate rise, from the current 0.1%, on the back burner. One member of the committee noted that there “could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy.” However, there has to be risks from delaying an interest rate rise for too long: and the BoE could be guilty of underestimating the inflationary impact over the past year.

On her visit this week to the US, Anne-Marie Trevelyan, warned the US that the UK could step up retaliatory measures if punitive tariffs on UK steel exports were not lifted soon. The UK International Trade Secretary had been in Washington for talks with the Commerce Secretary Gina Raimondo and commented that “I am very keen that we solve this with what is our closest ally in the US through a positive removal”. It was Donald Trump who imposed tariffs of 25% on steel exports (and 10% on aluminium exports) when the UK was part of the EU. Subsequently, the EU had discussions earlier in the year that saw them lifted as from 01 January 2022 – but did not include the UK which had already exited the bloc. If the issue is not resolved quickly, the UK could increase existing retaliatory tariffs on products such as US whisky and cosmetics that could extend to other items such as lobsters, electric motors and orange juice.

The Australian Competition and Consumer Commission has given its approval for Sydney Airport to be taken over by a consortium of infrastructure investors for US$ 16.9 billion. In November, Sydney Airport agreed to be bought out by the Sydney Aviation Alliance (SAA), comprising IFM Investors, (which has stakes in nine other Australian airports, including Melbourne (25%) and Brisbane (20%)), QSuper, AustralianSuper and US-based Global Infrastructure Partners. It still needs the go-ahead from Australia’s Foreign Investment Review Board (FIRB) and the company’s shareholders.

BNPL is becoming something of a scourge for those Australians who max out and cannot repay their debts. If people are struggling, they are supposed to be able to access a hardship program so they can work out a new payment plan. Financial Counselling Australia has surveyed several buy now, pay later companies and reported that the industry’s practice falls well short of expected standards. Afterpay’s hardship program was ranked the best, but it still only scored 5.9 out of 10, whilst at the other end of the scale were the likes of Humm, LatitudePay and Zip posting scores of 4.7, 5.2 and 5.5. Similar surveys for the major banks saw average scores of 7 out of 10. It is patently obvious that consumers need better support by the regulators and are not covered by the National Credit Code because BNPL use service charges, and not interest; NCC covers credit cards, mortgages, personal loans, payday loans and consumer leases, whilst many of BNPL providers are signatories of a voluntary industry code of practice.

A report by the Commonwealth Bank sees their Household Spending Intentions Index rising to its highest level, (up 2.1% to 110.3 points) since December 2019 and a prediction that the population has retained US$ 170.2 billion in excess savings due to Covid-19 and the resulting lockdowns, lost incomes and travel restrictions. The end result is that it is expected that it will be a bumper Christmas, especially for retail, as Australians spend some of that “windfall”, with the national economy recovering strongly. It is estimated that shoppers spent US$ 5.75 billion in Black Friday and Cyber Monday sales, driven by resilient household incomes and high savings rates through the year, due to lockdown conditions, improvements in consumer confidence through November and a lack of opportunity for international – and, in many cases, domestic – travel.

The Australian Bureau of Agricultural and Resource Economics and Sciences has posted that the value and volume of their food and fibre has climbed to historic highs. Because of the price of grain rising, and historically high prices being paid at livestock sales all year, it is forecast that total farm production will top US$ 56 billion, and exports will hit a record US$ 43.8 billion this financial year. The global weather has been a major factor in the increased value of production, as poor seasonal weather in farming countries, like Argentina, Brazil, Canada, Russia, Ukraine and the US conditions, has had a negative impact on their agricultural production. Another positive for Australian ‘cockies’, is that La Niña is expected to set farmers up for another good year in 2022. For the fiscal year ending 30 June 2022, it is expected that farm cash income will hit a record US$ 22.0 billion, off the back of the larger volumes of food and fibre. However, farmers will face higher prices, with fuel, fertiliser and chemicals all heading north and there is no doubt that inflationary food prices may see some social unrest in H1 2022.

It is three years since Australia’s banking royal commission final report was published, referring thirteen cases to the Australian Securities and Investments Commission. Furthermore, thirty-two case studies were examined to see if banks should face prosecution. Even though ASIC confirmed it had thoroughly investigated all forty-five cases, twenty referred cases did not even reach court and were “concluded with no further action”. Now it is reported that the regulator has launched its final case, closing the door on any more court action for banks that ripped billions of dollars from customers. Thursday’s final case encapsulates the decades-long systemic issues exposed by the Hayne inquiry in 2018. Once again, it seems that the Australian banking system has escaped the true wrath of the law and its customers are the ones having to pay for the corrupt dealings of the banking hierarchy.

It appears that the banks – and more specifically senior management – have gotten off very lightly by admitting they broke the law ahead of proceedings. Of the thirteen referrals, six were dealt with in civil cases and only two became criminal cases; three are ongoing with five being completed, with total fines of US$ 56 million. In the thirty-two case studies, fifteen ended with no action taken and of the remainder, there were twelve civil and five criminal cases; total penalties to date total just US$ 22 million. One of the last cases before the courts involves ANZ, which is being sued for misleading, and ripping off, 580k customers since the mid-1990s; the bank has admitted that it breached its financial services and credit licence. ANZ said it would not be defending this case. The company admitted that it had made false or misleading representations to customers, about having systems and processes in place to ensure customers would receive their fee waivers and interest rate discounts. For far too long, it appears that many financial institutions have failed to honour agreements with customers and to ensure proper processes and systems are in place to prevent widespread compliance failures.

Last year, the big four Australian banks made US$ 19.2 billion in profit! A sad indictment of the system is that not one enforcement case has been brought against the management or board of the big financial service companies. There is no doubt that the culture and incentive rewards in place were the main drivers behind an industry driven by greed

Life is not getting any better for Turkish President Recep Tayyip Erdogan with the lira flirting with record lows, having already slumped 45% against the greenback YTD. Adopting a contrarian approach to Economics 101 and pressing ahead with his “economic war of independence”, backed up by low interest rates, he is of the opinion that keeping interest rates low is the panacea to boost Turkey’s economic growth and export potential. This contrasts with the commonly held belief that the President’s model will inevitably result in soaring inflation, higher unemployment, poverty, and a banana republic style currency – and the way to control surging price increases is by raising interest rates. According to the Turkish leader, such rates are “an evil that make the rich richer and the poor poorer”, at a time when the country’s inflation is above 21%; his response is to cut rates again, from 16% to 15%, for the third time this year. The question is whether the people will wait until 2023, for the next election, to oust the ruling Justice and Development Party (AKP), which has been in power since 2002.

Although up to 500k new jobs were expected, November job growth slowed to 210k, the smallest monthly increase seen in 2021, indicating that there is a major problem for employers to attract workers for the millions of vacancies. The US Labor Department figures pointed out that the unemployment rate fell to 4.2%, with the labour force participation rate nudging higher to 61.8%. The data was collected before the Omicron variant emerged in the US and there is the possibility that it could slow the economy if it were to discourage Americans from travelling, shopping and eating out in the coming months. Earlier figures forecast the Q4 economy growing 7.0%, compared to 2.1% in the previous quarter, but this may now have to be cut.

Initial claims for US state unemployment benefits, for the week ending 04 December, declined by 43k to a seasonally adjusted 184k – its lowest level in more than fifty-two years as labour market conditions continued to tighten amid an acute shortage of workers. Claims have declined from a record high of 6.149 million, in early April of 2020, to 1.992 million. There were eleven million unfilled jobs at the end of October, leaving employers reluctant to let workers go. Observers are taking more than a passing interest in the latest Omicron variant and the havoc it could wreak on the economy.

In a move that the federal government feels would “boost productivity and improve work-life balance”, the UAE is cutting its working week to four-and-half days and moving its weekend from Friday-Saturday to Saturday-Sunday. Initially applicable to the public sector, and starting from 01 January 2022, the new working week will be 7.30 am to 3.30 pm Monday to Thursday, and 7.30 am to 12 pm Friday; on that day, prayers at mosques will be held after 1.15pm all year round. The government said it would “ensure smooth financial, trade and economic transactions with countries that follow a Saturday-Sunday weekend, facilitating stronger international business links and opportunities for thousands of UAE-based and multinational companies”. Trials in other countries, such as Iceland, Ireland, Japan, New Zealand, Scotland, Spain and Sweden, have taken place and seem to indicate an improvement in both productivity and employee well-being. One can only congratulate the authorities on their forward thinking and foresight and if there is any place in the world that this strategy is going to work it must be the UAE. Come 2022, the whole of the country will be even more Ready For The Weekend!

Ready For The Weekend!                                                     09 December 2021

Last month, Dubai registered an 80.4% jump in sales to 7.0k deals, worth US$ 4.89 billion, making it the best November, in terms of total sales, for eight years.; it was also 45% higher than the November 2019 return, occurring before the onset of the Covid-19 pandemic. Property Finder also commented that “the data clearly shows that investors and consumers are confident in Dubai’s future, which is reinforced by proactive government initiatives, attractive real estate projects and the vision of the city.” The split percentage of all property transactions was 54:46 between secondary or ready property, (3.2k properties, valued at US$ 1.86 billion), and off-plan property, (3.8k, worth US$ 3.03 billion). The consultancy also noted that Expo 2020 may have had a positive impact on sales and that “it is interesting to note that November 2021 had the highest number of sales transactions since Expo 2020 was announced in December 2013.” By the end of November, Dubai had recorded 55.7k sales transactions worth US$ 36.89 billion – up 88.4%, compared with the whole of 2020; even without December, this is already the highest yearly sales figure since 2014.

Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid, issued a directive that sees tenants, who are rebuilding or renovating their properties in Al Quoz Creative Zone, being exempted from paying rents for up to two years. This is part of the strategy to transform the development project into a comprehensive creative hub with the aim of attracting global talent. It also runs in tandem with the emirate’s ambition to become an international cultural destination and the global capital of the creative economy by 2025. A dedicated platform, called the Creatives’ Journey, has been introduced to support the business operations of creatives and provide a single window to get licences for their projects within a few minutes. The plan also seeks to provide soft-mobility solutions for the people in the zone and to develop transport infrastructure between the free zone and Al Safa Metro Station. To date, Dubai Culture has awarded 4.5k certificates of accreditation to creatives and artists of different nationalities.

HH Sheikh Hamdan bin Mohammed has advised that the Executive Council, of which he is the Chairman, is seeking to enable greater corporate social responsibility in private sector companies. One such policy plans to align CSR projects and contributions with the priorities set by the government, as well as to promote partnerships between the private, public, and non-profit sectors that will eventually positively impact the community. Dubai’s Crown Prince noted that “strong partnerships with the private sector, which is a strategic partner in our development journey, is vital to accelerate our development plans.”. The new policy introduced social responsibility policy, with the aim of raising the role of companies and private establishments in social and economic development and inspire private companies to contribute to the community.

Under the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, his son, Sheikh Maktoum announced the listing of TECOM on the Dubai Financial Market which is part of a strategy to increase the size of the DFM to US$ 817 million (AED 3 million). TECOM, with ten business communities in Dubai that offer state-of-the-art infrastructure, is a strategic business enabler that creates innovative business communities and thriving work environments. Its business communities include Dubai Internet City, Dubai Media City, Dubai Design District and Dubai Industrial Park.

After two months since its opening, Expo 2020 Dubai has recorded nearly 4.77 million visits, with virtual visits having reached 23.5 million.

This week, the UAE Railway Programme was launched in the presence of the country’s two leaders – HH Sheikh Mohammed bin Rashid Al Maktoum and HH Sheikh Mohamed bin Zayed Al Nahyan. The integrated programme comprises three key projects, viz., freight, (including the Etihad Rail freight services), passenger, (connecting eleven cities with travel between Abu Dhabi and Dubai taking forty minutes at speeds of 200 kph), and integration with a network of light rail facilitating transportation inside the seven emirates. By 2030, the number of passengers is expected to reach more than 36.5 million annually.

DP World and Emergent Cold Latin America, (Latin America’s newest temperature-controlled warehousing and logistics provider), will become partners to develop two temperature-controlled logistics facilities within DP World Caucedo (Dominican Republic), a world class logistics hub, and Duran Logistics Centre (Ecuador). These developments will provide both parties’ customers with a fully integrated supply chain solution and will see them both explore development activities in other DP World locations in Latin America.

Emirates Airline is expecting a busy week at the start of the holiday season and has advised its passengers to arrive early at the airport or opt for early check-in to avoid the peak holiday rush. The carrier estimates that this weekend it will carry 250k passengers and that passenger traffic at DXB’s Terminal 3 is forecast to be around 1.1 million over the next twelve days.

Over the next six months, Emirates Group is planning to hire five hundred IT professionals, covering a myriad of roles including cyber security, technical product management, DevOps, hybrid cloud, modern architecture, software engineering, service management, digital workplace, agile delivery and innovation. In September, the carrier announced that it would be hiring 3k cabin crew and 500 airport services over the ensuing six months; a month later a further 6k staff were to be added prior to the end of Q1 2022. Emirates is hoping to reach 70% of its pre-pandemic capacity by the end of December, having already restored 90% of its network.

Majid Al Futtaim Properties and Abu Dhabi’s biggest developer, Aldar Properties, has teamed up to create an online real estate platform for their businesses, at a time when new legal reforms are being implemented. Such amendments include changes to electronic transactions and trust services that give digital signatures the same weight as a handwritten signature. The agreement will see both parties work together to “enhance innovation, customer experience, digital transformation and sustainable practices in the real estate sector”. Dubai-based MAF owns and operates twenty-nine shopping malls, thirteen hotels and four mixed-use communities, whilst Aldar has developed a number of projects in Abu Dhabi, including on Yas Island, Al Raha and Saadiyat Island.

The latest Global Power City Index 2021, published by the Institute for Urban Strategies at the Mori Memorial Foundation, has seen Dubai move up three places to fourteenth. The city was ranked fifth globally for “cultural interaction”; this category measures leadership, tourist and cultural attractions, communication and visitor amenities. London came top overall and also in the “cultural interaction” category. The survey ranks more than forty major cities on aspects such as the economy, research and development, cultural interaction, livability, environment and accessibility. The Crown Prince, Sheikh Hamdan noted that “Dubai continues to be a global model for a vibrant creative economy.”

