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In line with recent similar industry reports, JLL has also concluded that the Dubai property downturn has probably bottomed out and, that after a subdued Q2 (with little change in rentals and sales prices), positivity could return in H2. The first five months saw an addition of 5.4k residential units to Dubai’s property portfolio, 20% more than the 4.5k in 2016. Although there is a further 25k scheduled for delivery in 2017, it is expected that the actual number handed over will be shy of 13k.

JLL expect that a total of 78k units could be delivered over the next three years or 26k a year. Over the past three years, delivery totals have been in the region of 45k; so going forward, the figure does look on the high side. The Dubai Population Clock shows a 9.14% annual population increase to 2.805 million as at 07 July. If Dubai has a current portfolio of say 500k, a 3.5% increase in supply would see 554k units by July 2020. It would seem logical that, even excluding foreign buyers, domestic demand would indicate a shortfall in supply and an upward movement in sales prices.

The big news of the week was the launch by HH Sheikh Mohammed bin Rashid Al Maktoum of the US$ 1.4 billion Emirates Towers Business Park, to be developed by Dubai Holding in conjunction with DIFC. The development will include three hotels, several grade A office buildings, retail / recreational space and an arena. The four-year development will also have a three-level basement parking and be connected by pedestrian bridges with the DIFC.

Atlantis The Palm is spending US$ 100 million over the next three years to refurbish its 1.5k rooms and suites, so as to be completed in time for Expo 2020. UAE-based WA International was awarded the interior design contract. So far this year, the property has seen occupancy rates at 93% – 11% higher than this time last year.

Dubai Investments announced that it would start work on its US$ 272 million, 70-storey residential tower on SZR by the end of the year. Construction tenders will soon be released for the site adjacent to Al Habtoor City, with all government approvals in place, including the requisite 20% RERA project value deposit.  The company expects to raise US$ 110 million financing per local banks.

Sobha is set to launch its Hartland Estates Forest Villas, located near to the Dubai Water Canal and surrounded by 2.4 million sq ft of greenery. The project is part of the massive US$ 4 billion, 8 million sq ft, Sobha Hartland development in Mohammed bin Rashid Al Maktoum City.

Cityland has managed to raise 44% (US$ 143 million) 7-year bank finance for the development of Cityland Mall on SZR. The developer, already involved in projects such as Dubai Miracle Garden and Dubai Butterfly Garden, is considering building an adjacent hotel. Construction of the 1.8 million sq ft, single storey circular building has already started and should be completed towards the end of next year.

Al Naboodah Co LLC has awarded a US$ 31 million MEP contract to an Arabtec subsidiary, Emirates Falcon Electromechanical Co for work on part of the Dubai Creek Harbour Development, this being a JV between Emaar Properties and Dubai Holding. Work on the two 37-storey residential towers is slated to be finished by Q1 2019. The company has also won a US$ 96 million contract from Abu Dhabi National Media Council to build the UAE Pavilion at Expo 2020. The troubled developer’s successful week was capped off by one of its offshoots, Target Engineering Construction Company, being awarded four projects amounting to US$ 79 million.

Dubai-based Premier Composite Technologies was responsible for manufacturing the world’s ‘largest freestanding carbon-fibre roof’. This was installed on Apple’s new Californian HQ and is a striking focal point of the US$ 5 billion structure.

Tesla will open its Dubai showroom next Wednesday (12 July). Potential customers will be able to order their Models S and X, already in the country, with starting prices at US$ 75k and US$ 94k respectively. The RTA has already an order for 200 vehicles, with Tesla due to invest US$ millions in the UAE’s electric car infrastructure.

Dubai Health Authority expects a 46% increase in the number of hospitals to 38 over the next three years, adding a further 750 beds. The emirate has over 3k private medical health facilities and boasts over 36k licensed physicians.

A recent HSBC report has placed the country the second most expensive global location (after Hong Kong) when it comes to education. It estimates the total cost from primary to the end of secondary schooling is US$ 99k. (That seems very low when some schools are charging in excess of US$ 27k a year, just for tuition and not including any add-ons).

DP World is considering resumption of major developments on its US$ 1.6 billion Jebel Ali fourth terminal, which had been put on hold last year because of a softening container shipping market. The port’s capacity by year-end will have reached 19.3 million TEUs (twenty-foot equivalent units), as T3 is completed. It is expected that phase 1 of T4 would result in capacity being boosted by a further 3.1 million TEUs.

There was good news for Emirates (along with Etihad and Qatar) as the US laptop ban was lifted. The Dubai carrier had introduced more rigorous security measures to meet the requirements of the US Department of Homeland Security.

May witnessed a 1.9%, year on year, increase in passenger numbers at Dubai International to 6.9 million, bringing the 5-month YTD total to 37.0 million – up 6.7% on 2016 returns. Freight volumes continued upwards by 2.6% to 233k tonnes and YTD by 3.0% to 1.1 million tonnes.

ME air cargo volumes have shown a 3.0% monthly increase and a 10.2% jump over the past year (as capacity rose by only 1.7%). The main driver behind these impressive returns was a 19.0% hike in European traffic – slightly offset by a 1.0% decline in Asian volumes. On a global scale, air freight demand was 12.7% higher than in May 2016 and was more than three times higher than the five-year 3.8% average.

The Central Bank announced a 19.6% jump in forex reserves to US$ 86.3 billion over the first five months of the year, with May posting a 3.1% hike. Total assets grew 4.8% to US$ 104.1 billion over the same period.

June’s Emirates NBD PMI rose 1.5, month on month, to 55.8 – an indicator that the country’s non-oil private sector continues its upward momentum. The main drivers, jumps in both new orders and output, saw companies’ inventory levels rise as input prices rebounded; however, fierce local competition resulted in a fall in selling prices, adding pressure to margins. Both export orders and job creation fell for the first time since late 2016.

Both Jumeirah and Emirates NBD lost key personnel this week. The hotel company announced that its Group CEO, Stefan Leser, had left for “personal reasons”, after only 15 months in the position, and that current COO Marc Dardenne would be acting in the position until a replacement was found. Meanwhile the bank has accepted the resignation of its Chief Investment Officer, Gary Dugan, who took over the position some 18 months ago.

Following their March agreement, Amazon has finally completed the acquisition of local on-line retailer, Souq.com; this will allow users to log on to the Dubai site, using their Amazon details.

Already a major player in the African market, having deployed over US$ 3.2 billion, Abraaj Group has reported that it is to acquire the coffee and casual dining chain, Java House Group, for an undisclosed fee. The East African-based company has three main brands – Java House, Planet Yogurt and 360 Degrees Artisan Pizza – along with commercial coffee roasteries. In the past five years, since the private equity firm, Emerging Capital Partners, took a majority stake in the company, it has expanded from 13 Nairobi shops to 60 stores in Kenya, Rwanda and Uganda.

The DFM opened Sunday at 3392 and nudged 9 points higher at 3401 by the end of the week. Volumes were wafer thin, closing on Thursday at just 88 million shares, valued at US$ 33 million, (cf 116 million shares for US$ 50 million, the previous Thursday). Emaar Properties was flat at US$ 2.12, with Arabtec recovering  US$ 0.10 up to US$ 0.88.

By Thursday, Brent Crude was US$ 0.69 higher at US$ 48.11, with gold falling US$ 23 to US$ 1,223 by 06 July 2017. Oil prices had plummeted almost 4% on Wednesday on the back of reports that OPEC’s exports had risen and this, after prices had risen over 10% in the previous eight sessions, from a ten-month closing low.

The EC has given the green light for the PSA Group to take over the Opel and Vauxhall brands and, at the same time, has given Peugeot, which has not made a profit since 1999, unconditional approval to purchase GM’s European division; the French carmaker, which employs 33.5k, has made sixteen years of consecutive losses, racking up a total US$ 15 billion deficit.

Samsung has announced a massive US$ 18 billion, 4-year investment plan, as it aims to expand its two local memory chip plants in Pyeongtaek and Hwaseong, with a third in Xian, China; the move could create 440k new jobs in South Korea. The company has had its fair share of recent problems, including last year’s mass recall of its Galaxy Note 7 smartphones and increased competition from Apple and several Chinese rivals.

Two UK tech companies had different market fortunes this week. Shares in Worldpay, a global leader in on-line and contactless payments, skyrocketed 28% on news that both JP Morgan and Vantiv could be interested in some form of acquisition. By Wednesday, the UK’s biggest payments processor had agreed a deal with Vantiv that valued Worldpay at US$ 10 billion.

Having been hit earlier in the year by “challenging conditions in the UK retail sector”, this week saw Game Digital’s shares plunge 36%, following supply issues affecting Nintendo consoles which are impacting on sales, despite strong demand; in other areas, such as its core Xbox and PlayStation markets, the retailer reported a “continued softness”. In H1, the company posted falls of 18% in sales and profits dropping 27% to US$ 21 million – H2 is expected to see even worse returns, as UK inflation rises and wage growth remains flat.

The May government has suffered another blow with news that the much vaunted Hinkley Point C nuclear power plant is already facing a 15-month delay and an 8.3% (US$ 1.9 billion) cost over-run to US$ 23.2 billion. The project, two thirds owned by the French group, EDF, with the balance by China’s General Nuclear Power Group, has indicated the possibility of a further US$ 1 billion cost blow-out. The National Audit Office has also warned that payments set to be added to consumer bills have quintupled to US$ 38.7 billion.

Coal has come to the rescue of the Australian economy in May as exports were 62% higher than in April – this resulted in the country’s trade surplus jumping from US$ 68 million to US$ 1.88 billion, more than double market expectations. May exports increased by 9.0%, or US$ 2.0 billion, as imports only rose by 1.0% to US$ 166 million.

Latest figures from Australia indicate that the property bubble there continues to be pumped up, except in Perth where prices have fallen 1.8% over the past twelve months. Meanwhile Sydney and Melbourne steam ahead with double-digit growth of 12.6% and 14.1%, with Adelaide and Brisbane recording more modest gains of 2.5% and 3.4%.

On Wednesday, the Pakistani rupee fell 3.1% to 108.1 to the US$ – its lowest level in over three years and its biggest fall in nine years. It seems that the move may have been perpetrated by the government – and if so the devaluation is a means to alleviate pressure on the ailing economy, ahead of elections in 2018. Only last year, the IMF estimated that the rupee was 20% overvalued, with a detrimental effect on the country’s exports; over the past twelve months, its trade gap had jumped nearly 60% to US$ 3.5 billion, with its current account gap almost trebling from US$ 3.2 billion to US$ 8.9 billion.

Japan is still trying to get to grips with the double whammy of years of deflation and slow growth. May saw the fifth straight month of inflation nudging higher but this is still some way off the central bank’s 2% target. However, an unexpected increase in the jobless rate (now at 3.1%) and a fall in industrial production are indicators that the Abe government may well have to reduce its 2017 growth forecast. Wages and inflation will only head north if and when the economy picks up and the labour market tightens.

There is no doubt that on-going political impasse has begun to affect Qatar’s economy as Moody’s downgrades its outlook from stable to negative. Prior to the onset of the current dispute, the nation had already been impacted by the low energy prices; now that diplomatic and economic ties have been severed, there is bound to be mounting pressure on its finances. The local bourse has been spooked and has lost 10% in value.

In June, China’s service sector PMI fell 1.2 to 51.6 from a month earlier, with the Caixin composite output index falling four notches to 51.1. This weakness in services activity ensured that expansion was at its slowest pace in a year and reflects a worrying downward trend in economic activity. A slight improvement in manufacturing activity did little to raise hopes of a quick turnaround in fortunes.

Although China has the third largest global bond market, trading at US$ 9 trillion, only 2% of that total is foreign owned. Now the government is making a concerted effort to rectify this by introducing The Bond Connect programme which will allow bonds to be bought by banks, insurers and fund managers via Hong Kong. HSBC, with a US$ 300 million bond purchase, was the first foreign entity to use the new programme.

Whilst the Chinese President Xi Jinping was in Germany, he signed a US$ 23 billion order for 140 Airbus aircraft – 100 A320s and 40 A350s. The planes – 50% of which will be assembled in China – will initially be bought by the state-owned China Aviation Supplies Holding Company, prior to allocation to various local airlines.

June Eurozone factory output grew at its fastest rate in six years, with the manufacturing Purchasing Managers’ Index rising to 57.4. This equates to an annual growth of some 5.0% which bodes well for upcoming Q2 GDP growth figures. Unsurprisingly, Germany fared well with its headline IHS Markit/BME PMI reading of 59.6 and even France came in at 54.8. Other indicators point to the bloc’s economy gaining momentum. With the HIS Markit PMI returning a June reading of 56.3 and the Q2 average of 56.6 was the best quarterly result in over six years. Such figures indicate a Q2 growth figure of 0.7%, with healthy figures from across the board from most member states.

With a Q1 0.5% fall, The Office for National Statistics reported that UK productivity had declined to its lowest level since 2007. The figures reiterate the point that the country’s productivity is abysmal and is well below the likes of France, Germany and the USA. Although the country’s economy has grown in the intervening period since the GFC, this has been brought about by the actual number of employees rising and that number working longer hours. Interestingly, the report indicates that the output in the capital’s financial industry is seven times higher than in the lowest productivity regional industries. The question is what would happen to the UK’s economy if its total labour force worked Harder, Better, Faster?

Propertyfinder has signalled that the three year realty slump may have come to an end, following an 18 month fall in median sales prices of 20% (and rental falls of 21%), up to April 2017. The consultancy estimates that with a further 28k new units being released this year, prices could remain flat into 2018. (That figure of 28k does seem to be on the high side).

Following the success of its first Dubai Healthcare City project – Azizi Aaliyah – Azizi Development has launched the US$ 163 million Farhad Azizi. With 634 studio,1/2 bedroom units, as well as a community centre, schools and pool area – covering an area of 728k sq ft – completion is within two years. It also announced a double launch Azizi Berton and Azizi Pearl in Al Furjan bringing its total developments to date to 19; the former will house 245 apartments and the latter 260, with completion date slated for Q2 2019.

The developer has started on its US$ 460 million Meydan 1 project, encompassing 18 mid-rise towers having 2.3k apartments; this will be followed by phase 2, with 17 towers and 2.2k residential units.

Dubai Properties has launched phase 3 of its 8.2 million sq ft Serena community, Casa Viva, in Dubailand; this follows the success of phases 1 and 2 – Bella Casa and Casa Dora.

A month after launching its DUKES Dubai Sky Collection apartments, developer Seven Tides announced that the 60 apartments on offer have sold out.   With sales prices starting at US$ 271k, investors were lured by the five-year guarantee of an annual 10% return!

Arabtec has started infrastructure work on Dubai Investments’ The Palisades project in Dubai Investment Park. The contract for earthworks, and the grading of roads, is worth US$ 158 million and should be completed within three months. The master plan is for 20 buildings, housing 1.5k units, along with office, recreational and retail space.

It has been a good start to the year for Dubai Investment Park, with 280 new sub-tenants leasing premises in the four months to April, bringing the total number of operational companies to 4.9k. It is estimated that over 98% of its industrial zone is occupied and 95% of land leased. Furthermore, DIP boasts, inter alia, 12k residential units, housing 90k residents, 20 million sq ft of office space, six schools and five hotels.

As indicated in a recent blog, MAF has finally acquired 26 Geant stores, located in UAE, Bahrain and Kuwait, from BMA International. The retail giant has decided to move all these operations to its Carrefour brand, which will see the number of UAE outlets increase overnight by 13 to 80 stores. All employees from the “old” operation will be retained.

