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Time Is Running Out!!                                                                       17 December 2020

The latest Valustrat report points to a stabilisation in property prices in 2021 with two caveats – the economy recovers from the pandemic-induced slowdown and government initiatives, including overseas visas for expatriate retirees and the expansion of the ten-year golden visa scheme, attracts foreign professionals. The report further adds that it expects increased buying activity from China and higher business activitie,s brought on by the delayed six-month Dubai 2020 Expo, starting next October, as well as the 50-year anniversary of the UAE.. Furthermore, the recent reforms in commercial and inheritance laws, along with the easing of certain other social restrictions, have done much to improve both business and expat confidence, which has a knock-on impact on the realty sector.

Although Chesterton’s Mena expects stability to return to the sector in 2021. It stlll sees moderate declines next year, although there will be differences between property types and locations. ValuStrat estimates that November property prices are down 13.8% on the year, but only 0.2% month on month, making it still a buyers’ market.  Villa prices in Jumeirah Village and Dubai Sports City recorded the biggest falls of 14.8% and 14.4%, whilst Discovery Gardens, Dubai Production City, Jumeirah Village, Business Bay, Burj Khalifa and Dubai Marina dropped 16.8%, 16.4%, 16.0%, 14.5%, 15.2% and 13.8% respectively. However, with such low prices, there has been strong buying interest in certain locations, including Dubai Marina, International City, Jumeirah Lake Towers, Arabian Ranches, Jumeirah Village, Meadows, Business Bay and Downtown Dubai.

Next year, Cavendish Maxwell expects the Dubai market portfolio to increase by 50k, but this does seem to be on the high side. There is no doubt that with developers, such as Emaar and Damac, curbing new supply, by temporarily curtailing all future developments, market equilibrium will soon come into play. Two major trends which started in 2020 will continue into the new year – the secondary market will dominate transactions and increased demand for villas in selected locations will continue.

The following uses official data from the Government of Dubai’s Statistics Centre. In the past five years, to mid-December 2020, Dubai’s population has increased 40.5% from 2.43 million to 3.41 million but only by 0.07 million, 0.2%, over the past year because of the impact of Covid-19. Meanwhile, the number of units at the end of 2015 totalled 481.6k (397.6k apartments and 84.0k villas), increasing by 168.3k (23.4%) to 649.9k (537.4k apartments or by 35.2% and 112.5k villas or by 33.9%). Over that four-year period, the population, expanded by 38.3%., at a slightly quicker rate than the rise in residential units.

A new law, introduced by HH Sheikh Mohammed bin Rashid Al Maktoum, sees the establishment of a special tribunal to oversee the liquidation of unfinished and cancelled projects, as well as the settling of related claims; this will supersede the 2013 law, dealing with cancelled projects, and will also take up existing cases that the previous committee has not settled. Decisions made by the special tribunal will be “final and uncontestable”, If the Dubai Land Department’s Real Estate Regulatory Agency has confirmed a project cancelled, the tribunal will be responsible for liquidating the assets and will “define the rights of investors and purchasers”.  More importantly for the end user – and in a step that will encourage increased investment into the residential sector -a second decree states that if a developer fails to start a property project for reasons beyond their control, or if it has been cancelled by Rera, the developer in question “must refund the entire amount paid by purchasers”.

The Dubai Ruler also issued Law No. (14) of 2020 regulating the timeshare industry in the emirate, with the aims of strengthening the pertinent legal framework, along with stimulating both the tourism and real estate sectors. As tourism matures in the emirate, timeshare is increasing its footprint, giving adequate alternative residential alternatives for tourists and visitors, whilst encouraging investments in the vacation ownership sector. The management of the emirate’s timeshare industry has been handed to Dubai’s Department of Tourism and Commerce Marketing who will coordinate with the Dubai Land Department and Dubai International Financial Centre in all matters related to the timeshare-related activities of developers and brokers, and registration of timeshare contracts and right of usufruct. Timeshare permits will be valid for a renewable period of one year.

Emaar has named Mohammed Alabbar as its new MD, with him being replaced by Jamal Al Theniyah as Chairman, in a move brought on by new regulations that prohibit combining the chairmanship of a company with another executive position; Ahmed Jawa becomes the new vice-chairman. The move comes a week after Dubai’s largest property developer announced that it was holding back on new launches in a bid to overcome the current oversupply in the market. One consultancy reckoned that Dubai has 585k homes at the end of Q3 and nobody really seems to know how many will come to completion for the year 2020, with estimates ranging from 35k to 55k.

Reportage Properties is set to develop ten real estate projects, delivering 4k units, in both Dubai and Abu Dhabi. The Abu Dhabi-based developer noted that the real estate sector market is beginning to show positive developments, resulting in increased sales during the current year, particularly for residential units in Rukan Tower, which is being developed in Dubailand, in cooperation with the Continental Investment. Comprising 488 units of studio to 2 B/R apartments, with prices of US$76k, US$ 106k and US$ 163k respectively, the project will be ready for handover by the end of 2022. Last year, the developer launched Rukan Tower, consisting of two phases of 349 and 305 residential villas; 20% of the construction work has been completed.

It is estimated that the UAE has injected support packages of US$ 107 billion to try and support the economy, battered by the pandemic, with a selected committee formed to administer and oversee the process. Two of the packages included the Central Bank’s Targeted Economic Support Scheme in March, (to boost liquidity in the financial and banking sectors), and the US$ 13 billion Tess programme, offering zero-cost collateral funding to banks to encourage lending to the broader economy.  Other governmental measures have been added to ease the cost of doing business in the country. These include a major overhaul of commercial companies’ law and that, in most cases, the need for onshore companies to have an Emirati shareholder has been removed. Other ‘legal’ initiatives include major changes to the commercial transactions and bankruptcy laws, as well as the decriminalisation of bounced cheques.  The government has also allocated grants and incentives to tourism establishments and reduced tourism sector fees and taxes. To date, it is estimated that such measures have benefitted 10k SMEs, 1.5k private sector companies and more than 310k of the population.

The seasonally adjusted November IHS Markit PMI fell 0.9 to 49.0, on the month, with only titbits of positive news, such as job losses being at their lowest since February, as business picked up in the wholesale and retail sector. News of vaccines being available could result in a quicker than expected economic recovery.

In a move that intends to ease access to credit insurance and reduce exporters’ non-payment risk, Etihad Credit Insurance and the Israel Foreign Trade Risks Insurance Corporation (Ashr’a) have signed a deal to strengthen bilateral trade ties that will encourage exports and investments. According to the ECI, the annual exchange of trade between the UAE and Israel is expected to reach $4 billion, with the deal expected “to ease access to export credit facilities” for exporters and minimise risks associated with non-payment. Both parties will also explore mutual opportunities for co-insurance services for exporters and facilitating market access to SMEs.

