Bumpy Ride!

Posted on January 4, 2025 by howesdubai

Bumpy Ride!                                                                        03 January 2025

The four hundred and twenty-five metre tall Marina 101 project, (featuring one hundred and one floors floors), launched by Sheffield Real Estate, had been progressing well, especially in the boom years prior to the 2008 GFC. Since then, it has been beset by problems, including multiple project delays, cost issues, and even an auction (for the thirty-three floors of the hotel part of the construction, originally named as a Hard Rock Hotel). When the project was eventually 97% completed, the developer had run up a sizeable debt by which time, the banks, (the lead one being the Bank of Baroda), had become involved to try and recoup some of their project exposure. Now at the beginning of 2025, the wait is almost over, with some expecting the Real Estate Regulatory Agency to soon issue the final paperwork, including a building completion certificate, to finally open the tower for its investors. One outstanding point seems to be the status of the hotel and whether it will need further enhancements. However, Bayut continues to show apartment listings, including a one-bedroom at US$ 409k and a two-bedroom for US$ 736k.

Ajman-based GJ Properties Investments LLC posted a recent daily sales figure of US$ 150 million at its recent Ajman Sales Event; these included eight hundred and thirty-seven units sold across three new developments – Al Ameera Village, Nuaimia Two Tower and Ajman Creek Towers, with seven hundred and twenty-four units, sixty-three and fifty apartments respectively. On the back of its Ajman success, it has recently launched Biltmore Residences Sufouh in Dubai, located on Sheikh Zayed Road The luxury development, comprising a range of one- and two-bedroom apartments, along with a luxurious penthouse, is 62% completed and slated for a Q1 2026 handover.

A recent Cushman and Wakefield Core report indicated that, in Q3, Dubai property rents increased by 18% on the year – its fifteenth consecutive quarter of hikes; some of the highest premiums on new leases were seen in beachfront communities such as Palm Jumeirah and Bluewaters Island, attributable to their luxury lifestyle offerings and iconic locations. Other factors such as the requirement for larger spaces, central locations, gated communities and premium amenities have seen price hikes in locations such as Emirates Living, Dubai Hills Estate, and District One. The fact that such areas now have limited supply available – and high demand – will ensure that rents will continue to be well above the average. It is a fact of Dubai property life that most new supply will be found on the emirate’s outskirts and that those established communities, nearer the coast, will continue to charge higher premiums.

Another year, another record for Dubai realty, with 2024 posting an all-time peak of 180.9k transactions, (up 35.9%), worth US$ 112.02 billion, 27.0% higher on the year. The primary market registered a 30.0% surge to US$ 91.04 billion, with the transaction volume surging by 51% to 119.8k – sure indicators that robust demand continues for new developments and off-plan properties; the average price per sq ft, came in 10% higher at US$ 436. Exciting new project launches, along with favourable payment plans, were two main drivers behind the impressive 2024 returns; foreign investors were also attracted by residency incentives and visa reforms. There was a 21% hike in the secondary market, with a 21% increase in re-sales to US$ 51.25 billion, as  transaction volumes rose by 14%  to 61.1k; the average price per sq ft increased by an annual 12% to US$ 354. These returns showed that buyers were keen to move to established villas for immediate occupancy and investors in the market for high rental returns.

There were record apartment and villa sales during the  period – with the former posting a 42% climb in volume, with 141.2k transactions, valued at US$ 71.00 billion; villa sales were 21.1% higher, relating to 30.9k units selling for US$ 44.71 billion. Commercial sales posted much smaller increases, with transaction up 10.1% to 4.3k units, valued at US$ 2.64 billion; plot sales rose by 2.6% to 4.4k, worth US$ 2.64 billion.

Al Barsha South 4 was the top performing location registering 12.9k first sales whilst Business Bay was top when it came to sales value, with 6.9k transactions, worth US$ 5.75 billion. The popularity of areas such as Madinat Al Mataar and Wadi Al Safa 5 reflects the increased demand for community living in the outer suburbs. Other neighbourhoods that fall in the same category, of affordable properties, include the likes of Dubai South, Al Furjan and Jumeirah Village Circle all of which will continue to be in high demand

The driving factors behind the three-year surge in Dubai property are manifold, including its position of being an important global travel hub, its world-class infrastructure, progressive government-backed initiatives, favourable tax policies, economic stability, public safety, excellent amenities, attractive rental yields, investor protection measures, ease of doing business, thriving real estate sector etc etc. Even as we enter 2025, the impact of Expo2020, although dwindling, is still present and a driver in the record-breaking property sales. It is not only residential property that will offer impressive returns in 2025 – many investors forget there are other potential sectors, such as industrial, commercial, office, retail and short-term lets

Dubai Land Department has announced it will launch a new ‘Smart Rental Index’ this month, with its main aim to enhance transparency in the real estate market by providing accurate and current data. It will also further develop the booming realty sector by fostering trust and confidence among all stakeholders including landlords, tenants, and investors. It is hoped that the initiative will place Dubai as a global model for leveraging technology to serve the real estate sector and align with the Dubai Digital Strategy, the Dubai Real Estate Sector Strategy 2033, and the emirate’s future vision for achieving sustainability and excellence.

Although the last Real Estate Regulatory Authority’s Rental Index, in March, saw the gap between new leases and renewal rates narrow, Dubai tenants are still paying up to 30% more for new leases, compared to renewals. This trend of increasing tenant renewals will continue into 2025. A notable trend in Q3 was the continued increase in tenant renewals, which rose by 16.0%, whilst new leases are still trading at an average premium of 14% over renewals, with still high demand for new homes.

Last Saturday, the one hundred and seventeenth open auction, for exclusive vehicle number plates in Dubai, took place resulting in revenues of US$ 22.3 million – the highest ever amount achieved. The auction covered ninety premium numbers, featuring two, three, four, and five digits, spanning the codes AA, BB, K, O, T, U, V, W, X, Y, and Z. The Roads and Transport Authority held the event which saw plate BB55 reach US$ 1.72 million, with other high returns for AA21, BB100 and BB111 of US$ 1.68 million, US$ 1.36 million and US$ 1.15 million.

With exceptional sales in the last two months of 2024, Dubai Duty Free completed the year with record sales of US$ 2.16 billion; last month set an all-time monthly record with sales of US$ 225 million, driven by its forty-first anniversary celebrations on 20 December when it offered a 25% discount on a wide range of goods.  It is estimated that last year, there were 20.7 million sales transactions, with 55,137 million units of merchandise sold to 13.7 million customers. Online sales topped US$ 54 million, equating to 2.5% of total sales, whilst departure sales at US$ 1.951 billion accounted for 90.3% turnover, (up 0.84% on the year); arrival sales were 12.21% lower at US$ 147 million, accounting for 6.8% of total turnover.

Latest figures by the Federal Competitiveness and Statistics Centre show that the country’s economy grew 3.6% in H1, with the GDP reaching US$ 239.67 billion. Over the period, the non-oil sector, growing by 4.4%, led by the transportation, construction and ICT sectors, contributed over 75% of the UAE’s economy. In H1, the value of nominal GDP (at current prices) amounted to about US$ 267.30 billion, growing at 5.6%, while the value of non-oil GDP, (at current prices), was 6.8% higher during the same period to about US$ 204.09 billion. In October, the IMF amended the country’s 2024 growth forecast from its earlier April prediction of 4.2% to 5.1%, driven by strong growth in the non-oil sectors. Meanwhile, the International Institute of Finance also projected that the UAE GDP growth will lead the region in 2024 and 2025. The Federal Competitiveness and Statistics Centre has estimated that, in H1, transportation/storage, financial/insurance, construction/building, information/communications and hotel/restaurants activities grew by 8.4%, 7.6%, 7.3%, 5.3% and 5.1% respectively. Growth in the latter sector was helped by hotel revenues, increasing by 7.0% to US$ 6.70 billion, as guest numbers rose by 10.5% to 15.3 million.