The latest report from the World Travel and Tourism Council is upbeat about the country’s travel and tourism sector. It expects that its contribution to GDP will rise by 2.9% this year, to US$ 44.6 billion, whilst it expects increases in employment – direct by 2.3% to 318k and indirect by 1.8% to 629k. Recent figures from Dubai Tourism point to an 11% hike in Q1 traveller numbers to 4.6 million.

The departure this week of C.S. Sea Princess from Port Rashid signified the end of this year’s cruise season. It has been a record year for the sector that has seen the number of liners berthing increasing by 18% to 157 and the number of visitors by 17% to 625k. Jamal Humaid Al Falasi, Director of Dubai Cruise Tourism, is confident of hitting the magical million within four years. Seabourn Encore will open the next season when it arrives on 25 October.

A study by US News and World Report ranks Dubai tenth in its best destinations in the world survey. Not surprisingly, it was the highest placed location in the MENA region and was placed ahead of the likes of Bali, Cape Town, Las Vegas and Venice; Rome topped the list.

In the Bloomberg World Airbnb Cost Index, Dubai is ranked third (behind Miami and Reykjavik) as the most expensive destination using that platform; records indicate that there are 4.2k properties (charging an average of US$ 180) in the emirate. As Dubai Airbnb prices jumped 7% year on year, local hotels recorded a 28% fall to US$ 175.

DEWA has awarded a US$ 68 million contract, covering Al Qudra Street and the Dubai to Al Ain highway, for a 40km extension of water pipes; this expansion will improve water-flow capacity and also service new residential areas.

July will witness a 5.4% reduction in Special 95 petrol to US$ 0.477 per litre, with diesel also heading down by 3.2% to US$ 0.501.

The DFM opened Wednesday at 3402 and traded 0.3% lower at 3392 by the end of the shortened week. Volumes were wafer thin, closing on Thursday at just 116 million shares, valued at US$ 50 million, (cf 350 million shares for US$ 128 million, the previous Thursday). Emaar Properties fell US$ 0.03 to US$ 2.12, with Arabtec trading at US$ 0.78, significantly up from its 22 June close of US$ 0.20; this anomaly arose because of its capital reduction plan that saw US$ 1.25 billion wiped off its share capital to its new level of US$ 409 million. The share price was amended on Wednesday from US$ 0.20 to US$ 0.83; the market was not impressed, with Arabtec losing a further 9.2% in two days of narrow trading.

At the end of June, the bourse closed on 3392, gaining 1.6%, month on month, from 3339 but down 3.9% YTD from its 01 January opening of 3531. Emaar, at US$ 2.12, posted an 8.2% monthly gain, from US$ 1.96, and YTD was 9.3% higher from its year start of US$ 1.94. Arabtec began the year at US$ 0.36 but with its share value greatly diluted on 28 June ended the half year on US$ 0.78.

By Thursday, Brent Crude, having shed almost 14% over the previous four weeks, regained some lost ground up US$ 2.20 (4.9%) to US$ 47.42, with gold again nudging lower by US$ 3 to US$ 1,246 by 29 June 2017. Brent started the year trading at US$ 56.32 and the month of June on US$ 50.76; closing on 30 June on US$ 48.77, it had shed 14.2% of its YTD value and 3.9% for the month. In comparison, gold performed well – 7.8% up YTD having opened on 01 January at US$ 1,151 but down 2.6% on the month from its starting position of US$ 1,275 to close on 30 June at US$ 1,241.

With the exception of Brent and coffee, all commodities, as they did in 2016 have headed upwards in the first six months and this trend will probably continue into H2. Despite the doomsayers predicting the end of sterling, all currencies have strengthened against the greenback. The bourses continue their upward trend, some into record territory, but expect a blip sometime before year end.

Despite the fall in the DFMI , driven by poor performances by the likes of Arabtec and Drake & Scull,  low volumes, and the recent mini collapse of oil prices, brought about by market shenanigans, 2017 to date has been a better year than most “experts” expected. On the local front, realty is moving off its bottom and expect a slight upward movement before year end. The Expo momentum is beginning to take effect and oil prices will again head north for both political reasons and the fact that the Saudis will want higher prices because of the upcoming Aramco IPO. The emirate’s inflation rate will hover around 3.0%, direct foreign trade in H2 will top US$ 130 billion, its population will grow to 2.95 million by year end and its economic growth will reach 2.9%. The hospitality sector will again display world-beating occupancy rates but will have trouble improving revenue returns; travel will see marginal improvements.  Worries still remain in the retail field, particularly eateries.

The 147-year old Holland & Barrett, the UK’s biggest health food retailer, has been acquired by L1 Retail (a fund controlled by Russian billionaire, Mikhail Friedman) for US$ 2.3 billion. The company has 1.3k global outlets and a payroll numbering 4k.

L’Oreal has finally divested itself of The Body Shop (founded by the late Dame Anita Roddick in 1976) to a Brazilian cosmetics group, Natura for a reported US$ 1.1 billion. The French cosmetics chain bought the company, which has 3k stores in 66 countries, eleven years ago for just over US$ 1 billion.

Today, 29 June, is the tenth anniversary for Apple’s iPhone and in the ten years since then, the company has sold more than one billion units. Last year, the tech giant turned over US$ 24.3 billion in sales and it is estimated that two billion people now use smartphones.

After climbing 23% this year, Google shares took a 1.5% dive this week, following the announcement of a US$ 2.7 billion fine from the EC. It has been ordered to stop its “illegal conduct” and to treat all its rival price comparison services on an equal footing. The seven-year investigation concluded that since 2008, Google had systematically given its own search engine prominence over all its rivals, resulting in a significant increase in traffic, at the expense of competitors who suffered permanent losses. Those who consider that the EU appears to target US firms should look at how the boot is on the other foot when it comes to banking.

Two Japanese companies were in trouble this week. Takata has filed for bankruptcy protection in both its home country and the USA, as it faces billions of dollars in compensation claims resulting from use of its defective vehicle airbags. Key Safety Systems has bought all the company’s assets, apart from those relating to air bags, for an estimated US$ 1.6 billion. Already it has agreed to pay out US$ 1 billion in US penalty charges but is facing additional legal action, involving claims in excess of US$ 9 billion. To date, 100 million cars, using the company’s airbags, have been recalled.

Embattled Toshiba has now upped its estimate of 2016 losses by US$ 0.3 billion to US$ 7.0 billion and has again delayed its 2016 return to the end of the month; however, it is known that its liabilities will be greater than its assets and this must place a huge question mark on whether the Japanese electronics giant can continue in business. The company is facing legal claims, having inflated its profit by US$ 1.2 billion for seven consecutive years. Furthermore, it is facing huge losses from its investment in the US nuclear unit, Westinghouse. The company, the world’s second-largest chip manufacturer, will have to sell its prized chip operation, to have any hope of remaining solvent.

Three Australian Crown Casino executives have been jailed in China for illegally promoting gambling in that country. Although casinos can be found in Macau, they are banned in the rest of China. James Packer owns Crown and has operations in both Melbourne and Perth where it is estimated that international “high rollers” gambled almost US$ 47 billion in the last financial year, with Chinese punters making up 50% of the number.

A report by Deloitte Access Economics has valued Australia’s Barrier Reef at US$ 43 billion and has warned that more needs to be done to protect this World Heritage Site. It is facing on-going problems such as climate change, poor water quality, pollution and mass coral bleaching. The huge area is said to add US$ 4.9 billion to the economy every year and employs, directly and indirectly, some 64k.

China’s Yancoal has been gazumped by Glencore, as the race to acquire Rio Tinto’s NSW coal operations, Coal and Allied, hots up. Their latest bid of US$ 2.68 billion was higher than the Chinese initial offer of US$ 2.45 billion but that did come with regulatory approval. The Chinese have now responded with an increased US$ 2.69 billion offer that has received the approval of 97% of shareholders.

With a US$ 190 million investment in a new test bed, Rolls Royce is set to create 200 new jobs and secure its current 7k Derby payroll for five years. The new facility will be used to test large civil aero-engines.

Following the recent World Trade Organisation’s finding in favour of Boeing, the EU has appealed, claiming that Airbus is right to maintain that the US aircraft maker continues to receive unfair state government support. The 13-year old dispute seems set to rumble on, despite the WTO indicating that all but one of its 2012 rulings that Boeing was receiving billions in US$ in illegal subsidies have since been addressed; the exception – a US$ 800 million Washington state aid – still continues. The world body also found that subsidies, totalling billions of US$, have been provided to Airbus.

“Petya”, the latest global ransomware cyber-attack, emanating from the Ukraine, has struck largely across Europe and the US, including the advertising agency WPP, Russia’s biggest oil company, Rosneft, Danish shipping giant AP Moller-Maersk, the Chernobyl nuclear power plant and Kiev airport. The virus takes out affected users’ computers until an untraceable ransom of US$ 300 is paid, using the digital bitcoin. The virus is similar to May’s “WannaCry” cyber-attack that impacted more than 300k computers and includes “Eternal Blue”, a ransomware virus that may have been stolen from the U.S. National Security Agency.

With the possibility of law suits arising because of the Grenfell fire, shares in Arconic, the maker of the cladding used in that and other buildings, fell over 6%. The US firm supplied the material to Reynobond PE and had publicly warned them of the fire risk involved. Now it has also withdrawn this particular cladding from production citing the “inconsistency of building codes across the world”. How authorities allowed this sort of cladding to be used in the first place beggars belief and one can only hope that the proposed public enquiry does not follow the same Hillsboroughesque cover-up antics that has taken 28 years for justice to be seen.

After years of falsifying accounts, by overstating earnings of its Italian operation, the Financial Reporting Council has begun investigations into the auditing of BT by PwC, covering 2015-2017. The UK’s accountancy watchdog will be looking at why the British telecom operator wrote off US$ 680 million for “inappropriate behaviour” involving “a complex set of improper sales, purchase, factoring and leasing transactions”. Casualties from the fall-out include the original auditors now replaced by KPMG and the termination of several senior managers, including the head of BT Europe, Corrado Sciolla, and BT Italy’s chief executive Gianluca Cimini.

With its two main creditors, the EU and the IMF, still in disagreement about the modus operandi of Greece’s bailout payment, it seems that the country may escape a July payment default with the world body compromising, by approving a financing programme “in principle”. This will provide more time for all parties but it is only delaying the inevitable impasse because both sides remain intransigent. The EU will not entertain any further “haircuts”, mainly for domestic political reasons – and the inevitable electorate backlash – despite the obvious economic logic that Greece cannot manage its present repayment schedule; this represents almost 200% of GDP. Meanwhile the IMF has reiterated the nation’s debt is unsustainable and debt reduction is essential for the future progress of the Hellenic country.

Not known for their forecasting, the IMF has cut US growth for this year and 2018 to 2.1%, from 2.3% (2017) and 2.5%. The White House is still going for a 3% expansion, despite some uncertainty about the efficacy of some of their economic policies, including healthcare and spending cuts. The Trump target is an ambitious figure bearing in mind that in this century, annual growth has only averaged 2%. The US Commerce Department upped their initial Q1 findings, reporting that growth was 1.4% (not 1.2%), driven by a 7.0% jump in exports, 4.5% fall in imports and increased consumer spending (which accounts for 67% of the country’s economic activity).

It appears that the Bank of England is asking banks to find a further US$ 14.6 billion over the next 18 months to shore up their capital base in case of a fall-out from bad loans. Its Financial Policy Committee is becoming increasingly worried that loans are becoming too easy, as complacency returns to the lending departments of many financial institutions. There has been a marked 10% increase in rapidly growing consumer borrowing via credit cards, personal loans and, notably, car finance; it is estimated that such lenders are ten times more likely to default than mortgage borrowers.

A week after indicating that “now is not yet the time to begin” raising interest rates, Bank of England supremo, Mark Carney, has suggested that rates could rise if business investment expands. Sterling rose 1.0% to US$ 1.294 – rather ironic for those in the Remain camp, who one year ago were predicting that the currency would fall off the cliff and hit parity.

If the EU thinks they have a problem with Brexit, then wait until the Italian banking system starts to unravel. In order to ensure “the good health of its banks”, the government is to throw US$ 5.8 billion of taxpayers’ money at two failing banks – Venetian Banco and Bianca Popolare di Vicenza – in a belated and futile bailout attempt. Any good assets remaining from this fallout will be taken over by Intelsat Sanpaolo, with the Gentiloni government guaranteeing a further US$ 13.4 billion for potential losses arising from bad debts and risky loans taken over. (This comes six months after the world’s oldest bank, and that country’s fourth largest lender, needed bailout funds).

The Italian banks have an estimated US$ 390 billion of bad loans (a staggering third of the eurozone’s total bad debt). In allowing the country to utilise state funds, the EC’s competition commissioner said this would “avoid an economic disturbance in the Venetian region” and that “these measures will also remove US$ 20 billion in non-performing loans from the Italian banking sector and contribute to its consolidation”. It remains to be seen who actually picks up the bill for this debacle and what happens when the next bank needs bailing out? Could the EU – and the Italian banking system – be in a bigger mess than most people think? It a matter of time before parties start wondering Where Did We Go Wrong?

Dubai has come up with another global first – this time a collective-endowment park, established by the Mohammed Bin Rashid Global Centre for Endowment Consultancy and Dubai Municipality. Located in Mushrif Park, it will include a not-for-profit date-packing factory that will produce up to 150 tonnes of dates grown from trees donated by the UAE community; net proceeds will be given to charity for the needier sector, in line with a 125-year old Hatta tradition of endowing palms.

With the onerous buying conditions (including up to 30% cash deposit and other fees) still in place for completed properties, many potential expat buyers are turning to off-plan developers. In the current economic climate, they are being offered attractive conditions, including low upfront fees and a greater selection of properties. The two major players – Emaar and Damac – reported Q1 sales increases of 44% to US$ 1.6 billion and 11% to US$ 600 million respectively.

Last month, Ellington Properties completed its first ever Dubai development – Belgravia – in JVC and has now launched Eaton Place in the same location; this project will comprise 1 and 2 bedroom units, along with a pool courtyard.

Progress Constructions has been appointed by Jumeirah Golf Estates as contractor to build 95 2/3 bedroom units and a retail centre for its mid-range Alandalus development, with completion slated within 15 months. The community will also include 715 apartments, a hotel and its second golf club house.

A week after its chairman, Kabir Mulchandani, announced FIVE Holdings as the region’s first hospitality-focused real estate investment trust, (which included its existing Viceroy Palm Jumeirah, Viceroy Jumeirah Village, due to open next year, and two projects at the development stage), the company has taken over the running of the Palm property. Its CEO, Aloki Batra, indicated that most of the commercial benefits are taken by the operators, at the expense of the developer. The company also announced the establishment of a new hotel brand – FIVE Hotels & Resorts – which will run all four properties, valued at a total of US$ 2 billion.

In less than three years, Danube Properties has already released eight developments with more on the horizon. The property development company, an offshoot of the successful building materials group founded by Rizwan Sajan is now considering an entree into the hospitality sector. The founder has ruled out his company going public in the foreseeable future.

Damac Properties has been appointed by the Omani government to develop Port Sultan Qaboos in Muscat. This will be the Dubai developer’s first foray in that country but it has had prior experience in Lebanon, Qatar and Saudi Arabia. The US$ 1 billion, 10-year, development will be in four phases, with the initial one completed by 2020. Damac has already handed over 18.5k residential units, over the past decade, and has a further 44k under development.