In 2019, the UAE’s US$ 414 billion economy was driven by Abu Dhabi and Dubai, accounting for 59% and 28% of that year’s GDP. The latest report from S&P Global Ratings estimates that, because of the pandemic, the economy will lose 5.7% in value but will post a 3.1% expansion in 2021. However, the International Finance the Corporation expects the country to experience a contraction of 5.7 % this year, followed by a modest recovery of 3.1% in 2021.  It is not expected that the economy will recover fully until 2023, as sharp falls in key sectors – tourism and real estate – will take time to recover. The ratings agency indicated that Dubai’s economy would contract sharply on the back of the pandemic battering that the travel and tourism sectors have taken, as well as broad declines across the rest of the economy. However, there is every chance that the delayed Expo 2020 will prove a catalyst for some sort of economic recovery in Q4 2021.With the hydrocarbon sector production being boosted from 2022, with Opec+ oil production limits being lifted and new gas production coming on stream, the non-oil sector recovery will be driven by public investment in manufacturing particularly petrochemicals, logistics, and construction. Credit agencies have been hopelessly wrong in the past and there is every chance that this will be the case this time, with Dubai recovering much quicker and returning to pre-pandemic levels (and more) well before S&P’s 2023 mark.

UAE Q3 sales of mobile phones saw Chinese company Xiaomi joining the pack of the three main suppliers – along with Samsung and Huawei – as sales rose 6.4% to one million, quarter on quarter, partly driven by pent-up demand. The GCC witnessed a slight 0.2% decline in the period to 4.97 million units, with UAE sales accounting for 24.1% of the total, behind Saudi Arabia’s 52.6%; Saudi sales dipped because of the tripling of their VAT rate to 15%, pushing prices higher. Samsung remained the region’s leading provider, accounting for a 44.6% share. In units shipped, but second with a 30.8% share of the monetary value, indicating that the market preference is for the entry-level and mid-range price brands; this explains Samsung’s market share discrepancy between units sold and their monetary value. Q4 and Q1 sales will probably see similar quarterly unit increases, at around 6.5%, with brands like Apple (reportedly planning to increase iPhone production by 30% in H1 2021), and Samsung selling more with their newly released models.

It is estimated that the UAE accounts for 11% of the total global gold exports, with the country becoming increasingly important on the world stage. Trading in the yellow metal accounts for more than 29% of the total national non-oil exports and that, despite the pandemic, the gold trade was 6% higher, year on year to August. The federal government has introduced a new policy for the gold sector, aimed at enhancing the UAE’s governance of gold trade so as to align with best international practice. The new policy covers four areas – establishing the UAE’s standard for good gold delivery, development of a federal platform for gold trade, establishing a committee for the UAE bullion market, and building a database for companies and individuals involved in the gold trade.

Disgraced payments firm Finablr, which owns a number of foreign exchange and digital payments companies, including UAE Exchange, Xpress Money, Unimoni, Remit2India and Bayan Pay, has been sold to Global Fintech Investments Holding for a nominal US$ 1. GFIH – an affiliate of Israel-based Prism Group – has formed a consortium with Abu Dhabi’s Royal Strategic Partners to purchase Finablr and will provide the company with working capital to help it operate and support its creditors and employees; it will also undertake to support and facilitate the company’s continued efforts to recover funds from third parties  The BR Shetty  company was listed on the London Stock Exchange in May 2019, at which time it also owned the Travelex foreign exchange business,  which has since been divested to another lender Then it was valued at US$ 1.5 billion but was hit with two major problems – a cyberattack on Travelex, along with the unfolding collapse of its parent firm, BRS Investment Holdings. In May, with it being disclosed that its debt was US$ 1 billion more than what was accounted, itappointed a law firm to “investigate historic potential malfeasance within the Finablr Group and any misappropriation of assets” in July.

A JV with the Republic of Rwanda will see DP World launch its new global B2B and B2C e-commerce platform, DuBuy.com,  following a Memorandum of Understanding with the Rwanda Development Board. Apart from making it easier for Rwandan companies to trade on the international stage, it will also strengthen commercial trading links between the UAE and Rwanda. The platform will enhance the promotion of exports of coffee, tea, and horticulture from the African country. DP World, which has already invested in world class port and logistics facilities in Kigali, will also assist with improvements to the country’s supply chain logistics, including in rural areas, and access to digital tools to help businesses become more efficient and expand their reach to local, regional, and global markets.

A new law enacted this week sees the granting of more autonomy to the Dubai Civil Aviation Authority, in tandem with the UAE’s General Civil Aviation Authority. Whilst also boosting sectorial safety, security and sustainability, its twin aims are to consolidate the emirate’s global leadership in the civil aviation sector, and also to enhance its attractiveness as a destination for aviation businesses. A government spokesman commented that “under the new law, DCAA is authorised to sign agreements … related to air traffic rights to operate via Dubai airports, and implement them in co-ordination with the GCCA.” The local agency will represent Dubai in all civil aviation matters, including all nature of negotiations, including air traffic rights, and accident investigations. Dubai will no longer have to seek approval from the GCAA, and report Dubai’s air traffic data to the federal regulatory body.

Dubai Aerospace Enterprise has a deal with American Airlines to deliver eighteen Boeing 737 MAX 8 aircraft, with the first of those arriving to the airline this week. DAE’s owned and committed fleet includes twenty-two Boeing 737 MAX 8 aircraft, which has just been allowed to return to US skies, some twenty-one months since two fatal crashes saw the plane being grounded. This is part of the Purchase and Leaseback agreement signed with the US carrier in Q3.

Following governmental directives, Dubai-based district cooling provider Emirates Central Cooling Systems Corporation has started reducing fuel surcharge on electricity and water for more than 140k of its customers,  reducing charges by US$ 13.1 million. Empower, which has an availability of a total cooling capacity of 1.53 million refrigeration tonnes, is keen to increase the share of renewable and clean energy in Dubai’s energy mix, in line with government targets of 25% from renewable sources by 2030 and 50% by 2050.

Recent figures indicate that foreign interests have invested US$ 5.8 billion, totalling 8.4 billion shares, in the six real estate companies listed on the Abu Dhabi and Dubai financial markets as on 09 December. As with most listed companies, foreign ownership of up to 49% of a company is allowed and perhaps this has helped the Dubai bourse jump 17.9 % over the previous four weeks. The significant rise in the number and value of shares owned by foreign investors in real estate companies has followed a surge in their share prices in recent months. Three of the Dubai listed companies – Emaar, Damac and UP – accounted for 35.51%, 33.83% and 17.06% of all real estate companies’ shares listed. It is expected that the percentage of foreign share ownership will continue to move north in the future.