More than eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee, in 2020. The controls were removed in March 2021 to reflect the movement of the market once again. Last Wednesday, retail prices fixed at December’s prices – the first time that there were no monthly adjustments. The breakdown of fuel prices for a litre for January is as follows:

Super 98      US$ 0.711 from US$ 0.711     in Jan (flat)       down 7.4% YTD US$ 0.768     

Special 95   US$ 0.681 from US$ 0.681      in Jan (flat)       down 7.7% YTD  US$ 0.738         

E-plus 91     US$ 0.662 from US$ 0.662      in Jan (flat)      down 7.9% YTD   US$ 0.719

Diesel           US$ 0.730 from US$ 0.730      in Jan (flat)       down 10.6% YTD US$ 0.817

2024 was a boom year for the two local bourses, with the Dubai Financial Market surging, driven by a robust economy, foreign investments, and several IPOs; the result was the DFM’s market cap and trading volumes surged. By the end of the year, the combined market cap of the Dubai and Abu Dhabi stock markets topped US$ 1.06 trillion, 7.0% higher on the year, with the DFM’s market cap, 31.9% higher at US$ 247.11 billion; its trading value came in on US$ 29.07 billion and total volume of shares at 51.85 billion.

The DFM opened the week, on Monday 30 December, three hundred points (6.2%) higher the previous fortnight, gained eight points (0%), to close the trading week on 5,138 points by Friday 03 January 2025. Emaar Properties, US$ 0.02 lower the previous week, shed US$ 0.04, closing on US$ 3.45 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.76, US$ 5.83 US$ 1.92 and US$ 0.41 and closed on US$ 0.78, US$ 5.61, US$ 1.91 and US$ 0.41. On 03 January, trading was at two hundred and thirty-seven million shares, with a value of US$ one hundred and forty-seven million dollars, compared to two hundred and thirty-seven million shares, with a value of US$ ninety-one million, on 27 December.  

The bourse had opened the year on 4,063 points and, having closed on 31 December at 5,159 was 1,096 points (27.0%) higher in 2024. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, and has gained US$ 1.34, to close YTD at US$ 3.50. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.77, US$ 5.84, US$ 1.93 and US$ 0.41.

By Friday, 03 January 2025, Brent, US$ 1.23 higher (1.7%) the previous week, gained US$ 2.42 (3.3%) to close on US$ 76.59. Gold, US$ 27 (1.0%) higher the previous week, shed  US$ 1 (0%) to end the week’s trading at US$ 2,653 on 03 January 2025.

Brent started the year on US$ 77.23 and shed US$ 2.42 (3.1%), to close 31 December 2024 on US$ 74.81. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 550 (26.5%) to close the year on US$ 2,624.

After more than eighteen months of legal wrangling, Do Kwon will be extradited from Montenegro to the US to face fraud charges over the collapse of two digital tokens – TerraUSD and Luna. The South Korean cryptocurrency entrepreneur, and his company Terraform Labs, were involved in “orchestrating a multi-billion-dollar crypto asset securities fraud”, which sunk some US$ 40 billion from investors and rocked global crypto markets. It was alleged that Kwon repeatedly claimed that the tokens would increase in value, and misled investors about the stability of TerraUSD, which, despite billions in investment, went broke in May 2022, leading to panic and sell-offs in other major cryptocurrencies including Bitcoin.

The Department of Justice announced that a US government fund created to help compensate victims of the late fraudster Bernard Madoff has made its final payment of US$ 131 million which will bring the grand total of US$ 4.30 billion being returned to 40.9k claimants. The MFV estimates it will have recovered nearly 94% of the victims’ proven losses when it completes its mission in 2025. The Wall Street financier, who died in prison in 2021, had been sentenced to a one-hundred-and-fifty-year sentence for a Ponzi scheme which graduated to being one of the biggest frauds ever seen. His Bernard L Madoff Investment Securities firm was set up in 1960 and became one of Wall Street’s largest market-makers over the ensuing forty-eight years, during which time he also served as chairman of the Nasdaq stock trading platform. Even though the firm was investigated eight times by the SEC, because of its exceptional returns, it only collapsed because of the impact of the 2008 GFC.

The future of TikTok, with over one hundred and seventy million US users, may be settled next month, with the court set to hear arguments in the case on 10 January. Last April, the US Congress voted to ban it, unless its Chinese owner, ByteDance sold the app to an American company by 19 January – one day before Donald Trump’s inauguration. In 2020, he had tried to block the app in the United States, and force its sale to a US company, but appears to have done a U-turn, with his lawyer commenting “President Trump takes no position on the underlying merits of this dispute. Instead, he respectfully requests that the Court consider staying the Act’s deadline for divestment of 19 January 2025, while it considers the merits of this case, thus permitting President Trump’s incoming administration the opportunity to pursue a political resolution of the questions at issue in the case.” Earlier in the month, when meeting TikTok CEO Shou Zi Chew, he noted that he had a “warm spot” for the app and that he favoured allowing TikTok to keep operating in the United States for at least a little while.

The National Bureau of Statistics of China announced that, in the eleven months to 30 November, the combined profit of major industrial enterprises declined by an annual 4.7%, according to People’s Daily Online. Following three years of decline, the blue-chip CSI 300 Index, tracking the biggest companies listed in the cities of Shanghai and Shenzhen, rose 15.9%, despite the ongoing property crisis and continuing weak consumer confidence. Meanwhile, both the Shanghai Composite Index and Hong Kong’s benchmark Hang Seng Index closed the year gaining 13.9% and 17.9%, (after two years and four years of declines). Banking stocks led the market gains, pushing 36% higher, with the four largest state banks attaining multi-year highs, along with the chip sector surging 54%. However, the year ended with indicators that China’s factory activity expansion slowed in December amid rising trade risks.

Last month, Pakistan saw consumer inflation rate dip 0.8%, on the month to its lowest point, at 4.1%, in nearly seven years – some good news for the country, as it tries to make some sort of economic recovery, aided by a September US$ 7 million IMF facility. The Finance Ministry posted that it expects annual 2024 inflation rate to hold in the range of 4% – 5%. The inflation level has markedly improved from the multi-decade high of 40% posted twenty months ago in May 2023; this has been attributed to a more stable currency, lower global commodity prices and improved supply chain.  Consumer prices nudged 0.1% on the month. Meanwhile the State Bank of Pakistan cut its key policy rate by 200 bp to 13% last month, the fifth straight reduction since June, and down from the 22% mark at the beginning of 2024.

For the seventh consecutive month, in December, Türkiye’s annual inflation rate dipped to 44.38% – 2.69% lower on the month. The highest inflation rate was education – at 91.64% – and at the other end of the scale was transportation at 25.88%. The monthly consumer price index rose at the slowest pace since May 2023 at 1.03% in December, compared to 2.24% a month earlier. Over the twelve months, it fell by 20%.