The RTA confirmed that autonomous air taxis will be trialled in Q4, later than the original Q3 plan because of the need to obtain all the required safety approvals. The German-made Volocopter can fly for up to 30 minutes, at a speed of 100 kph, and is equipped with nine independent battery systems (and an emergency parachute).

The government-controlled Dubai Aerospace Enterprise, which recently acquired Ireland’s aircraft lessor, AWAS, is planning to issue bonds, totalling US$ 2 billion, to part finance the deal. With this take-over, the Dubai aircraft leasing and maintenance company will have a fleet of almost 400 planes, with a book value in excess of US$ 14 billion.

The country’s first 3D printing facility has been launched. Immensa Technologies Labs uses eight 3D printing systems, offering 30 materials for production for use in a gamut of industries.

GEMS Education, which operates over 250 schools in 14 countries, is reportedly considering a London IPO that could value the private school operator at some US$ 4 billion. Among its backers are Bahrain’s Mumtalakat Holding Co, Blackstone and Fajr Capital Ltd.

DP World and the Kazakhstan government have signed two agreements with the aim of improving the ease of doing business there, including the introduction of paperless systems to speed up processes. The country is at a prime location when it comes to China’s One Belt, One Road initiative.

Dubai’s CPI was 2.26% higher in May than a year earlier but 0.22% lower than April’s return. Although there was an 11.7% hike in the goods/services sector, there were minor falls in transport (0.30%) and 0.26% in the hospitality sector.

Inflation is one of the main reasons why Dubai is becoming more expensive, as it moves up one place to 20^th in the latest Mercer’s Cost of Living Survey; Abu Dhabi is ranked 23^rd of 200 global cities surveyed. The five most expensive locations were Luanda, Hong Kong, Tokyo, Zurich and Singapore.

The UAE is number one in the world, as ranked in the Efficiency of Customs Procedures Index by the Swiss Global Competitiveness Center of the International Institute for Administrative Development. The ranking is based on some 346 indices that gauge the efficiency of customs resource management in 63 countries.

During the first five months of the year, the UAE Clearing Cheque System handled 12.9 million cheques, with a total value in excess of US$ 175 billion. Of that total, US$ 7.9 billion, equating to 4.5%, were bounced – well down on the 7.3% reported a year earlier. It is still a criminal matter in this country if cheques are bounced and those perpetrators could easily find themselves incarcerated.

Troubled Drake & Scull is still planning to reduce its capital base by 75% in Q3. This will be partly offset by a US$ 136 million cash injection by its principal stakeholder, Tabarak Investment, which after acquiring the shares of former chief executive Khaldoun Tabari, now owns almost 20% of the Dubai-based contractor. The company also hopes to improve cash flow by chasing up US$ 272 million of debts, here and in Saudi Arabia, restructuring payments with creditors and even probably tapping into the bond market.

The DFM opened Sunday at 3459 and traded 1.6% lower at 3402 by the end of the week. Volumes were markedly down, closing on Thursday, 22 June, at 350 million shares, valued at US$ 128 million, (cf 565 million shares for US$ 132 million, the previous Thursday). Emaar Properties fell US$ 0.03 (having gained US$ 0.22 the previous two weeks) to US$ 2.15, with Arabtec also down by US$ 0.01 to US$ 0.20.The bourse will be closed all next week because of the Eid Al Fitr holiday and will reopen on 02 July.

By Thursday, Brent Crude, having shed almost 10% over the previous three weeks, was yet again in negative territory down US$ 0.98 (3.5%) to US$ 45.22, with gold nudging lower by US$ 6 to US$ 1,249 by 22 June 2017. Growing US output appears to be taking up the slack from the recent OPEC production quota cuts and this is weighing heavily on downward prices. Last week, there was a 2.5 million barrel decrease in US crude oil supplies, compared to a week earlier.

Following recent problems around the company and an investigation headed by former US Attorney General, Eric Holder, it was no surprise that Uber’s CEO and co-founder, Travis Kalanick, has resigned; his position was not helped by the fact that five of the company’s major investors called for his head. Being the major shareholder, he still retains his position on the Board.

Ford may have just upset Donald Trump with their decision to move its Focus model production to China in 2019 after, earlier in the year, scrapping plans to produce in Mexico. The auto-maker has seen flat sales of the model in the US, as local demand still prefers larger vehicles, and has indicated that  the move will save US$ 500 million and that there would be no US lay-offs emanating from this decision.

UK’s Competition and Markets Authority has given the green light to the US$ 14 billion merger between Standard Life and Aberdeen Asset Management. It is expected that there will be an 8.2% decrease in payroll numbers to 9k but the new entity – Standard Life Aberdeen – will cut costs by US$ 254 million; it will also become Europe’s second biggest fund manager, with assets of US$ 850 billion.

The former chief executive of Barclays has resigned as an independent director of mining giant, Rio Tinto. John Varley headed the bank that has been investigated by the Serious Fraud Squad and is also one of the four executives charged by the agency for their roles in acquiring funds to keep the bank afloat at the time of the GFC.

After six problematic years, Egypt’s economy seems to be on the mend, with news that Q3 growth was at 4.3%, year on year, driven by marked expansions in sectors such as communications, manufacturing and tourism (with numbers up 106% to 14.2 million and revenue by 128% to US$ 1.3 billion), and also helped by a recent US$ 12 billion IMF loan. For the first nine months of the fiscal year, the country posted an US$ 11 billion balance of payments surplus and its budget deficit fell 1.0% to 8.4%. Although high inflation remains a problem, the country’s exports have become more competitive since the Egypt floated its currency last November, resulting in its halving in value.

Yet again, Chinese authorities are voicing concerns about the country’s major financial institutions acquiring overseas trophy assets and are trying to stem the flow of money overseas.  The fact is that 2016 overseas investments topped US$ 225 billion which in turn depleted the country’s forex reserves and increased pressure on the renminbi. Regulators are analysing deals by the country’s five major players – Anbang Insurance, Dalian Wanda, Fosun International, HNA and Zhejiang Luosen. This week, shares in Fosun (that owns Wolverhampton Wanderers) and HNA (that owns Swissport, Gate Gourmet and 25% of Hilton) fell by 6% on Thursday, as news of government concerns on loan exposures gained traction.

It has not been a good time for Japan’s Prime Minister, Shinzo Abe, as he faces mounting criticism involving approval of a veterinary school, run by a friend, to be in a special state run economic zone. As his ratings took a tumble to 36%, he has vowed to take steps to regain public confidence which will see a cabinet reshuffle in the coming weeks. The economy dipped in May as the merchandise trade deficit of US$ 1.82 billion, was well off market expectations of a US$ 389 million surplus; exports climbed 14.9% (against a 16.0% forecast), year on year, but imports came in higher at 17.8% – compared to a forecast 14.5%.

Because of exports falling faster (at 2.1%) than its imports (0.8%), the euro area trade surplus disappointed the market by falling 11.7%, month on month, to US$ 24.8 billion. Headline inflation fell in May from 1.9% (a month earlier) to 1.4%, mainly driven by lower energy prices, and is still some way off the 2.0% ECB target.

Driven by higher a 4.3% hike in VAT receipts, the UK’s May budget deficit, at US$ 8.5 billion, reached its lowest borrowing level in a decade. The first two months of the fiscal year seem to indicate that the public sector finances are keeping on track with an improvement recorded in the year ending 31 March 2017; the deficit for the year was US$ 59.5 billion, the lowest return since March 2008. Whether this is set to continue remains to be seen as the public  sector debt of US$ 2.22 trillion still equates to worrying 86.5% of GDP; in his dreams, the Chancellor still aims to balance the budget within the next decade but he will not be in power then, so being a true politician, he can promise whatever.

It is not all bad news coming out of the UK as the CBI has reported that “made in Britain” firms have order books not seen since the halcyon days of the 1980s. Buoyed by a fall in sterling, exports have become cheaper for foreign consumers with the manufacturing sector now having export order books the best since 1995 as total orders, including domestic business, at their highest level since 1988, driven by four sectors – chemicals, drink, food and tobacco. However, there are problems ahead as domestic consumer spending weakens with inflation rising and the cost of importing materials heading further north.

It seems that Mark Carney is again acting as a doom and gloom merchant indicating that Brexit is to make people poorer and that there is a direct link between leaving the EU and “weaker real income growth”. Also speaking at a recent Mansion House meeting was the Chancellor, another firmly in the “Remain” camp twelve months ago: Philip Hammond has said that no one voted for Brexit to become poorer as the country suffers from a drop in real incomes with inflation running at a higher level than wage growth, driven by a fall in sterling. Both got it horribly wrong one year ago and have since eaten their share of humble pie. Both seem to be taking easy options and changing their opinions as circumstances dictate with an end game of a “Brexit without a Brexit”. Talk about Bend Me Shape Me (Anyway You Want Me)!

According to the latest Global Capital Partners-Reidin study, off-plan sales surged 58.2% to 7.2k for the first five months of 2017. The three more popular locations were Dubai South up 613.5% to 528 units, JVC (169.8% to 342) and Dubai Creek Harbour (224.2% to 632). In the more established areas, such as Dubai Marina and Downtown, growth was somewhat subdued, with increases of 120.0% to 608 and 60.9% to 820 units. The two main drivers behind this resurgence seem to be improved payment plans and other incentives. The report estimates that 2017 handovers at 15k will be 1k less than last year which seems to be more probable than the 30k figure, espoused by some consultancies earlier in the year.

A June ValuStrat report estimates that current residential prices are still 14.2% off their 2014 highs although, as expected, some locations are performing better than others. 25% of all locations are within 10% off from their value three years ago, with Motor City only 1% shy of that target. At the other end of the scale, apartment prices in Dubai Marina, JBR and JLT are up to 28% lower on 2014 peaks.

The Shaikhani Group has handed over a further 100 apartments of its US$ 41 million, 15-storey Champions Tower 1. The Dubai-based group has five projects that are under construction, three of which are in Dubai Sports City, and in total expect to add 2.1k units to Dubai’s property portfolio by 2020.

Dubai Investments Real Estate Company has advised that preparation work on phase 1 of its US$ 817 million Mirdif Hills project is now complete. The 1k+ apartments – in three components, Janayen Avenue, Nasayem Avenue and Al Multaqa Avenue – will be ready within 18 months.

Al Qandeel Contracting Company has been awarded a US$ 32 million contract by Azizi Developments, as part of its Aura project in Downtown Jebel Ali. The project – encompassing 479 (studio – 2 bedroom) units, retail space and health club – is already 57% sold.

wasl Topaz is to build 90 apartments in one of Dubai’s older districts – Umm Hurair. The revamp will also include other community amenities, such as additional retail space, gyms and a swimming pool.

The foundation has been laid for the emirate’s first fully fledged water homes on the Dubai Water Canal. Using Dutch technology, known as Seaflex, Dubai Properties, the developer, will use a mooring technology that ebbs and flows with the tides. No financial details were given about the 100 homes that are to be built but prices could top US$ 1k per sq ft. An official launch is expected later in the year, with a building time of two years.

Dubai is well on its way to achieve its target of 500k medical tourists by 2020, with 2016 returns 9.5% higher at 327k, bringing in revenue for the emirate of US$ 387 million.

Staying on the topic of health, the country wants to enhance its position as a global leader in the healthcare and pharmaceutical sector by doubling the number of related factories by 2021. It is aiming for a 39% hike in the current number of major pharmaceutical firms to 75 and a doubling of drugs manufacturing factories to 34 over the next four years. There is no doubt that the market is ripe for investment when the 2016 market value spend on drugs is expected to jump by 36.6% to US$ 3.6 billion by 2020.

Ahmad Buamin, the GM of DCCI, estimates the size of the region’s e-commerce market to top US$ 41.5 billion as yet again Dubai paves the way, with a 55% market share, followed a long way behind by Saudi Arabia (14%) and Oman (12%). He also expects that over the next eight years, 19% of the forecast US$ 4.3 trillion global retail sales will be done on-line.

DEWA has signed a US$ 463 million, 12-year deal with Siemens that will see the German company responsible for the utility’s operating plant services. It will also include maintenance and spare parts at specified power stations within the emirate.

France’s EDF has won the US$ 16 million DEWA consultancy contract for the hydroelectric station in Hatta. This is the first of its kind in the Gulf and is expected to last up to 80 years. The authority will build the power station to generate electricity that can be connected to the grid, making use of up to 1,716 million gallons, stored in the Hatta dam, and a newly built reservoir above the dam capable of holding 880 million gallons.

The Masdar/EDF consortium has successfully arranged financing for phase 3 of the Mohammed bin Rashid Al Maktoum Solar Park. The 16 sq km 800 MW photovoltaic  plant, the largest global single site solar park, is being developed in three phases – 200 MW by 2018, 300 MW (2019) and the final 300 MW a year later. On completion, it will generate 2.5 million megawatt hours every year.

Following last December’s first tranche for US$ 350 million financing, local ride-hailing app Careem has successfully raised a further US$ 150 million from investors such as Coates, Daimler, DCM, and Kingdom Holding; the latter, headed by Prince Waleed bin Talal, has also acquired a further stake by buying The Abraaj Group’s shareholding; this brings its total shareholding to 7%, currently valued at US$ 62 million. Some analysts estimate the Dubai company could now be worth up to US$ 1.5 billion!

Further to the latest Emirates NBD Economic Tracker Index, Dubai’s construction sector is on the move up, touching 56.2 in May, although the seasonally adjusted index fell from its two-year April high of 57.7 to 55.0. Other sub-sectors impressed including wholesale/retail (55.5) and travel/tourism (54.2).

The country’s first residential estate investment trust, launched in February 2017, is looking to go public next year. The initial seven-year old REIT, floated in 2014 by Equitiva, has seen its portfolio grow 21%, year on year, and expects rental income to top US$ 50 million this year.

The DFM opened Sunday at 3400 and traded 1.4% higher this eventful week – closing on Thursday – 15 June – at 3459. Volumes were lower, closing on Thursday at 565 million shares, valued at US$ 132 million, (cf 615 million shares for US$ 243 million, the previous Thursday). Emaar Properties, increased by a further US$ 0.11 (as it did the previous week) to US$ 2.18, whilst Arabtec also remained flat at US$ 0.21.

By Thursday, Brent Crude, having shed 7.5% the previous two weeks, traded down again US$ 0.98 (2.0%) to US$ 46.88, with gold losing US$ 25 to US$ 1,255 by 15 June 2017. The growing US output appears to be taking up the slack from the recent OPEC production quota cuts which are weighing heavily on downward prices.

The world’s biggest gaming trade show, E3, opened its doors on Tuesday in Los Angeles, although some high profile game studios – such as Microsoft and Sony – hold events earlier. For the first time in its 24-year history, the industry-only event will allow 15k game fans to attend the conference showcasing the latest games.

With its acquisition of Google’s Alphabet robot-maker Boston Dynamics for an undisclosed amount, Softbank’s shares in Tokyo climbed 7% to its highest level in almost twenty years. The Japanese conglomerate, founded by Masayoshi Son, has also bought robotics group Schaft.

For a company yet to turn in a profit, Uber has an impressive market value of US$ 68 billion. Following a report into the company, that still is privately owned with voting controlled by its Chief Executive Travis Kalanick and two other board members, its senior Vice President Emil Michael has left the car riding firm; a former US Attorney General was asked to investigate the company’s culture and practices following high profile incidents involving sexual harassment, discrimination and staff bullying, as well as looking at procedures involving spending and human resources. Kalanick is now to take time away and may even return to a lesser role in the organisation. Uber has to take stock of the situation and take urgent action before the unthinkable happens.