The bourse opened on Sunday 13 December and, 260 points (17.9%) to the good the previous five weeks, nudged 3 points higher to close on 2,550 by Thursday 17 December. Emaar Properties, US$ 0.11 higher the previous week, traded US$ 0.02 lower at US$ 0.96, whilst Arabtec is now in the throes of liquidation, with its last trading, late in September, at US$ 0.14. Thursday 17 December saw the market trading at 160 million shares, worth US$ 59 million, (compared to 456 million shares, at a value of US$ 80 million, on 10 December).

By Thursday, 17 December, Brent, US$ 9.30 (22.6%) higher the previous four weeks, gained a further US$ 0.97 (1.9%) in this week’s trading to close on US$ 51.35. Gold, US$ 2 (0.1%) lower the previous week, gained US$ 43 (2.3%) to close on US$ 1,837, by Thursday 17 December.

Bitcoin has once again hit a new record. with the cryptocurrency having tripled in value this year, trading at US$ 22,945 by the end of Thursday trading. With bitcoin’s supply capped at 21 million, investors see it as a hedge against the risk of inflation, with governments and central banks turning on the stimulus taps to tackle the negative impact of Covid-19. When this particular “tap” is turned off, there will be those who will search for alternative currencies due to constant fiat money debasement. Only four years ago, it came close to topping the US$ 20k mark but since then has hit extreme lows and even falling below US$ 3.3k. Despite BoE Governor Andrew Bailey (and he has been wrong before) cautioning over its use as a means of payment, it is being widely utilised as a form of payment with PayPal among the most recent adopters of the digital currency.

In a cash deal of over US$ 3.9 billion, Zurich Insurance is planning to acquire MetLife’s US property and casualty business, extending its reach of its Farmers subsidiaries; it is expected that the cost of the purchase will be divided between Zurich’s Farmers Group and Farmers Exchanges subsidiaries in the US. Zurich, which saw its gross written premiums declining 3% to US$ 15.3 billion in Q3, hopes that with the Farmers businesses gaining a nationwide presence and access to MetLife’s distribution channels to 3.8k companies for ten years, will see a boost in its revenue stream. The MetLife deal, which includes 2.4 million policies and a reported US$ 3.6 billion net written premiums, is expected to contribute a 10% return on investment to Zurich’s earnings from 2023.

UK’s video-game-maker Codemasters, in a deal worth an estimated US$ 1.2 billion, has been acquired by games giant Electronic Arts which owns the global franchise to Need for Speed. Codemasters, also involved in racing games, including the Dirt Rally series and Formula 1 licences, had earlier rejected a US$ 973 million offer from New York-based Take-Two Interactive and has indicated that it would recommend its shareholders accept the offer. However, there is still a chance that Take-Two could respond with a better offer, which would see the two US gaming giants raising the stakes for Codemasters, founded in 1986 by two schoolboy brothers.  

Cyberpunk 2077, touted as one of the biggest gaming releases of the year, has been pulled from PlayStation stores after complaints of bugs, compatibility issues and even health risks; its long-awaited arrival had already been delayed twice. This will be a major blow for Sony Interactive Entertainment, as this is one of the most expensive video games ever made,  The company has indicated that it will “begin to offer a full refund for all gamers who have purchased Cyberpunk 2077 via PlayStation Store”. It will also remove the game until further notice.

It seems that the huge on-going financial scandal, bedevilling Germany, may claim another victim, Ralph Bose, who has headed Apas, the country’s accounting regulator, since 2016; before that, he was a senior partner at the Big Four firm, KPMG.  He has confessed that he had bought and sold shares in Wirecard last April, at the same time, his own watchdog was investigating the fraudulent payments company auditor, EY. It seems that many were aware of Wirecard’s problems even before Apas opened a preliminary probe into EY’s audit work in October 2019 and it took the watchdog a further eight months to open a full investigation, whilst in September it filed a criminal case against three EY auditors. It looks highly likely that another one will bite the dust.

Covid-19 has not been kind to AMC Entertainment Holdings, the world’s largest movie theatre operator, which has seen attendances slump by 92% in the US and 86% internationally. It has secured a further US$ 100 million in emergency funds – but that will only see it to the end of December at best, as its average monthly cash burn has been 25% higher at US$ 125 million. Whist most of the cinemas have been closed, the growth of streaming has becoming so popular that there is no doubt it will continue to present a major problem, even when some sort of normalcy returns to the screen. Both Warner and Disney have plans to push more of their new releases through streaming services – the former confirming that all of its 2021 films will be released online on the same day, with Disney also indicating that it plans to push more of its films to its Disney+ streaming service.

Ride-hailing firm Uber Technologies Inc was fined $59 million on Monday for failing to provide the California Public Utilities Commission (CPUC) with information on certain sexual assault and harassment claims between 2017 – 2019.

Following the earlier success of DoorDash, Airbnb hit the jackpot this week when its IPO share price of US$ 68.00 ended its first trading day 112.8% higher at US$ 144.71, proving the resilience of the home sharing company, during a year when global travel ground to a halt; a year earlier, 54 million guests stayed at an Airbnb. The closing price gave the company a valuation of just over US$ 100 billion, although Airbnb only raised US$ 3.7 billion in its offering, making it the biggest US IPO this year.  It still is a mystery how a company can be so valued even though it has never made a profit – and its nine-month revenue to September was down 32% to US$ 2.5 billion. It is reported that Airbnb controls around 39% of the global short-term rental market and is the market leader in Europe but trails VRBO, a vacation rental company owned by Expedia, in North America. It has 7.4 million listings in 22 countries and operated by four million hosts.

Another week, another IPO and another jackpot for investors but this time it was not in the US but India where Burger King jumped 87.5% on its market debut on Monday, with each US$ 0.82 share closing on US$ 1.53.  At the beginning of the day, the company, that runs the franchise of Restaurant Brands International Inc’s US chain Burger King, was valued at US$ 583 million and ended worth almost US$ 1.1 billion. The IPO raised about US$ 110 million and was an indicator that the country’s food service sector was moving forward.

A rarely known fact is that sportswear firm Reebok started life almost seventy years ago in Bolton, England, but was later bought by an enterprising US entrepreneur. The company became a global player in 1982 on the back of its development of the Reebok Freestyle aerobics shoe, the first athletic shoe designed for women, at the start of the aerobics fitness trend. Adidas, which acquired the company in 2006 for US$ 3.8 billion, is now possibly in the market to sell it and will decide by March; it seems that interested parties could include the private equity firm Permira, which owns the Dr Martens footwear company, and Timberland brand owner, VF Corp. 2019 figures of an increase in revenue to US$ 2.1 billion only account for 7% of Adidas’ total annual sales. Currently, Reebok, based in Boston, currently has a six-year US$ 70 million deal with Ultimate Fighting Championship.