Ukrainian President Volodymyr Zelensky said earlier that his country would not allow Russia to “earn additional billions on our blood” and had given the EU a year to prepare; now, to his word, Russian gas supplies to EU states via Ukraine have ended, after a five-year deal between Ukraine’s gas transit operator Naftogaz and Russia’s Gazprom expired. Russian gas can still transit to Hungary, as well as Turkiye and Serbia, through the TurkStream pipeline across the Black Sea. It is obvious that Russia has lost an important market, (estimated at a current level of US$ 5.2 billion), but its president, Vladimir Putin, says EU countries will suffer most; in 2021, Russian gas was 40% of EU gas imports – today it is less than 10%.

Still showing to be a healthy labour market and pointing to fewer layoffs at the end of the year, the number of Americans filing new applications for unemployment benefits dropped to an eight-month low last week. There is no doubt that the market’s resilience is helping to stabilise the US economy. This and other recent data, including consumer spending, point the Federal Reserve considering fewer rate cuts in 2025, with the last 0.25% cut in December, pushing the benchmark overnight rate to between 4.25% and 4.50%. Initial claims for state unemployment benefits dipped 9k to a seasonally adjusted 211k – the lowest level since April. The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased 52k, to a seasonally adjusted 1.844 million, with the December unemployment rate expected to come in flat at 4.2%.

According to Nationwide, UK house prices rose by 4.7% last year, with it noting that property prices and housing market activity remained “remarkably resilient” despite affordability challenges facing buyers; by the end of 2024, the average UK home was valued at US$ 335k, still below the summer peaks of 2022. The building society found that terraced homes rose fastest during the year and that Northern Ireland saw the fastest price growth, with values also rising faster in northern England than in the south. It also noted that house prices remained high relative to average earnings at the start of 2024, which meant that raising a deposit was  becoming harder for prospective first-time buyers.

A letter – signed by PM Keir Starmer, Rachel Reeves, the Chancellor, and Jonathan Reynolds, the Business Secretary – has been sent to more than ten of the UK’s leading watchdogs giving them no more than three weeks to submit a range of pro-growth initiatives to Downing Street – and submit five ideas on the best way to achieve this target. Those, including the leaders of Ofgem, Ofwat, Ofcom, the Environment Agency, healthcare regulators, the Financial Conduct Authority and the Competition and Markets, have been ordered to remove barriers to growth, in a bid to kickstart the UK’s sluggish economy. He also wants every government department and regulator to support growth and identify where regulatory objectives were either conflicting or confused. Maybe it would have been a better idea if he had come up with this scheme before trying to crash an already battered economy in hid first six months in office.

It has taken the UK over eight years to be invited back to a meeting involving EU leaders, following the country leaving the bloc and ridding itself of the likes of egoistic and intransient bureaucrats, such as Jean-Claude Juncker and Michel Barnier, who seemed to take pleasure in ensuring that the Brexit negotiations were all one-sided. Now PM Keir Starmer has been invited to an informal summit of EU leaders, in February, with the focus on future security and defence co-operation, in the wake of the Ukraine war, (with Russia receiving help from Iran, North Korea and China), along with the start of Trump’s second term as president – and his threat to impose punitive sanctions on the EU.  There is no doubt that the EU was impacted by the UK’s surprise departure in 2016 and the loss of not only a major economy but also its foremost military power. (The UK’s economy also suffered). It seems that with the major EU players, Germany, France and Italy, all troubled by political and economic woes, it is a good time for the bloc to offer the hand of reconciliation on more equitable terms for the benefit of all stakeholders. It will be a question of give and take from both sides in a new environment of goodwill, with Labour espousing an “ambitious reset” of EU-UK relations.

2025 could be a make-or-break year for the UK economy and many of the country’s stakeholders face a turbulent year ahead. Retail will suffer from several negative factors, including an April 2025 1.2% rise in employer’s National Insurance contributions, with the sector impacted by the treble whammy of increased costs. They will be reflected in lower margins, (with the sector bearing some of the increased costs) whilst others will see higher prices, borne by the consumers; price rises will result in lower sales which will be further exacerbated by very subdued consumer confidence and a reduction in their spend. Weak footfall over Q4 could be a worrying sign of things to come in the new year.

MNCs and exporters will suffer the same as retailers but will also be damaged if Donald Trump keeps to his promise of extending tariffs. This, in turn, could turn into a major trade war if countries will respond in kind – a distinct possibility with many economies, including the EU, UK and Japan already intimating that there would be retaliatory measures. (Interestingly, it is unlikely that China would join). If this were to go ahead, the result would inevitably be a damaging trade war that would hit global growth. Two other negative factors would be the weak state of the Chinese economy and the ongoing wars in the ME, Ukraine and other places.

To add to their woes, are the political and economic problems in the EU, more so in the three major nations – Germany, France and Italy – where economic activity will grind to a snail’s pace, especially in Germany until after their snap election next month.

The hospitality sector will face most of the problems listed above but will also, like Retail, be very concerned about the upcoming increase in the national living wage.

The manufacturing sector will continue to struggle. For example, the MV sector continues to face stiff competition from Chinese imports, as well as facing the threat of penalties where electric vehicles are too low a proportion of their overall sales, if unrealistic high targets, set by the government, are not sensibly amended, then they will face major financial problems.

The housing sector could be an outlier in 2025 and one of the few expected to improve its position this year. The Starmer government has set what some may consider unrealistically high targets of 300k new builds every year and this despite a marked deficiency in skilled labour numbers.

There is no doubt that the UK economy is looking down the barrel as itenters Q2 of the century.

The Centre for Retail Research has estimated that almost 170k retail workers have lost their jobs in 2024, after the collapse of major high street chains; this is the worst annual loss of jobs since the Covid era of 2020. This figure is 50k (41.9%) higher on the year, with one of the main drivers being the collapse of major chains such as Ted Baker and Homebase. Further statistics showed that about 33% of this year’s losses, equating to 55.9k, were the result of business collapses, with thirty-eight major retailers going into administration, including Lloyds Pharmacy, The Body Shop, and Carpetright. The balance was because of “rationalisation”, as part of cost-cutting programmes by large retailers or small independents choosing to permanently close their stores. It is estimated that independent retailers, which are generally small businesses with between one and five stores, shed a total of 58.6k jobs last year. The same five factors continued to play their parts in closures and cut-backs – changed customer shopping habits, inflation, rising energy costs, higher rents and ongoing business rates – and 2025 is likely to follow the same pattern, with the two extra burdens being the 1.2% hike in employers’ national insurance contributions to 15%, starting in April – adding a further GBP 2.3 billion cost to the sector – and the reduction, (from 75% to 40%), in discounts for business rates. It is estimated that these will result in independent retailers paying an extra annual US$ 6.3k, with their bills rising some 140%; this will cost the retail sector an extra US$ 863 million. If nothing is changed, and the status quo remains, the sector will have to find an additional US$ 2.89 billion and, at the same time, will see further redundancies exceeding 200k in 2025.

2025 could prove to be a tricky year for the UK property market because of a change in stamp duty and market uncertainty on mortgage rates. Q1 should see a flurry of activity ahead of changes that will see house buyers paying more stamp duty on properties of over US$ 155k, (GBP 125k), half of the current US$ 310k threshold. First-time buyers begin to pay stamp duty on purchases of over US$ 527k (GBP 425k) but this will be reduced to US$ 382k come April. Furthermore, there are still concerns if and when the BoE will actually start cutting rates in 2025, with its governor, Andrew Bailey commenting that “the world is too uncertain” to make accurate predictions of when interest rates would fall, and by how much. However, as house prices still remain stubbornly high relative to average earnings, some prospective first-time buyers have already exited unable to raise the initial deposit. To exacerbate the problem, record rates of rental growth, in recent years, have seen those actually saving for a deposit in a situation that they are taking longer to raise the money needed to obtain a mortgage. There is hope that housing affordability could improve later in the year if mortgage rates were to fall and wages were to rise, (well above the inflation rate). Indeed, Finance has forecast an optimistic 10% rise in mortgage lending for house purchases during 2025, although some analysts have already questioned this prediction as optimistic for lenders. It is estimated that 80% of mortgages are fixed rate – normally either two-year or five-year deals – with the BoE estimating that 4.4 million mortgage holders are expected to see payments rise by 2027.