To cover its mega losses in its US nuclear division, Westinghouse Electric, Toshiba is planning to sell part or all of its chip unit business with the Taiwan-based Foxconn the front runner; the company will head a consortium, including the likes of Alphabet, Amazon, Cisco Systems, Dell and Microsoft, that will offer up to US$ 18 billion. However, other interested parties include Broadcom, Micron Technology and SK Digital. (There is no better news for the embattled Toshiba, with its latest trouble being a law suit from 26 foreign investors suing the Japanese electronics giant for US$ 1.0 billion in relation to their seven-year scam in which they inflated their profits by US$ 1.2 billion).

Troubled RBS looks set to be fined at least US$ 4.5 billion by US authorities for their role in the mis-selling of toxic mortgage bonds prior to the 2008 financial crisis. An announcement is expected next month that will then clear the path for the UK Government to start divesting its stake for which the then Labour government paid US$ 6.43 per share (US$ 58.2 billion); prior to last week’s debacle, Chancellor Hammond indicated that he thought the fair value of the taxpayers’ shareholding could be below this price. How right he was – as the shares are now trading at less than half that value at US$ 3.20!

Barclays is another UK bank that will also soon receive bad news and this will be from the Serious Fraud Office’s probe into their actions relating to the US$ 13.6 billion share sale in 2008 that saved the financial institution from being bailed out by the government. The enquiry has centred on arrangements made with a Qatari SWF and how they – unlike RBS and Lloyds – were able to raise capital at such a difficult time. Barclays is also facing a civil lawsuit about non-payment of fees in its dealings with PCP Capital Partners.

One Australian company that has fallen from grace is the Ten Network that has gone into voluntary administration after two of its major backers, Lachlan Murdoch and Bruce Gordon, lost patience and decided not to guarantee a US$ 190 million rescue package. Over the past year, its stock had traded at an average of US$ 0.80 – this week it sank to a nadir of US$ 0.12.

Industrial production in China continued its recent upward trend growing by 6.5% in May, year on year, and unchanged from a month earlier. Also heading north on an annual basis were fixed asset investment at 8.6% and retail sales at 10.7%.

As expected, the US Federal Reserve lifted rates a further 0.25% to 1.25% – its second increase this year – which is at its highest level in nine years. The main drivers were the historically low unemployment rates and recent economic growth. However, the 2% inflation target is still some way off and this could have a possible drag impact on the economy.

Low inflation is one thing that does not worry UK economists and at 2.8% – and rising – it is beginning to hurt the retail sector. May reported a 1.2% fall, month on month, whilst the 12 month growth of only 0.9% was the weakest return in four years. This is at a time when average annual store prices rose at their highest in five years – at 2.8% – and was driven by the rising cost of imported computer games and more expensive overseas holidays. Two of the main reasons for this recent surge are the fall in the value of sterling, following last year’s Brexit referendum, and wage increases (of only 2.1% that have not kept up with the rising prices). There will be no let up for the rest of the year and inflation could reach 3.5% by Q4 and, at that level, it is hard to envisage any interest hikes in 2017.

There is no doubt that the self-aggrandising UK Prime Minister, Theresa May, is living on borrowed time. Recent events indicate that she has been badly advised, easily swayed and is now lacking the confidence of both her party and the electorate. This time last year, she was steadfastly in the “Remain” camp but soon moved her position to appear pro-Brexit. The same can be said of her cohort, Chancellor Phillip Hammond as both canvassed for a “Hard” exit after the referendum. Now it looks as if the debate will go full circle and both turncoats will opt for a very soft Brexit resulting in the UK retaining more than one foot in the EU – so much for the PM’s battle cry of “no deal is better than a bad deal”! With allies like Mr Hammond, the vicar’s daughter had better keep checking The Ground Beneath Her Feet!

In the spirit of giving during the holy month of Ramadan, Damac Properties will give buyers of their latest launch – Aurum Villas – 1 kg of gold, valued in the region of US$ 41k. Located within an international golf community, villa prices will start at US$ 436k.

Sofitel’s largest ME hotel – the Sofitel Dubai Wafi – is to be built in collaboration with MKM Commercial Holdings LLC. The property, housing 511 keys, along with 97 (studio – 3 bedroom) serviced residences, will open in 2019.

Dubai Investments is planning to spend US$ 272 million on a 70-storey tower, overlooking Dubai Water Canal on SZR. Tenders will be released shortly and the project will be finalised by 2020.

It is reported that Nakheel will introduce three yet unnamed hotel brands into the local market within weeks. The developer has 4.3k hotel units, under operation and construction, and expects to double its investment portfolio to the same level as both its residential and retail leasing divisions.

In order to house its hospitality staff in one location, wasl Asset Management Group is building 3.9k residential units (ranging from shared rooms to 1-bedroom units). Encompassing 26 separate buildings, the development will be located in Warsan, within easy reach of many of its new hotels, due to open in the Expo 2020 area. Earlier in the year, the company launched its first three hotel projects – Hyatt Centric, Mandarin Oriental and MGM.

ACWA Power submitted the lowest of the four DEWA bids for the phase 4 tender of the Mohammed bin Rashid Al Maktoum Solar Park was US$ 0.945 per kW/h. The winning bidder for the 200 MW plant will complete the project by 2021.

Al Futtaim Automall is to open a 12k sq mt sales facility next month in DFC, with a 400-car capacity. The 17-year old company is the largest used car dealer in the country, with seven showrooms nationwide, including three in Dubai.

MAF is reportedly the front runner to acquire Geant in what could be a deal worth US$ 500 million. The supermarket, a franchise of French grocery retailer Casino Guichard-Perrachon SA, and operated by Dubai-based BMA International Group, has had a presence in the country since 2001 and operates throughout the GCC. It appears that Saudi Arabia’s Bindawood Holding is also showing interest.

A major Fortune 100 global health insurance and service company has opened its MENA regional centre in the DIFC. Cigna Corporation is expecting to grow its market in providing personal and local health service solutions.

DP World has opened a new terminal in its home base of Jebel Ali that will reduce the time needed to transfer containers and improve traffic flow within the port environs. Latest figures indicate that the port recorded a 5.7% volume hike in Q1 to 16.4 million containers.

The port operator has acquired Spain’s Reyser for an undisclosed amount (but probably under US$ 500 million). The maritime service company, with 151 vessels and agreements with 10 Spanish ports, is involved in harbour towage, mooring and bunkering. The Dubai company also has a major share in the Somaliland’s Berbera Port along with the local government who are reported considering giving 19% of its share to Ethiopia.

Growth in the UAE’s non-oil private sector activity slowed – to 54.1 from 56.1 in April – for the first time in six months, according to the headline Emirates NBD PMI. Although there was expansion of sorts in new orders, employment and output, input and selling prices dipped. Meanwhile, the Markit/CIPS services PMI also slipped from 55.8 to 53.8 in May.

On Wednesday the Chairman of China Construction Bank, Guo You, rang the opening Nasdaq Dubai bell, as the bank listed its second bond on the local bourse; the US$ 1.2 billion issue (following the first one last October for US$ 600 million) is part of CCB’s US$ 6 billion Medium Term Note Programme.

Arqaam Capital is to join forces with New York-based Marco Polo Securities Inc to help the broker market its products in Egypt. The 17-year old US dealer, with an extensive global network of securities firms, is involved in the trading of exchange listed securities along with private placements.

Because no agreement could be reached between GFH and the Dubai-based investment bank Shuaa Capital, the Bahraini firm has temporarily pulled out of further acquisition negotiations. On the news, shares in both firms fell – with Shuaa down 5.3% to US$ 0.39 and GFH by 4.7% to US$ 0.61.

In a surprise announcement, Emaar is planning to list, on the DFM, up to 30% of its real estate development business and to distribute the proceeds to shareholders. No date has been announced but it is likely that the IPO will occur before the end of the year and could be bigger than the Emaar Malls’ 15% placement in 2014.The developer’s value of properties sold but revenues not recognised stands at US$ 10.9 billion.

The DFM opened Sunday at 3352 and traded 1.4% higher this eventful week – closing on Thursday – 08 June – at 3400. Volumes were lower, closing on Thursday at 565 million shares, valued at US$ 132 million, (cf 615 million shares for US$ 243 million, the previous Thursday). Emaar Properties, following its midweek announcement about another IPO, jumped US$ 0.11 to US$ 2.07, whilst Arabtec remained flat at US$ 0.21.

By Thursday, Brent Crude, having shed 2.0% the previous week, traded down again US$ 2.77 (5.5%) to US$ 47.86, with gold again heading the other way, gaining US$ 10 to US$ 1,280 by 08 June 2017.

IATA reported a 3.1% increase in ME cargo for the year ended 31 March 2016. However, the world body has sobering news for the region, with a forecast that local airlines will post a 63.7% fall in 2017 profits to US$ 400 million – and this despite passenger demand rising 7.0% on the back of a 6.9% rise in capacity. On a global scale, the industry is expected to show a US$ 31.4 billion profit, with revenues climbing to US$ 743 billion.

Despite environmental opposition, the Queensland government has given final approval for the Indian company Adani to start work on the state’s mega US$ 12.3 billion Carmichael coal mine. The project, located in the Galilee Basin, will include six open-cut and three underground mines, covering an area of 250 sq km.

It is reported that the Big 4 accounting firm, KPMG, has written to some 500 UK retired and existing partners, with a warning that they could be liable for huge tax bills; the problem comes about with a 2010 disagreement between the firm and HM Revenue & Customs on the treatment (and eligible tax deductions) of an investment in one of its Middle East operations.

For the first time in eight years, the UK housing market has witnessed a fall in prices (of 0.2%, 0.3% and 0.4%) for three consecutive months, with the annual rate dropping to 2.1% – its lowest level in four years. The Nationwide figures also show that the average UK house price stands at US$ 269k. As inflation takes hold and consumer spending weakens, it is inevitable that house prices will continue to slow and a real fall in prices will only be averted by the fact that there is a shortage of properties on the market.

It seems that alcohol drinking is on a global decline, according to an International Wine and Spirits report which estimated that there was a 1.3% annual drop in all drinks – with worldwide consumption of beer, cider and wine 1.8%, 1.5% and 0.1% lower in 2016. UK wine drinkers have also been hit hard by Brexit, as the average price of a bottle in the 12 weeks to 25 March increased by 3.0% to reach US$ 7 – its highest price ever. The fall in sterling, rising inflation, allied with reduced consumer spending, and increasing costs are the drivers that will see the price of the 1.8 billion bottles consumed annually continue their upward trend.

With The Body Shop’s profits falling – estimated to drop from 2013’s equivalent figure of US$ 127 million and last year’s US$ 90 million to a forecast US$ 73 million – it would appear that the upcoming L’Oreal auction will struggle to reach its initial estimate of US$ 900 million; a figure of say US$ 600 million would be a more realistic target.

Australia’s junior telco, Vocus Group has seen its share value drop 70% since August and last month issued its second profit warning in six months. Now Kohlberg Kravis Robert has tabled a conditional US$ 2.5 billion takeover offer that would include debt of US$ 840 million; at this level, it represents a premium of 22%.

The RBS Shareholder Action Group seems to have lost its nerve by accepting a settlement with the bank of US$ 1.39 a share – considering that they had been duped in paying up to US$ 3.00 per share in 2008. The bank raised US$ 15.5 billion by these devious means and also received US$ 58.0 billion from the UK government in bailout funds; nine years later, the government still owns 70% of RBS.

Spanish banking giant Santander has paid US$ 1 in a deal that is expected to cost US$ 7.9 billion to save Banco Popular – a bank deemed to “fail or likely to fail” by the ECB. The bank had struggled after several property investments, totalling US$ 40 billion, turned bad, as the country’s economy imploded. Last year, the bank posted a US$ 3.9 billion loss.

Last Thursday, the Pakistani bourse, Asia’s best performing market in 2016, was upgraded to Emerging Markets Index from Frontier Markets status. To the surprise of many, and after a record high in late May, the exchange shed 8%, as US$ 500 million worth of shares were sold off but only US$ 450 million of foreign funds entered the market. Other factors involved were the inevitable profit-taking opportunity and uncertainty about the government’s upcoming budget that could include higher taxes on dividend payments.

China’s service sector continues its expansion push, with the latest Caixin PMI data posting a 1.3% month on month increase to a May reading of 52.8. At the same time, the composite index was three notches higher at 51.5.

Japan’s service sector also continues its recent improvement from April’s 52.2, with a May reading of 53.0 – its highest level in four years. The main driver appears to be a major boost in new work, resulting in an increase in job numbers. The composite index also jumped 8 notches to 53.4.

Australia has now gone 26 years without a recession, recording an 0.3% Q1 growth and 1.4% for the twelve months – its slowest rate since 2009. The expansion came despite falls in exports and housing investment, whilst the manufacturing sector decreased for the tenth quarter out of the past eleven. However, there was a dramatic April fall in the country’s trade balance surplus which fell month on month from US$ 2.4 billion to just US$ 0.4 billion, driven by an 8% drop (US$ 2.1 billion) in exports. The country may be struggling later in the year, if growth continues to slow and energy prices remain sluggish.

On the flip side – and not surprisingly the way the country appears to be run – South Africa has gone into recession, after two contractions of 0.3% in Q4 and 0.7% this quarter. The markets had expected Q1 growth of 0.9% but, with falls in both trade and manufacturing sectors, this was never going to happen. The economy will not be helped as it now has to borrow money at a higher rate following S&P and Fitch downgrading the country’s creditworthiness to junk status.

Although the US economy is still on track  to full employment – with the May unemployment rate again moving lower to 4.3%, its lowest level since 2001 – payroll numbers only increased by a disappointing 138k. Average hourly earnings of US$ 26.22 are 2.5% higher, year on year. Although this is but one indicator on the health of the US economy, there have been other data that indicate a weakening but officials are confident that this is a temporary blip.  For example, new orders tumbled resulting in a slowdown in the US services sector whilst the ISM’s non-manufacturing activity index lost 0.6 but was still at a high of 56.9. The pointers indicate a Fed rate hike of 0.25% next week.

The UAE was one of several countries, including Saudi Arabia and Bahrain, to cut ties with neighbor Qatar, accusing it of supporting terrorism. At the same time, postal links were severed and transport corridors in and out of the country were closed so that the country’s four airlines – Emirates, flydubai, Etihad and Air Arabia – have cancelled all flights with almost immediate effect. Furthermore, Qatari nationals have been given 15 days to leave the country with the same for UAE nationals in Qatar. It is probably too early to ascertain the economic impact of these moves but in the short-term, Qatar will have problems importing food and other essentials. As the rial fell 1% on Wednesday – its lowest level in 11 years – S&P downgraded the country’s credit rating to AA- from AA.

On the back of an improving global economic environment, UK manufacturing remains buoyant with exports still getting the benefit of a weak pound, as companies report improving output and new orders. Another positive driver is the fact that since exports become more expensive, domestic consumers may focus more on locally produced merchandise. However, there are challenges ahead for the UK economy with sluggish real wages growth having a possible negative impact on household income and spend and any fall-out from a hard Brexit.

A revised OECD report has indicted that this year’s global economic growth will be 3.5% with 3.8% expected in 2018. The UK’s forecast is a markedly lower 1.6% and an even lower 1.0% next year. The agency’s rationale is based on the uncertainty in relation to Brexit and sluggish consumer spending resulting from higher prices and lower real wages.