McLaren is to sell as much as 33% in its racing unit to a US consortium led by MSP Sports Capital and is set to receive US$ 245 million – funding that will be spent to refinance bonds due in 2022 and repair its finances to continue developing new models. At this level of investment McLaren’s racing unit is valued at US$ 740 million. To raise extra financing, the company is considering a sale of its Woking headquarters. Continuing the F1 connection in the week that saw the Abu Dhabi Grand Prix closing the 2020 season, Ferrari was in the news ,with the sudden departure of its chief executive Louis Camiller;  he was quickly replaced by an Agnelli family descendant, John Elkann, on an interim basis.

Aiming to help Americans, who were struggling because of the pandemic, MacKenzie Scott, has donated more than US$ 4 billion to food banks and emergency relief funds in four months; this brings her total charitable donations to over US$ 6.0 billion with 380 charities benefitting from her largesse. The ex-wife of Amazon founder Jeff Bezos, and now the world’s 18th-richest person, has seen her personal wealth jump 156% this year to US$ 60.7 billion. Latest figures show that the US poverty rate has surged since June to reach 7.8 million citizens.

By the end of the week, once again, all three US markets hit record highs, with the Dow Jones gaining 147 points (0.5%) to close at its highest ever level of 30,302 points, whilst the benchmark S&P 500 closed 0.6% higher at 3,722, with the tech-heavy Nasdaq 0.8% to the good to 12,764 points.  The main drivers continue to be rising unemployment rates, surging pandemic cases and confidence that the US Government would need to pass a stimulus bill to bolster the economy. Latest data also points to manufacturing activity in the mid-Atlantic region cooling, with factories reporting a sharp slowdown in new orders and job growth.

There are reports that indicate that Spain will be the main beneficiary of the EU’s US$ 920 billion coronavirus fund, with a possible US$ 172 billion in project financing. Some of the country’s blue-chip companies – including Seat, Telefonica and Iberdrola – are making plans to ensure that they will receive funding. Other countries in the line-up include “old favourites” – Croatia, Bulgaria, Greece, Portugal and Romania – some of them which have had economic well documented woes in the past.

Meanwhile, the bloc’s stand-out economy, Germany, is heading for a double-dip recession, as the Merkel administration has imposed a severe four-week lockdown, which could knock off 4% from the country’s growth rate, compared to the 2.5% from the first lockdown earlier in the year.

The EU is to introduce a pair of laws – the Digital Services and Digital Markets Acts – focusing on competition and making platforms responsible for hosted content. The new laws will “overhaul” the digital market, including how tech giants operate, with transgressors facing heavy penalties. Driven by Competition Commissioner, Margrethe Vestager, and Internal Market Commissioner, Thierry Breton, they have noted that much of the current outdated law goes back to the start of the century and that “the business and political interests of a handful of companies should not dictate our future”, adding “that our rules and principles are respected everywhere. Online as well as offline.” In the past, the EC has taken swipes at the US tech giants, such as Google and Facebook, and their market dominance along with their preponderance to utilise the data they gather from one service to “improve or develop” a new one in a different area, making it difficult to compete with them. Labelling such firms “gatekeepers”, that “set the rules of the game for their users and their competitors”, the EU will surely have a battle on their hands.

Cuba is set to devalue its peso to US$ 0.24 on 01 January 2021, as the government struggles with its worst economic crisis since the collapse of the Soviet Union. For years, the currency has been artificially set at parity to the greenback. The Miguel Diaz-Canal government plans to raise state wages and pensions fivefold to compensate for the almost-certain jump in inflation, driven by the devaluation. However, this move will only benefit 60% of the working population, with the 40% balance working in the private and informal sectors.

In a rare setback for the Australian medical research centre, Australia has cancelled plans to proceed with CSL’s promising Covid vaccine, as clinical trials, being developed by the University of Queensland and CSL, have been abandoned because some participants returned what are called false positive test results for HIV. (Importantly, the participants did not develop HIV or any of its symptoms, but in tests for disease they returned results that incorrectly looked positive for it). The federal government had already signed deals with four companies for the supply of a Covid vaccine including 51 million doses from CSL. CSL is one of the country’s most valuable companies, having started the century, with a share value of US$ 5.30, and, having doubled its price over the past five years to US$ 255, last March it temporarily become the largest market cap on the ASX; last year, it posted a profit in excess of US$ 1.6 billion.

Once a geological survey and fundraising are finalised, work is planned to start in 2026 in Western Australia on a US$ 27 billion project to mass-produce hydrogen, from renewable power sources; this could present the country a major revenue generating opportunity to move away from coal to clean energy exports. When completed, it will churn out 1.75 million tons of hydrogen annually, equating to enough fuel for thermal power plants equivalent to six nuclear reactors Utilising a leased space of 6.5k sq mt, (six times the size of Hong Kong), the Asian Renewable Energy Hub plans to build wind turbines and photovoltaic systems generating 26k megawatts. The four-company consortium, including a private investment company affiliated with Australia’s Macquarie Group, aims to meet Canberra’s hydrogen production cost target of US$ 1.50 per kg; this would inevitably generate massive demand, as the current cost in Japan is US$ 7.20. The country aims to become a hydrogen powerhouse by 2030 and expects the hydrogen sector to contribute as much as US$ 19.5 billion to GDP in 2050.

The Financial Conduct Authority, which was then led by the current Bank of England Governor, has been reprimanded for failing to “effectively supervise and regulate” London Capital and Finance which collapsed in January 2019. Records show that some 11.6k investors had lodged US$ 330 million before its failure, with many who lost all their investment may now receive a one-off compensation; the firm was offering 8% for people investing for more than three years. Former Court of Appeal judge, Dame Elizabeth Gloster, who wrote the review, noted that FCA’s “flawed approach” allowed LCF to look respectable, even regarding its non-regulated products and that Its failure to regulate properly was due to “significant gaps and weaknesses” in its practices and policies. It concluded that “responsibility for the failure in respect of the FCA’s approach to its perimeter rests with the executive committee and Mr Bailey”. Belatedly the current governor, appointed in March 2020, was gracious enough to apologise to those, many of whom were first-time investors, who lost life savings whilst he got promoted to the top job in the banking world. To make matters worse, several independent financial advisers had warned the FCA, some four years earlier, about what they felt were “misleading, inaccurate and not clear” adverts, often promoted on social media.

By the end of the week, hopes of a Brexit deal grew, as it was reported that the EC President, Ursula von der Leyen had told the European Parliament that that “there is a path to an agreement now”, albeit a narrow one. Boris Johnson later joined in the farce telling UK lawmakers that there was “every hope, every opportunity” of a deal if the EU were to recognise the country’s sovereignty in important areas. Even MPS, who were yet on another holiday, were put on standby to approve any last-minute deal.  Sterling responded well to the news reaching two-year highs of US$ 1.35 and even bookies now estimate there is an 81% chance of a deal. It does seem incongruous that the original referendum was in June 2016 and it has taken so long to come to this stage. But the EU does have form when it comes to last minute deals but Time Is Running Out!