According to a whitepaper released by Dubai Chamber, over the past five years, the UAE has accounted for 74% of GCC investments in ASEAN markets. The study, examining the business and investment environment in the ASEAN region, and assessing prospects for expanding bilateral economic co-operation. It is estimated that the total value of funding from the GCC into the region was over US$ 13.3 billion. The findings of the report were further studied and analysed by public and private sector stakeholders at Expo 2020 Dubai for the inaugural two-day GBF ASEAN which closed today, 09 December 2021.

Khalid Ali Al Bustani, Director-General of the Federal Tax Authority, has again confirmed that the well-publicised 70% discounted tax penalties do not apply to the actual tax but is a reduction in the penalties accrued over time. He also advised that those businesses who intend to avail the 70% discount on tax penalties must clear all their tax dues before that has accrued before June 28 and pay 30% of the penalty amount by the end of this month. VAT tax collection continues to rise on the back of new businesses and many enterprises previously below the taxable threshold, now being in the tax bracket.

BARQ EV, the first licensed drone delivery service provider in the UAE, broke two Guinness World Records, by executing the longest flight of a drone for the delivery service at 13.584 km, and the longest non-stop return flight for a drone at 18.065 km. The smart mobility solutions company, backed by Ahmad Al Mazrui, Abdullah Abu Sheikh and Mazen Al-Jubeir, will be launched in early 2022. They commented that the drone programme, introduced by the Crown Prince, Sheikh Hamdan, “seeks to improve people’s lives by reducing carbon emissions generated by traditional shipping and transportation methods and facilitating the movement of goods and materials. This way, it will contribute to positioning Dubai as one of the smartest cities in the world.” It is also an indicator that the emirate is fast becoming a centre of innovation and provides the ideal hub for start-ups specialising in innovation and technology

Last week, as the UAE celebrated its fiftieth anniversary, the United Nations Conference on Trade and Development released a report detailing the value of the country’s foreign trade since its 1971 inception. It noted that this has amounted to US$ 9.32 trillion and the country’s trade balance has recorded a surplus of nearly US$ 1.3 trillion over that period. Since 1971, the value of UAE’s foreign trade has increased 473 times from just US$ 1.15 billion to US$ 542.02 billion by the end of last year. During the fifty years, exports have increased 380 times, to US$ 319.3 billion, and imports 730 times to US$ 225.7 billion, whilst the cumulative balance of foreign direct investments jumped from US$ 7.8 million in 1971 to US$ 20.0 billion by the end of 2020.

Dubai stock exchanges will change their trading week to Monday-Friday, from 03 January, in line with the government’s new work system; trading hours will be between 10.00 to 15.00. This latest move will most probably benefit the DFM’s operations as it will bring it more in line with international financial markets, a factor that will enhance its competitiveness regionally and globally.

The DFM opened on Sunday, 05 December, 287 points (8.5%) lower the previous fortnight and gained 153 points (5.9%) to close the week, on Thursday 09 December at 3,226. Emaar Properties, US$ 0.11 lower the previous fortnight, closed, up US$ 0.05, at US$ 1.33. Emirates NBD and Damac started the previous week on US$ 3.60 and US$ 0.38 and closed on US$ 3.79 and US$ 0.38. On Thursday, 09 December, 297 million shares changed hands, with a value of US$ 115 million, compared to 365 million shares, with a value of US$ 271 million, on 02 December.

By Thursday, 09 December, Brent, US$ 11.87 (1.8%) lower the previous three weeks, tanked US$ 10.41 (12.8%), to close on US$ 70.80. Gold, US$ 97 (5.2%) lower the previous fortnight shed US$ 19 (1.1%), to close Thursday 09 December on US$ 1,773. 

One of the most expensive cases in legal history concluded this week, with the jury rejecting claims that the late Dave Kleiman was a former business partner of Craig Wright, a computer scientist, who has always asserted that he invented Bitcoin. Also known as Satoshi Nakamoto, he has won a court case allowing him to keep 1.1 million coins, worth over US$ 50 billion. The Kleiman heirs have always maintained that the claimant, a computer security expert who died in 2013, had worked with Mr Wright to create and mine the first Bitcoin in existence in 2008, and that he had stolen it. The Miami jury in the civil lawsuit cleared Mr Wright on nearly all issues brought by the Kleiman family but they will receive US$ 100 million for intellectual property infringement.

TikTok has become the second fastest-ever expanding social media with the one billion user number recently been reached. This has been done in 5.1 years, only surpassed by Facebook Messenger taking just 4.9 years to hit this target. Other apps have taken longer to top one billion users – WeChat, Facebook, Instagram and WhatsApp (7, 7.7, 8.5 and 8.7 years). TikTok, known then as Douyin, started life in China in September 2016.

Following heavy political pressure, Didi Global has decided to remove its shares off the New York Stock Exchange and move them to Hong Kong. The Chinese ride-hailing giant made its US debut in July, after raising US$ 4.4 billion in its IPO, but at almost the same time that Beijing announced a crackdown on technology companies listing overseas, with the internet regulator ordering online stores not to offer Didi’s app, saying it illegally collected users’ personal data. To make matters worse for the Chinese tech company, it has also come under pressure from regulators in the US and Europe, as US regulators unveiled tough new rules for Chinese firms that list in America.

For apparently violating EU Competition rules, Italy’s anti-trust authority kas fined Amazon US$ 1.3 billion accusing the company of exploiting its dominant position against independent sellers on its website. European governments appear to be taking early action against the tech giants if they step out of line. Italy’s AGCM authority has claimed that Amazon has required that third-party sellers use Fulfilment by Amazon, which gives it a double whammy of damaging competitors and strengthening its own position. It also prevents third-party sellers from gaining access to Amazon’s Prime loyalty program, “which makes it easier to sell to the more than seven million most-loyal and highest-spending consumers”.

Five years ago, Lego built its first Asian factory in China and has announced that its second one will be a US$ 1 billion investment in Vietnam to keep up with growing demand for its products in Asia, where it has witnessed double digit growth since 2019. Construction of the toymaker’s first carbon neutral factory, (with solar panels on its roof), will start next year, with production slated to commence in 2024; 4k jobs are expected to be created over the next fifteen years. Lego also notes that building production plants, close to key markets, “provides the flexibility to respond quickly to shifts in local consumer demand, shortens the supply chain, and reduces the environmental impact of shipping long distances.”

Utilising Japanese bullet train technology and European high-speed network expertise, HS2 has signed a US$ 2.6 billion contract with Hitachi and Alstom to build fifty-four of the fastest trains in the UK, creating some 2.5k. jobs. The controversial high-speed network, with links between London, the Midlands, and the North of England, will have trains that can travel at 225 mph, with production starting at Newton Aycliffe, County Durham, and be finished at Alstom’s Derby and Crewe sites. It could take five years before the first train rolls off the production line. Each train will be around 200 mt long, with the option to couple two units together to create a 400 mt long train with up to 1.1k seats.

There are reports that the Chinese property giant Evergrande Group could default on its latest debt repayment, with the markets not impressed as its share value tanked 20% on Monday. There are also contagion concerns of the knock-on impact on other shares, especially in property and banking sectors, which witnessed similar falls on Monday. With total liabilities, both in China and overseas, Evergrande commented that it could not guarantee “to perform its financial obligations”, following a US$ 260 million demand for payment. Even if the company were to soon fail, it will take years for the mess to be cleared. Matters did not improve on Monday, when smaller property developer Sunshine 100 China Holdings defaulted on a US$ 170 million debt payment “owing to liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment and the real estate industry”.

Today, 09 December, Fitch Ratings downgraded the Evergrande Group and its subsidiaries from C to RD (restricted default), confirming that they were defaulters, as the grace period to make two coupon payments, (US$ 645 million, 13% bonds and US$ 590 million, 13.75% bonds), had expired on Monday. Evergrande, China’s second-largest property company by sales, has more than $300 billion of debt and is considered the world’s most indebted developer. The Shenzhen-based conglomerate owns more than 1.3k projects in 280 or more cities in China, whilst its Hong Kong-listed property services arm has about 2.8k projects in more than 310 Chinese cities The company ais also involved in electric vehicles, finance, healthcare and cultural tourism.

The luxury department store group Selfridges, which has twenty-five outlets in the UK, Ireland, Netherlands and Canada, has been sold to the Thai conglomerate, Central Group for US$ 5.3 billion. Founded in 1908, by retail magnate Harry Gordon Selfridge, the iconic brand had a flagship store in London’s Oxford Street that used to boast one hundred stores, including a library and shooting range. Selfridges, owned by Canada’s Weston family since 2003, was put up for sale in June, a few months after the death of Galen Weston. The new Thai owner has over 3.7k global shops, from supermarkets to electronics outlets, and department stores in Europe. Latest figures to February 2020 show that Selfridges had revenues of US$ 2.65 billion but this sales figure will have declined somewhat when the latest figures are released.

Last Saturday, Bitcoin plunged, to as low as US$ 42.3k, along with other cryptocurrencies – an obvious sign of the risk aversion sweeping across financial markets, as spiking inflation is ensuring that banks are finally beginning to tighten monetary policy and reduce liquidity. With Ether, the second largest token, tanking 17.4%, the end result saw the overall crypto sector shedding 20% to a cumulative US$ 2.2 trillion. It is estimated that on Saturday, 04 December, about US$ 2.4 billion of crypto exposure, both long and short, was liquidated. The Omicron variant has spooked the markets, as the danger of another lockdown looms and how the jittery global economies react.

The head of the Dutch central bank, and an ECB policymaker, Klaas Knot, commented that if inflation were to continue to be higher than the bank’s base case scenario next year, there could be increases in interest rates in 2023. However, it does seem that the consensus is that the current elevated inflation rate, which stood at a record high 4.9% in November, is still considered “to be largely a temporary phenomenon;” the ECB’s target is at a much lower 2.0%. At next week’s policy meeting, it is highly likely that the plug will be pulled on its US$ 2.09 trillion emergency stimulus scheme, and as per the bank’s policy any interest rate increase would only come “shortly after” quantitative easing ends. However, the decision to raise rates this month hangs in the balance, given the new variant, with some arguing that more details on its possible impact on the economy are needed before proceeding.

At last month’s BoE meeting, only two of the nine members of the Monetary Policy Committee voted for an immediate UK rate hike and there were strong indicators then that December would be the time to do so. However, the arrival of the Omicron coronavirus variant, which could slow the UK economy, may put any immediate rise, from the current 0.1%, on the back burner. One member of the committee noted that there “could be particular advantages in waiting to see more evidence on its possible effects on public health outcomes and hence on the economy.” However, there has to be risks from delaying an interest rate rise for too long: and the BoE could be guilty of underestimating the inflationary impact over the past year.

On her visit this week to the US, Anne-Marie Trevelyan, warned the US that the UK could step up retaliatory measures if punitive tariffs on UK steel exports were not lifted soon. The UK International Trade Secretary had been in Washington for talks with the Commerce Secretary Gina Raimondo and commented that “I am very keen that we solve this with what is our closest ally in the US through a positive removal”. It was Donald Trump who imposed tariffs of 25% on steel exports (and 10% on aluminium exports) when the UK was part of the EU. Subsequently, the EU had discussions earlier in the year that saw them lifted as from 01 January 2022 – but did not include the UK which had already exited the bloc. If the issue is not resolved quickly, the UK could increase existing retaliatory tariffs on products such as US whisky and cosmetics that could extend to other items such as lobsters, electric motors and orange juice.

The Australian Competition and Consumer Commission has given its approval for Sydney Airport to be taken over by a consortium of infrastructure investors for US$ 16.9 billion. In November, Sydney Airport agreed to be bought out by the Sydney Aviation Alliance (SAA), comprising IFM Investors, (which has stakes in nine other Australian airports, including Melbourne (25%) and Brisbane (20%)), QSuper, AustralianSuper and US-based Global Infrastructure Partners. It still needs the go-ahead from Australia’s Foreign Investment Review Board (FIRB) and the company’s shareholders.

BNPL is becoming something of a scourge for those Australians who max out and cannot repay their debts. If people are struggling, they are supposed to be able to access a hardship program so they can work out a new payment plan. Financial Counselling Australia has surveyed several buy now, pay later companies and reported that the industry’s practice falls well short of expected standards. Afterpay’s hardship program was ranked the best, but it still only scored 5.9 out of 10, whilst at the other end of the scale were the likes of Humm, LatitudePay and Zip posting scores of 4.7, 5.2 and 5.5. Similar surveys for the major banks saw average scores of 7 out of 10. It is patently obvious that consumers need better support by the regulators and are not covered by the National Credit Code because BNPL use service charges, and not interest; NCC covers credit cards, mortgages, personal loans, payday loans and consumer leases, whilst many of BNPL providers are signatories of a voluntary industry code of practice.

A report by the Commonwealth Bank sees their Household Spending Intentions Index rising to its highest level, (up 2.1% to 110.3 points) since December 2019 and a prediction that the population has retained US$ 170.2 billion in excess savings due to Covid-19 and the resulting lockdowns, lost incomes and travel restrictions. The end result is that it is expected that it will be a bumper Christmas, especially for retail, as Australians spend some of that “windfall”, with the national economy recovering strongly. It is estimated that shoppers spent US$ 5.75 billion in Black Friday and Cyber Monday sales, driven by resilient household incomes and high savings rates through the year, due to lockdown conditions, improvements in consumer confidence through November and a lack of opportunity for international – and, in many cases, domestic – travel.

The Australian Bureau of Agricultural and Resource Economics and Sciences has posted that the value and volume of their food and fibre has climbed to historic highs. Because of the price of grain rising, and historically high prices being paid at livestock sales all year, it is forecast that total farm production will top US$ 56 billion, and exports will hit a record US$ 43.8 billion this financial year. The global weather has been a major factor in the increased value of production, as poor seasonal weather in farming countries, like Argentina, Brazil, Canada, Russia, Ukraine and the US conditions, has had a negative impact on their agricultural production. Another positive for Australian ‘cockies’, is that La Niña is expected to set farmers up for another good year in 2022. For the fiscal year ending 30 June 2022, it is expected that farm cash income will hit a record US$ 22.0 billion, off the back of the larger volumes of food and fibre. However, farmers will face higher prices, with fuel, fertiliser and chemicals all heading north and there is no doubt that inflationary food prices may see some social unrest in H1 2022.