This data was available prior to the general election, with a hung parliament all but certain by late Thursday. Sterling will wobble but the volatility seen last year after the Brexit referendum is unlikely to be repeated. There are very few winners in this debacle but the big loser has to be the Prime Minister, Theresa May, who called an unnecessary election and seemed a disinterested observer over the past month. Almost certain to lose her job, she is now looking at The Dark Side Of The Moon.

HH Sheikh Mohammed bin Rashid Al Maktoum toured the site of The Tower at Dubai Creek Harbour  which, when completed in 2020, will dwarf the Burj Khalifa by 100 mt. Already the foundation work has been completed, whilst the anchorages for the stay cables are in progress. The project will have minimal residential and leisure features but will have a 360 degree viewing deck, with fully glazed rotating balconies that extend outward from the tower’s main frame.

Following a major fire last August, developer SKAI has announced that 40% of its Viceroy Dubai Jumeirah Village hotel and residences is now complete. The US$ 349 million, 60-storey tower, encompassing 247 hotel rooms and 254 hotel apartments, is still scheduled to open by the end of 2018.

MAG Property Development has appointed Parsons to design and supervise its US$ 1.1 billion District 7 project in Meydan City. The US company will be responsible for a development that includes 35 residential buildings, retail / commercial space and a clubhouse.

Initial work has started on HNI Clients Real Estate’s six-tower project in JVC, to be built by Ghantoot Gulf Contracting Company. The 100k sq ft, US$ 112 million development of 772 apartments will be completed by the end of next year.

Al Thuriah Properties has completed the construction of its US$ 80 million, 33-storey Sahara 4 Towers. Located on the border with Sharjah, handover of the 300 apartments has already started.

With office space in non-prime areas having up to 30% vacancy levels and showing flat or reduced rental returns, it appears that the Grade A builds, in the better locations of Downtown, SZR and Tecom, are performing much better. According to CBRE, there are a number of international firms relocating to Dubai, from within the region, as well as existing local companies moving to better properties.  Growth in prime office supply will be limited until early 2019 and then the floodgates will open, led by the ICD Brookfield tower, introducing 1 million sq ft in DIFC to the market.

An E&Y report will confound the growing number of doom and gloom merchants, with news that Dubai hotels not only have the highest occupancy rate at 88% but also the highest revenue per average room of US$ 273 – 18.7% higher than in April 2016.

Financed by a US$ 5 million investment from the likes of DCCI, du, and the EITC, the Dubai Smart City Accelerator has been established. Operated by Startupbootcamp, the three-year programme will help 40 selected start-ups with office space, consultancy and access to US$ 20k cash – in return for just 6% equity.

According to HE Sultan bin Saeed Al Mansouri, federal Minister of Economy, the Dubai Islamic Economic Development Centre has already attained 75% of its targets to make the emirate the global capital for Islamic finance. Earlier in the year, its latest 2017-2021 strategy was released, with three key pillars being Islamic finance, the Halal sector and Islamic lifestyle, including art, culture, fashion and Islamic tourism.

Saturday was the first day for the sale of the Dubai Lamp – a collaboration between Dutch company Philips and Dubai Municipality. The lamp is the most energy efficient light bulb ever made – with a 90% energy reduction – and use of it could save Dubai consumers US$ 545 annually off their DEWA bills.

Canadian Solar Inc has been selected as the sole modular supplier to provide 268 MW of double glass Dymond modules for phase 1 of the Mohammed bin Rashid Solar Park. Upon completion by 2020, the three phases of the project will require 800k modules.

Ground-breaking has occurred for Patchi’s new chocolate manufacturing facility, covering 122 sq mt, in Dubai Industrial Park. The new factory, also housing the company’s HQ and 3k sq mt warehouse, will open by Q4 2018.

MAF has announced a ten year business plan, with the retail developer investing US$ 8.1 billion in the country, introducing new facilities and expanding existing assets. The development will see a new Dubai regional mall, as part of a mixed use development, as well as ten new shopping malls under its City Centre branding. Over the next ten years, MAF will add 170k direct/indirect jobs, as it more than doubles its retail space to 1.5 million sq mt

The National Industries Park is the location for MAF’s new regional distribution centre which is expected to save over 50% energy per cu mt, with its enhanced warehousing, storage, and logistics technologies.

Dubai Maritime City Authority is reportedly considering the establishment of a US$ 1 billion fund to provide financial investment for Dubai-based firms, with the prime aim of developing the local maritime sector. Initial details are sketchy but the financing could come from a combination of state-owned banks and private investors.

To finance the first phase of the15 km new Metro line to the Expo 2020 site, the Dubai government is expected to be in the market for a US$ 500 million loan facility for a project that will probably require financing of around US$ 2.8 billion. Earlier in the year, US$ 3 billion was raised for expansion work on both of Dubai’s airports.

United Airlines has terminated both its ticketing and baggage interline agreements with both Dubai airlines but its impact is likely to be minimal. Emirates has several codeshare arrangements, with the likes of Alaska Airlines and JetBlue, and interline deals with other US carriers.

By the end of April, Dubai International had seen YTD passenger traffic grow by 7.9% to 30.1 million, with April numbers up 9.0% at 7.6 million. The airport also posted gains in cargo traffic – 1.9% higher to 218k tonnes in the month.

Dubai Airport Freezone Authority posted a 7.0% jump in Q1 sales revenue, on the back of a 31% hike in the number of registered companies; at the same time, it has already attained 62% of its total 2017 sales forecast.

JAFZA reported that it added a further 122 new companies to its register in Q1, 55% of which are from the ME region.

The Telecommunications Regulatory Authority reported that Q1 mobile phone usage in the country has risen to 228 phones per 100 people, with a total number of subscriptions standing at 19.8 million.

June fuel prices are set to fall with Special 95 down 2.6% to US$ 0.504 per litre, with diesel 3.6% lower at US$ 0.518.

Moody’s has upgraded the country’s creditworthiness and is now forecasting UAE growth this year of 1.7% (down from the 2.7% level in 2016). As oil prices start to slowly recover, the agency estimates that the 2017 government deficit will fall to 1.9% of GDP, compared to 3.9% the previous year.

Smart Exchange, with only six branches in the country, has been closed down by the Central Bank following numerous complaints of irregularities and non-transfer of monies, ranging from US$ 272 to US$ 13.6k, to overseas locations. It is thought that because of the need for the country’s 65 exchange bureaux to lodge a bank guarantee with the authorities, customers should get their money returned.

It is reported that the Australian-Indian founder of Pacific Controls, Dilip Rahulan has been jailed for three years in absentia.  The case involved issuing two personal cheques totalling US $ 5.9 million “in bad faith” that were returned due to insufficient funds. The 33-year old tech company, once the doyen of the environmentally friendly sector, has had cash flow problems for some time and last year it seems that it was in discussions with banks over debts of some US$ 380 million.

The country’s 23 local banks reported a 9.4% April increase in assets to US$ 62.4 billion, whilst the 35 international institutions posted a 6.5% fall to US$ 101.4 billion. The same trend was seen with credit provided by local banks up 7.6% to US$ 383.8 billion, as overseas banks drifted 9.3% lower to US$ 51.9 billion.

Dubai International Financial Centre’s recently launched FinTech accelerator has already attracted over 100 international companies keen to make use of the chance of highlighting their work in front of possible investors. FinTech Hive at DIFC, in conjunction with Accenture, aims to introduce world class ventures to Dubai to further enhance the region’s financial services industry.

Emirates NBD’s new real estate investment trust has paid US$ 33 million for Dubai’s first purpose-built student accommodation block – a 424-bedroom building, located close to Dubai Academic City. The 7-year sale-and-leaseback agreement, with Global Student Accommodation, brings the value of the bank’s trust portfolio to US$ 349 million.

It is reported that Dubai-based Aster DM Healthcare is considering a 10% capital float later in the year, with the preferred bourse being either London or Mumbai. Money raised will be used for new projects in Saudi Arabia and India, further possible mergers and debt repayment.

With former CEO, Raed Kajoor Al Nuaimi, moving to a new position to manage development projects for Dubai Holding and Meraas Holding, the new incumbent to run DXB Entertainments will be Mohamed Al Mulla.

Drake and Scull International confirmed that it is continuing discussions with all its stakeholders, including banks. The troubled Dubai-listed construction firm is reportedly expecting to have access to US$ 272 million over the next four years, as it chips away to reduce its debt balance.

The DFM opened Sunday at 3327 and traded 0.8% higher this week – closing on Thursday, 01 June, at 3352. Volumes improved noticeably, closing on Thursday at 615 million shares, valued at US$ 243 million, (cf 215 million shares for US$ 74 million, the previous Thursday). Emaar Properties dropped US$ 0.01 to US$ 1.96, whilst Arabtec nudged US$ 0.01 higher to US$ 0.21. For the month of May, the bourse lost 76 points having started May at 3415 to close on 31 May at 3339, with both Emaar and Arabtec down for the month by US$ 0.02 to US$ 1.96 and US$ 0.02 to US$ 0.21.

By Thursday, Brent Crude, having nearly touched US$ 55 two weeks ago, traded down again this week by US$ 0.83 (2.0%) to US$ 50.63, with gold again heading the other way gaining US$ 14 to US$ 1,270 by 01 June 2017. Over the month, Brent traded US$ 1.13 lower to US$ 50.76, whilst the yellow metal moved up US$ 7 to US$ 1,275.

There are several companies, including CVC Capital Partners and Investindustrial, interested in acquiring Body Shop from L’Oreal. A surprise late entrant for the proposed auction, that could raise US$ 780 million, is the Chinese healthcare company, Renhe Pharmacy Co.

On Tuesday, one Amazon share reached the landmark US$ 1,000, having listed in May 1997 at US$ 18. Its market cap is now at US$ 478 billion, making it the 4^th most valuable US company behind Apple, Alphabet and Microsoft. It is estimated that the former book-selling company now accounts for about 43% of all US online sales.

After several failed attempts to acquire Akko Nobel, the last being a  US$ 29.7 billion offer, the US paints and coating maker, PPG Industries, has finally seen the light and given up.

United Airlines has terminated both its ticketing and baggage interline agreements with both Dubai airlines but its impact is likely to be minimal. Emirates has several codeshare arrangements, with the likes of Alaska Airlines and JetBlue, and interline with other US carriers.

1.4k investors in Ingenious, involved in a controversial film-funding scheme, are facing a tax bill of nearly US$ 1 billion. The UK’s HMRC has won a case claiming that it was a means of avoiding tax rather than one of supporting films, such as Life of Pi and Avatar, and a tax break claiming 100% tax relief (and not the usual 30%). Among those caught include footballers Wayne Rooney, Steven Gerrard and Gary Lineker.

BA may be hit with a bill of up to US$ 130 million on the back of a disastrous bank holiday weekend that saw all flights in and out of their two London airports cancelled. A catastrophic IT failure resulted in the airline’s computer systems failing, with a blame game now in full swing. Chief executive, Alex Cruz, has ruled out a cyber-attack (which had been the cause of the NHS shutdown earlier in the month) indicating the cause to be a “power supply issue”; he also reiterated that the move of 600 IT jobs to India had no bearing on the shutdown. By Tuesday, the market value of IAG, BA’s ultimate owner, had fallen by US$ 630 million, as its share value dropped by over 4% on the first day of trading after the Bank Holiday.

IAG hopes to have better luck with the launch of Level, its new budget airline which will initially fly out of Barcelona to three trans-Atlantic destinations – Buenos Aires, Punta Cana (Dominican Republic) and San Francisco. With one-way prices starting at US$ 125, it is little wonder that 100k tickets have already been sold. However, it will have much to do to catch up with the likes of Norwegian.

In the twelve weeks to 21 May, UK grocery inflation reached 2.9% and grocery sales rose by 3.8%, its highest level in almost four years. As has often been the case, the big winners were the German discount stores of Aldi and Lidl which posted impressive 19.8% and 18.3% increases in turnover, compared to an average 1.6% hike by the Big 4 – Tesco, Sainsbury’s, Asda and Morrisons.

Sberbank posted a record quarterly profit on the back of cheaper funding and reduced management risk costs. Russia’s largest bank, which holds 33% of the country’s banking deposits, reported a Q1 profit of US$ 2.7 billion.

In a bid to raise an extra US$ 3.0 billion for the coffers, the West Australian government may make the country’s two commodity giants, Rio Tinto and BHP Billiton, pay out a one-off iron ore levy (instead of paying a lease rent of US$ 0.18 per tonne).This comes after tax revenue has been badly impacted by the slump in commodity prices, leaving the state government with a debt of over US$ 22.5 billion.

Q1 growth in the Indian economy dipped to an annualised 6.1% compared to 7.0% the previous quarter, as annual growth in the financial year to March 2017 slowed to 7.1%, compared to 8.0% a year earlier. The main reason for the fall was the Modi government’s November withdrawal of 500 and 1k rupee banknotes, effectively removing 86% of the currency out of circulation.

It seems that Greece wants to have its cake and eat it, as Finance Minister, Euclid Tsakalotos, indicated that there are no excuses for his country not to receive the next US$ 8.3 billion tranche of its bailout payment from the EU/IMF.  The Greek government has passed a series of austerity measures, that includes pension cuts and tax reform, and seems to think that it has carried out its side of the bargain. However, Germany does not agree with the IMF about whether the Hellenic country should have its total debt reduced yet again. If no agreement is made before the 15 June deadline, it may have to opt out of a July loan repayment.

There was some good European news on the unemployment front with falls reported in April. The eurozone reported its lowest figure – at 9.3% – in over eight years, with the EU posting a decline to 7.8%, its lowest since December 2008. Germany witnessed even better figures as its jobless rate declined to 5.7%, a new record low since the 1990 reunification.

However it was not all good news for Angela Merkel, as April retail sales slipped to 0.9% year on year following a March return of 2.9%.

Since the start of the year, the Japanese economy has been showing signs of improvement. Positive indicators include Q1 capital spending up 4.5% (following a 3.8% hike in Q4) and the latest manufacturing PMI for May up four notches to 53.1 from a month earlier, driven by rising output and new orders. Both company sales and profits headed north in Q1 by 2.0% to 5.6% and 9.7% to an impressive 26.6% respectively.

Although 14% higher than a year earlier, Chinese industrial firms saw April profit figures, at US$ 83.6 billion, lower than the 23.8% level attained a month earlier; for the first four months of 2017, the total profit figure of US$ 332.7 billion was 24.4% higher than the same period last year. The impressive start to the year, including a 6.9% Q1 growth figure, is not expected to continue, with rising debt becoming a major concern for the authorities.

Brazil has come out of recession after a two-year spell that saw the economy contract by more than 8% and bedeviled by continuing political and corporate scandals. However, the Q1 0.5% expansion figure could be a temporary blip and the country – with a record 14 million unemployed, social unrest and uncertainty about the future of current president, Michel Temer – could soon return to negative growth.

Brazil has yet again been rocked by another scandal – JBS, the world’s largest meat-packing company, has agreed to pay a whopping US$ 3.4 billion fine following a corruption probe involving hush-money payments being made to nearly 1.9k Brazilian politicians, in return for economic favours.