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No Face, No Name, No Number.                                                           19 November 2020

According to DLD statistics, the top five nationalities, investing in the local property market last year, were Indians, Emiratis, Saudis, Chinese and the British.  Figures involved were 5.3.k and US$ 3.0 billion, 5.2k – US$ 2.2 billion, 2.2k – US$ 1.3 billion, 2.1k – US$ 1.0 billion and 2.1k – US$ 1.1 billion respectively. The next five nationalities were from Pakistan, Egypt, Jordan, US and Canada. The number of investments last year topped 47k, with a value of US$ 61.6 billion. When it comes to the most popular locations in which to invest, Dubai Marina ranked first, with 3.9k real estate investments in 2019, followed by Business Bay’s 3.5k, Al Khairan First area with 3.1k, Sheikh Mohammed Bin Rashid Gardens’ 2.8k investments and the Burj Khalifa’s 2.7k. Surprisingly, the number of added real estate units last year was noted at just over 17k.

Having initially forecast sales of almost US$ 545 million, (AED 2 billion), equating to 1.5k units, for 2020, (with Covid having driven this down to US$ 381 million), Dubai developer Sobha Realty is confident that, with the launch of new projects, this figure could hit US$ 680 million (AED 2.5 billion) next year. The projects would be part of its massive US$ 4.0 billion, ten-year Sobha Hartland master development in Mohammad bin Rashid City which is being financed through a mix of debt and equity. The developer points to positive changes to visa rules targeting retirees, along with vaccine developments as drivers to a potential boost in realty sales. This week, the emirate’s ten-year golden visa system was extended to embrace a wider range of professionals – another potential boost to the local housing market.

With only US$ 272 million in bank debt and Fitch-rated BB-, with a stable outlook, Azizi Developments is looking at investing nearly US 1 billion over the next two years. Even through this year of Covid, the developer has already launched three projects, with a further two prior to the end of the year, with a total value of US$ 272 million; it plans to deliver 3k property units in 2020. Financing for the forty-five buildings will be carried out by various sources – internal equity, off-plan sales, commercial loans and possibly upsizing its planned US$ 300 million Sukuk. The developer estimates that sales are still 30% lower, year on year.

With the recent introduction of an air corridor between the UAE and the UK, there has been a demand surge resulting in Emirates increasing its Heathrow daily schedule to four A380s, as well as operating the jumbo on the Manchester route to six times a week, and daily to Birmingham and Glasgow. The carrier will also increase the frequency of its Boeing 777s to UK destinations. The so-called air corridor means that passengers entering the UK from the UAE are no longer required to quarantine. This in turn will undoubtedly give the Dubai hospitality sector a much-needed boost, especially with the upcoming holiday season, including Christmas.

On the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, more than 1k ministers, and senior federal/local government officials, have been holding eleven consultative meetings to discuss the path for the economic environment and economic models and sectors for the next fifty years. The meetings were part of the efforts of the fifty-year Development Plan Committee, with the aims of ensuring the country’s leading stature regionally and globally and strengthening government integration to chart the future to implement a comprehensive ongoing development plan. The meetings focussed on issues such as the business environment and stimulating entrepreneurship, foreign trade and partnerships, attracting investments, talents and skills, and building the capabilities of national cadres and qualifying them to lead the future economy.

Another new firm destined for the ever-growing DIFC is robo-advisory platform StashAway, which has just received an asset management licence from the Dubai Financial Services Authority. Although only founded in 2016, and based in Singapore, it has already become one

 of SE Asia’s largest digital wealth managers and has users from more than 145 countries. StashAway sees Dubai as the logical ME hub and expects to tap into a growing segment of affluent investors looking for low-cost ways to build their wealth. It hopes to follow its earlier success where it quickly became the benchmark for the financial services industry by delivering robust returns and low fees. Over the past year, its assets under management have grown more than 4.3 times and, to date, it has raised US$ 36 million in four funding rounds, with backers including Eight Roads Ventures, (the global investment firm backed by Fidelity and an early investor in Alibaba), and Square Peg, the largest venture capital fund in Australia.

Yet another start-up, Fenix, has landed almost US$ 4 million in seed funding from Maniv Mobility, in what is the first venture investment into a UAE company by an Israel-based VC. The co-founders, Jaideep Dhanoa and IQ Sayed, started the company after leaving Circ, a Berlin-based e-scooter hire firm, in January, which had been sold to US-based Bird. The start-up is forecasting that it will have the biggest fleet of e-scooters that have been “purpose-built for continuous shared use”. Scooters will cost US$ 0.27 per kilometre to ride, with a US$ 0.82 unlocking fee. There is no doubt that Fenix has entered a sector that is set to explode with estimates that the shared micro-mobility market – offering e-scooters and electric bikes for hire – is expected to be worth up to US$ 500 billion across the US, Europe and China by 2030. A further US study estimates that start-ups in the sector have attracted about US$ 5.3 billion in funding over the past five years.

Despite the pandemic, and the consequent tightening of liquidity across the board, some start-ups seem to have had no problem raising capital, including a Dubai-based fresh fruit delivery company.  Fruitful Day has managed to raise US$ 820k in two successive fundraising rounds, through global equity crowdfunding platform Eureeca, the last one which saw forty new investors from countries such as the UAE, Saudi Arabia, Switzerland and Singapore. The money raised will help the five-year old company to focus on further horizontal and vertical expansion in the home market. Covid was a driver in pushing its home deliveries higher.

The Ministry of Finance has announced that all companies in the UAE that engage in any of the Economic Substance Regulations, ESR’s relevant activities, within the fiscal year ending 31 December 2019 must submit an annual ESR notification to its Regulatory Authority no later than the end of this calendar year. The ministry will launch the ESR portal early next month and non-compliance will lead to penalties. All reports, notifications and supporting documents will be submitted electronically and interestingly, all companies must also re-submit the reports and notifications that were previously submitted to the regulatory authorities on the ESR Portal by the same deadline.

In a surprise announcement, it appears thatBR Shetty plans to return to the UAE ‘imminently’ to support authorities on the NMC probe, indicating that he has “complete faith in the justice system of the UAE” and that he was looking forward “to the perpetrators of the fraud facing justice.” Mr Shetty said he is returning to the UAE to support “all relevant bodies to correct any injustice done to the companies, their employees, shareholders and other stakeholders and help find solutions to outstanding matters”. The Indian billionaire doctor founded NMC Health in 1975 and grew it to become the country’s biggest privately-owned healthcare operator, and in 2012 took it to a London Stock Exchange listing, with a value of US$ 11.3 billion at its peak. The company was put into administration in April after it declared its debts at US$ 6.6 billon, more than the triple the figure of US$ 2.2 billion stated in its accounts. The DIFC courts have issued a worldwide freezing order on the businessman’s assets, whilst the company’s biggest creditor, ADCB, has started criminal legal proceedings against Mr Shetty and a number of other individuals.