A Sky News study indicates that the typical UK household will have to bear a further US$ 335, with the increase in costs for energy, water and council tax, outstripping the 2.6% inflation rate. On top of these troubles for the consumer, the economy, which had been the best performing in the G7 this time last year, is flatlining, as it enters the new year, with latest figures from the Office of National Statistics indicating there was zero growth in Q3. Then in April the arrival of the 1.2% hike in employers’ national insurance contributions will inevitably result in loss of jobs and reduced pay.

The following table traces how certain indices have performed over the years. Gold has had two great years jumping 43.39% over that period, including 26.52% in 20234 with more of the same on the way this year. It closed 2024 at US$ 2,624 and it is highly likely that it will top US$ 3k sometime in H1 and a 20% rise could see it trading around the US$ 3,150 mark. Brent has had its troubles, (12.9% lower than its 2022 year-end high of US$ 74.81), that have been well documented; given the global economic environment, it is difficult to see the index moving any higher than US$ 80 in 2025. After two years of double-digit growth, iron ore saw a 23.1% slump in 2024 to close on US$ 103.61. Little upward movement is expected this year. Meanwhile coffee had a stellar year, mainly attributable to the weather and increased consumption numbers. A 70.5% price surge last year, to US$ 320, will not be repeated in 2025 but prices will remain buoyant, driven by on-going supply constraints. For the third year in a row, cotton continued its downward spiral and is 39.3% lower than three years earlier. Silver performed better than expected – up nearly 20% on the year – after a flat three years; 2025 will see the metal with increased market support and there is hope that it will top US$ 30 this year. Copper traded 2.0% higher in 2024 and is expected to move higher at a slightly quicker pace next year. The strength of the US$ came to the forefront in Q4 and saw the greenback showing gains on the year against sterling, the Ozzie dollar, the euro and rouble of 1.73%, 9.24%, 6.24% and 18.18% at US$ 1.251, US$ 0.619, US$ 1.036 and US$ 0.009. It will be interesting to see what impact sanctions will have and whether the dollar weakens to make US imports cheaper this year.  All five bourses are moving in the right direction with the local DFM posting another impressive return of 26.98% after a 20%+ figure a year earlier – it will probably hit double figure gains in 2025 but not as high as recorded last year. The FTSE is slowly – but steadily – losing its influence on the global stage but will continue to tick over this year. The US bourses again were up across the board, with the S&P 500 23.34% higher at 5,882. They will still have momentum going forward but any gains will be well down on 2023 returns. Bitcoin is another story and there is every reason to see it moving upwards again this year.

   %age31-Dec31-Dec31-Dec31-Dec
  UnitRise2024202320222021
Gold oz26.52%2,62420741,8301,831
Iron Ore lb-23.08%103.61134.7121.3106.7
Oil-Brent bar-3.10%74.8177.285.9177.78
Coffee lb70.48%320.84188.2174226.75
Cotton lb-15.79%68.3881.283.4112.65
Silver oz19.83%28.8824.124.1823.36
Copper lb2.05%3.983.93.824.46
AUD  -9.24%0.6190.6820.6810.726
GBP  -1.73%1.2511.2731.21.01.353
Euro  -6.24%1.0361.1051.0731.137
Rouble  -18.18%0.0090.0110.0140.013
FTSE 100  5.69%8,17377337,4527,403
CSI300  14.69%3,93534313,8724,940
S&P 500  23.34%5,88247693,8404,766
DFMI  26.98%5,1594,0633,3363,196
ASX 200  7.50%8,15975907,0397,844
Bitcoin  119.87%93,53342539.21685648011

2024 Dubai Forecasts

  • in 2024, Dubai’s population grew by 170k, (4.664%) to 3.825 million, accounting for 34.20% of the country’s population of 11,184 million. In 2025, Dubai’s population, with an increase of one hundred and eighty thousand, will top four million, to 4.005 million – up 4.75% on the year
  • there will be a marked number of “new” residents moving to Dubai from the northern emirates
  • last year, an estimated 43k units were added to the Dubai property portfolio to 873k, with an expected 52k to be added in 2025, to 925k units
  • there is no doubt that property prices have skyrocketed since the pandemic and average prices will continue to move higher – in 2025, expect a lower double-digit growth
  • prices for off-plan residences, villas, and townhouses expected to rise by another 10-15% – and even higher in the luxury market sector which could be as high as 30%
  • by the end of 2024, the UAE government had signed twenty-four Comprehensive Economic Partnership Agreements, with countries and international blocs, covering approximately 2.5 billion people or 30.5% of the global population of 8.197 billion. it will sign at least fifteen new CEPAs in 2025 in a bid to achieve the administration’s aim of targeting US$ 1.09 trillion in total trade value by 2031 and doubling the size of the wider economy by 2030
  • having jumped 61.4% in the previous three years to 31 December 2024, including a 2024 growth of 26.98% to 5,159 points, the DFM will maintain its upward momentum into the new year, with a slightly slower – but still double-digit growth
  • having delivered the highest level of profit (US$ 4.70 billion), and revenue (US$ 37.40 billion), last fiscal year, ending 31 March 2024, expect Emirates to deliver enhanced figures with revenue rising by more than 10% and profit slightly less
  • DXB will record a record number of passengers reaching ninety-one million in 2024, with numbers expected to top ninety-three million in 2025
  • Dubai’s debt will remain steady at 34% of GDP, (down from 70% in 2021), helped by several factors including its strong resurgence post-Covid, asset sales of several GREs, increased dividends from associated companies, the introduction of corporation tax and a further surge in tourism. grew 3.6% in H1, with the GDP reaching US$ 239.67 billion. Over the period, the non-oil sector, growing by 4.4%, led by the transportation, construction and ICT sectors, contributed over 75% of the UAE’s economy
  • GDP growth in Dubai to be close to 4% on average between 2025 and 2027, after a 3.6% growth in H2 2024. Thus far, the effects of geopolitical tensions have been minimal. Non-oil sector will grow by 5.0% in 2025, with latest figures showing a 4.4% hike in H1 2024, whilst total growth will come in at 5.2%
  • further growth in the hospitality sector will see hotel revenues 8% higher, at US$ 7.2 billion, in 2025, with guest numbers increasing 10% 16.8 million
  • two more government-related companies listed on the DFM
  • one Dubai family IPO to be listed on the DFM