And if that was not enough trouble for the South American country, it is facing problems with its orange industry as a result of changing breakfast habits in other parts of the world and a falling rial. Brazil is the global leader for both oranges and orange juice, producing a third of the world’s oranges and more than half of its orange juice; it has the added problem of relying too much on exports, with 95% of all production shipped overseas. For example, the UK consumption of orange juice, over the past four years, has fallen by 100 million litres – at a time when the demand for coconut water has risen by 80 million litres. Another reason for Brazil to have the Orange Juice Blues!

Dubai Civil Engineering broke ground this week on Schön Properties’ US$ 870 million iSuites project in Dubai Investments Park. The massive development, slated for completion by 2020, will include 2.3k hotel apartments, 125k sq ft retail space, 52 restaurants/cafes, along with a man-made lagoon covering 5 acres.

Dubai will become the eighth global location for Mama Shelter, a global set of hotels established in 2009. The 201-key hotel, with 80 residences, will be located in Business Bay and managed by Accor Hotels.

There were three property launches this week with Emaar involved in two of them – Vida Residences Dubai Mall, that comprises five towers in the heart of Dubai, and Creek Heights in Dubai Creek Harbour – with Damac introducing its latest project, Aknan Villas.

According to Core Savills, Dubai’s secondary office market is unlikely to see light until late next year as there is still a large stock of empty offices in places such as Business Bay, Barsha Heights and JLT, with occupancy levels nearing 30%. 71.3% of the total stock of 9 million sq ft is rated Grade B and C.

Ventures Onsight estimate that the UAE will account for 33.7% of new construction contracts, totalling US$ 40.5 billion; Qatar and Saudi Arabia follow well behind, with sums of US$ 16.7 billion and US$ 16.0 billion.

Careem has introduced a new service – BOX – which will see the Dubai-based ride-hailing app branching out to transporting not only people but now goods. The app will allow customers to track the whereabouts of their merchandise and will be available 12 hours a day.

The world’s third largest money transfer company, Ria Money Transfer, is set to expand its regional operations. A subsidiary of Euronet Worldwide Inc (which itself saw a 2016 20% hike in transactions to 82.3 million, valued at US$ 33 billion).

In a bid to ensure that there is more transparency – and less risk – for investors there has been a new global accounting update that will see insurers having to provide more viable assessments of their assets. This has not come  day too soon since insurance companies’ balances total more than US$ 13 trillion, equating to 12% of all assets held by listed companies. The impact on the local market will probably see reduced short-term profits in the insurance sector, as many operations and processes will have to be improved and standardised, whilst more formal valuations will have to be carried out – all at a cost.

According to a CBRE report, Dubai still holds second place as the city hosting the highest number of global brands, at 57.3%, just behind London’s 57.9%. Last year, it ranked third, behind London and Hong Kong, in attracting the highest number of new labels, with 59 new brands.

A Central Bank study has indicated a Q1 improvement in loan demand, as the economic environment continues to show signs of improvement on the back of recovering energy prices. With demand moving higher, especially in conventional loans and by large entities, there has been a tightening of conditions by banks. This is most noticeable in larger collateralization requirements and increased interest premiums on some loans.

Following the massive success of last week’s 3-day sale, details of the 20th edition of Dubai Summer Surprises have been released. The six-week sales bonanza, starting on 01 July, will see retailers offering up to 75% discount on a wide array of brands.

The ME fashion website, Namshi has sold a 51% stake to Emaar Malls for a reported US$ 151 million, with the current owners, Global Fashion Group, retaining a 49% share. The five-year old company, with a client base of 750k in the GCC, trades 50k products from 600 international and local brands. Last year, it posted a net revenue figure of US$ 151 million.

By the end of the year, consumers will have to pay a 100% excise tax on tobacco products and energy drinks, along with a 50% levy on soft drinks. The introduction of VAT is still on the cards for 01 January 2018, with businesses having an annual turnover of US$ 102k required to register, whilst those with sales of between US$ 51k and US$ 102k have the option to register.

Emaar Turkey, a subsidiary of Emaar Properties, have opened Emaar Square Mall in Istanbul.

Those doom and gloom merchants, who relate tales of a mass Dubai expat exodus, need to see latest figures from the Knowledge and Human Development Authority. Private schools in the emirate have seen an average annual 6.6% growth over the past decade and that ten new schools will open in 2017 bringing the total number to 195 and student numbers to 290k. Dubai is expected to see a further 120 new schools, before 2026, to keep up with the growing demand.

Emaar accounts for 44% of the total value of assets held by UAE companies in the real estate sector, with a 2.8% hike in Q1 to US$ 27.0 billion, compared to the same quarter in 2016. Some way behind are Emaar Malls, Damac and Arabtec with US$ 7.1 billion, US$ 7.1 billion and US$ 2.9 billion respectively.

Some investors have been left poorer but hopefully a little wiser. Those who bought contracts in Arabtec may have lost up to 33% in only a week if they had acquired shares in a rights issue at US$ 0.572 on 15 May but were left holding them on 21 May at US$ 0.163. On that day, Arabtec shares, with a par value of US$0.272, were trading at US$ 0.216.

Shares in the embattled developer received a mini boost this week with news that it had been awarded a Wasl Asset Management Group US$ 398 million contract to build the 63-storey Wasl Tower on SZR. The development will include a Mandarin Orient hotel and is due to open in late 2020. Arabtec has a current backlog totalling US$ 4.6 billion. The company has also requested that their creditors submit all details and documents of their debts in person by 20 June at the latest.

The DFM opened Sunday at 3378 and traded 1.5% lower this week – closing on Thursday (25 May – the last day before the start of the holy month of Ramadan) at 3327. Volumes were again wafer thin, closing on Thursday at 215 million shares, valued at US$ 74 million, (cf 195 million shares for US$ 64 million, the previous Thursday). Emaar Properties dropped US$ 0.06 to US$ 1.97, whilst Arabtec closed flat at US$ 0.20.

By Thursday, Brent Crude, having nearly touched US$ 55 earlier in the week, traded down US$ 1.05 (2.0%) at US$ 51.46, with gold heading the other way gaining US$ 3 to US$ 1,256 by 25 May 2017.

At Thursday’s Vienna meeting, OPEC decided to extend oil production cuts for a further nine months but the market was disappointed that no extra measures were introduced and prices initially slid 2.3% on the lack of further news. There is still too much surplus stock in the pipeline, not helped by increasing US shale production.

With a Serious Fraud Office investigation taking place and its COO, Marwan Chedid, suspended by the company, it was no surprise to see Petrofac shares plummet more than 30% this week. The allegations involve the Monaco-based oil contractor, Unaoil, and “bribery, corruption and money laundering”, in securing dozens of international contracts, mainly in Kazakhstan, between 2002 – 2009.

As part of its global restructuring strategy, GM India will no longer make vehicles for the local market and instead concentrate on using its Maharashtra plant for exports, mainly to South and Central America. This comes after its unit sales in the sub-continent were less than 1% of its total turnover. At the same time, the US auto giant will sell its South African business to Isuzu, with that company also acquiring 57.7% in its East African operations.

A dispute between Apple and Nokia, over the use of smartphone patented technology, has been settled out of court. The end result is that Apple will continue to use the technology for which the Finnish company will receive cash payments upfront, as well as stocking Nokia’s health products in its retail stores. No financial details were made available but this agreement appears to suggest that Nokia will benefit to the tune of US$ hundreds of millions every year.

Having already raised nearly US$ 80 billion from a myriad of investors, including Apple, Foxconn, Qualcomm and Saudi’s PIF, Abu Dhabi’s Mubadala has weighed in with a US$ 15 billion commitment to the Softbank Vision Fund. The huge Japanese Softbank Group investment vehicle will support leading tech companies and entrepreneurial start-ups, with a focus on technology and innovation.

Crypto currency Bitcoin continues to confound analysts reaching a peak of US$ 2,727, before retreating to US$ 2,678 by Thursday. This still represents a massive – and potentially disturbing – 200% increase already this year.

Having had to pay over US$ 520 million in one off-charges relating to pension adjustments and store closures, it was no surprise to see Marks & Spencer report a 63.0% slump in 12-month profits to US$ 230 million. Sales also fell with clothing/home ware down 3.4% (Q4 – 5.9%) and food by 0.8% (Q4 – 2.1%).

The UK’s third largest supermarket, Asda, recorded its 11^th straight quarterly fall in profits, posting a Q1 2.8% slump on a like-for-like basis. Luckily its parent company, Walmart reported a 1.4% hike in its US market, as Q1 sales figures reached US$ 117.5 billion. The other three majors – Morrisons, Sainsbury’s and Tesco – are performing better but are all facing stiff competition from the Germen interlopers, Aldi and Lidl.

Despite a decreasing number of worshippers, the Church of England has announced that its 2016 investments returned an impressive US$ 300 million, equating to 17.1%, compared to 8.2% in 2015. The Church Commissioners must be receiving some form of divine intervention as its average annual return over the past 30 years has been 9.6%, beating the likes of the impressive Yale University endowment fund. Investments only account for some 15% of its total income.

After closing the year with its lowest annual borrowing, at US$ 63 billion, since the year ending 31 March 2008, the UK government got a rude awakening in April. Official figures indicate that monthly public sector net borrowing jumped 13.0% to US$ 13.4 billion – its highest level in three years; total public debt was a mouth-watering US$ 2.2 trillion, accounting for 86% of the country’s GDP. Treasury revenues were held back by falling VAT receipts – a possible sign that spending is being stymied by the recent hikes in inflation. Official Q1 growth figures point to a disappointing 0.2% as both real wages (also down 0.2%) and consumer confidence levels dipped.

With a breakdown in last minute talks, Greece failed to convince their creditors (the IMF and the EU) to release a further US$ 8.3 billion tranche of its bailout funds. The cash is needed to ensure that the country does not default on a loan repayment due next month. The main sticking point seems to hinge on differences between the IMF – who would prefer a reduction in the loan – and Germany who insist on no more haircuts. In Q1, Greece fell back into recession, as its GDP fell 0.1% after a 1.2% decline in the previous quarter.

Meanwhile, Portugal has seen its annual deficit, now at 2%, fall below the 3% threshold; this allows the country to exit the EC’s excessive debt procedures after six years of austerity since its 2011 bailout. In true EU fashion, it seems like business as usual for Spain and France despite their 4.5% and 3.4% deficits in breach of the bloc’s regulations.

A Westpac report indicates that growth in Australia will reach 3% this year but the signs for 2018 are “discouraging”. The three obvious drag factors will be a slowdown in exports, weaker wage growth and a contraction in the housing sector.

At this week’s meeting, eleven of the twelve Asia-Pacific trade ministers from Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam decided to go ahead with the Trans-Pacific Partnership (TPP). This is after  the US withdrawal from the controversial trade deal, following President Trump’s inauguration in January.

Donald Trump certainly made his presence known in Saudi Arabia as a raft of bipartisan deals was signed totalling up to US$ 200 billion. These included a US$ 110 billion defence package, Aramco signing off on US$ 50 billion of agreements with 11 companies and Saudi’s Public Investment Fund (PIF) contributing $20 billion in an infrastructure investment fund with Blackstone Group LP.

The travelling US president released his 2018 budget request that would see him try and balance the country’s budget – which currently stands at US$ 19.9 trillion, equating to 104% of GDP (compared to China (250%), UK (84%) and Dubai (42%) – over the next decade. It includes a spending cut of US$ 1.7 trillion, including US$ 272 billion in welfare programmes, whilst spending more on defence and border security by US$ 54 billion (10%) and US$ 2.6 billion respectively.

The S&P 500 index and Nasdaq hit record highs this week reaching 2415 and 6205 in late week trading. One of the main drivers came from renewed consumer confidence in the US as the retail sector posted improving results. This bullish sentiment echoed around the world with the MSCI 46-country global stock index moving to a record 464.

China could be faced with a bigger borrowing cost as Moody’s downgraded its long-term local currency and foreign currency issuer ratings by one notch to A1 from Aa3, whilst changing its outlook from stable from negative. The agency is concerned that the country’s growth is slowing and its debt continues to rise.

According to Chinese authorities their much vaunted Belt and Road initiative has already attracted deals of more than US$ 900 billion, with heady estimates of trade growing to up to US$ 8 trillion. Indeed this week, President Xi Jinping has pledged a further US$ 78 billion but whether other stakeholders have the financial appetite to help with the infrastructure, to link China with Europe via Asia, the Middle East and Africa, remains to be seen. Whatever happens, trade will be quicker than On A Slow Boat To China.

This week HH Sheikh Mohammed bin Rashid Al Maktoum launched the ambitious Marsa Al Arab, to be developed by Dubai Holding. The project will have two islands, one of which, located to the left of the Burj Al Arab, will have 140 luxury villas, a private marina and a boutique hotel.

The second island will include the Dubai Pearl Museum (including a mollusc farm and a pearl-inspired hotel), a 1.7k capacity theatre to be used by Cirque du Soleil and an expanded Wild Wadi / Marine Park, encompassing 2.5 million sq ft.

The mainland will have 20k sq mt of retail space (built on the current Wild Wadi Water Park site), a convention centre (with commercial lots) and a hotel. 300 seafront residential apartments are also included in the plans, as are 400 food-and-beverage outlets.

Nakheel has signed a US$ 409 million, 30-month construction contract with Shapoorji Pallonji to build The Palm Gateway. The three-tower development, to be built above the Palm Monorail terminal, will house 1.3k luxury apartments for lease, along with a retail and beach complex.

MAG Property Development is going upmarket, as it adds MAG 318 and MAG 230 to its growing portfolio; the former will be located in Downtown and the latter will be part of City of Arabia.

A three-day pre-Ramadan sale starts today, with more than 1k retailers offering discounts of up to 90%! If today is anything to go by, the shopping malls will be filled to capacity over the weekend.

It was no surprise to ascertain that e-commerce site, JadoPado, which went off-line last month, has been acquired by a tech fund led by Mohamed Alabbar. He also announced this week that his US$ 1 billion e-commerce platform, noon, is to go live later in the year and then have its permanent base in Riyadh – 50% of its backing is from Saudi Arabia’s Public Investment Fund. Interestingly, on-line trading has little traction in the region, with an estimated 2% of the retail market, but this is expected to grow to US$ 70 billion by 2025 – a good enough reason to get a toehold in the sector.

In a bid to discover tech entrepreneurs and innovators, the Chairman of Emaar Properties has also bought a large stake in ME Venture Partners, a company that already has US$ 120 million of assets under management and a further US$ 60 million in co-investments. He also has a number of interests in this sector, including a 40% stake in the US$ 145 million JV with Yoox Net-A-Porter to start regional on-line trading for the Italian fashion house.

It seems that the image of Financial Advisors will have to improve as the Central Bank has given them 90 days, from its 11 May circular, to resolve all of their outstanding mis-selling complaints amicably. These include certain fixed term savings schemes, banned in many western countries, that have been criticised by some as being the most expensive financial products available anywhere in the world. Other complaints include that under-trained staff, selling these products, have neither the wherewithal to understand clients’ risk profile nor the ability to explain their intricacies. It looks as if formerly opaque plans will become simpler and more transparent indicating how much the client has to pay in commission which in the past has often been front-loaded and biased in favour of the advisor.

There was a 2.9% increase in Q1 Metro users to 51.4 million compared to a year earlier, whilst Dubai Tram saw numbers up by an impressive 23.1% to 1.6 million.

The completion date for Dubai World Central has been put back a year to 2018, when its capacity will jump fivefold to 26 million passengers, growing to 146 million by 2025. It is expected that both Dubai airports will serve more than 100 million people this year. The Dubai government has secured a US$ 1.6 billion 7-year conventional loan along with a 7-year US$ 1.5 billion Ijara facility as part of its two airports’ financing strategy.