The country’s largest Sharia-compliant lender by assets priced its five-year US$ 1 billion additional tier-1 sukuk, at a profit rate of 4.625% pa, carrying the lowest-ever yield achieved by any bank globally on tier-1 Sharia-compliant bonds. Earlier in the month, Dubai Islamic Bank completed the integration of Noor Bank, ahead of schedule, raising its asset base to more than US$ 81.7 billion. The sukuk is listed on Euronext Dublin and Nasdaq Dubai.

Dubai-listed Gulf Navigation posted a Q3 loss of US$ 3 million – a 37% improvement on comparative figures – bringing its retained losses to US$ 138 million; this was put down to several factors, including a decrease in revenue of all vessels, an increase in net finance costs and fluctuations in vessel rates due to Covid-19. The maritime and shipping company saw Q3 operating costs 23.0% lower at US$ 9 million and wrote off US$ 54 million for a vessel but recovered the same amount from an insurance claim; its Gulf Livestock 1 vessel capsized with 43 crew and almost 6k cattle on board in the East China Sea in September. Its nine-month revenue dipped almost 15% to US$ 30 million, with its loss 36.5% higher at US$ 17 million.

The bourse opened on Sunday 15 November and, 103 points (4.8%) to the good the previous week, rose 53 points (2.3%) to close on 2,316 by Thursday 19 November. Emaar Properties, US$ 0.07 higher the previous fortnight, traded up US$ 0.05 at US$ 0.83, whilst Arabtec is now in the throes of liquidation, with its last trading, late in September, at US$ 0.14. Thursday 19 November saw the market trading at 159 million shares, worth US$ 63 million, (compared to 391 million shares, at a value of US$ 73 million, on 12 November).

By Thursday, 19 November, Brent, US$ 2.64 (6.5%) higher the previous week, gained a further US$ 1.26 (3.1%) in this week’s trading to close on US$ 44.21. Gold, US$ 64 (3.3%) lower the previous week, shed  a further US$ 17 (1.0%) to close on US$ 1,879, by Thursday 19 November.

The UAE confirmed its commitment to proposed production cuts to be discussed by the Opec+ alliance. The country, the third largest OPEC producer accounting for an estimated 4.2% of global output, reported 126% compliance with the Opec+ agreement last month and lowered its crude output by 153k bpd, in line with the current level of curbs. Opec+ will convene online on 01 December and it seems likely that the current level of restrictions will be rolled over and that future agreed incrementally increases in production reversed. A leap in the number of Covid-19 cases, and subsequent reimposition of lockdowns in several parts of the world, have again seen the energy demand slow so this may result in further cuts being implemented.

After more than twenty months of being grounded, following two fatal crashes, in Indonesia and Ethiopia, the US Federal Aviation Administration has finally approved Boeing’s 737 Max to recommence flying. Airlines are now allowed to resume operating the 737 Max, the company’s best-selling jet, and deliveries can be resumed.  Early Tuesday trading saw its share value rally by over 5%. Whether the plane maker has learnt from its past history, of arrogant independence and a self-centred corporate culture, and whether it will focus more on core values of safety, quality and integrity, remains to be seen.  Also, in “the dock” is the US regulator who, at the end of the day, allowed a deeply flawed plane into service, resulting in tragedy.

It has been a mega year for Bitcoin which has leapfrogged by 130% so far YTD and reached US$ 17.3k by midweek – its highest level since January 2018 and up fourfold since its March lows. Whether it beats its all-time December 2017 high of US$ 19.7k remains to be seen. This year’s rally has been driven by some investors’ strong appetite for riskier assets in the wake of massive fiscal and monetary stimulus measures by global governments and central banks and a growing attraction to its purported inflation-proof qualities; with its supply capped at 21 million, this scarcity is alleged by some to shield it from central bank or government policies that stoke inflation. In October, PayPal said it would include Bitcoin and other cryptocurrencies on its platform, a move that has seen it jump in value by almost 50%.

Tata Steel has announced that it plans to keep its UK plants running, without financial support from India, but to sell its European business; a possible buyer is Swedish steel firm SSAB who are in discussions to acquire its interests in the Netherlands, including the steelworks at Ijmuiden. Meanwhile, the Indian conglomerate is dealing with the UK government about the business’s future in the country and the long-term future of Tata Steel UK, which employs 8k; Tata has also indicated that it will separate the UK and Netherlands arms of the business.

Probably the country’s best known bakery chain, Greggs, is to cut more than 800 jobs because of a sales slump, driven by Covid-19, as it would not be “profitable” if action was not taken. The Newcastle-based company noted that its “battle with Covid was intensifying further” and, two months ago, confirmed it was in talks with staff to cut hours to try and minimise job losses, but that has proved that more cost cuts were essential for it to remain a viable and profitable business.

EasyJet has reported its first annual loss, for the year ended 30 September, in the airline’s 25-year history, at US$ 1.7 billion, as the coronavirus crisis continued to ravage the travel sector; revenue more than halved over the twelve months, not helped by its entire fleet being grounded for eleven weeks at the start of the pandemic.  The budget airline believes that the underlying demand for air travel is still robust and, with this week’s news of a vaccine, the carrier saw bookings 50% higher. However, with a second wave hitting, EasyJet is hunkering down for a long hard winter and operating at just 20% capacity. To date, it considers the US$ 4 billion it has raised, through taking on more debt, including a US$ 800 million government loan, selling assets and extra equity financing, will leave it enough funds until Q2 next year.

Despite all the hassle associated with the pandemic, Airbnb has filed papers that will see the lodging website become a publicly listed company. The IPO is expected to raise around US$ 3.0 billion that would rate the twelve-year old company at more than US$ 30.0 billion – a lot of money considering last year it posted a US$ 674 million loss which has already been surpassed in only nine months to September this year. The 30% revenue growth reported in 2019 has all but eroded by September, with a twelve-month 32.4% slump to US$ 3.3 billion.

There are two reports relating to Topshop owner Arcadia; one is that it is in discussions with lenders to secure US$ 40 million in funding and the other that it is drawing up plans to place the business under administration, the latter of which has been refuted by the retailer. Arcadia – owned by the controversial Sir Philip Green – is confident that it will secure financing to continue trading, as phase 2 of the pandemic begins to impact on the retail sector which has been forced to close until 02 December. Topshop – which also owns Miss Selfridge, Evans, Burton and Dorothy Perkins – furloughed most of its 15k workforce in their 500 outlets during the first outbreak.

New Xbox consoles and fresh releases to the Call of Duty games franchise are being blamed for the UK’s leading internet providers – including BT, Virgin Media, Sky, TalkTalk, Vodafone, City Fibre and Zen Internet – recently experiencing record broadband use; it seems that much of the activity was generated by video gamers downloading large files.  For example, the recent release of updates to Call of Duty: Modern Warfare and Warzone and an update to Bungie’s video game Destiny 2   both range up to 65GB in size, whilst pre-loads of Call of Duty: Black Ops Cold War take up to 130GB. The internet service providers will be tested again today, on 19 November, when the PlayStation 5 comes to the UK.