2024 Global Forecasts

  • in 2024, the global economy slowed to 3.2%, not helped by geo-political problems. 2025 will see marginally higher economic growth, at 3.3%, as interest rates nudge slowly lower
  • G20 headline inflation will ease to 3.3% in 2025, down from the 6.1% level in 2023
  • high global debt will continue to hurt the poorer nations with a major famine/pandemic all but inevitable and, as usual, the emerging nations will bear the brunt, with the poor becoming poorer and the rich richer
  • although there will be some sort of settlements in both the ME and Ukraine crises this year, geopolitical tensions will not go away but just move from location to location, with West Africa, Taiwan and Yemen places to watch. Wherever they occur, it will damage the health of global economies including the US and China
  • expect to see German Chancellor, Olaf Scholz, and the French President Emmanuel Macron out of office this year
  • there will be minimal growth in the EU with Germany, (and maybe France and Italy) expected to go into recession sometime in 2025
  • Australia, India, Brazil and parts of Europe will be hit by a mix of floods and record high temperatures which will impact global economic growth
  • oil prices will hover around US$ 80 during another year of volatile trading that will see production two million bpd higher
  • despite all the talk circulating around climate control, 2024 global coal demand is projected to have grown by 1.0%, setting a new all-time high of 8 771 MT, with China, India and ASEAN countries consuming 75% of total demand, (compared to 35% at the beginning of the century). With slowing global economic growth, coal demand will only nudge slightly higher in 2025, to a new record high 9,200 MT, but it will not be until at least 2027 that demand will start to fall
  • the so-called “Magnificent 7” – Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla – had another great year, gaining 63% in value last year and 75% in 2023 – another good year expected in 2025 but slightly down compared to 2024. (Their 2024 profits accounted for about 75% of S&P 500 earnings growth)
  • from being the fastest growing economy in the G7 during the first half of 2024, the UK stagnated during Q3 2024, as the incoming government ladled on the doom and gloom in a bid to underline what it presented as its dire economic inheritance, hitting business and consumer confidence in the process. With many, including the BoE, expecting the economy to have flatlined, more of the same awaits the UK in 2025

Although we are sheltered somewhat here in Dubai, whatever happens in 2025 remains to be seen but one thing is for sure – we are in for a Bumpy Ride!

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Second Hand News!

Posted on December 28, 2024 by howesdubai

Second-Hand News!                                                         27 December 2024

Union Properties has broken ground on its latest Motor City US$ 545 million project – the Takaya – which overlooks the Dubai Autodrome; home prices will be in the mid-to-high range. This development comes after UP has been notably absent from off plan launches, as it had been recovering from previous losses, following dubious management action. Including a five-hundred-meter-long shopping boulevard, the project will encompass three residential towers, with seven hundred and eighty-eight units. There are listings for an in-development studio unit at Motor City for US$ 155k, while one-bedroom prices are from US$ 245k, with rentals for one-bedroom and two-bedroom apartments at US$ 23k and US$ 37k.

With just over 40k residential units entering the market this year, demand remains tight. Over recent years, this has resulted in a mini exodus to other northern emirates which has seen the daily commute traffic worsen, so much so that up to two-hour, one-way drives have become the norm. This, in turn, has resulted in property prices, north of the border, rising but with an expected softening in 2025 rentals/prices in certain Dubai tier-2 areas like Arjan, Jumeirah Village Circle and Sports City, the price differential between the emirates will lessen; this could see many returning to Dubai. Add in to the mix, the actual cost of commuting, plus the stress factor of queuing in traffic four hours a day, and a move back to Dubai becomes a reasonable option. According to Asteco’s Q3 data, a studio costs US$ 5.45k per annum in International City, compared to US$ 4.90k in Sharjah’s high-end areas bordering Dubai and US$ 4.63k in Ajman.

After almost two years of remedial work, Ain Dubai, the world’s tallest observation wheel, resumed with a soft opening on Christmas Day. Closed since March 2022, the attraction is now fully operational; prices range from US$ 39 to US$ 343.

The government-owned EV charging network has announced that there will be new tariffs, to be introduced on 01 January 2025, which will see DC chargers, costing US$ 0.33 plus VAT per kWh, and AC Chargers at US$ 0.19. In the eight months, since May, when tariffs were first introduced until the end of the year, EV charging services have remained free. UAEV is to introduce an app to provide features such as finding the next charging station, live status updates, and simple payment options, as well as launching a dedicated 24/7 call centre to provide instant support and assistance. Sharif al Olama, Chairman of UAEV, noted that “by expanding our network and aligning with the UAE’s Net Zero 2050 Strategy, we are driving a cleaner, greener future for all.” Within six years, UAEV’s network will include 1k chargers, strategically located across urban hubs, highways and transit points within the country.

Starting from 02 January, the federal Ministry of Economy on Tuesday announced a minimum time period of six months, between two consecutive increases in prices of nine basic commodities, without prior approval, in order to protect consumers and enhance competition; they are cooking oil, eggs, dairy products, rice, sugar, poultry, legumes, bread and wheat. Under the new policy, retail stores are required to display unit prices to promote transparency, with the Ministry given supervisory powers to ensure that all parties comply with the decisions.

In the nine months to 30 September, the five leading countries, in the list of non-Emirati entities applying to join the Dubai Chamber of Commerce, were from India, Pakistan, Egypt, Syria and the UK with numbers of 12.14k, 6.06k 3.61k, 2.06k and 1.89k. Other countries, with more than 1k joiners, were Bangladesh, Iraq, China, Jordan and Sudan. The sector-wise split saw trade/services, real estate/business services, construction and transport/storage/communications, accounting for 41.0%, 33.3%, 10.4% and 8.6% of the total.

HH Sheikh Mohammed bin Rashid has issued Decree No. (48) of 2024 establishing the Dubai Resilience Centre. The main aim of the Decree is to make Dubai the world’s most agile city in dealing with various risks, in times of emergencies, crises, and disasters, and ensuring it has the ability to take measures to prevent and address such events and ensure rapid recovery if they occur. The new entity will operate under Dubai’s Supreme Committee of Crisis and Disaster Management, the legal authority and capacity to implement actions and transactions necessary to fulfil its mandate.

The DRC is responsible for measuring performance indicators, (and the rate of progress in implementing approved plans and programmes), and submitting regular reports to the Supreme Committee. This decree obliges all government and non-government entities in Dubai to fully cooperate with the Centre, provide the necessary support, data, information, documents, statistics, and studies it requests to carry out its tasks. HH, the Chairman of the Supreme Committee of Crisis and Disaster Management, will issue the decisions necessary to implement the provisions of this Decree. The provisions of any other legislation that conflicts with the Decree will be annulled.

Drydocks World has opened its massive 75k sq mt multi-million-dollar expansion facility in Dubai, with the new South Yard enhancing its fabrication capabilities by 40% and yard capacity by 25%; this will help the ship repair and maintenance company carry out multiple large-scale projects simultaneously. It will also feature the MEA’s biggest load-out jetty, capable of handling structures weighing up to 37k tonnes, and will ensure the facility’s ability to meet ‘growing demand for energy transition projects and deliver innovative offshore solutions worldwide’. The addition of a 5k tonne Sheerleg Floating Crane, expected to be operational by 2026, will further expand the facility’s ability to handle large and complex projects on a global stage. The South Yard will operate entirely on clean energy, sourced from the Sheikh Mohammed bin Rashid Al Maktoum Solar Park.

Dubai-listed Takaful Emarat – Insurance PJSC, has completed its capital increase to US$ 57.4 million, by raising US$ 50.4 million, via a rights issue offered to existing investors, at an issuance price of US$ 0.272 per new share.  Times have improved for the insurer, as it has managed to turn a Q3 2023 loss of US$ 232k to a US$ 2.40 million profit in Q3 2024. Earlier, this year, the Board wrote-off of accumulated losses, as part of a broader initiative, and introduced other enhancements such as improved transparency, and the delivery of cutting-edge products and services. It ended the week with a share price of US$ 0.37.