It is three years since Australia’s banking royal commission final report was published, referring thirteen cases to the Australian Securities and Investments Commission. Furthermore, thirty-two case studies were examined to see if banks should face prosecution. Even though ASIC confirmed it had thoroughly investigated all forty-five cases, twenty referred cases did not even reach court and were “concluded with no further action”. Now it is reported that the regulator has launched its final case, closing the door on any more court action for banks that ripped billions of dollars from customers. Thursday’s final case encapsulates the decades-long systemic issues exposed by the Hayne inquiry in 2018. Once again, it seems that the Australian banking system has escaped the true wrath of the law and its customers are the ones having to pay for the corrupt dealings of the banking hierarchy.

It appears that the banks – and more specifically senior management – have gotten off very lightly by admitting they broke the law ahead of proceedings. Of the thirteen referrals, six were dealt with in civil cases and only two became criminal cases; three are ongoing with five being completed, with total fines of US$ 56 million. In the thirty-two case studies, fifteen ended with no action taken and of the remainder, there were twelve civil and five criminal cases; total penalties to date total just US$ 22 million. One of the last cases before the courts involves ANZ, which is being sued for misleading, and ripping off, 580k customers since the mid-1990s; the bank has admitted that it breached its financial services and credit licence. ANZ said it would not be defending this case. The company admitted that it had made false or misleading representations to customers, about having systems and processes in place to ensure customers would receive their fee waivers and interest rate discounts. For far too long, it appears that many financial institutions have failed to honour agreements with customers and to ensure proper processes and systems are in place to prevent widespread compliance failures.

Last year, the big four Australian banks made US$ 19.2 billion in profit! A sad indictment of the system is that not one enforcement case has been brought against the management or board of the big financial service companies. There is no doubt that the culture and incentive rewards in place were the main drivers behind an industry driven by greed

Life is not getting any better for Turkish President Recep Tayyip Erdogan with the lira flirting with record lows, having already slumped 45% against the greenback YTD. Adopting a contrarian approach to Economics 101 and pressing ahead with his “economic war of independence”, backed up by low interest rates, he is of the opinion that keeping interest rates low is the panacea to boost Turkey’s economic growth and export potential. This contrasts with the commonly held belief that the President’s model will inevitably result in soaring inflation, higher unemployment, poverty, and a banana republic style currency – and the way to control surging price increases is by raising interest rates. According to the Turkish leader, such rates are “an evil that make the rich richer and the poor poorer”, at a time when the country’s inflation is above 21%; his response is to cut rates again, from 16% to 15%, for the third time this year. The question is whether the people will wait until 2023, for the next election, to oust the ruling Justice and Development Party (AKP), which has been in power since 2002.

Although up to 500k new jobs were expected, November job growth slowed to 210k, the smallest monthly increase seen in 2021, indicating that there is a major problem for employers to attract workers for the millions of vacancies. The US Labor Department figures pointed out that the unemployment rate fell to 4.2%, with the labour force participation rate nudging higher to 61.8%. The data was collected before the Omicron variant emerged in the US and there is the possibility that it could slow the economy if it were to discourage Americans from travelling, shopping and eating out in the coming months. Earlier figures forecast the Q4 economy growing 7.0%, compared to 2.1% in the previous quarter, but this may now have to be cut.

Initial claims for US state unemployment benefits, for the week ending 04 December, declined by 43k to a seasonally adjusted 184k – its lowest level in more than fifty-two years as labour market conditions continued to tighten amid an acute shortage of workers. Claims have declined from a record high of 6.149 million, in early April of 2020, to 1.992 million. There were eleven million unfilled jobs at the end of October, leaving employers reluctant to let workers go. Observers are taking more than a passing interest in the latest Omicron variant and the havoc it could wreak on the economy.

In a move that the federal government feels would “boost productivity and improve work-life balance”, the UAE is cutting its working week to four-and-half days and moving its weekend from Friday-Saturday to Saturday-Sunday. Initially applicable to the public sector, and starting from 01 January 2022, the new working week will be 7.30 am to 3.30 pm Monday to Thursday, and 7.30 am to 12 pm Friday; on that day, prayers at mosques will be held after 1.15pm all year round. The government said it would “ensure smooth financial, trade and economic transactions with countries that follow a Saturday-Sunday weekend, facilitating stronger international business links and opportunities for thousands of UAE-based and multinational companies”. Trials in other countries, such as Iceland, Ireland, Japan, New Zealand, Scotland, Spain and Sweden, have taken place and seem to indicate an improvement in both productivity and employee well-being. One can only congratulate the authorities on their forward thinking and foresight and if there is any place in the world that this strategy is going to work it must be the UAE. Come 2022, the whole of the country will be even more Ready For The Weekend!

Lock ‘Em Up!                                                                                      02 December 2021               

For the past previous week, ending 25 November, Dubai Land Department recorded a total of 1,850 real estate and properties transactions, with a gross value of US$ 1.91 billion. It confirmed that 1,684 villas/apartments were sold for US$ 1.04 billion, and 166 plots for US$ 275 million over the week. The top three land transactions were for a plot of land in MBR Gardens, worth US$ 39 million, followed by one for US$ 22 million in Nad Al Shiba and another for US$ 21 million in Jebel Ali. The most popular locations in terms of volume were Business Bay, with 285 transactions, totalling US$ 170 million, and Dubai Marina, with 206 transactions worth US$ 157 million. Mortgaged properties for the week totalled US$ 537 million and 71 properties were granted between first-degree relatives, worth US$ 67 million.

Knight Frank’s latest report estimates that Dubai’s average October house price rose 21.0% to US$ 336 per sq ft in the first ten months of the year, driven by an accelerated vaccination programme and other government measures. Other factors impacting on the price increases include people upgrading to larger homes with outdoor amenities, (amid a surge in remote working and online learning), government stimulus packages and other initiatives, such as residency permits for those who have retired as well as for remote workers, and the expansion of the ten-year golden visa programme. The consultancy noted that there had been increased demand from “non-resident, ultra-high-net-worth individuals” which has resulted in the market for US$ 10 million properties witnessing the percentage of total transactions rising from its long-term average of just 2% to 7%. Surprisingly, residential values are still about 29% below 2014 peak levels which may point to further hikes in this current cycle.

Since the onset of the pandemic twenty-one months ago, Knight Frank indicated that villa prices had risen 14% and that apartments in the more expensive areas of Dubai – such as The Palm Jumeirah and Downtown Dubai – outperforming the average, as have villa prices in areas such as Mohammed Bin Rashid City, Dubai Hills and The Palm Jumeirah. October home sales, at US$ 3.05 billion, were 8.2% lower than in September which had been 100% higher than the previous September record of US$ 1.66 billion posted in 2009.

Meanwhile Asteco noted a broader recovery in the emirate’s Q3 residential sector, estimating that apartment and villa prices were 14.0% and 37.0% higher on the year. In line with the consensus, the consultancy expects prices to edge higher in December and that the growth trend will continue into 2022, albeit at a slower pace, as more developments come on stream. During the past twelve months, rents have also headed north – villas by an average 19.0% and apartments a disappointing 3.0%.

Dubai Maritime City is to spend US$ 4 million to complete the upgrade for its wastewater management network in the industrial precinct which will connect DMC, Mina Rashid and P&O Marinas to the existing Dubai Municipality main infrastructure. DP World’s purpose-built maritime centre, currently with 300 business partners and 82% occupancy, has a range of workshops, warehouses, showrooms, shops and office spaces, and is set for further expansion.The current project, with 98% of the design work and 36% of the engineering and placement of contracts completed, is scheduled to be finalised by the end of H1 2022. It is related to the upgrade project that commenced in October 2020 and is scheduled for completion in Q2 of 2022.

UAE’s fuel price committee announced that retail prices will dip by over 1% this month. Super 98, Special 95 and diesel have declined by 1.1% to US$ 0.755, 1.1% to US$ 0.725, and 1.4% to US$ 0.755. Covid had seen prices frozen for a year and it was only in March this year that prices were duly amended, with Special 95 and diesel retailing at US$ 0.548 and US$ 0.586. Petrol prices in the UAE were liberalised in August 2015 to allow them to move in line with the market, at which time Special 95 and diesel prices were at US$ 0.58 and US$ 0.56.

Dubai-based iOL Pay, a wholly owned subsidiary of enterprise system provider Illusions Online, hopes to become the first US$ 1 billion global hospitality FinTech unicorn, within twelve months; it has already launched in thirty-seven international markets. The company’s aim is to transform how the hotel industry manages payments, with its platform will enabling clients to initially manage US$ 500 million in total processing value; this figure is expected to expand sixfold within two years. The tech company reckons that “as digitisation has swept through the hospitality industry, consumer and B2B payment systems and processes haven’t advanced at the same pace.” It also notes that global hotel process payments topped US$ 1.45 trillion last year but that it would focus on the four and five-star hotel category, valued at US$ 450 billion.

Founded in 2014, Telr is a payment gateway provider that offers a set of APIs and tools, enabling businesses to accept and manage online payments via web, mobile and social media. This week Cashfree Payments became one of its largest shareholders when investing US$ 15 million in the Dubai’s e-payment solution firm, with the money being utilised to expand operations in the Mena – a fast growing online payment market. The move will benefit both parties, with a unified cross-border payments platform assisting Indian merchants accepting payments from customers in Mena and vice-versa. The region’s digital payments market is expected to grow at a 15.4% compound rate annual rate over the next five years. According to the Dubai Chamber of Commerce and Industry, UAE’s e-commerce market grew 53% to US$ 3.9 billion last year, with more of the same expected forthwith.

The DFM opened on Sunday, 28 November, 95 points (2.6%) lower the previous week and lost 192 points (5.9%) to close the shortened week, because of National Day holidays, on Tuesday 30 November at 3,073. Emaar Properties, US$ 0.05 lower the previous week, closed down US$ 0.06 at US$ 1.28. Emirates NBD and Damac started the previous week on US$ 3.58 and US$ 0.37 and closed on US$ 3.60 and US$ 0.38. On Tuesday, 30 November, 365 million shares changed hands, with a value of US$ 271 million, compared to 416 million shares, with a value of US$ 147 million, on 25 November.

For the month of November, the bourse had opened on 2,864 and, having closed the month on 3,073 was 209 points (7.3%) higher. Emaar traded up from its 01 November 2021 opening figure of US$ 1.11, to close November US$ 0.07 higher at US$ 1.28. Two other bellwether stocks, Emirates NBD and Damac, started the month on US$ 3.75 and US$ 0.38 and closed on 30 November on US$ 3.60 and US$ 0.38 respectively. YTD, the bourse had opened the year on 2,492 and gained 581 points (23.3%) to close the eleven months on 3,073. NBD and Damac started the year on US$ 3.33 and US$ 0.35 and closed 30 November at US$ 3.75 and US$ 0.38.

By Thursday, 02 December, Brent, US$ 1.46 (1.8%) lower the previous fortnight, tanked US$ 10.41 (12.8%), to close on US$ 70.80. Gold, US$ 78 (4.2%) lower the previous week shed US$ 19 (1.1%), to close Thursday 02 December on US$ 1,773.  Brent started November on US$ 83.64, and had a disastrous month losing US$ 12.33 (14.7%), to close on US$ 71.31. YTD, it started the year trading at US$ 51.80 and has gained US$ 19.51 (37.7%) to close on US$ 71.31 during the first eleven months of the year. Meanwhile, the yellow metal opened November trading at US$ 1,785 and shed US$ 7 (0.4%), during the month, to close on US$ 1,778. Over the year, it has lost US$ 117 (6.2%) from its opening year balance of US$ 1,895.

Although final figures will not be known until January, Black Friday, traditionally the busiest and most important day of the year for US retailers, saw thinner shopping traffic and lower than pre-pandemic levels; Thanksgiving Day sales were flat at US$ 5.1 billion. Although figures indicate that visits to stores and shopping centres climbed 48% on the year, they still lagged 28% behind 2019 traffic. Probably the most important driver behind these figures is the fact that retailers spread out traffic peaks by starting holiday deals much earlier; in the past, the holiday season traditionally started the week of Black Friday. With supply chain problems apparently continuing unabated, the trend of prioritising in-store shopping to beat any logjams has resulted in physical shop visits declining only 10% compared to pre-Covid levels, whilst Black Friday online spending, of US$ 8.9 billion, was at the low end of expectations – and slightly less than the US$ 9.0 billion recorded last year. In shops, toys and cooking items were the top sellers, whilst electronics and video games, such as FIFA 22from Electronic Arts and Ubisoft Entertainment’s Far Cry 6 dominated the list of top-selling products bought online. One worrying factor saw a marked 31% annual hike in the use of BNPL (Buy Now, Pay Later), accounting for 8% of all payments.

Utilising a Spac (special purpose acquisition company), Grab made its stock market debut on New York’s Nasdaq, valuing the Singapore ride haling app at US$ 40 billion. Initially, shares rose 21% but this was short-lived with them closing its first day down more than 20%. The tech app has yet to make a profit and does not expect to be trading profitably until 2023 but has indicated that its profit margins were “industry leading” and that it was focused on growing in a cost-disciplined way.

In the UK, the RAC is pointing the finger at retailers for pushing fuel prices higher on the back of wholesale oil prices. Last Friday, 19 November, oil prices dropped US$ 10 a barrel on the news of the spread of the Omicron variant but this has yet to be reflected at the pumps. Last month, retailers added US$ 0.041 to a litre of unleaded petrol. The RAC noted that, despite wholesale costs having fallen by US$ 0.093 from mid-November, retailers continued to put prices up, with the average cost of a litre of unleaded petrol ending the month at US$ 1.96, after peaking at a record US$ 2.01 on 21 November. The motoring organisation said this price hike was “completely unjustified”, with larger retailers – such as Asda, Sainsbury’s, Tesco and Morrisons – making a “shocking” profit.

November saw Australian housing prices climbing for the 14th-straight month, but the pace of growth last month, (1.3%) was the slowest since January, indicating the latest boom may be nearing its peak; in November, regional markets and capital cities showed rises of 2.2% and 1.1%, with the number of homes listed for sale in Sydney and Melbourne recently increasing – a sure sign that stock levels across those cities have pretty well returned to normalcy. Over the year, Hobart had the biggest capital city price increase, at 27.7%, and Perth the smallest rise at 14.5%. The market is waiting for the inevitable lifting of interest rates, as one of the main drivers of the recent boom has been the historically low mortgage rates; indeed, average fixed rates are rising for new borrowers. In November, Canberra median house prices almost touched the AUD 1 million (US$ 717k) level, ahead of Melbourne’s AUD 987k, but behind Sydney’s AUD 1 million mark.