Having been charged by The Securities and Exchange Commission for endorsing and disclosing sales metrics Wells Fargo should have known were false, ex-chief John Stumpf has agreed to pay US$ 2.5 million to settle the charges, whilst Carrie Tolstedt, the former head of its community banking operation, is fighting the fraud claims in court.  The major US financial institution has been under investigation for the past four years, when it was revealed the firm had boosted its sales by opening millions of accounts without authorisation. Earlier in the year, the bank paid US$ 3.0 billion to settle an US Department of Justice and SEC investigation, whilst their ex-chief was fined US$ 18 million and barred from working in the banking industry for life.

In the US, Amazon has introduced its own online pharmacy that will allow customers to buy prescription medicines and give its Prime members free two-day delivery and discounts of up to 80% on generic medicines and 40% on prescribed brand-name drugs. All that the tech company needs to know are the bare facts, such as whether customers are pregnant, date of birth, gender and insurance details. Doctors can send prescriptions directly to Amazon Pharmacy or patients can request a transfer from their existing retailer. Two years ago, Amazon acquired online pharmacy Pillpack for US$ 753 million and confirmed that health data would remain separate and distinct from that on its retail site.

A day after Crown Casinos admitted to an inquiry that accounts it set up for VIP players could have been used for money laundering, NSW’s gaming regulator has banned them from opening its new Sydney casino next month. This has thrown into disarray the gaming conglomerate’s plans to open its US$ 1.5 billion development at Barangaroo, which includes a casino, fourteen bars and opening restaurants, along with a 350-room hotel. A final decision whether Crown can keep its licence will be made within three months and will come a year after the regulator started examining Crown’s fitness to hold its 99-year licence for the casino.  It now seems that “Crown will focus on opening the non-gaming operations at Crown Sydney, in consultation with ILGA, in the absence of the commencement of gaming operations.”  It seems highly likely that Crown will have to ditch its principal shareholder, James Packer, to have any chance of salvaging its core business interest – the casino. Now it seems that questions will be asked by the governments and gambling regulators of both Victoria and Western Australia where Crown has casinos in their capital cities of Melbourne and Perth.

It is reported that one of Australia’s leading builders is in financial difficulties. Grocon, which has built two of the country’s tallest buildings, Eureka Tower and the Rialto Towers, and Melbourne’s casino. Now it seems that almost 100 subcontractors, on its Collingwood office tower development, are owed US$ 4 million, with invoices months in arrears. Sources suggest the company has been impacted by several expensive legal battles, with the NSW and Queensland governments, and not helped by the COVID pandemic which has seen the stalling of some future projects. It has recently won a US$ 55 million contract to help in cleaning up and rebuilding after Victoria’s bushfires.

The latest Economist Intelligence Unit’s survey confirms that the three most expensive cities in the world are Hong Kong, Zurich (overtaking Singapore) and Paris (replacing Osaka), with Tel Aviv moving up two places and ranked alongside Osaka as the world’s fifth costliest city. Surprisingly, Amman is the most expensive ME city, moving down ten places to 27^th with both Abu Dhabi and Dubai slipping to 53^rd and 66^th. Because of a fall in the greenback and the rise in both the euro and sterling, cities in the Americas, Africa and Eastern Europe have become less expensive since last year and western European cities have become costlier. The index uses various measures in their rankings including currency volatility, supply chain problems, the impact of taxes and subsidies, and shifts in consumer preferences.

The world’s third largest economy, which took a battering at the onset of the pandemic in March, has bounced back in Q3. Japan, whose economy jumped 5.0% in Q3, is one of the Asian countries that are leading the way for a global recovery in what has become known as the “Zoom boom” – because of the increased demand for IT equipment from the rising number of people working from home and utilising online meeting platforms like Zoom. After an 8.2% Q2 contraction, Japan’s economy returned to positive territory, because of a rise in domestic demand as well as exports, although some analysts see future growth to be moderate. By the end of Japan’s fiscal year in March, the economy is expected to have slumped by 5.6% over the previous twelve months.

However, there is only one regional country that will end the year in the black and that is Vietnam, with a forecast 2.4% growth. The IMF noted the reason for this positive news was that its government took “decisive steps to contain the health and economic fallout from Covid-19”. To date, it has registered only 35 deaths and 1.3k cases. There are many reasons why the country has appeared to get off so lightly, including that it was quick to develop testing kits, and used a combination of strategic testing, aggressive contact tracing to help control numbers. However, although its tourist trade took a battering, it has benefitted from the global move to work from home which boosted the sales of laptops and office furniture, both of which are manufactured in the country; in the first nine months of the year, exports to the US came in 23% to the good, whilst global electronic exports grew by 26%.

Just as Australians seem to be ditching their credit cards with buy now, pay later cards, there are warnings from the Australian Securities and Investments Commission that some consumers are having to cut back on essentials, such as meals, because of debt they have racked up from using them; it is estimated that 20% are missing payments. Although not yet suggesting that they should be more regulated, the corporate watchdog’s review of six companies found that harm was being done – and that despite concerns from consumer advocates that it is just another form of credit that allows people to take on too much debt. It is reported that the number of buy now, pay later transactions almost doubled to 32 million last year, with missed payment fees up 38%, making up 20% of cards’ total revenue. Almost 70% of those who had taken out another loan to make their buy now, pay later payments – which should be settled every fifteen days – had also missed a payment, and half were under 30. An interim Senate enquiry seems to back self-regulation rather than a ‘one-size-fits- all’ approach.

Following details of the ongoing trade rift between Australia and Chinese – and its negative impact on the wine industry – there are signs that Australia’s multi-million-dollar wine trade with China has effectively been closed, as it appears that none of their wine has cleared China’s customs in the past two weeks. It is estimated that up to 60% of wine that would normally be exported to China remains in Australia and that local winemakers are expecting tariffs to be applied shortly. It is estimated that more than half of all wine exports to China has not left Australian shores due to growing uncertainty in the industry – a major worry with the upcoming maximum export time leading up to the Chinese New Year. There is every chance that tariffs will be levied because authorities believe that Australian winemakers have been selling produce below cost and have been receiving government subsidies. Last year, more than 2.4k exporters sold wine to China worth almost US$ 900 million.

At the weekend, fifteen countries – comprising ten SE Asian nations, as well as South Korea, China, Japan, Australia and New Zealand – signed an agreement forming the world’s largest trading bloc, covering nearly a third of the planet’s total population and accounting for 29% of global GDP. A notable absentee was the US, which withdrew from the then Trans-Pacific Partnership in 2017; India was initially in talks but withdrew over concerns that lower tariffs could hurt local producers. At the time, it was seen to be a counterbalance to China’s surging power in the region but, eight years in the making, the new pact, the Regional Comprehensive Economic Partnership, confirms China’s advancing influence in the region. The venture hopes to eliminate a range of tariffs on imports by 2040 and also covers provisions on intellectual property, telecommunications, financial services, e-commerce and professional services.