The DFM opened the week, on Monday 23 December, two hundred and twenty-seven points (4.7%) higher the previous week, gained seven-three points (1.4%), to close the trading week on 5,130 points by Friday 27 December 2024. Emaar Properties, US$ 0.90 higher the previous week, shed US$ 0.02, closing on US$ 3.49 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.74, US$ 5.56 US$ 1.91 and US$ 0.40 and closed on US$ 0.76, US$ 5.83, US$ 1.92 and US$ 0.41. On 27 December, trading was at two hundred and thirty-seven million shares, with a value of US$ ninety-one million, compared to three hundred and sixty-five million shares, with a value of US$ 329 million, on 20 December.  

By Friday, 27 December 2024, Brent, US$ 1.47 lower (2.0%) the previous week, gained US$ 1.23 (1.7%) to close on US$ 74.17. Gold, US$ 49 (1.9%) lower the previous week, gained US$ 27 (1.0%) to end the week’s trading at US$ 2,654 on 27 December 2024.

Having allegedly putting some one hundred and sixty workers in a “degrading” environment and having their passports and salaries withheld by a building company, Brazilian authorities have taken immediate action by halting the construction of a US$ 482 million factory for BYD; the Chinese EV giant has subsequently stated that it had cut links with the builder and remained committed to “full compliance with Brazilian legislation”. The factory, slated for handover next March, was set to be BYD’s first EV plant outside of Asia; in 2015, it had opened a factory in São Paulo, producing chassis for electric buses. Brazil is the company’s largest overseas market.

Reports indicate that Toyota is planning to build an EV factory in Shanghai, for its luxury Lexus brand, despite several foreign automakers struggling to make headwind in China. Ready by 2027, the factory will be the first Japanese vehicle factory of its kind in China, and will be running solo, without a local partner. Toyota is banking on the new plant will help it catch up in the Chinese market; China overtook Japan as the biggest vehicle exporter last year. The planned Shanghai factory would mainly produce Lexus models, since Toyota mostly sells Japanese-made Lexus vehicles in China.

Citing “dramatic changes in the environment surrounding both companies and the automotive industry”, Honda and Nissan, number two and three carmakers in Japan, confirmed their plan to list a holding company in August 2026. The aim of the exercise is to strengthen their position on EVs and self-driving tech, which has been impacted by weak consumer spending and tough competition in several markets, including Europe.

It will take Lamborghini another five years before it launches its first electric model; long-term rival, Ferrari expects to have its first EV on the road by the end of 2025. It seems obvious that the car maker is in no hurry to rush into the EV sector, but it does have an entire hybrid three-model line-up, with the new version of Urus SE SUV, the Revuelto sports car and the new Temerario sports car – the latter priced at over US$ 315k, excluding VAT. The Italian motor company also reconfirmed that there were no plans for a Lamborghini spin-off from the Volkswagen group, adding that Lamborghini cars would always be produced in Italy.

Last Friday, Novo Nordisk saw its market cap lose US$ 125 billion, (up to 27%), on the back of disappointing results in a late-stage trial for its experimental next-generation obesity drug CagriSema; this was supposed to be a follow up to its highly successful Wegovy weight-loss drug, that is more powerful than Eli Lilly’s rival Zepbound, also known as Mounjaro. The CagriSema trial showed the drug helped patients cut their weight by 22.7%, below the 25%-mark Novo Nordisk had expected, but it noted that if all people adhered to treatment with CagriSema, patients overall achieved weight loss of 22.7% after sixty-eight weeks, with 40.4% losing 25% or more.

Following a US$ 4.30 billion offer declined last month, Aviva has finally succeeded in acquiring rival company Direct Line for US$ 4.82 billion. Aviva will pay US$ 1.69 in cash, and US$ 0.37 of its own shares, for each Direct Line share as part of the takeover, along with a US$ 0.065 in dividend payments per share to Direct Line shareholders. Aviva shareholders will own 87.5% of the new company and Direct Line shareholders the balance. This will see the expanded entity cover more than 20% of the UK market.

It was not a happy Christmas for Cadbury, after discovering that it no longer holds its royal warrant, granted by Queen Victoria, one hundred and seventy years ago. The action by King Charles came after he was urged by the campaign group B4Ukraine to take warrants from companies “still operating in Russia”, after the invasion of Ukraine. The chocolate maker noted that it was “disappointed” to lose its warrants which are granted as a special mark of recognition to people or companies who have regularly supplied goods or services to the royal household. Unilever, which owns consumer brands Dove and Lipton, was also stripped of its warrant. However, Bacardi and Samsung, that were also named in the B4Ukraine list, have not been stripped of their royal warrants, indicating the decision is not linked to Russia’s invasion.

Finance Minister Anton Siluanov confirmed what most already knew – that Russian companies have begun using bitcoin and other digital currencies in international payments in order to counter Western sanctions. Russia has had past problems with two of its major partners – China and Turkey – as local banks are extremely cautious with Russian-related transactions to avoid scrutiny from Western regulators. In 2024, the government also made it legal to mine cryptocurrencies, including bitcoin.

In Kuwait, the Council of Ministers has approved the “Multinational Entities Group Tax Law”, which will see a 15% tax on multinational entities starting on 01 January 2025; it will apply to companies operating across multiple countries or jurisdictions. This move aligns with international tax standards and is designed to curb tax evasion and prevent the leakage of tax revenues to other countries – and follows a similar move here in the UAE.

Starting on 01 January 2026, China approved a VAT law that brings into one document previous regulations that have included exempting items from the tax. It is estimated that this tax is the country’s largest tax category, accounting for 38% of national tax revenue in 2023. This latest draft included exemptions for some agricultural products, imported instruments and equipment for scientific research and teaching, as well as some imported goods for the disabled and services provided by welfare institutions such as nursery, kindergarten and nursing institution for the elderly. With the economy slowing, YTD VAT revenue dipped 4.7% on the year to US$ 840 billion, but rose 1.36% in November; that month, the government unveiled tax incentives on home and land transactions to support the crisis-hit property market, with VAT exemptions allowed for residents when homes were sold after at least two years post purchase.

The Reserve Bank of Australia has been cautioned by the IMF that it should consider tighter monetary policy if progress on lowering inflation stalls, because of government spending heading higher and an increasing tighter than expected jobs market. As the RBA is working towards inflation heading down towards its 2.0% – 3.0% target, the IMF is concerned that efforts will stall, as it considers that the government’s fiscal policy is working against the RBA’s restrictive monetary policy, in a manner that contradicts the disinflation objective. Furthermore, there are worries about the country’s job markets that have yet to peak at 4.5%, (per the Treasury and RBA’s unemployment forecast), still hovering around the 3.9% rate.

Claiming that “the fees being charged by Panama are ridiculous, highly unfair,” and charging “exorbitant prices” to American shipping and naval vessels, Donald Trump, has demanded Panama reduce fees on the Panama Canal or return it to US control. Panama’s President, José Raúl Mulino, added that Panama’s sovereignty and independence were non-negotiable, and quickly retorted that “every square metre” of the eighty-two km canal and surrounding area belong to his country. Built in the early 1900s, the US maintained control over the canal zone until 1977, when treaties gradually ceded the land back to Panama. After a period of joint control, Panama took sole control in 1999.The US reserved the right to use military force in defence of the canal against any threat to its neutrality – a threat which now appears to be coming from the US itself. Some 75% of the cargo passing through the waterway in the latest fiscal year was either destined for or originated from the US, according to the Panama Canal Authority.