Although Australia’s economy recorded its third-biggest fall on record, (Q3, a 1.9% contraction), attributable to lockdowns slashing economic activity., it was still 3.9% bigger than it was at the same point in 2020, after Q2 2020 had seen the worst quarterly fall on record of 6.8%. The latest data shows the current GDP is 0.2% lower than the Q4 2019 pre-pandemic level. There was a 4.8% slump on household spending, but household savings rose 19.8% due to the fall in spending plus stimulus payments that boosted disposable incomes. There was a 5.8% slump in services spending focused on hospitality, (tanking 21.2%), recreation, culture, and transport. Household spending in NSW, Victoria and the ACT fell 8.4%, compared with the other states, which rose 0.7%. Stimulus packages and other government support measures saw household gross disposable income rise 4.6% and SMEs recording a surprise 8.0% bounce in profits, also no doubt helped greatly by stimulus payments. That rise in incomes, combined with the slump in spending, saw the household savings ratio jump from 8% to 19.8%, nearing the record 23.6% high reached during the first lockdown in Q2 2020. However, there has been a marked improvement, with  the economy bouncing back, as restrictions were lifted and there is every chance that it will recover most or all of the lost ground in Q4, with a major caveat – the Omicron variant.

News of a new strain of Covid-19, that may be resistant to the current vaccine regime, and discovered in South Africa las Friday, sent the global markets in a spin, with major Australian companies, such as Flight Centre, Qantas and Corporate Travel Management, falling sharply down between 5% -7% on the day.  Although the general population will be more readied if a fourth wave were to arrive, the economy may not be. Twenty months ago, when Covid-19 struck, the economy was in a much better state than now, with an almost balanced budget and enough monetary wiggle room to introduce massive stimulus packages. Now the government is in US$ 615 billion worth of debt, and the RBA’s cash rate is just above the zero rate. Another extended lockdown would prove to be an economic disaster. A further problem would be inflation rates which have more than doubled this year which in turn will result in an uplift in interest rates – and therefore leading to heading higher borrowing costs. Whilst the possibility of a further lockdown remains, global markets will continue to be volatile, and investors will have to exercise caution during these troubled times.

With the current surge in inflation expected to continue into 2022, Federal Reserve Chairman Jerome Powell seems to indicate that, at the next mid-December policy meeting, there could be a winding down of its large-scale bond purchases. He was speaking after the emergence of the new coronavirus variant – which had rattled markets last Friday – saying it could not be compared to the spring of 2020 when the pandemic erupted. More interestingly, he suggested that he may have got it wrong when he considered rising inflation to be transitory and that policy makers may well be taking early action to reduce inflation; that would mean further tapering of its 2020 QE strategy sooner than many had predicted, having already cut it to a monthly US$ 120 billion last month.

Having lost ground on Wednesday, which saw a steep sell-off in the last hour of trade on worries about the Omicron variant, and the upcoming withdrawal of stimulus by the US central bank, Thursday witnessed a rally. Better performers on the day were economically sensitive smaller stocks and transport firms, along with travel and hospitality stocks also bouncing back. Boeing shares surged with news that the aircraft maker had been making progress with Chinese regulators on getting approval of its 737 MAX plane; the authority issued an airworthiness directive on the aircraft that will help pave the way for its return to service in China, thirty-two months after being grounded following two deadly crashes. The Dow was 1.8% (618 points) higher at 34,640, the S&P 500 up 1.4% to 4,577 and the Nasdaq Composite 0.8% higher to 15,381, driven by two factors – strong economic data, particularly with labour figures, and reduced concerns that Omicron infections may not be as severe as first thought. Latest data sees claims for unemployment benefits rising by 28k to 222k for the week ending 27 November, having dropped to 194k a week earlier – its lowest level since 1969. It is estimated that there were 10.4 million job openings at the end of September and that the total number of people receiving unemployment benefits was 2.31 million in mid-November.

Again, no surprise to see banks behaving badly again. This week, the EC has fined a raft of them – including Barclays, Credit Suisse, HSBC, RBS and UBS, – US$ 390 million for colluding in the trading of foreign currencies. It is alleged that traders, acting on behalf of the “Secret Five”, exchanged sensitive information and shared their plans and “occasionally coordinated their trading strategies” through an online chatroom called Sterling Lads. The regulator commented that their behaviour “undermined the integrity of the financial sector at the expense of the European economy and consumers”.

Another week, and yet another case besmirches the Australian banking sector. This time it involves Westpac, with the Australian Securities and Investments Commission launching six court cases, for alleged, widespread compliance failures that impacted thousands of deceased consumers. The outcome sees the bank agreeing to pay US$ 58 million to compensate the estates of its affected customers, with ASIC seeking a further US$ 81 million in fines to which Westpac has all but agreed. Some of the offences committed by the bank included charging fees to its dead customers, double-charging insurance policies, (affecting 7k paying twice for the same house insurance) and failing to adequately disclose its fees to financial advice customers. Only last year, Westpac agreed to pay the largest fine in Australian corporate history — a US$ 932 million civil penalty for more than 23 million breaches of anti-money laundering laws.

The main problem is that the people who should get punished for these misdemeanours escape any penalties. Senior managers – who are often the purveyors of wrongdoing – will receive their bonuses at the time the offences take place Years later, when action is taken, the bank will incur all the charges and penalties afforded by the regulator or the courts. Shareholders and customers will pick up the tab. The former will see their equity reduce because of reduced profits, leading to a lower share value and the latter by bearing  the brunt of extra costs incurred and reduced service levels The instigators will escape scot free and the only way to curb theses excesses is to hit the culprits hard, not financially, but introduce custodial sentences. Lock ‘Em Up!

Lock ‘Em Up!                                                                                      02 December 2021               

For the past previous week, ending 25 November, Dubai Land Department recorded a total of 1,850 real estate and properties transactions, with a gross value of US$ 1.91 billion. It confirmed that 1,684 villas/apartments were sold for US$ 1.04 billion, and 166 plots for US$ 275 million over the week. The top three land transactions were for a plot of land in MBR Gardens, worth US$ 39 million, followed by one for US$ 22 million in Nad Al Shiba and another for US$ 21 million in Jebel Ali. The most popular locations in terms of volume were Business Bay, with 285 transactions, totalling US$ 170 million, and Dubai Marina, with 206 transactions worth US$ 157 million. Mortgaged properties for the week totalled US$ 537 million and 71 properties were granted between first-degree relatives, worth US$ 67 million.

Knight Frank’s latest report estimates that Dubai’s average October house price rose 21.0% to US$ 336 per sq ft in the first ten months of the year, driven by an accelerated vaccination programme and other government measures. Other factors impacting on the price increases include people upgrading to larger homes with outdoor amenities, (amid a surge in remote working and online learning), government stimulus packages and other initiatives, such as residency permits for those who have retired as well as for remote workers, and the expansion of the ten-year golden visa programme. The consultancy noted that there had been increased demand from “non-resident, ultra-high-net-worth individuals” which has resulted in the market for US$ 10 million properties witnessing the percentage of total transactions rising from its long-term average of just 2% to 7%. Surprisingly, residential values are still about 29% below 2014 peak levels which may point to further hikes in this current cycle.

Since the onset of the pandemic twenty-one months ago, Knight Frank indicated that villa prices had risen 14% and that apartments in the more expensive areas of Dubai – such as The Palm Jumeirah and Downtown Dubai – outperforming the average, as have villa prices in areas such as Mohammed Bin Rashid City, Dubai Hills and The Palm Jumeirah. October home sales, at US$ 3.05 billion, were 8.2% lower than in September which had been 100% higher than the previous September record of US$ 1.66 billion posted in 2009.

Meanwhile Asteco noted a broader recovery in the emirate’s Q3 residential sector, estimating that apartment and villa prices were 14.0% and 37.0% higher on the year. In line with the consensus, the consultancy expects prices to edge higher in December and that the growth trend will continue into 2022, albeit at a slower pace, as more developments come on stream. During the past twelve months, rents have also headed north – villas by an average 19.0% and apartments a disappointing 3.0%.

Dubai Maritime City is to spend US$ 4 million to complete the upgrade for its wastewater management network in the industrial precinct which will connect DMC, Mina Rashid and P&O Marinas to the existing Dubai Municipality main infrastructure. DP World’s purpose-built maritime centre, currently with 300 business partners and 82% occupancy, has a range of workshops, warehouses, showrooms, shops and office spaces, and is set for further expansion.The current project, with 98% of the design work and 36% of the engineering and placement of contracts completed, is scheduled to be finalised by the end of H1 2022. It is related to the upgrade project that commenced in October 2020 and is scheduled for completion in Q2 of 2022.

UAE’s fuel price committee announced that retail prices will dip by over 1% this month. Super 98, Special 95 and diesel have declined by 1.1% to US$ 0.755, 1.1% to US$ 0.725, and 1.4% to US$ 0.755. Covid had seen prices frozen for a year and it was only in March this year that prices were duly amended, with Special 95 and diesel retailing at US$ 0.548 and US$ 0.586. Petrol prices in the UAE were liberalised in August 2015 to allow them to move in line with the market, at which time Special 95 and diesel prices were at US$ 0.58 and US$ 0.56.

Dubai-based iOL Pay, a wholly owned subsidiary of enterprise system provider Illusions Online, hopes to become the first US$ 1 billion global hospitality FinTech unicorn, within twelve months; it has already launched in thirty-seven international markets. The company’s aim is to transform how the hotel industry manages payments, with its platform will enabling clients to initially manage US$ 500 million in total processing value; this figure is expected to expand sixfold within two years. The tech company reckons that “as digitisation has swept through the hospitality industry, consumer and B2B payment systems and processes haven’t advanced at the same pace.” It also notes that global hotel process payments topped US$ 1.45 trillion last year but that it would focus on the four and five-star hotel category, valued at US$ 450 billion.

Founded in 2014, Telr is a payment gateway provider that offers a set of APIs and tools, enabling businesses to accept and manage online payments via web, mobile and social media. This week Cashfree Payments became one of its largest shareholders when investing US$ 15 million in the Dubai’s e-payment solution firm, with the money being utilised to expand operations in the Mena – a fast growing online payment market. The move will benefit both parties, with a unified cross-border payments platform assisting Indian merchants accepting payments from customers in Mena and vice-versa. The region’s digital payments market is expected to grow at a 15.4% compound rate annual rate over the next five years. According to the Dubai Chamber of Commerce and Industry, UAE’s e-commerce market grew 53% to US$ 3.9 billion last year, with more of the same expected forthwith.

The DFM opened on Sunday, 28 November, 95 points (2.6%) lower the previous week and lost 192 points (5.9%) to close the shortened week, because of National Day holidays, on Tuesday 30 November at 3,073. Emaar Properties, US$ 0.05 lower the previous week, closed down US$ 0.06 at US$ 1.28. Emirates NBD and Damac started the previous week on US$ 3.58 and US$ 0.37 and closed on US$ 3.60 and US$ 0.38. On Tuesday, 30 November, 365 million shares changed hands, with a value of US$ 271 million, compared to 416 million shares, with a value of US$ 147 million, on 25 November.

For the month of November, the bourse had opened on 2,864 and, having closed the month on 3,073 was 209 points (7.3%) higher. Emaar traded up from its 01 November 2021 opening figure of US$ 1.11, to close November US$ 0.07 higher at US$ 1.28. Two other bellwether stocks, Emirates NBD and Damac, started the month on US$ 3.75 and US$ 0.38 and closed on 30 November on US$ 3.60 and US$ 0.38 respectively. YTD, the bourse had opened the year on 2,492 and gained 581 points (23.3%) to close the eleven months on 3,073. NBD and Damac started the year on US$ 3.33 and US$ 0.35 and closed 30 November at US$ 3.75 and US$ 0.38.

By Thursday, 02 December, Brent, US$ 1.46 (1.8%) lower the previous fortnight, tanked US$ 10.41 (12.8%), to close on US$ 70.80. Gold, US$ 78 (4.2%) lower the previous week shed US$ 19 (1.1%), to close Thursday 02 December on US$ 1,773.  Brent started November on US$ 83.64, and had a disastrous month losing US$ 12.33 (14.7%), to close on US$ 71.31. YTD, it started the year trading at US$ 51.80 and has gained US$ 19.51 (37.7%) to close on US$ 71.31 during the first eleven months of the year. Meanwhile, the yellow metal opened November trading at US$ 1,785 and shed US$ 7 (0.4%), during the month, to close on US$ 1,778. Over the year, it has lost US$ 117 (6.2%) from its opening year balance of US$ 1,895.

Although final figures will not be known until January, Black Friday, traditionally the busiest and most important day of the year for US retailers, saw thinner shopping traffic and lower than pre-pandemic levels; Thanksgiving Day sales were flat at US$ 5.1 billion. Although figures indicate that visits to stores and shopping centres climbed 48% on the year, they still lagged 28% behind 2019 traffic. Probably the most important driver behind these figures is the fact that retailers spread out traffic peaks by starting holiday deals much earlier; in the past, the holiday season traditionally started the week of Black Friday. With supply chain problems apparently continuing unabated, the trend of prioritising in-store shopping to beat any logjams has resulted in physical shop visits declining only 10% compared to pre-Covid levels, whilst Black Friday online spending, of US$ 8.9 billion, was at the low end of expectations – and slightly less than the US$ 9.0 billion recorded last year. In shops, toys and cooking items were the top sellers, whilst electronics and video games, such as FIFA 22from Electronic Arts and Ubisoft Entertainment’s Far Cry 6 dominated the list of top-selling products bought online. One worrying factor saw a marked 31% annual hike in the use of BNPL (Buy Now, Pay Later), accounting for 8% of all payments.

Utilising a Spac (special purpose acquisition company), Grab made its stock market debut on New York’s Nasdaq, valuing the Singapore ride haling app at US$ 40 billion. Initially, shares rose 21% but this was short-lived with them closing its first day down more than 20%. The tech app has yet to make a profit and does not expect to be trading profitably until 2023 but has indicated that its profit margins were “industry leading” and that it was focused on growing in a cost-disciplined way.