Saturday will see the start of a two-day virtual G20 summit, hosted by Saudi Arabia, bringing the twenty leading global economies to discuss the most pressing global socio-economic issues. It will focus on empowering people, safeguarding the planet, and shaping new frontiers. This meeting will occur on the anniversary of Covid-19 being detected for the first time in China and since then the pandemic has ravaged – and continues to do so – global economies. It was on 26 March that the same meeting vowed to “spare no efforts” to overcome the pandemic and to look at ways of reviving the global economy. Since then, a combination of global governments and central banks has poured in almost US$ 20 trillion to fight the negative aspects of the pandemic but it does seem that a lot of that has been poured down the global drain.  The measures have helped shore up the world’s banking system, safeguard financial markets and put a floor under the global economy which still seems to be in a perilous state. The end result will be a 4.4% decline in the global economy this year, with a marginal improvement in 2021 and that the world death rate of 1.34 million to date will continue heading upwards.

Unctad expects international FDI flows to decrease by up to 40% this year, from US$ 1.5 trillion in 2019 – the first time this figure has dipped below US$ 1.0 trillion since 2005.  The first six months of the year saw the figure plummet even further to only US$ 399 billion, with developed economies taking the brunt, down 75% to US$ 98 billion. Some industry experts see global foreign direct investment flows in a gradual U-shaped recovery, with pre-pandemic levels returning by 2022. Global FDI is projected to slip by up to 10% next year before the turnaround the following year. The recovery curve will be in contrast to the U-shaped recovery expected for global GDP and trade in 2021. However, the caveat remains unchanged – prospects for recovery depend on the duration of the pandemic and effectiveness of policy response – and this still remains highly uncertain.

House prices in the US reported their biggest annual increase in seven years, with October figures reflecting a 12% jump in prices over the past twelve months. Even with many people struggling with cash flows, (because of the impact of Covid-19, near record low mortgage rates and the rush to the suburbs for extra space, in the era of restrictions and quarantines), an increasing number of buyers are chasing a limited supply of listings. However, as prices continue to head northwards, more and more first-time buyers are being priced out of the home ownership market. According to Freddie Mac, the average rate for a 30-year mortgage stands at 2.84% and that the nationwide median price of a single-family home in the quarter was US$ 313k. Currently, there are 1.47 million previously owned homes available for sale in the country, 19.2% less than a year ago; it would take just 2.7 months to sell those homes at the current rate of deals.

Saudi Arabia’s Crown Prince Mohammed bin Salman has announced that the kingdom’s Public Investment Fund will inject US$ 40 billion, over the next two years, in a move to further boost economic growth; it is known that the Crown Prince is a proponent for greater diversification of the oil-reliant economy, which is a lynchpin of its Vision 2030 strategy. Investments will be made to enhance many economic sectors, including tourism, sports, industry, agriculture, transportation, mining and space. Earlier in the month, the PIF placed US$ 1.3 billion for a 2.04% stake in Mukesh Ambani’s Reliance Retail Ventures, India’s largest retail chain.

The OECD has seen the 37-country bloc’s economic output in Q3 surge an impressive 9.0%, including the likes of France – up 18.2%, following a 13.7% contraction a quarter earlier – Italy, 16.9% higher following a 13.0% Q2 shrinkage, and the UK’s 15.5% hike following a 19.8% fall the previous quarter; other economies moved north, including the euro area and the EU, up 12.6% and 11.6% after Q2 falls of 11.8% and 11.4% respectively. Canada, Germany, the US and Japan all moved higher in Q3 by 10.0%, 8.2%, 7.4% and 5.0% respectively. By the end of September, the cumulative GDP is still 4.3% below the pre-pandemic high. In October, the OECD has warned that the 2020 UK economy was on track to contract by 10%, attributable to the second wave of Covid-19 and a disorderly Brexit from the EU. (Perhaps they have turned a blind eye that the same rationale applies to the EU). On the world stage, the global economy is expected to contract 4.4% this year due to the economic fallout from the coronavirus pandemic, rebounding to 5.2% in 2021. OECD employment, at 64.6%, fell to its lowest level in a decade in Q2, down 34 million, quarter to quarter to 560 million.

The UK inflation rate jumped 0.2%, month on month, to 0.7% in October as bigger than expected rises in the cost of clothing and food helped to push UK inflation higher; second-hand cars and computer games also saw prices move higher whilst there were declines in the cost of energy and holidays. Past history indicates that prices for clothes and shoes traditionally decline over summer before the new autumn ranges come in, with prices edging higher before falling again with the sales season towards the end of the year. However, the future short-term problem will not be inflation but deflation and the only way to deal with this is to introduce fiscal measures to stimulate and fix a much-scarred economy still reeling from the impact of Covid-19. The Bank of England cannot do much more to stimulate the economy and it is up to the Johnson government to do the shovel work from now on in.

One good reason that the UK is better off outside the European bloc came with the announcement this week that two member states, Hungary and Poland, by voting against the resolution, have blocked approval of the EU’s budget over a clause that ties EU funding with adherence to the rule of law. The other twenty-five countries were for passing the US$ 890 billion financial package for a coronavirus recovery fund. It is not the first time that these two former Communist countries have gone against the majority and both are being investigated for undermining the independence of courts, media and non-governmental organisations. Unlike the 2021-2027 budget, that only required a qualified majority, this resolution had to be passed unanimously. Some outsiders may have some sympathy for the Polish Justice Minister Zbigniew Ziobro, who argued that the rule of law issue was “just a pretext” and “it is really an institutional, political enslavement, a radical limitation of sovereignty.”

It cannot be Christmas without fraudsters upping their game and exploiting festive bargain-hunters who have switched to online shopping owing to coronavirus restrictions. A recent UK study notes that those searching for games consoles, bicycles and clothing may be at a higher risk of encountering a scam, and that the average loss could be as high as US$ 1k. UK Finance has noted that social media platforms, online marketplaces and auction websites are being increasingly used by criminals to carry out scams which see a customer paying in advance for goods or services that do not exist and are never received. Once payment has been made, they are taken off the integrated payment platform and are made through a bank transfer instead, meaning those that have been scammed are unlikely to be refunded. Figures from Barclays indicate a 66% hike in fraud attempts in H1, with UK Finance putting losses in the six months at US$ 36 million. With Black Friday one week away, and one month to Christmas, watch out for these scams; for just one such fraud merchant, there will be thousands of victims, many of whom are still reeling from the impact of Covid-19. If in any doubt, do not proceed with that online sale and remember – No Face, No Name, No Number.