Leading UK retail giants are expected to unite in a new year campaign to again warn Rachel Reeves that her plans to hike business rates on larger shops will put jobs and stores under threat. It seems that the likes of Asda, Marks & Spencer, Primark, J Sainsbury, Morrisons, Kingfisher-owned B&Q and Tesco will be involved, having agreed to revive a group called the Retail Jobs Alliance. It will argue that a wave of tax rises and regulatory changes will threaten investment by major retailers in economically deprived areas of the country. In total, the RJA’s members employ more than a million people across the country and account for a significant proportion of the stores, with rateable values in excess of the proposed threshold.

The Confederation of British Industry, joining the list of dissatisfied stakeholders, commented that the UK economy is “headed for the worst of all worlds”, as businesses expect activity to fall at the start of next year. Its latest survey points to private sector firms expecting to cut down on hiring, and to reduce output, as well as for prices to rise in Q1; the main driver continues to be Rachel Reeves’ decision to raise US$ 31.33 billion by increasing employers’ national insurance contributions by 1.2% to 15.0%. The CBI added that firms are looking for the government “to boost confidence and to give them a reason to invest” in 2025, “whether that’s long overdue moves to reform the apprenticeship levy, supporting the health of the workforce through increased occupational health incentives or a reform of business rates”.

It is estimated that more than US$ 2.55 billion was spent on second-hand gifts this Christmas, boosted by the current cost of living crisis and, to a lesser extent, a move to sustainable buying and sustainable consumption. Vinted, an online marketplace for buying and selling pre-owned items, made its first annual net profit last year of US$ 19 million, as annual revenue climbed 61%, driven by a rise in demand for second-hand goods.A report by Vinted and Retail Economics found that second-hand shopping will account for just over 10% of all gift spending. A study estimated that more than 80% also said they might spend some of their budget on pre-loved gifts this year. Furthermore, shoppers are also selling their own belongings to fund Christmas gifts, with 43% selling online. However, HM Revenue and Customs’ regulations indicate that if someone sells above a certain threshold, Vinted must ask the seller for their national insurance number and share it with HMRC. The company noted that it “is obligated to collect the national insurance number for any seller who sold more than thirty items or more than US$ 2.13k worth of product in the previous twelve months”; “but here’s the really important thing, the obligation to give your national insurance number does not mean there is any obligation to actually pay tax… there is no tax to pay on the private sale of second-hand items.” It would be interesting to see how the local market fares in this sector, with this observer indicating that it is on the rise. and it is no longer Second-Hand News!

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Highway To Hell!

Posted on December 21, 2024 by howesdubai

Highway To Hell!                                                  20 December 2024

This week, a nine-bedroom mansion in Hills Grove, Dubai Hills Estate, sold for a record-breaking US$ 54.5 million. Hills Grove, with just twenty-six residences along a single street, has become known as the ‘Street of Dreams’ and is one of two exclusive mansion enclaves in Dubai Hills Estate; it is surrounded by the golf course and picturesque lakes.  The mansion, set on a 37.7k sq ft plot, covers four levels, including a rooftop terrace and basement, along with a large private garden and a unique boomerang-shaped swimming pool.

With over two decades of European expertise, Mr. Eight Development announced that it was to enter the burgeoning Dubai property market, introducing innovative, boutique-inspired residences that prioritise stylish design and bespoke guest experiences. The developer has secured eight plots on Dubai Island and plans to invest US$ 272 million in launching five projects next year. Residents will be able to join an exclusive Members Club which will give them access to a number of unparalleled privileges, including the use of in-house Rolls-Royce cars, (with professional chauffeurs, available on-demand for personal use), a 24 mt motorboat with a skilled captain, an on-site bell boy, beach club access, valet parking and other facilities.

Keeping their cards close to their chest, Dar Global is keeping the location and other details of a possible Trump Tower project in Dubai. Its CEO, Ziad El Char, did admit, “we are looking at a Q2-25 launch – I feel doing the launch in Q1-25 would be a bit tight”. Possibly located in the Downtown area, the US$ 545 million project will also feature the ‘first Trump hotel in Dubai’. Twenty years ago, a similar project was in fact announced on the Palm Jumeirah, but then the 2008 GFC happened and that got scrapped.

Recently marked as “under cancellation” by the Dubai Land Department, Dubai Lagoon, first launched nineteen years ago in 2005 by Schon Properties, comprised fifty-three mid-rise buildings, with 4.2k residential units, ranging from studios to four-bedroom apartments. In March 2006, it was announced that the project’s first phase was sold out eight weeks after its launch. The first-phase construction was set for completion by September 2007 and handover by 2008. However, the project, impacted by stakeholders’ disputes and financial problems, (most of their own doing), failed to meet deadlines which came and went at regular intervals. By 2017, the Dubai Land Department became involved – and the Lily Zone was then handed over to Xanadu Real Estate Development for completion. But that failed.

The RTA announced that it had awarded three contracts, totalling US$ 5.59 billion to three contractors  – Turkey’s Mapa and Limak, along with China Railway Rolling Stock Corporation – to construct the Dubai Metro Blue Line; operations are slated to start on 09 September 2029 – exactly  twenty years after the start of the Metro on 09-09-09, at exactly the ninth second of the ninth minute at 9pm. Spanning thirty km, with fourteen stations, it will utilise twenty-eight trains, carrying 200k passengers, rising to 320k by 2040. The nine key areas include Mirdif, Al Warqa, International City 1 and 2, Dubai Silicon Oasis, Academic City, Ras Al Khor Industrial Area, Dubai Creek Harbour and Dubai Festival City.

Space42 has signed a US$ 5.09 billion contract with the federal government to supply critical, secure communication services until 2043. The locally based AI-powered SpaceTech company will provide secure and reliable satellite capacity and related managed services with the existing Al Yah 1 and Al Yah 2 satellites in orbit; two more satellites – Al Yah 4 and Al Yah 5 – are expected to be launched in 2027 and 2028, with the company receiving an advanced payment of US$ 1.0 billion to construct them. Space42 recently contracted Airbus to construct the satellites and has selected SpaceX to launch them into orbit using the reliable Falcon 9 rocket launch vehicle. The new satellites will provide secure governmental communications across the ME, Africa, Europe, and Asia.

According to Younis Haji Al Khoori, Undersecretary of the Ministry of Finance, indirect taxes in the UAE generate between US$ 2.72 billion and US$ 3.00 billion annually, a substantial portion of the federal budget, which totals approximately US$ 17.71 billion. He noted that “this underscores the robustness of the UAE’s tax framework, which is aligned with its strategic vision of achieving economic diversification and financial sustainability.”

This week, Emirates NBD listed a US$ 500 million, five-year Sustainability-Linked Loan Financing Bond, at a fixed coupon rate of 5.141%, being  the latest of nine issues on Nasdaq Dubai, totalling US$ 5.77 billion. This was the world’s first SLLB issued under the new International Capital Market Association and Loan Market Association framework. Rated A2/A+ by Moody’s and Fitch, the bond is issued under Emirates NBD’s US$ 20 billion EMTN (Euro Medium Term Note) Programme. This latest issue enhances the bourse’s stature on the global stage and solidifies its position as the premier platform for regional and global fixed-income and ESG-related listings. It now has an outstanding total value of US$ 139 billion in listed fixed-income securities.