Although revenue was some 20.4% higher at US$ 640 million, Damac Properties returned a 16.2% fall in Q1 profit to US$ 240 million, with cost of sales 40.3% up at US$ 242 million. Booked sales for the quarter – at US$ 599 million – were 10.0% higher, with the developer still expecting growth of US$ 1.9 billion this year. (It was also announced that Ziad El Chaar has resigned his position as MD for the developer, with whom he has worked for the past 12 years).

With higher property sales of 44% and its other divisions – entertainment, hospitality, leisure and malls – performing well, Emaar Properties posted a 14.0% jump in profits to US$ 376 million, with revenue 15.3% higher at US$ 1.11 billion. The four divisions saw their revenue jump 44%, whilst contributing 39.1% to the total group revenue. The developer has a backlog amounting to US$ 12.6 billion.

Emaar Malls had comparatively flat results with Q1 revenue just US$ 1 million higher at US$ 228 million whilst profit nudged 1.9% higher to US$ 147 million.

Union Properties announced a 0.9% rise in Q1 net profit to US$ 12 million, although revenue climbed at a much higher rate – 25.2% to US$ 73 million; direct costs were up 39.7% at US$ 69 million.

Having made just a US$ 3 million profit in Q1 last year, embattled Drake & Scull turned in a US$ 228 million loss this quarter, as revenues fell 22.7% to US$ 217 million. The company has already incurred deficits over the past two years of US$ 256 million (2015) and US$ 214 million last year.

Amanat Holdings saw Q1 profits 49.0% higher at US$ 4 million, whilst Gulf General Investment Company posted a US$ 12 million loss (Q1 2016 profit – US$ 2 million) as revenue declined 30.8% to US$ 40 million.

The DFM opened Sunday at 3420 and traded 1.2% lower this week – closing on Thursday (18 May) at 3378. Volumes were again wafer thin, closing on Thursday at 195 million shares, valued at US$ 64 million, (cf 250 million shares for US$ 93 million, the previous Thursday). Emaar Properties shed US$ 0.01 to US$ 2.03, whilst struggling Arabtec yet again closed lower, down US$ 0.01 at US$ 0.20.

By Thursday, Brent Crude continued the previous week’s upward trend to close US$ 1.74 (3.4%) higher at US$ 52.51, with gold again also on the up, gaining US$ 29 to US$ 1,253 by 18 May 2017.

The increase in oil prices have come about because of  Monday’s announcement by Saudi Arabia and Russia that they will abide with the oil quota cuts until next year and US oil inventories falling  during the week from 2.3 million bpd to 520 million.

Facebook has only been fined US$ 125 million – and not hit by other sanctions – by the EC for “incorrect or misleading” information in relation to its 2014 takeover of WhatsApp. Not surprisingly, the US tech giant has indicated that it will not fight the penalty.

A slowdown in April saw China’s annual industrial output soften to 6.5% – well down from March’s return of 7.6%, A feeling that the world’s second biggest economy is losing the momentum of Q1 came with news that fixed asset investment, at 8.9% for the first four months of 2017, was lower than estimates with retail sales, at 10.7%, 2 notches lower than a month earlier. Growth, which was at 6.5% in Q1, is now being stymied by the government’s effort to marginalise risky debt and a notable softening in domestic demand.

The market was surprised by Japan’s Q1 GDP expanding by a creditable 0.5% from 0.3% the previous quarter, equating to an annual 2.2% hike – and well above previous 1.7% expectations. These figures reflect that the country has recorded its longest period of expansion since 2006, driven by an increase in domestic consumption, stronger exports (helped by a falling yen) and the knock-on impact of the upcoming 2020 Tokyo Olympics. It has taken a long time but finally the world’s third largest economy may be thankful for their Prime Minister’s style of economics.

Last month, RBA governor, Philip Lowe, indicated that Australian household debt was on the high side, having risen. 6.5% over the previous 12 months. During that time, median house prices in Melbourne and Sydney rose by 15.2% and 13.1% respectively, equating to a growth of about 3% in aggregate household income. It can only be a matter of time before the property bubble bursts – the only question will be by how much?

Greek Prime Minister Alexis Tsipras has had to eat a little more humble pie as he agrees reluctantly to a further round of pension cuts and lower tax breaks (totalling US$ 5.4 billion in 2019/2020) in order to avail of further bailout funds next month from the EU/IMF. This has led to demonstrations and some social unrest in cities like Athens and Thessaloniki.

Angela Merkel has had a good start to the year with the German economy growing at 0.6% in Q1, compared to 0.4% the previous quarter, equating to an annual 1.7% uptick. Its consumer price index climbed to 2.0% in April (up from March’s reading of 1.6%), driven by a 5.1% jump in energy prices.

The Australian tax authorities have been shaken by one of its deputy commissioners, Michael Cranston, being charged with an abuse of his position. The case involves his 30-year old son Adam, one of nine people arrested for defrauding the government of US$ 122 million in a payroll scheme that saw monies being siphoned off to be used for the accused’s lavish lifestyle which has seen 2 planes, 18 houses, 25 cars and vintage wine being seized. It appears that the father may have unwittingly helped him access some confidential information and, if so, their relationship may be somewhat strained in an unfortunate reprise of Father and Son.

The RTA is set to spend US$ 102 million on road and tunnel infrastructure in and around the upcoming Jewel of the Creek project in Dubai. Set to be completed within two years, the 124k sq mt development will house hotels, apartments, offices and a conference centre.

Damac will open their ultra-luxury The Damac Maison Royale The Distinction next month. The 52-storey property, with 305 keys, is located in Downtown.

Yet another announcement from Azizi sees the developer planning to build luxury hotel apartments and residences in Dubai Studio City. The twin 8-storey towers will feature 177 1-3 bedroom apartments, along with 6k sq ft of retail space.

Nakheel and Spain’s RIU Hotels & Resorts have released a US$ 183 million construction tender for their 800-key Deira Islands property, to also include a beachfront resort and water park. Due for completion by Q4 2019, the resort will be a focal point of the new 15.3 sq km coastal city.

Local developer, RSG International, is set to have three new hotels in Dubai before Expo 2020, with the first being the US$ 163 million 4-star Sabah Rotana at Jebel Ali Central on SZR. The 40-storey property will have 180 keys and 300 hotel apartments.

Following a positive response to the 2016 launches of its Arabella 1 and Arabella 2, Dubai Properties has unveiled the third edition located in the Mudon community at Dubailand. The project, which will comprise 3-5 – bedroom units, will be close to the 41-acre Mudon Central Park, with its raft of leisure and entertainment amenities.

The Limitless 200-hectare mixed-use project in Downtown Jebel Ali is progressing, with 50% of the deep utilities (sewerage, storm water and water) now completed, as work on the road system has started. It is expected that the US$ 78 million infrastructure project will be finished by next year, with all plots connected to services.

It is reported that the long-awaited US$ 44 million Dubai Frame is set to open this October, with the delay attributed to Dubai Municipality’s decision to replace the landmark’s exterior cladding. Located in Zabeel Park, the 150 mt high, 93 mt wide construction has been built in such a way that Old Dubai – such as Deira and Karama – can be viewed from one side, whilst buildings, like Burj Khalifa and Emirates Towers, representing New Dubai, can be seen from the other side.

Emirates Group reported a not unexpected 70% slump in annual profit to US$ 681 million – with Emirates, down 82.0%, but still contributing US$ 354 million and dnata US$ 327 million, its highest ever. Despite the difficult operating conditions, Group revenue nudged 2.0% higher to US$ 25.8 billion, of which US$ 3.3 billion emanated from dnata operations. During the year, the airline invested US$ 3.7 billion and received 35 new aircraft (19 A380s and 16 777s) to bring its total fleet size to 259. The airline served 56.1 million passengers, with a Passenger Seat Factor of 75.1%, slightly down on the previous year’s 76.5%, as the supply chain increased seat capacity by 10%. Payroll grew by 11% to 105k.

The specialised freighter operator, Cargolux has signed an operational agreement with Emirates SkyCargo to work closely that will see both entities, at times, using each other’s facilities. This will be most noticeable in areas where one or the other does not currently operate.

As it continues to expand its international cargo network, Dnata has acquired Lynx Holdings’ AirLogistix USA 30k sq ft cargo handling operations at Houston Airport – the Dubai company’s first foray in the US market. It has also agreed to open a similar facility at Dallas Fort Worth airport later in the year. Having opened 18 new facilities over the past five years, Dnata now handles 2.8 million tonnes of cargo at 42 global airports.

The Federal Customs Authority reported a 0.5% increase in the country’s non-oil trade to US$ 426.1 billion. Of that figure, there were increases in all three sectors – imports up 1.7% to US$ 264.0 billion, exports by 5.2% to US$ 53.1 billion and reexports at US$ 109.0 billion.

Despite all the doom and gloom permeating through the market, Q1 money outflows continued their upward trend, with a 1.1% increase to US$ 10.11 billion. Indian, Pakistani and Filipino expats – at US$ 3.53 billion, US$ 950 million and US$ 738 million – accounted for 51.6% of all remittances. US and UK nationals sent home US$ 546 million and US$ 445 million.

An initiative between Dubai Municipality and the Dutch conglomerate, Philips Lighting, has resulted in the future use of Dubai Lamp in many of the emirate’s projects, including two million energy-efficient LED units this year alone. Already major developers, such as Emaar Properties and Dubai Properties Group, have bought into the scheme and it is hoped that by 2021, most of Dubai will be using this form of lighting.

UPS has signed an agreement to provide logistic support at Dubai Expo 2020, starting in October of that year. The company expects to hire up to 1k people and will work from warehouse facilities, covering 27k sq mt. It is keen to expand its international network, as over 75% of its US$ 90 billion revenue last year emanated from its home country of USA.

The entertainment division of Emaar Properties could be divesting itself of a 40% (valued in the region of US$ 800 million) stake in a probable deal with Blackstone Group LP (from the US) and Luxembourg-based CVC Capital Partners. It operates some of Dubai’s most impressive destinations, including Dubai Aquarium & Underwater Zoo, Dubai Ice Rink and Reel Cinemas.

Emaar Properties has announced that it will not be providing any further funding to Emaar India – a JV with MGF Developments Ltd – in which it had already invested US$ 1.1 billion but ended the arrangement in April 2016. The Indian developer requires a further US$ 311 million cash injection to complete all pending projects, having already raised US$ 390 million debt finance since Emaar Properties pulled out.

It is reported that loss-making Drake & Scull International is owed US$ 613 million by Saudi Aramco and hopes to soon settle at least US$ 280 million of the balance; the claim refers to work carried out on the King Abdullah Petroleum Studies and Research Centre in Riyadh which opened last year. In a bid to return to profitability, the Dubai-based contractor is taking steps such as chasing up other debts, totalling over US$ 600k, cutting its payroll by 25% to 21k, selling non-core assets (including its Indian operations) and rescheduling its debt repayments. Despite further diluting shareholders’ equity, they have agreed to increase its write off by US$ 197 million, in addition to a previously arranged US$ 270 million reduction.

Arabtec has announced that its US$ 409 million rights issue will open from 15 – 28 May, whilst trading in the rights issue will only be for the week commencing 15 May. Existing shareholders will be able to trade their rights, with a one fils starting price on the first day during which it will free float but for the following four trading days, it will trade between the 10% down to 15% up  range.

Tabreed (National Central Cooling) posted a 19.0% jump in Q1 profits to US$ 21 million, with revenue increasing by 5.8% to US$ 74 million.

Having made a Q1 loss of US$ 80 million (compared to a US$ 10 million deficit in the same period last year and US$ 64 million the previous quarter), DXB Entertainments is planning to slash costs by 20%; revenue for Q1 came in at US$ 44 million from 586k visits and was well down on forecasts.

Amlak Finance posted a 95.4% slump in Q1 profits to US$ 2 million, as revenue fell 75% to US$ 26 million driven by a softening in the realty sector. The company’s assets stood at US$ 1.77 billion.

Dubai Investments posted a slightly weaker Q1 return, compared to the same period in 2016, with revenue slipping 2.5% to US$ 190 million and profit down 3.0% at US$ 79 million. However, the 2016 figure did include a one-off profit of US$ 51 million, arising from the sale of its stake in Marmum Dairy Farm.

Dubai Financial Market posted a 19.0% hike in Q1 profit to US$ 28 million, as revenue expanded 17.6% to US$ 41 million, comprising US$ 34 million attributable to operating income and the balance of US$ 7 million to investment returns. Over the period, the DFM saw trade grow 18.8% to US$ 13.1 billion.

Emirates REIT returned a 21.2% improvement in Q1 rental income to US$ 13 million driven by stronger leasing at Index Tower and income from its two educational facilities – Jebel Ali School and the new British Columbia Canadian School.

The DFM opened Sunday at 3420 and once again traded flat this week – closing on Thursday (11 May) at 3420. Volumes were wafer thin, closing on Thursday at 250 million shares, valued at US$ 93 million, (cf 308 million shares for US$ 121 million, the previous Thursday). Emaar Properties gained US$ 0.06 to US$ 2.04, whilst struggling Arabtec closed US$ 0.02 lower at US$ 0.21.

By Thursday, Brent Crude, having lost over 14% the previous three weeks, made somewhat of a recovery gaining 4.9% (US$ 2.39) to close on US$ 50.77, with gold again lower (US$ 5) at US$ 1,224 by 11 May 2017.

Although selling more cars (10.25 million), Toyota reported its first fall in profits for five years, driven by exchange fluctuations and higher costs, as it warned that the situation may not improve in the short term; its profit figure slid 21.0% to US$ 16.1 billion.

It was no surprise to see Qatar Airways taking over from Emirates as an official FIFA partner in a deal that will see it have marketing and branding rights at the next two World Cups – in Russia next year and in their home base four years later.

Having left the club in 2012 for US$ 2 million to play for Juventus, Paul Pogba returned to Manchester United in 2016 in a world record US$ 114 million transfer. A new German book – The Football Leaks: The Dirty Business of Football – claims that the player’s agent, Mino Raiola, earned a mouth-watering US$ 52 million in the deal. Now FIFA has contacted the EPL team “”to seek clarification on the deal” to ascertain who was involved and how much each party to the deal received.The theme parks operator DXB Entertainments said it planned to cut operational costs by 20 per cent this year, compared with initial projections, after it missed analysts’ forecasts and posted a wider-than-expected first-quarter loss on higher expenses.

Even though there still “several hundred cases” of corruption pending, the FIFA hierarchy has decided to remove its ethics team, including investigator Cornel Borbely and the ethics judge, Hans-Joachim Eckert, who both helped bring down disgraced former chief Sepp Blatter and some of his cronies.

Ray Gammell has been appointed temporary CEO of Etihad with immediate effect, replacing James Hogan who will leave on 01 July. The group’s CFO, James Rigney, will also leave at the same time, with Ricky Thirion taking over his mantle.

Buoyed by bigger attendances at its resorts, Walt Disney returned an 11.0% rise in Q1 profits to US$ 2.4 billion, even though revenues were only 3% higher at US$ 13.3 billion. 40% of the company’s revenue originates from its TV networks – ABC, Disney and ESPN; the latter is suffering,  having lost millions of subscribers and subsequent advertising revenue, as viewers turn to cheaper sporting alternatives.