In the UK, the RAC is pointing the finger at retailers for pushing fuel prices higher on the back of wholesale oil prices. Last Friday, 19 November, oil prices dropped US$ 10 a barrel on the news of the spread of the Omicron variant but this has yet to be reflected at the pumps. Last month, retailers added US$ 0.041 to a litre of unleaded petrol. The RAC noted that, despite wholesale costs having fallen by US$ 0.093 from mid-November, retailers continued to put prices up, with the average cost of a litre of unleaded petrol ending the month at US$ 1.96, after peaking at a record US$ 2.01 on 21 November. The motoring organisation said this price hike was “completely unjustified”, with larger retailers – such as Asda, Sainsbury’s, Tesco and Morrisons – making a “shocking” profit.

November saw Australian housing prices climbing for the 14th-straight month, but the pace of growth last month, (1.3%) was the slowest since January, indicating the latest boom may be nearing its peak; in November, regional markets and capital cities showed rises of 2.2% and 1.1%, with the number of homes listed for sale in Sydney and Melbourne recently increasing – a sure sign that stock levels across those cities have pretty well returned to normalcy. Over the year, Hobart had the biggest capital city price increase, at 27.7%, and Perth the smallest rise at 14.5%. The market is waiting for the inevitable lifting of interest rates, as one of the main drivers of the recent boom has been the historically low mortgage rates; indeed, average fixed rates are rising for new borrowers. In November, Canberra median house prices almost touched the AUD 1 million (US$ 717k) level, ahead of Melbourne’s AUD 987k, but behind Sydney’s AUD 1 million mark.

Although Australia’s economy recorded its third-biggest fall on record, (Q3, a 1.9% contraction), attributable to lockdowns slashing economic activity., it was still 3.9% bigger than it was at the same point in 2020, after Q2 2020 had seen the worst quarterly fall on record of 6.8%. The latest data shows the current GDP is 0.2% lower than the Q4 2019 pre-pandemic level. There was a 4.8% slump on household spending, but household savings rose 19.8% due to the fall in spending plus stimulus payments that boosted disposable incomes. There was a 5.8% slump in services spending focused on hospitality, (tanking 21.2%), recreation, culture, and transport. Household spending in NSW, Victoria and the ACT fell 8.4%, compared with the other states, which rose 0.7%. Stimulus packages and other government support measures saw household gross disposable income rise 4.6% and SMEs recording a surprise 8.0% bounce in profits, also no doubt helped greatly by stimulus payments. That rise in incomes, combined with the slump in spending, saw the household savings ratio jump from 8% to 19.8%, nearing the record 23.6% high reached during the first lockdown in Q2 2020. However, there has been a marked improvement, with  the economy bouncing back, as restrictions were lifted and there is every chance that it will recover most or all of the lost ground in Q4, with a major caveat – the Omicron variant.

News of a new strain of Covid-19, that may be resistant to the current vaccine regime, and discovered in South Africa las Friday, sent the global markets in a spin, with major Australian companies, such as Flight Centre, Qantas and Corporate Travel Management, falling sharply down between 5% -7% on the day.  Although the general population will be more readied if a fourth wave were to arrive, the economy may not be. Twenty months ago, when Covid-19 struck, the economy was in a much better state than now, with an almost balanced budget and enough monetary wiggle room to introduce massive stimulus packages. Now the government is in US$ 615 billion worth of debt, and the RBA’s cash rate is just above the zero rate. Another extended lockdown would prove to be an economic disaster. A further problem would be inflation rates which have more than doubled this year which in turn will result in an uplift in interest rates – and therefore leading to heading higher borrowing costs. Whilst the possibility of a further lockdown remains, global markets will continue to be volatile, and investors will have to exercise caution during these troubled times.

With the current surge in inflation expected to continue into 2022, Federal Reserve Chairman Jerome Powell seems to indicate that, at the next mid-December policy meeting, there could be a winding down of its large-scale bond purchases. He was speaking after the emergence of the new coronavirus variant – which had rattled markets last Friday – saying it could not be compared to the spring of 2020 when the pandemic erupted. More interestingly, he suggested that he may have got it wrong when he considered rising inflation to be transitory and that policy makers may well be taking early action to reduce inflation; that would mean further tapering of its 2020 QE strategy sooner than many had predicted, having already cut it to a monthly US$ 120 billion last month.

Having lost ground on Wednesday, which saw a steep sell-off in the last hour of trade on worries about the Omicron variant, and the upcoming withdrawal of stimulus by the US central bank, Thursday witnessed a rally. Better performers on the day were economically sensitive smaller stocks and transport firms, along with travel and hospitality stocks also bouncing back. Boeing shares surged with news that the aircraft maker had been making progress with Chinese regulators on getting approval of its 737 MAX plane; the authority issued an airworthiness directive on the aircraft that will help pave the way for its return to service in China, thirty-two months after being grounded following two deadly crashes. The Dow was 1.8% (618 points) higher at 34,640, the S&P 500 up 1.4% to 4,577 and the Nasdaq Composite 0.8% higher to 15,381, driven by two factors – strong economic data, particularly with labour figures, and reduced concerns that Omicron infections may not be as severe as first thought. Latest data sees claims for unemployment benefits rising by 28k to 222k for the week ending 27 November, having dropped to 194k a week earlier – its lowest level since 1969. It is estimated that there were 10.4 million job openings at the end of September and that the total number of people receiving unemployment benefits was 2.31 million in mid-November.

Again, no surprise to see banks behaving badly again. This week, the EC has fined a raft of them – including Barclays, Credit Suisse, HSBC, RBS and UBS, – US$ 390 million for colluding in the trading of foreign currencies. It is alleged that traders, acting on behalf of the “Secret Five”, exchanged sensitive information and shared their plans and “occasionally coordinated their trading strategies” through an online chatroom called Sterling Lads. The regulator commented that their behaviour “undermined the integrity of the financial sector at the expense of the European economy and consumers”.

Another week, and yet another case besmirches the Australian banking sector. This time it involves Westpac, with the Australian Securities and Investments Commission launching six court cases, for alleged, widespread compliance failures that impacted thousands of deceased consumers. The outcome sees the bank agreeing to pay US$ 58 million to compensate the estates of its affected customers, with ASIC seeking a further US$ 81 million in fines to which Westpac has all but agreed. Some of the offences committed by the bank included charging fees to its dead customers, double-charging insurance policies, (affecting 7k paying twice for the same house insurance) and failing to adequately disclose its fees to financial advice customers. Only last year, Westpac agreed to pay the largest fine in Australian corporate history — a US$ 932 million civil penalty for more than 23 million breaches of anti-money laundering laws.

The main problem is that the people who should get punished for these misdemeanours escape any penalties. Senior managers – who are often the purveyors of wrongdoing – will receive their bonuses at the time the offences take place Years later, when action is taken, the bank will incur all the charges and penalties afforded by the regulator or the courts. Shareholders and customers will pick up the tab. The former will see their equity reduce because of reduced profits, leading to a lower share value and the latter by bearing  the brunt of extra costs incurred and reduced service levels The instigators will escape scot free and the only way to curb theses excesses is to hit the culprits hard, not financially, but introduce custodial sentences. Lock ‘Em Up

I Did It My Way!                                                                                 25 November 2021

Into Q4, and towards the end of 2021, the Dubai real estate market continues to post further growth sales transactions records. Latest figures from the 20^th edition of Mo’asher, indicates 5,352 sales transactions, worth US$ 3.57 billion, making it the best October since 2013. YTD, there have been 48,651 sales transactions, worth US$ 48.34 billion – 63.4% higher, year on year. Even with two months to go until the end of the year, it has already surpassed the highest yearly sales figure since 2015. With the index base rate of 1 in 2012, October’s overall monthly index was at 1.132, (with an index price of US$ 296k); apartments’ monthly Index posted 1.16, and an index price of US$ 266k, with villas/townhouses monthly Index at 1.13 and an index price of US$ 535k.

In October 2021, 60% of all transactions were for secondary/ready properties and 40% for off-plan properties, which witnessed 2,133 transactions, valued at US$ 1.20 billion. The prime markets saw figures of 3,219 sales transactions, worth US$ 2.38 billion. The total transaction value of US$ 3.57 billion on 5,352 deals can be split between the developers’ 3,395 transactions, worth US$ 2.20 billion, which included off-plan and prime, ready properties while individual sales accounted for 1,957 transactions, worth US$ 1.37 billion.

Property Finder estimates that Damac Hills 2, Nad Al Sheba, The Springs, Dubai Hills Estate and Arabian Ranches were the best locations for sales of villas/townhouses, with Dubai Marina, Business Bay, Jumeirah Village Circle, Downtown Dubai and JLT sectors the leaders for apartments.For off-plan properties, the best locations for villas/townhouses were Dubai Marina, Business Bay, JVC, Downtown Dubai and JLT. For off-plan properties, and for apartments, Dubai Harbour, Mohammed bin Rashid City, Dubai Creek Harbour, Business Bay and Downtown Dubai were the leading locations.

A plot of land, located next to Burj Daman, and opposite ICD Brookfield, has been sold in a cash deal for US$ 79 million to a private family developer, represented by Luxhabitat Sotheby’s International Realty. Initially acquired by Al Rihab Real Estate in 2010, it became the first-ever repossession order, granted by the DIFC courts in favour of Emirates NBD after a lengthy legal case. With an estimated total built-up area of 2.2 million sq ft, the luxury development is expected to include exclusive hospitality, residential, commercial and retail space.

For the first ten months of the year, Dubai’s Department of Economy and Tourism issued 55.2k new business licences – up 69.2%, year on year; they were split 59:41 between professional and commercial. Location wise, Bur Dubai accounted for 37.6k and Deira 17.6k of the total. Three types of legal entities – Sole Establishment, LLC and Civil Company – accounted for 38%, 28% and 24% of the total. Over the period, business registration and licensing transactions being completed were 17.0% higher at 233.9k, with the total number of renewal transactions touching 120.1k, a growth of 2.7%.

At this week’s 12th World Chambers Congress in Dubai, Hamad Buamim commented that Expo 2020 Dubai had already proven to be a catalyst for growth for the emirate’s economy. The president and chief executive of Dubai Chamber also noted that the emirate is set to expand at the faster pace of 4.0% next year, by taking steps to develop its digital economy and boosting the start-up ecosystem. The local economy has recovered quicker than expected from the pandemic’s impact, driven by speedy government measures to support businesses and the digital transformation during the crisis. Mr Buamin also commented that “we think the recovery we are seeing in the fourth quarter will fuel the [economic activity] in 2022,” and “hopefully, it will bring the recovery way beyond the single-digit level that we have seen projected for the UAE and Dubai.” Mr Buamim expects business confidence in Dubai’s growth potential to remain high, as the economic transformation, driven by the Expo, will last beyond the six months of the world’s fair. He also noted that trade and the digital economy were at a better stage than they were in 2019 and that it is only a matter of time before tourism and retail perform likewise.

Under the directive of Dubai’s Crown Prince, HH Sheikh Hamdan bin Mohammed, the Dubai Executive Council has introduced a programme that explores the use of the tech in several sectors, including health, security, shipping and food. Dubai’s Crown Prince noted that “the Dubai Programme to Enable Drone Transportation will create an advanced infrastructure that enables innovators and relevant entities to test prototypes of unmanned aerial vehicles in designated areas and develop legislation that optimises their implementation”. This programme will not only enhance the emirate’s competitiveness but also attract talent and local and foreign investments to the drone applications sector. Dubai Future Foundation will oversee the implementation of the outputs of the Dubai Program to Enable Drone Transportation through Dubai Future Labs. As far back as 2014, Dubai had attracted thousands of innovators in this field, from 165 countries, to participate in the UAE Drones for Good Award, seen to be “beginning of our journey with this emerging technology”.

Emirates Central Cooling Systems Corporation posted a 49%, nine-month, year on year, expansion in the number of new registered individuals and companies in Dubai. The company, better known as Empower, is the first district cooling services provider in the country, and the region, to launch electronic registration. This strategy is in line with the ‘Dubai Paperless Strategy’ which saves time and money for all stakeholders, as all transactions are now online, without the need of visiting customer service centres. The company noted that the recent improvement in the UAE economy would inevitably open up many more deals and new expansion projects.

Shuaa has confirmed that it is in the “very early stages” – and that it may list “one or more” of its subsidiaries – and is in talks with different, yet to be named, stock exchanges to list through initial public offerings. According to Bloomberg, the investment bank is in discussions with the DFM to launch IPOs for two of its subsidiaries – Stanford Marine Group and NCM Investment which have a combined US$ 545 million valuation; this could happen before the end of Q1 2022. This comes at a time when the Dubai government is to list ten state-owned companies, starting with DEWA and Salik, as part of its wider strategy to double the size of the local financial market to US$ 815 billion; it also planning to set up a US$ 545 million market-maker fund to encourage listings from private and family owned businesses from the energy, logistics and retail sectors, as well as  a US$ 272 million fund to attract more technology companies to list.

The DFM opened on Sunday, 21 November, 489 points (17.6%) higher the previous five weeks but shed 95 points (2.9%) to close the week at 3,265. Emaar Properties, US$ 0.32 higher the previous four weeks, closed US$ 0.05 lower at US$ 1.34. Emirates NBD and Damac started the previous week on US$ 3.87 and US$ 0.38 and closed on US$ 3.58 and US$ 0.37. On Thursday, 25 November, 416 million shares changed hands, with a value of US$ 147 million, compared to 582 million shares, with a value of US$ 225 million, on 18 November.

By Thursday, 25 November, Brent, US$ 0.62 (0.7%) lower the previous week, shed US$ 0.84 (1.0%), to close on US$ 81.21. Gold, US$ 78 (4.2%) higher the previous fortnight, lost all that gain, shedding US$ 78 (4.2%), to close Thursday 25 November on US$ 1,792. 

The UK government has set aside nearly US$ 2.3 billion to help the failed firm Bulb, which was put into special administration on Wednesday, continue supplying energy to its 1.7 million customers. Teneo, the appointed administrator, estimates it will cost around US$ 2.8 billion to keep Bulb trading until the end of next April. Due to its size, Bulb – which is triple the size any other energy supplier that has failed in recent years – will be run as normal for the time being, rather than its customers being immediately transferred to other suppliers, as has happened in the past. Since the beginning of September, twenty-two energy suppliers have failed, following a spike in gas prices.