For the third time, US-based PPG Industries has failed in its attempt to acquire Akzo Nobel, the owner of Dulux paint, despite a higher bid of US$ 29.2 billion; the Dutch conglomerate indicated that the offer was not only high enough but showed a “lack of cultural understanding of the brand”. Further negotiations may not be so friendly and a hostile bid directly to the shareholders may now be on the cards.

Crown Resorts has sold the remaining 11.2% stake in its Macau casino investment to its JV partner, Melco Resorts and Entertainment, for US$1.0 billion. The Australian company, controlled by James Packer,  has had many problems in the Chinese enclave, including last year’s detention of 15 of his employees by Chinese authorities.

Australian building materials supplier, Boral, has acquired its US competitor, Headwaters Incorporated, in a deal worth US$ 2.6 billion. The new entity, known as Boral North America, will have an expected annual revenue of US$ 1.8 billion.

The Australian property bubble is still waiting to burst – latest Q1 figures indicate price rises of 4.6% in Sydney and 5.1% in Melbourne, with a national average of 3.7%.

Treasurer Scott Morrison surprised the big 5 Australian banks (ANZ, CBA, Macquarie, NAB and Westpac) by a levy increase that will see an extra US$ 4.6 billion being paid over the next four years. He also wants to save US$ 2.9 billion from the education budget which will result in students paying a greater share of the cost of obtaining degrees.

The IMF has raised its 2017 Asia Pacific growth forecast to 5.5% and expects a marginal fall to 5.4% the following year, whilst noting that the near-term outlook was clouded with significant uncertainty.

Growth in China and Japan was revised upward for 2017 compared to the October 2016 World Economic Outlook, owing mainly to continued policy support and strong recent data. Two of the area’s main economies are now expected to grow faster this year with India set to return a 7.2% figure as China comes in at 6.6%; in 2018, growth estimates are 7.7% and 6.2% respectively. Japan’s prospects were disappointing with growth of only 1.2% and 0.6% over the next two years.

However, a 13.1% hike in March exports to US$ 631 billion and a higher 15.4% jump in imports to US$ 555 billion saw Japan post a trade surplus of US$ 762 billion; its current account surplus fell 2.2% to US$ 256 billion. Meanwhile the Bank of Japan recorded 3.0% April rise in overall bank lending to US$ 4.53 trillion. The recent economic upturn has been felt on the Tokyo bourse, with the Nikkei 225 8.5% higher than its 14 April low, aided by a 4 point drop in the yen to 113 to US$ 1.

Despite the eurozone being in the best of economic health for a decade, there is a dichotomy between official employment figures and the real world. A study by the ECB indicates that unemployment in the bloc is higher than what has been recorded and that wage growth has been exceptionally weak. The ECB has indicated that inflation levels have to rise before it can cut back on its stimulus measures – and that means a marked improvement in wage growth is essential along with a significant tightening in the labour market.

The UK economy suffers from the same problem – the strongly performing labour market is not matched by robust wage growth. With only a 4.7% unemployment rate and a record high 74.6% employment level, wage growth should be higher, indicating that there is still slack in the market.

The US and other economies are also suffering from a considerable degree of labour market slack, driven by underemployment and hidden underemployment. The former refers to those who are working part-time but want a full-time position, whilst the latter are not working but would rejoin the work force if the remuneration made it worthwhile. Wage growth would improve if more full time better, paid jobs are made available, with an increasing number working 9 to 5.

If you thought Dubai property was expensive (at US$ 6,653 per sq mt), then consider Monaco where prices are seven times higher, according to global property firm Savills. On average, the emirate’s villa prices have surged 94% in the past decade but there is a wide variance between locations including Jumeirah Palm and Emirates Hills both up 238% and 45% respectively, whilst Burj Khalifa has seen prices off by 12% since its 2010 opening. The report indicates that Dubai is the tenth most expensive city, with Hong Kong, Tokyo, London and New York joining the principality in the top five locations.

Much of the same from the latest Asteco property report indicating that average apartment rentals fell 3% in Q1 and are 8% lower over the past twelve months; however, the upper end of the market suffered as exemplified by Palm Jumeirah where rents have fallen 7% last quarter and 14% since April 2016. The company estimates that 3.6k new apartments have been added in Q1, with the annual figure by December to reach 17k. Average villa rentals followed the same path as apartments, with the consultancy expecting 4k new villas to be handed over in 2017. Sale prices in both villas and apartments were lower – both down 1% in Q1, with villas flat for the year whilst apartment prices dipped by 3%.

According to Reidin-GCP, there has been a 20% increase in the number of ready units being sold in the first four months of 2017, as numbers reach 4.33k. The main locations with impressive growth numbers were Discovery Gardens up 72% to 244 and Jumeirah Palm 58% higher at 196 homes.

With the Mandarin Oriental Jumeirah Beach due to open late next year, the hotel group will have a second property ready for Expo 2020. Located in Downtown, and also owned and developed by wasl Asset Management, the 257-key hotel will anchor a 63-storey new-build mixed-use building on SZR. There will also be 144 ‘Residences at Mandarin Oriental’ on the tower’s upper floors.

Hilton has signed an agreement with Nakheel to manage two new properties under its DoubleTree by Hilton brand – a 254-key hotel in Jumeirah Village Triangle and a twin tower complex, with 250 hotel rooms and 200 serviced apartments, on Deira Islands.

This week witnessed Dubai’s biggest residential land sale, for the year so far, as Falcon Group chairman, Kamel Al Zarka sold a plot in Meydan for US$ 16 million. The unnamed Emirati buyer is planning to build three family custom-designed mansions on the 120k sq ft site.

“Dubai Font” has been created making the emirate the first location in the world for a Microsoft font to be named after it. The development includes 23 languages and helps to combine both Arabic and Latin scripts seamlessly. All government agencies will be encouraged to use the new font whenever practicable.

Noting that the country is currently well served when it comes to both military and economic power, HH Sheikh Mohammed bin Rashid Al Maktoum has now launched the UAE Soft Power Council, reporting directly to the federal cabinet. The development of soft power strategy will cover various sectors including cultural, humanitarian, scientific and technology, with the aim of enhancing UAE’s position and reputation on the global stage.

Although marginally lower, April’s UAE Purchasing Managers’ Index still provided comforting reading as growth in new orders and output helped the index reach 56.1 – just one notch lower than the March return which was then at a 19-month high. The only drag factors appear to be a tepid environment for new jobs and higher market prices. The non-oil sector is performing better than expected and it is hoped that this recent momentum can be carried forward into the summer months.

Following a decrease in April, UAE pump prices headed north again for May. Special 95 will now retail at US$ 0.518 per litre – up 3.3% on the month – as diesel nudges 1.0% higher to US$ 0.531.

The DIFC had a strong 2016 with increases in three main indicators – gross operating profit, 4% higher at US$ 149 million, employment 9% up at 21.6k and the number of registered entities increasing by 13% to 1.65k. Occupancy figures in the investment park topped an impressive 98%.

Deyaar posted a 37.3% slump in Q1 profits to US$ 9 million, despite revenue surging 137% to US$ 39 million, driven by strong figures from its The Atria and Mont Rose projects.

Arabtec Holding has approved the launch of a US$ 409 million rights issue – at US$ 0.272 per share – with the subscription date of 28 May 2017; this will increase the developer’s capital from US$ 1.26 billion to US$ 1.67 billion which will dilute non-participating shares by up to 24.53%. However, there was some good news of sorts for investors as it turned in its first quarterly profit – since Q3 2014 – posting a US$ 5 million surplus on an 11% hike in revenue to US$ 599 million.

Marka shareholders have agreed to sell their 60% stake in Cheeky Monkeys, a local children’s indoor play area operator. The loss-making Dubai-listed retail company acquired its share for US$ 8 million in April 2015.

With trading stopped on Thursday before resuming on Sunday, Union Properties have voted in a new chairman, Nasser Butti Umar bin Yousuf, and vice-chairman, Hamad Abdulla Mohamed Abdulla Al Mass, replacing Khalid Jassim Bin Kalban and Mohamed Saif Darwish Ahmed Al Ketbi.

Although Q1 revenue was 6.8% higher at US$ 300 million, Aramex posted a 5.3% fall in profit to US$ 24 million, driven lower by an 8.5% hike in the value of the provision related to the company’s incentive scheme; this reduced the logistics firm’s profit by US$ 4 million.

The DFM opened Sunday at 3417 and, having shed 110 points over the previous fortnight, traded flat this week – gaining 3 points – to end on Thursday (04 May) at 3420. Volumes nudged higher, closing on Thursday at 308 million shares, valued at US$ 121 million, (cf 256 million shares for US$ 94 million, the previous Thursday). Emaar Properties gained US$ 0.02 to US$ 1.98, whilst struggling Arabtec closed US$ 0.01 lower at US$ 0.23. For the month, the index fell 1.9% from its April opening of 3480 to close on Sunday (30 April) at 3415. Emaar Properties slipped US$ 0.03 to US$ 1.98, whilst Arabtec’s demise continued, down 4.4% to US$ 0.23.

By Thursday, Brent Crude, having lost almost 8% the previous fortnight, tanked again this week losing 6.0% (US$ 3.08) to close on US$ 48.38, with gold also lower (US$ 37) at US$ 1,229 by 04 May 2017. For the month, Brent shed 2.8% (US$ 1.48), whilst gold ended April US$ 16 higher at US$ 1,268.

The oil prices are at a five-month low driven by the fact that the US has seen production levels rise 10%, pumping out 9.3 million bpd, and this despite the November oil quota cut of 1.8 million bpd largely holding.

BP has managed to turn around a US$ 485 million loss last year to a Q1 profit of US$ 1.1 billion, on the replacement cost measure, driven by oil price rises. At the same time, operating cash flow was up to US$ 4.4 billion, compared to US$ 3.0 billion a year earlier. Royal Dutch Shell also had impressive quarterly returns with profits, on a current cost of supply measure, more than trebling to US$ 3.4 billion (from US$ 1.0 billion a year earlier). Other majors – including Chevron, Exxon and Total – have reported better than expected results, helped by oil prices plateauing in the mid-US$ 50s range for most of the quarter. It will be interesting to see Q2 results with the recent fall in prices.

Alitalia is set to close down after employees rejected a fresh round of job and wage cuts. The troubled Italian flagship airline, 49% owned by Etihad, was privatised in 2008 and since then has racked up losses of over US$ 980 million; furthermore, it has never made a profit since 2002! The only government assistance could be a short-term bridging loan of up to US$ 200 million to keep the airline running in the forlorn hope of a possible external buyer.

Barclays surprised the market by a bigger than expected Q1 profit, up 121% to US$ 2.1 billion – and this despite a one – off goodwill impairment charge of US$ 1.1 billion on the bank’s stake in Barclays Africa Group.

Europe’s biggest bank, HSBC, posted an 18.0% fall in Q1 profit to 5.0 billion, as revenue dipped 13% to US$ 13.0 billion.

Even RBS returned a Q1 pre-tax profit of US$ 326 million (compared to a US$ 1.2 billion deficit in the same period last year). However, its total losses, since the 2008 government bailout, stand at US$ 73.1 billion, including US$ 8.8 billion last year.

ANZ posted a 23% increase in H1 cash profits to US$ 2.62 billion, with NAB reporting a 2.3% profit improvement to US$ 2.54 billion, driven lower by its bad debt impairment costs rising 5.1% to US$ 300 million. Australian banks are considered by some to be the most profitable in the world when measured by their profit share as a percentage of GDP. This is estimated at 2.9% with China (2.8%) and Sweden (2.6%) close behind but well ahead of the likes of the US – 1.9% – and the UK’s 0.9%.

Apple posted a 4.9% increase in Q1 profit to US$ 11.0 billion in line with a 4.6% rise in revenue to US$ 52.9 billion. Its i-Phone sales dipped to 50.8 million units and weaker sales of iPads and Mac computers were reported; revenue from other products such as AirPods wireless ear pieces and Apple Watch posted a 31% jump. Amazingly, the company now has a record level of cash holdings at US$ 256.8 billion.

With Q1 revenue increasing by 49% to US$ 8.03 billion, Facebook posted an impressive 76% surge in profit to US$ 3.06 billion, as user number jumped 17% to reach 1.94 billion. There were warnings that there will be increased pressure on future profit as the revenue stream may slow and expenses will rise.

In Q1, Adidas posted a 16% jump in revenue, as its profit climbed 30.0% to US$ 480 million. With global unit sales up 31%, it has completely outpaced its rival, Nike who managed only a 3% quarterly improvement.

IATA announced that March global air freight (measured by freight tonne kilometres) was 14.0% higher, year on year, as ME carriers posted a 16.4% hike – a sure sign that global trade is on the upturn. Q1 freight capacity rose by 3.7% as demand rose at a quicker pace of 11.0%. On the back of lower fares and an improving economic environment, global demand for air travel has shown a 6.8% quarterly improvement; however this figure for the ME came in lower at 4.9%.

Driven by upsurges in both purchasing activity and new export orders, Japan’s manufacturing PMI continued its upward trend in April – up 3 notches to 52.7. Further to a 20.3% March increase, April saw another impressive jump in Japan’s monetary base up 19.8% year on year to US$ 4.1 trillion.

Although still heading north, China’s PMI dipped six notches in April to 51.2 indicating a slower pace than in the previous month. The country’s GDP growth has shown improvement in Q1, driven by a rebound in retail spending.

As widely expected, the Federal Reserve maintained its benchmark interest rate at 0.75% – 1.0%, with a distinct possibility of a further hike before summer despite recent economic data. There have been two 0.25% rate rises in the past six months with a further two possible before the end of 2017. The Committee expects the recent economic growth to continue as the labour market improves and inflation settles around the 2% target level. Latest economic data shows a tightening of the labour market, with unemployment levels hitting 17-year lows; on the flip side, productivity levels continue to disappoint, with only a 0.6% annual average hike over the past five years.

Prime Minister, Alexis Tsipras, is keen to ensure a speedy end to the deal that will see Greece receive more funds from its US$ 94 billion IMF/EU rescue package. Negotiations are continuing over the country’s post-bailout targets with Greece, not surprisingly, indicating that it has already carried out all its commitments and are waiting for the other parties to move at a quicker pace.

Eurozone’s factory PMI grew at its fastest pace in six years as April data came in five notches, month on month, to 56.7 which equates to an annual rate in excess of 4.0%. Individual countries within the bloc recorded different results – Germany was actually down one point to 58.2 whilst France and Italy both improved by 1.8 to 55.1 and by 0.5 to 56.2 respectively.

The UK’s Markit/CIPS PMI posted a 3.1 jump to 57.3 in April – a sure indicator that the country’s manufacturing sector is weathering the post-Brexit storm. There is no doubt that the fall in sterling has helped, especially with exports, but it has had a negative impact on consumer confidence, as imported goods become more expensive, and ramps up inflation just as wage growth is flat. Whether the improvement in the global economy and the UK’s export competitiveness are enough to stimulate the country’s growth remains to be seen, at a time when Q1 growth fell from 0.7% to a disappointing 0.3% quarter on quarter, driven by weak retail sales figures. Meanwhile, the PMI for the services sector, which accounts for 75% of the UK economy, rose to 55.8

In November 2012, the 34-storey Tamweel Tower was damaged by a fire and it took until June 2016 for repair work to be completed. At the end of last year, Dubai Civil Defense requested incorporation of updated safety measures prior to granting a completion certificate. This has now been reportedly carried out and the official document has been handed over to the DCD. Now it seems that approvals are required from DMCC and Dubai Municipality before residents can return. Not before time, but Welcome Home!