In its biggest ever single investment in the US, Samsung will spend US$ 17.0 billion building a computer chip plant, in the Texan city of Taylor, that will be completed by H2 2024 and provide employment for2k; this will bring Samsung’s total US investment to US$ 47.0 billion. In line with its global rivals Samsung is racing to expand chip making in the US to tackle supply chain issues that currently appear not to be going away, The Biden administration, which has been pushing tech giants to increase their chip production in the US, noted that the new facility would help “protect our supply chains, revitalise our manufacturing base and create good jobs”. Earlier in the year, Taiwanese chipmaker TSMC announced a US$ 100 billion investment in Arizona, while US contract semiconductor manufacturer Global Foundries announced that it will increase its investment in upstate New York.

“We are well on our way to becoming an indispensable platform for enterprises, individuals and developers to connect, collaborate and build in the flexible hybrid world of work,” were the words of Eric Yuan, Zoom’s founder. The company had just announced a massive 71.5% hike in Q3 net profit, to US$ 340 million, on the back of a 35.2% improvement in revenue to US$ 1.05 billion and driven by an increase in the number of paid customers for the video-conferencing platform. Despite these results, the market was not happy, with the share value dipping 3.5% to US$ 242, a third down YTD. By the end of last month, Zoom had 512k paid customers, with more than ten employees – 18% higher than the same period in 2020 – and total cash and marketable securities stood of US$ 5.4 billion. It also recently called off plans to acquire Five9, for a reported US$ 14.7 billion, citing that the cloud call-centre software provider had not obtained the requisite stockholder support for the merger agreement.

New guidelines involving special purpose acquisition companies – also known as blank-cheque companies – have been issued by the Dubai Financial Services Authority, With the aim of mitigating some of the risks associated with Spacs, DIFC’s market regulator will ensure that they adequately ring-fence proceeds raised from investors and that applicants will also be required to appoint a sponsor company for the initial listing and subsequent acquisition of a target company. A Spac is a vehicle with no commercial operations that is formed with the intention of raising funds through an IPO and then acquiring an existing company. Since these entities do not have the onerous disclosure requirements of an IPO listing, they have grown in popularity to meet the need to take fast-growing companies public quickly. On a global scale, Q3 saw 88 Spacs announcing mergers with existing companies, with a US$ 16 billion value. PwC estimated that “there is nearly US$ 120 billion in cash on the sidelines in Spacs that have yet to announce a merger.”  

Although many had thought that the Modi government would do a U-turn on its cryptocurrency stance, it now seems likely that it will go ahead to ban most cryptocurrencies under a long-awaited bill. On the news, cryptocurrency prices dropped on Indian exchanges, as the new law aims “to create a facilitative framework for the creation of the official digital currency to be issued by the Reserve Bank of India”. Bitcoin declined 13%, as Shiba Inu and Dogecoin both dropped more than 15%. It seems that India is following on the coattails of China’s recent decision to make cryptocurrency illegal. There is no doubt that the RBI has very conservative views on cryptocurrency, with the 2020 verdict by the country’s supreme court overturning a digital currency trading ban imposed by RBI for two years. Only last week, the bank noted that it had “serious concerns from the point of view of macro-economic and financial stability”, and that blockchain technology can thrive without cryptocurrencies.

Unlike most other advanced economies, Japan will buck the trend by introducing a record US$ 490 billion spending package to further cushion the economic blow from the pandemic impact, at a time when many other countries are phasing out stimulus measures. Indeed, Prime Minister Fumio Kishida, in his earlier life, would have favoured fiscal restraint to focus on reflating the economy, and redistributing wealth to households, rather than spending to get the economy out of trouble. He is now following in the footsteps of his predecessor, Shinzo Abe, and appears to be using the scatter-gun approach shooting money at any target, whether the spending is to be effective or not, resulting in a lot of wasteful and unnecessary public spending. Kishida is also planning a US$ 280 billion year-end budget to fund the measures. including measures to counter higher oil prices, by subsidising oil refiners in the hope of capping wholesale gasoline and fuel prices to assist households and firms from rising oil costs.

Driven by concerns over higher prices and rising household debt, South Korea’s central bank has raised interest rates for the second time, (following its August move), in 2021, to 1.0%; it becomes the latest central bank to focus on monetary policy, which includes raising rates, as opposed to fiscal policy which involves spending money to spur economic growth in a bid to help with the post-pandemic recovery and rising inflation. The bank also raised its inflation outlook to 2.3% for this year and marginally lower to 2.0% for 2022 – an indicator that further rate rises are more than probable. The bank has to act on surging house prices and household debt to control financial risks, so the immediate need is to put a cap on rising prices, as well as to contain growing financial imbalances.

This week, the Reserve Bank of New Zealand lifted its official cash rate, by 25 bp to 0.75%, for the second consecutive meeting, in a bid to counter rising inflation, whilst its Australian counterpart reiterated that it is unlikely to hike rates before 2024. The RBNZ also withdrew pandemic stimulus – which had been one of the main factors that had driven consumer price inflation to its highest point since 2010; the CPI inflation rate is expected to top 5%, probably before the end of the year, but there are hopes that it will dip to its original 2% target by the end of 2023. New Zealand’s unemployment level has fallen but inflation and property prices have headed in the other direction.

Despite the apparent inaction by the RBA, there are many that believe it will have to make moves to raise rates earlier, driven by forecasts that wages will rise faster, than the central bank is expecting, and house prices may fall by 2023. (Some see Aussie house prices rising slower in 2022 by 7%, followed by a 10% decline a year later). The central bank is hoping that some of the factors driving near-term inflation – including higher oil prices, rising transport costs and the impact of supply shortfalls – are transient. The RBA’s forecast sees “normal” inflation will reach 3% by Q3 2023, at which time there will be full employment.  – that, being the case, it rules out any chance of a rate hike in 2022, with the RBA board being “prepared to be patient”.

Following a request from the US administration, that is pushing other nations, including China, for lower oil prices, by utilising their reserves, Japan is considering releasing oil from its stockpile. However, it appears that this would be against Japanese law as it states that reserves can be released only at a time of supply constraints or natural disasters, but not to lower prices. The world’s third biggest economy has used its reserves over the past thirty years on two occasions – following the fallout of the Gulf War in the early 1990s and the deadly earthquake and tsunami in 2011. Currently, the resource-poor country’s strategy seems to be coordinating with major consumer nations and international organisations such as IEA, at a time when surging oil prices and a weakening yen are driving up the cost of imports.

As bilateral tensions continue to worsen over the status of Taiwan and other issues. the US government has added twelve more Chinese companies to its restricted trade list. The Biden administration, also citing national security and foreign policy concerns, noted that eight of the firms were helping develop the Chinese military’s quantum computing programme, and have been added to the so-called “Entity List”; they were also accused of acquiring or attempting “to acquire US origin-items in support of military applications”. Sixteen individuals and entities, operating in China and Pakistan, were also added to the list due to their involvement in “Pakistan’s unsafeguarded nuclear activities or ballistic missile program.”

Jerome Powell, Donald Trump’s appointee in 2018, has seen Joe Biden nominate him for a second term as chair of the US Federal Reserve. His closest rival for the position was Lael Brainard, favoured by progressives on the left of the Democratic Party, was nominated for vice chair. Powell has been criticised for weakening regulation of financial institutions, as well as not doing enough to tackle climate change and poverty. The two appointments still have to be ratified by the Senate, where there will be opposition from those liberal members who want the Fed to be more aggressive in addressing income inequality and banking power. Biden’s view of continuing stability in the Fed is at odds with those who advocate more urgent action to better manage risks to the current financial system as well tackle climate change issues.

In another bid to counter China’s ever-growing global influence, especially in developing countries, the UK has overhauled its British International Investment institution which offers capital backing for schemes that promote growth in developing countries. It is hoped that the BII would be a “reliable and honest” source of funding for infrastructure and technology projects in countries across Asia, Africa and the Caribbean. This is part of the government’s policy to invest US$ 10.7 billion in international projects every year until 2025. African and developing world nations, some of which are recipients of high-interest Chinese loans, may see this as a welcome option to taking on “strings-attached debt”. BII will prioritise sustainable infrastructure investment to provide honest financing and avoid unsustainable debt, at a time when “too many countries are loading their balance sheets with unsustainable debt. Reliable and honest sources of finance are needed”.  It is estimated that since 2003, China has granted or lent US$ 843 billion to infrastructure projects in 165 countries.

Following zero growth the previous month, UK sales rose by 0.8% in October, driven by early Christmas shopping, as clothes sales jumped to just 0.5% lower than pre-pandemic levels. It was noted that shoppers were buying, or pre-ordering other items, such as toys, shoes and accessories earlier than usual for Christmas this year. However, there were declines in food and online sales, with fuel prices tanking, as consumers returned to normal levels after the September fuel supply crisis. Like for like sales in second-hand shops and other non-food stores headed north, with the charity shop sector posting sales 3% to 5% higher than pre-pandemic sales figures. Retailers continue to face supply chain problems, whilst labour shortages throughout the supply chains – from farms to distribution – are pushing up costs. As 5% inflation and climbing energy prices, will undoubtedly push up end prices, there is the chance that demand may slow as consumer confidence and spending start to dip next month.

On Tuesday, the Biden administration made the expected announcement that the United States will utilise its emergency stockpile by releasing fifty million barrels of the 605 million barrels in the reserve, in a bid to lower energy prices which have been skyrocketing in recent months; it had been discussing this strategy with major Asian energy consumers, including China, India, Japan and South Korea. This had arisen as OPEC+ appeared to reject US advances to tame soaring prices and put a cap on them; the oil cartel had already added 400k bpd to meet the increasing demand and have argued that the rebound in demand could be fragile if more supply was added.   So, the idea seems to be by pumping up supply, prices will fall to match rising demand. It is estimated that up to 140 million barrels, with the likes of India and South Korea contributing just small token amounts, will be released from the stockpiles and if that is the amount of the ‘release, this could be “very negative for pricing”.

After eleven straight days of declines, the Turkish currency tanked 15% on Tuesday to trade at just over thirteen lira to the greenback – down 45% YTD to make it the world’s worst performing currency. President Tayyip Erdogan has pushed Turkey’s central bank to make three rate cuts since September, in a move that he thinks will boost the flagging economy, but his action is the main driver for inflation levels rising above 20%; he still thinks that raising interest rates causes inflation, and that the way to combat rising prices is to make money cheaper. The president is determined that it’s his way or the highway. The fact is that the Turkish president is adamant that cutting rates is the best policy for Turkey and he will be telling the electorate next year, when the lira hits rock bottom and inflation skyrockets, that I Did It My Way!

”If You Can’t Beat Them, Join Them”!                                             11 November 2021

Tuesday was another stellar day for the Dubai realty sector, as it recorded US$ 463 million worth of transactions, including 267 sales valued at US$ 199 million. Land sales amounted to US$ 59 million, while US$ 139 million apartment and villa sales deals were conducted. Dubai Marine was the best performing location on the day with 33 apartment and villas sales deals, valued at US$ 23 million, followed by Business Bay and Al Barsha. This is in addition to mortgage deals of US$ 263 million and 23 gift transactions amounting to US$ 11 million.

Chestertons’ latest research noted that the value of Dubai’s Q3 residential property transactions was 10% higher, quarter on quarter, exceeding US$ 9.3 billion, driven by Dubai’s pandemic response, overall quality of life and recent visa reforms. Over the period, average villa and apartment prices were up 6.4% and 2.0%. Completed property sales accounted for more than 60% (US$ 5.62 billion) of the total with notable growth in the luxury segment, posting sales of US$ 545 million in Q3 and US$ 1.25 billion YTD to September. It posted that the best performing locations were Palm Jumeirah, Arabian Ranches and Jumeirah Park, up 8.8%, 8.2% and 7.7%, while Downtown Dubai and Business Bay, at 5.1% and 5.0%, witnessed the biggest quarterly uptick in prices in the apartments sector. Villa rents were 5.2% higher on the quarter, and 12.6% over the twelve months; in Q3, apartment rents were 0.6% higher.

According to a senior manager at Dubai Holding Real Estate, the UAE property market is undergoing a “true rebound and there are very good fundamentals underlying it.” It is expected that the current market momentum is sustainable for up to the next eighteen months, as the ongoing government initiatives continue to drive the sector forward that will encourage more residents to buy homes. Over the past year, the federal government has introduced a number of such measures, including visas for retirees and professionals working remotely, as well as expanding the ten-year golden visa initiative; it has also overhauled the country’s commercial companies’ law and annulled the requirement for onshore companies to have an Emirati shareholder. Earlier this year, the Dubai Ruler announced his 2040 urban plan to overhaul the emirate’s urban landscape, increasing community, economic and recreational areas, as well as nature reserves, by 2040; this will expand recreational areas by 150% and its beaches by an impressive 400%, with 60%of Dubai’s total area being nature reserves and rural areas.

According to Valustrat, Dubai’s October capital values for villas and apartments either “stabilised or improved”. In a sample of 13 villa communities and 21 apartment areas, the Valustrat Price Index jumped 12.6% on an annual basis in October, growing 1.8% on the month. The study noted that prices in some Dubai villa communities increased 30% on a yearly basis and “most of the apartment submarket continues to improve, albeit at a slower pace”. The villa segment, accounting for 13% of the residential market, saw some impressive annual gains in locations such as Arabian Ranches, Jumeirah Islands, The Lakes and The Meadows of 31.0%, 30.9%, 27.9% and 26.7% respectively. Palm Jumeirah (14.6%) and JBR (12.1%) were the best performers in the apartment sector, with negative returns being seen in Jumeirah Village (-6.3%), Dubai Production City (-2.6%) and Dubai Sports City (-2.8%). In the month, nineteen property transactions were sold at a price of over US$ 8.2 million, (AED 30 million) in the obvious locations such as Dubai Hills Estate, Downtown Dubai, Business Bay, District One, Jumeirah Golf Estates, Emirates Hills and Palm Jumeirah communities. Sales wise in October, four developers – Emaar, Damac, Nakheel and Dubai Properties at 30.2%, 11.5%, 5.4% and 4.3% – accounted for 51.4% of the month’s total. The top locations for off-plan transactions in October were in The Valley, Business Bay, Dubai Harbour and Arabian Ranches phase 3; for ready homes, Dubai Marina, Business Bay, Jumeirah Village, Akoya Oxygen and Jumeirah Lakes Towers, led the field.

Dubai-listed developer Deyaar “did exceedingly well” in terms of sales this year and plans to launch several projects in different locations next year, as it takes advantage of a strong rebound in the emirate’s property market. Financing via a mix of equity, debt and proceeds from sales, the company will start new projects in JVC, Al Furjan and at its Midtown master development in Dubai Production City. The developer, majority-owned by Dubai Islamic Bank, launched its Business Bay US$ 272 million, seventy-storey Regalia Tower, which is “almost sold out” , to both local buyers and international investors; prices for 1 B/R, 2 B/R and 3 B/R apartments start at US$ 267k, US$ 463k and US$  654k.

Danube Properties has announced plans that, over the next five years, it will launch two to three projects every year, worth as much as US$ 272 million every year, as it tries to bridge supply gaps in the emirate’s cheaper housing segment. Last month, it launched its US$ 129 million Skyz residential project, (which is 40% sold), and expects a similar US$ 109 million launch early next year. The developer already has vacant plots available for future residential developments in Arjan, Furjan and Warsan areas in Dubai. The company, with a US$ 1.36 billion portfolio in the emirate, is also looking at plots in Abu Dhabi which it considers to be a bullish market. Its chairman, Rizwan Sajan, noted that “the market has recovered so well that we are now extra bullish,” and “I personally feel that the boom is now coming to the UAE market, especially if you look at the prices that have gone up in the last six months to one year.”

Next July, Sobha Realty plans to launch a US$ 4 billion, eleven million sq ft mixed-use project, Hartland Sanctuary, adjacent to its current project Sobha Hartland in the MBR City; it is estimated that the project will be finished by 2030. The new development will be three million sq ft bigger than Sobha Hartland which is scheduled to be completed by 2025, having first been announced in 2014. Financing of the new launch will be via a mix of debt and equity with the developer also considering the bond market. The company is expecting net sales to total US$ 1 billion by the end of the year andhas a target of more than US$ 1 billion in sales next year. Sobha is also keen to enter both the Saudi and UK markets and has plans in place to start a new residential project in the UK in 2024.

Meanwhile, Azizi Developments has plans to spend US$ 1.9 billion on up to fifty new projects next year, encouraged by a market rebound in the wake of a successful Covid-19 vaccine programme and the bounce from Expo 2020.The developer will launch projects in several locations including MBR City, Healthcare City, Al Furjan and Studio City, expecting to raise over US$ 4.0 billion in sales. This year, it has already launched three projects with two more expected before the end of December. The Fitch BB- rated company, with only US$ 272 million bank debt on its balance sheet, will finance projects through equity, off-plan sales and commercial loans; it is also in the throes of a planned US$ 300 million sukuk issuance which may be amended upwards.

DMCC has announced that the construction of its iconic 340 mt high Uptown Tower is currently standing at 260 mt, with 68 of the 81 floors completed. The building will feature 188 luxury hotel rooms and suites, exclusive restaurants, extensive conference facilities, Grade A offices and 229 uniquely designed branded residences. The tower will be at the heart of the Uptown Dubai District which will be a 24-hour neighbourhood brimming with world-class dining, unique high-end retail outlets, a central entertainment plaza and several five-star hotels. It will also serve as a hub for leading global businesses.

According to Savills’ ‘Spotlight on Branded Residences’ report, the UAE, (with 39 completed schemes), has emerged as the third largest country market for branded residences globally, behind the US, (with almost 200 branded homes) and Thailand’s 42. Dubai took the top place among world cities, ahead of Miami and New York, with all three cities having established luxury property markets. It noted that Dubai benefits from a healthy mix of projects from global brands, along with a sizeable number of projects from domestic players such as Emaar. Over the past decade, the global branded residences sector has expanded by 230%, with 580 schemes open and operating with almost 100k units between them; it is expected to see schemes grow to 900 and up to 200k units by 2025, led by the US, Mexico and the UAE. The branded residences space has diversified significantly over the past decade, shifting from a market dominated entirely by hotel brands to a combination of hotel and non-hotel or lifestyle brands. Marriott has been the leader in this sector since 2002, but there have been new entrants into the market, as well as expansion of established players both in terms of type of brand and the location of the parent brand. Non-US brands, such as Emaar and Banyan Tree, have risen to become global contenders.

According to Mattar Mohammed Al Tayer, Chairman of the Roads and Transport Authority, Dubai’s transport agency, has invested US$ 40 billion, in enhancing the infrastructure of roads and transport, over the past fifteen years; this has saved about US$ 60 billion in time and fuel wasted through traffic congestions from 2006 to 2020. Speaking at the 18th IRF (International Road Federation) World Meeting and Exhibition, he noted how the RTA had achieved two of its mega projects – Dubai Metro project, in four years, and the Dubai Water Canal project in less than three years. Furthermore, over that period, its roadwork had doubled from 8.7k lane km to 18.3k, vehicle bridges/tunnels fivefold from 26 to 125, and cycling track network from nine km to 463 km. Interestingly, road accident fatalities have declined from 22 cases to 1.8 cases per 100k, and reduced pedestrian fatalities per 100k population from 9.5 to 0.5; carbon dioxide emissions have been reduced by 400k tons over the fifteen year period, with plans to zero-emissions public transport by 2050. Under the Dubai Urban Plan 2040, with the aim is to improve the wellbeing of people and make Dubai the best city for living in the world, 55% of the expected population will live within 800 mt of metro stations, with the plan to adopt a “20-minute city” concept to allow residents to access 80% of daily services, within twenty minutes by walking and cycling

An agreement with the European Tour group sees DP World becoming the new title sponsor of the group’s main tour from the start of the 2022 season. The Dubai port operator will target three key areas – elevating the Tour in every way, growing the game of golf globally, and driving positive community impact. Next year, the DP World Tour will have a record total prize money of over US$ 271 million, with a new minimum prize fund of US$ 2.71 million for all tournaments solely sanctioned by the DP World Tour. Over the year, the season will feature more than forty-seven tournaments in twenty-seven countries.

Although still in a loss position, H1 sees Emirates’ performance improving, posting a US$ 1.6 billion deficit, compared to US$ 3.4 billion loss in H1 2020. The airline’s revenue was 86% higher, at US$ 5.9 billion, with passenger numbers more than quadrupling to 6.1 million. With cargo 39% higher, to 1.1 million tonnes, it now stands at 90% of pre-pandemic levels. HH Sheikh Ahmed bin Saeed, the carrier’s chairman, noted that “while there is still some way to go before we restore our operations to pre-pandemic levels and return to profitability, we are well on the recovery path, with healthy revenue and a solid cash balance at the end of our first half of 2021-2022.”

The Emirates group narrowed its net loss to US$ 1.6 billion, compared with a US$ 3.8 billion loss in the same period last year, as revenue jumped 81% higher to US$ 6.7 billion and its cash position US$ 0.3 billion down at US$ 5.4 billion. It also received additional state support during the fiscal period, with a further injection of US$ 681 million by way of an equity investment. Dnata reported a US$ 23 million profit, (cf a US$ 396 million loss last year), whilst its revenue increased 55% to US$ 1 billion.

A Memorandum of Understanding, to set up a codeshare partnership, has been signed between Emirates and Garuda which covers seamless travel on both airlines’ routes, and frequent flyer programmes, across the Americas, Middle East, Africa and Europe; travel can be made on a single ticket. Subject to required regulatory approvals, the codeshare agreement is expected to come into effect in January. Emirates currently has codeshare cooperation agreements in place with twenty-one airline partners.

HH Sheikh Mohammed bin Rashid Al Maktoum has issued a decision to merge Dubai Economy and Dubai Tourism into one entity, under the name, ‘Dubai’s Department of Economy and Tourism’, with Helal Al Marri appointed as Director General. The Department is tasked with meeting seven targets to further strengthen Dubai’s leading position in tourism and economy and making it the world’s best city in which to live and work. These include increasing the added value of the industrial sector by 150% in the next five years, expanding export markets for local products by 50% and increasing the number of inbound tourists by 40% to 25 million, by 2025. Other responsibilities for the new set-up include ensuring that Dubai becomes one of the top five global cities, attracts 100k companies before the end of 2024, holds at least two hundred global economic events annually by 2025 and encourages private and family-owned businesses to get listed on the Dubai bourse. Furthermore, it will be in charge of other sectors, including attracting foreign investments and supporting SMEs.

Another directive by HH Sheikh Mohammed sees Dubai Courts announce the formation of a law enforcement committee for the emirate’s financial markets and the establishment of two new courts, within its Commercial Court, to expedite the resolution of disputes related to securities, shares, bonds, and other such financial instruments.  The aims of the exercise are twofold – to reinforce mechanisms to ensure the speedy delivery of justice in the financial sector, and to assist the emirate’s judicial system further raise its stature in the global commercial judicial community. The new courts will feature a remote litigation system that supports Dubai Courts’ aim of transforming itself into a smart judicial system, along with an interactive technology-based system that can be easily used by all parties including judges, advocates, experts and litigants.

At Tuesday’s cabinet meeting, held at the Expo 2020 site, HH Sheikh Mohammed announced “today, we decided to approve the requirements needed to grant residency visas for retired expatriates. This will allow retired foreigners to continue their stay in the UAE. We welcome everyone in our country.” This comes after the government recently introduced ‘Green’ and ‘Freelance’ visas.

In directing them to establish Dubai as a leading global centre for alternative dispute resolution, as per the highest standards of efficiency and transparency, the Dubai Ruler has formed the Board of Directors of the Dubai International Arbitration Centre. Under the chairmanship of Dr Tarik Humaid Al Tayer, and six other members, it is expected that the Centre will become one of the world’s top five arbitration centres in the next three years. Only last month, Sheikh Mohammed issued a Decree dissolving the Emirates Maritime Arbitration Centre and the Dubai International Financial Centre Arbitration Institute and merged their operations and assets into DIAC.

National Bonds has increased its stake in Taaleem Holdings by 3.4% to become a 23.0% shareholder in a global education provider that educates approximately 9.8k students across nine different schools. The investment company, owned by The Investment Corporation of Dubai, is now the largest shareholder in Taaleem and, as 30 September 2021, had an investment portfolio, valued at US$ 2.72 billion.

Boosted by a strong rebound in new orders and the first month of Expo 2020, the seasonally adjusted IHS Markit PMI was 3.0 higher on the month in October to 54.5 – its highest level in two years, and third highest in a decade. The marked increase in client demand and tourist numbers, as flights resumed, contributed to a sharp expansion in activity, with 75% of respondents expecting the Expo factor to be the main driver to benefit business in Q4. Indeed, firms’ output expanded to its strongest levels since July, whilst client orders, both domestically and abroad, headed north. All the emirate’s sectors, including construction, travel, tourism and wholesale/retail, witnessed growth; the latter recorded the biggest of the rises, as construction continued to see the strongest overall speed of recovery; furthermore, the easing of travel restrictions was another factor  helping the hospitality sector, driving September average occupancy rate higher to 67.2% in the month – up 51%, compared to the same month in 2020., and 9.2% higher than the August return. However, once again employment disappointed which only nudged up slightly, as staff hiring was partly linked to a rise in backlogs of work.

Shuaa Capital saw nine-month net profit, to 30 September, jump 39% to US$ 25 million, as its Q3 profit was 19% higher at almost US$ 10 million; the quarterly EBITDA, (earnings before interest, taxes, depreciation and amortisation) grew 5% to US$ 23 million. The improvement was attributable to stable recurring revenues and strong performance in its public markets fund. The Dubai-based investment bank, which has assets of nearly US$ 14 billion under management, led the funding round for music-streaming service Anghami late last year. Shuaa Capital merged with the Abu Dhabi Financial Group two years ago to create a business, with an asset management and investment banking platform that offers diversified revenue streams across different countries.

Driven by a strong capital and liquidity position, Mashreq posted a US$ 50 million Q3 net profit, (compared to a loss of US$ 51 million in the same period last year), helped by a marked improvement in the local economy and a rise in business confidence. However, the nine-month profit to 30 September declined almost 25% to US$ 72 million, largely attributable to an almost 25% hike on impairment provisions to US$ 564 million. Its operating profit came in 44% higher at US$ 201 million (US$ 654 million for the nine months), generated mainly from a 26.2% increase in fee and commission income. Both the bank’s customer deposits and total assets grew – by 7.4% to US$ 26.0 billion and 7.0% to US$ 46.2 billion respectively.

Emaar Malls posted an 86% leap in Q3 net profit to US$ 122 million, driven by a 36% hike in revenue to US$ 311 million, as Dubai’s retail sector improved in line with the emirate’s economy returning to pre-pandemic levels; its nine-month profit was 83% higher at US$ 272 million. Occupancy levels across Emaar Malls’ establishments remained flat at 91%. The unit of Dubai’s biggest developer, Emaar Properties, also reported that its e-commerce platform Namshi recorded quarterly sales of US$ 87 million. Official estimates are that Dubai’s wholesale and retail trade sector is on track to achieve 4.7% growth in 2021, whilst the local economy will be 3.1% higher this year and up 3.4% in 2022.

The DFM opened on Sunday, 07 November, 332 points (12.0%) higher the previous three weeks, gained a further 33 points (1.1%) to close the week at 3,141. Emaar Properties, US$ 0.23 higher the previous fortnight, closed US$ 0.02 higher at US$ 1.32. Emirates NBD and Damac started the previous week on US$ 3.83 and US$ 0.38 and closed on US$ 3.88 and US$ 0.39. On Thursday, 11 November, 538 million shares changed hands, with a value of US$ 173 million, compared to 821 million shares, with a value of US$ 251 million, on 04 November.

By Thursday, 11 November, Brent, US$ 2.78 (3.4%) lower the previous fortnight, regained US$ 0.87 (1.1%), to close on US$ 82.67. Gold, US$ 16 (0.5%) lower the previous fortnight, had a stellar week, (as the greenback strengthened), gaining US$ 74 (4.1%), to close Thursday 11 November on US$ 1,866. 

A US court has ordered the current and former company directors of Boeing to pay a US$ 238 million settlement with shareholders, over the safety oversight of the 737 MAX; the payment amount will be paid by the plane maker’s insurers. Furthermore, the agreement sees the need for the appointment of an additional board director, with aviation safety oversight expertise, and the creation of an ombudsperson programme. Boeing has reached an agreement with the families of the 157 people who died in the Ethiopia 737 Max crash in 2019 and importantly accepts liability for the fatalities; this deal is subject to families of the victims not seeking punitive damages from the company. Lawyers for the victims’ families said Boeing would still be held “fully accountable”. Last month, a former chief technical pilot for Boeing was charged with deceiving federal regulators who were evaluating the company’s 737 Max plane, with a lawyer claiming that he did not act alone. He was accused of “scheming to defraud Boeing’s US‑based airline customers to obtain tens of millions of dollars” for the company. (Interestingly, its new 777X will make its international debut at the Dubai Air show later this month – both in the air, with a 777-9 flight test aircraft, and on a static display).

In what would be one of the country’s biggest ever buyouts, Sydney Airport has agreed to accept a US$ 17.5 billion takeover bid from Sydney Aviation Alliance, comprising Australian firms IFM Investors, QSuper and AustralianSuper, as well as US-based Global Infrastructure Partners. Before this becomes reality, there are several obstacles to clear, including an independent report on the takeover, 75% shareholder approval and the green light from Australian regulators.

Evergrande is back in the news again as it managed to pay a US$ 148 million interest payment just before a deadline for payment; it has managed so far avoided defaulting on its debts by making overdue payments just before thirty-day grace periods expired. Earlier in the year, the cash-strapped Chinese real estate giant managed to sell a 5.7% stake in HengTen Networks Group. Evergrande owned a majority stake in the media firm but has since made a number of share sales, as it tries to raise money to meet its financial commitments. (Tencent, which in July, acquired a 7% stake for US$ 266 million from Evergrande, is now HengTen major shareholder, with a 24% stake). Last week, it also sold its UK-based electric motor making business Protean, which it bought in 2019 for US$ 58 million. However, as it has struggled to sell some of its other assets, it will continue to have problems repaying interest charges, (let alone winding down its massive US$ 300 billion debt); last month, a US$ 2.6 billion deal fell through after seventeen days of negotiations.

Shares in M&S skyrocketed yesterday, 10 November, by 18% – and its highest level since January 2020 – as it raised its profit forecast for the second time in less than three months; it now has upped its full year’s profit estimate to US$ 675 million, compared to its earlier expectation of US$ 472 million. For the six months to 02 October, it made a profit before tax and adjusting items of US$ 364 million, compared to a US$ 23 million loss over the same period in 2020. The main driver behind the improved results was a 10.4% increase in food sales, (and its deal with Ocado), offsetting a 1% decline in clothing caused by shop closures. The retailer had gone through a turbulent ten-year period but seems to have managed to turn around its ageing brand, with management focusing on transforming the company’s outdated culture, improving the quality and value of its clothing and food products, reshaping its stores and investing in technology and e-commerce. It also entered into an arrangement with online supermarket Ocado. It may have also benefitted from the fact that the UK has lost a staggering 83% of its rival department stores since 2016; it is estimated that 67% of closed shops remain unoccupied, with about 237 large shops yet to be taken over by a new business.

AB Foods, the parent company of Primark posted that the discount retail chain had lost one-third of its trading days in the 53 weeks to 18 September – which resulted in a 12% slump in sales, compared to pre-Covid, and lost sales totalling over US$ 2.7 billion – a massive blow for a retailer which has no online retail operations. AB Foods posted that its pre-tax profits dipped 1.0% to US$ 908 million for the year. Although Primark estimates that it could face disruption from global supply chain issues into 2023, it has assured customers that “we are getting the goods we need”. The retailer is bullish about its future, announcing a 33.2% increase in the number of shops to 530 over the next five years, with the number of US outlets rising more than fivefold to sixty. Although not ruling out introducing on-line sales, it still considers that it should focus on traditional shopping, but it does plan to overhaul its website to give more details of in-store ranges, so customers can “browse online, before they come into our stores”.

Google’s parent company Alphabet became the third tech giant to reach a market cap of over US$ 2 trillion, joining peers, Apple (US$ 2.47 billion) and Microsoft (US$ 2.53 billion); it only took the California-based company less than two years, after hitting US$ 1 trillion in January last year. The world’s largest provider of search and video advertisement posted a Q3 68.4% jump in net profit to US$ 18.9 billion, driven by the strong performance of Google Services business, which includes advertisements, Android, Chrome, hardware, Maps, Search, Google Play and YouTube. Since its 1998 formation, the company has diversified and has made some canny investments including paying US$ 50 million for the Android operating system, which is currently used by more than 2.5 billion people, and a year later, in 2006, US$ 1.65 billion for YouTube, whose revenue jumped 43% and added more than US$ 7.2 billion to Alphabet’s revenue.

Following a Twitter vote, arranged by the man himself, Elon Musk looks as if he is in the market to sell 10% of his Tesla stake as 58% of the 3.5 million Twitter users, who took part, were in favour of him trading US$ 21 billion worth of his stock. He has undertaken to keep to his promise, in response to a “billionaires’ tax” proposed by US Democrats, but should he go ahead with the sale, it could leave him with a huge tax bill. As he has apparently not taken any salary or bonuses from any of his companies, he has no earnings on which to pay income tax, but he has made billions of dollars through a compensation package, which gives him power to exercise large amounts of stock options when the company meets performance targets and its shares hit certain prices. His option, expiring next August, to buy 22.86 million Tesla shares at US$ 6.24 per share – on the day, 7.2% lower but still valued at US$ 1,222.00. Senate Democrats are proposing billionaires could be taxed on “unrealised gains” when the price of their shares goes up – even if they do not sell any of their stock. Yesterday, Elon Musk sold about US$ 5.1 billion in shares, with his trust selling nearly 3.6 million shares, worth around US$ 4 billion, while he also sold another 934,000 shares for US$ 1.1 billion after exercising options to acquire nearly 2.2 million shares; this equates to about 3% of his holdings in Tesla.

At Wednesday’s IPO on the New York bourse, shares in electric vehicle firm Rivian, having raised more than US$ 11.9 billion from investors, started above the company’s target range of US$ 78 each. Although the flotation is among the top ten US IPOs of all time, the company has made losses of over US$ 2 billion over the past two years and only started delivering its first electric trucks in September. It will roll out its SUVs next month and delivery vans in 2023. Despite this, it has been backed by Amazon and Ford (with a 13% stake), as well as hitting the market for small trucks, pick-ups and SUVs before its rivals such as GM. Not only is Amazon a 20% shareholder, it will also buy 100k electric delivery vans once they start production. Obviously, some investors are hoping that Rivian will emulate Tesla which went public in 2009, with a share value of US$ 17 – now they are trading at over US$ 1k. It was the world’s biggest initial public offering (IPO) this year and made Rivian the second most valuable car manufacturer behind Tesla (US$ 1 trillion), and ahead of GM (US$ 86 billion) and Ford (US$ 66 billion).   

Rolls-Royce Small Modular Reactor (SMR) business, backed by a consortium of private investors and the UK government, has been created to develop small nuclear reactors to generate cleaner energy. A US$ 285 million UK government grant and a US$ 265 million investor cash injection will fund the development of Rolls-Royce’s SMR design and take it through regulatory processes to assess whether it is suitable to be deployed in the UK. If successful, it could create 40k jobs by 2050 and result in this nuclear power contributing more than its current level of 16% to UKs electricity generation. At an expected cost of US$ 2.7 billion each, SMRs would cost less than the US$ 27 billion each for the larger plant under construction at Hinkley Point and a further possible plant at Sizewell in Suffolk. RR estimates a plant would have the capacity to generate 470MW of power, equating to the same amount of power produced by more than 150 onshore wind turbines.

At the Glasgow COP26 summit, the UAE indicated its intention to become a global leader in low carbon hydrogen, unveiling the Hydrogen Leadership Roadmap, a comprehensive national blueprint to support domestic, low-carbon industries. Its two aims are to contribute to the UAE’s net-zero ambition and establish the country as a competitive exporter of hydrogen. The country’s Minister of Energy and Infrastructure, Suhail bin Mohammed Al Mazrouei, told the summit that seven projects are currently underway, and the UAE is on-track to capture 25% market share in key export markets, including Japan, South Korea, Germany, and India initially along with additional high-potential markets in Europe and East Asia.

The FAO Food Price Index rose for the third month in a row, with October increasing on the month by 3.9% – its highest level since July 2011. The UN barometer for global food prices, which tracks the international prices of a basket of food commodities, saw marked rises in cereal, wheat, dairy and vegetable oil, of 3.2%, 5.0%, 2.6% and 9.6% respectively; with cheese prices remaining stable, the meat index declined, as did sugar prices dipping 1.8%. It is estimated that the production, distribution and consumption of all this food uses about a third of the world’s total energy, and that feeding the world is responsible for about a third of global greenhouse gas emissions.

Despite theGerman and French antitrust watchdogs, and their counterparts in the other twenty-five EU countries, having lobbied for a bigger role in enforcing the upcoming Digital Markets Act, representatives from EU countries have agreed that the EC will be the sole enforcer of new tech rules. Notwithstanding, there will be a more limited role for the national regulators, who may have more practical expertise in digital cases. An EU documents cites that “the Commission is the sole authority empowered to enforce this regulation.,” but noted that “member states may empower competent authorities enforcing competition rules to conduct investigative measures into possible infringements of obligations for gatekeepers,”

Labour Department data posts the October consumer price index at 6.2% on the year, and 0.9% on the month, driven by higher prices for energy, shelter, food and vehicles. Year on year, prices paid by US consumers rose by the most since 1990, reflecting broad-based increases and pushing up prices, as more often than not the consumer ends up paying for the inflationary increase. With the US returning to almost pre-pandemic normalcy, there is pent up demand for services and consumer goods, with certain sectors facing the double whammy of supply chain bottlenecks and a shortage of qualified workers which have been driving up costs. It seems that maybe the Fed, along with the BoE and many other global central banks, have underestimated the inflation impact on two counts – the percentage is higher than many had forecast and there was a feeling that the rise would be more transient than it has turned out.

After a depressed summer, caused by the spread of the Delta variant and sluggish economic growth, US October employment numbers rose by 531k, with the unemployment rate dipping to 4.6%. With an apparent reluctance from parts of the workforce to return to work, many employers seem to have problems acquiring staff to meet the growing demand and have had to increase remuneration levels to attract and retain staff. Although average private sector wages only grew by US$ 0.11 to US$ 30.96, it does follow six months of strong wage increases; over the past twelve months, average earnings are 4.9% higher but this figure is still short of the 5.4% annual inflation over the same period. Despite the positive news, it must be remembered that the country has more than four million fewer jobs than it did before the pandemic and that the participation rate, which shows what proportion of potential workers are in jobs or looking for one, remained worryingly flat at 61.6%.

Today, 11 November, the US dollar rose to 16-month highs against the euro and other currencies, as the yen sank towards four-year lows of US$ 114.5, after the latest US inflation readings saw the rate climb to a generation high and the growing possibility of a hike in interest rates. With seeming inactivity by the ECB, the euro took a battering, sinking to US$ 1.1459, its lowest level since July 2020. Better than expected economic data from the UK saw the BoE doing little to support sterling which dipped to an eleven-month low at US$ 1.3388. Another factor driving behind the dollar’s surge was the sharp rise in US government bond yields, including the 30-year Treasury passing 1.5%. To some observers, it is inevitable that the Fed will end near zero-rate interest rates and to speed up the pace of tapering its QE program before the end of 2021.

President Joe Biden has welcomed the House of Representatives finally passing his US$ 1 trillion infrastructure spending package, which includes a US$ 550 billion investment in infrastructure, over the next eight years, to upgrade highways, roads and bridges, and to modernise city transit systems and passenger rail networks. The balance will be spent on funding clean drinking water, high speed internet, and a nationwide network of electric vehicle charging points. This largest federal investment in the country’s infrastructure for decades, and seen by many to be a major domestic win for the US president, did not please all legislators, with some complaining that key liberal policies had been dropped in exchange for the bipartisan House victory. Members of the Congressional Progressive Caucus pledged they would not support the infrastructure bill until they had voted on a separate social welfare bill that allocates a massive US$ 1.75 trillion for healthcare, education and climate change initiatives.

China’s annual Singles Day is the world’s biggest shopping festival but this year, it has been a low-profile event, as the tech giants are wary of upsetting the Chinese administration which, over the past twelve months, has been cracking down on platforms such as Alibaba. Normally more money is spent on this extravaganza than the combined totals of Black Friday and Cyber Monday. It seems that the regulators have two problems with the tech giants – an alleged abuse of user data by online giants, and wider concerns that big tech had become too powerful and unregulated. Singles’ Day — so called for its 11.11 date — began more than a decade ago and was a 24-hour event for some time before Alibaba and its rivals began milking its success and then extended the promotion from 01 November to 11 November. Last year, the combined sales of Alibaba and JD.com came in at a mouth-watering US$ 158 billion. In prior years, most platforms had a running total of sales, but this has changed with the likes of Alibaba not releasing figures until after the event closes.

The UK economy seems to be faltering, as latest Q3 figures show only a 1.3% expansion, with one of the main drivers for this disappointing figure being the supply chain problems; this is well down on Q2’s 5.5% which rebounded because of coronavirus restrictions being lifted. During the quarter, the service sector grew 1.6%, with accommodation and food services expanding 30% and the arts and entertainment by 19.6%, but production and construction output fell. Despite the latest figure, and the fact that the economy is still 2.1% smaller than it was in Q4 2019, it is expected that the UK’s economy will have the fastest growth in the G7 this year. Things may not get better in the coming months, as household spending could be slowed, by higher taxes and rising utility prices, and the ongoing supply problem could see shortages continue; this could result in a phenomenon known as stagflation when the economy has slowing growth mixing with rising inflation.

It is reported that the Bank of England and the Treasury are to evaluate the possibility of a UK central bank digital currency. The consultation next year will form part of a “research and exploration” phase and will help the Bank and government develop the plans over the following few years. If the process were to be taken further, the new currency would not replace cash and bank but would be used in tandem – at least for the short-term because there is no doubt that cash is on its way out for good. Some central banks have warned that widespread use of CBDCs could deprive banks of a cheap and stable source of funding from consumer deposits. The success of Bitcoin, and some other cryptocurrencies, has caused great concern among most global central banks and there is a feeling that If You Can’t Beat Them, Join Them!