The DFM opened the week, on Monday 16 December, twenty-four points (0.5%) lower the previous week, gained two hundred and twenty-seven points (4.7%), to close the trading week on 5,057 points by Friday 20 December 2024. Emaar Properties, US$ 0.03 lower the previous week, gained US$ 0.90, closing on US$ 3.51 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.72, US$ 5.40 US$ 1.85 and US$ 0.37 and closed on US$ 0.74, US$ 5.56, US$ 1.91 and US$ 0.40. On 20 December, trading was at three hundred and sixty-five million shares, with a value of US$ 329 million, compared to two hundred and eighteen million shares with a value of US$ 111 million, on 13 December.  

By Friday, 20 December 2024, Brent, US$ 1.46 higher (2.0%) the previous week, shed US$ 1.47 (2.0%) to close on US$ 72.94. Gold, US$ 19 (2.2%) higher the previous week, shed US$ 49 (1.9%) to end the week’s trading at US$ 2,627 on 20 December 2024. 

It is reported that the two titans of the Japanese auto industry are in discussions to establish a holding company. This would allow Nissan and Honda to share resources and cooperate more closely on technology, at a time when they are losing EV global market share to the likes of Tesla and BYD. In addition, like other major players, they face stalling demand in Europe and the US. There is every possibility that a merger could take place and if it were to occur, it would be the second biggest in the industry, since the 2021 US$ 52.0 billion merger between Fiat Chrysler and PSA, to create Stellantis. Honda’s market cap of US$ 38.8 billion dwarfs Nissan’s US$ 7.6 billion. The two had combined global sales of 7.4 million vehicles in 2023.

Having “knowingly and intentionally” conspired with pharmaceutical firm Purdue Pharma to “aid and abet the misbranding of prescription drugs… without valid prescriptions”, consulting firm McKinsey has agreed to pay US$ 650 million to settle criminal charges related to its role in the US opioid crisis. Prosecutors said the firm gave Purdue Pharma advice on how to “turbocharge” sales of OxyContin, a brand name for the painkiller oxycodone hydrochloride. Rather belatedly, McKinsey apologised in a statement, saying “we should have appreciated the harm opioids were causing in our society”, had already previously settled nearly US$ 1 billion in lawsuits over its work with Purdue and other pharmaceutical companies. Purdue Pharma had pleaded in 2020 to criminal charges related to its role in the US opioid crisis in an US$ 8.3 billion settlement.

Vacuum cleaner manufacturer, Dyson, has been taken to court in the UK, with the Court of Appeal ruling that two dozen Nepalese and Bangladeshi migrant workers can sue Dyson Technology Ltd. It was alleged that the workers, employed by Malaysian firm ATA Industrial, were subjected to forced labour at a Malaysian factory while making parts for the company. Prosecution lawyers claim that the workers had money unlawfully deducted from their wages and were sometimes beaten for not meeting onerous targets, and that the Dyson companies were ultimately responsible.

For the first time in forty years, the Bank of France has raised its turnover threshold required to qualify for the bank’s rating, from US$ 777kt o US$ 130 million; this rating system, which is confidential and based on comprehensive data, checks the ability of companies to meet their financial obligations and is provided free of charge to clients. This adjustment is intended to adapt the system to changes in the economic environment while focusing resources on larger companies. In the current economic climate in France, this seems to be a wise move by the Bank. The decision to raise the turnover threshold means that approximately 7% of companies currently rated by the bank will no longer qualify for a rating, as the rating often influences trade credit insurance and payment terms.

The former chief executive of Bananacoast Community Credit Union Limited, a New South Wales credit union, has been sentenced to eighteen months in prison for financial crimes committed six years ago. Lyndon Allen Kingston, who was also a banking watchdog senior manager at Australia Prudential Regulation Authority, before joining the credit union in 2008, was found guilty of unlawfully pocketing payments from two credit union contractors, without knowledge of the board. He was also found guilty of providing false and misleading information to the auditor of BCU to conceal the payments. Two further offences were withdrawn by prosecutors when the jury was unable to reach a unanimous verdict.

El Salvador, the first country to make bitcoin legal tender, in 2021, has agreed to pare back its controversial bitcoin policies, as part of a US$ 1.1 billion loan deal with the IMF. The global body had indicated that “the potential risks of the Bitcoin project will be diminished significantly in line with Fund policies,” and that “legal reforms will make acceptance of Bitcoin by the private sector voluntary. For the public sector, engagement in Bitcoin-related economic activities and transactions, and purchases of Bitcoin will be confined.” The IMF did not favour the Salvadorean President Nayib Bukele’s crypto-friendly policies, warning they could become an obstacle to it offering financial assistance.

A mega trade deal this week saw the EU and four S American nations – Argentina, Brazil, Paraguay and Uruguay – agree to greatly reduce bilateral tariffs, along with greater amounts of exports and imports being permitted; the agreement will have an impact on eight hundred million. The deal still needs to be ratified by the twenty-seven EU member states – and no prizes for guessing who will not be a supporter, with France planning to block it, due to fears that it will harm its farming sector. It will also require France to persuade at least three other EU countries, representing at least 35% of the total population, to join it. Ireland, Poland and Austria are also opposed, but Italy will likely need to also come on board to achieve the required population quota. If it were to pass through next year, it will result in more S American beef, chicken and sugar coming to the EU, and at lower prices, with the likes of European cars, clothing and wine going in the other direction.

Although the Speaker of the House Mike Johnson has defended the 1.5k page stopgap bill to prevent the possibility of a US government shutdown, it seems that president-elect Trump wants to scrap the deal and pass an amended one. The short-term funding bill will need to be passed by Congress by the end of week to prevent many federal government offices from closing on Saturday. The bill, known as a continuing resolution, is required because Congress never passed a budget for the 2025 fiscal year, which began on 01 October. Elon Musk, a member of Trump’s cabal, is the tsar to cut government spending in his future administration role, and has lobbied heavily against the existing deal. There have been twenty-one US government shutdowns or partial shutdowns over the past five decades – the longest of which was during Trump’s first term when the government was closed for five weeks.

The Federal Reserve cut rates by 0.25% for the third month in a row, as inflation continues to cool. It noted that “economic activity has continued to expand at a solid pace” with an unemployment rate that “remains low” and inflation that “remains somewhat elevated.”

Latest figures relating to UK students’ loans provide distressing reading, with the highest amount owned by one student being over US$ 318k, whilst the highest repaid loan so far stands at US$ 172k, with another loan showing that US$ 80.6k had been accrued. More worryingly, it was estimated that by the end of last September, more than 2.2 million people had an outstanding loan balance of US$ 63k. It was only twelve years ago that David Cameron’s austerity measures included raising student loans threefold to US$ 11.3k. Last month, the new Labour government announced it was reversing the 2017 tuition fee freeze, and from next year it will cost students US$ 12.0k a year. It is estimated that since 2019, only 5.8% of student loan balances have been fully paid off.

It seems that the Starmer government and the UK building sector could be at loggerheads, with the Home Builders Federation arguing that skills shortages, ageing workers, (25% of the 22.67 million workforce), and Brexit were some of the factors behind the shrinking workforce, and that the country does not have enough construction workers to build the 1.5 million homes the government keeps promising; the target being an annual 300k every year until 2029, with the average, over recent times, being 220k. According to the HBF, the sector needs about 60k new recruits, including:

  • 20k bricklayers
  • 2.4k plumbers
  • 8k carpenters
  • 3.2k plasterers
  • 20k groundworkers
  • 1.2k tilers
  • 2.4k electricians
  • 2.4k roofers
  • 0.5k engineers

The HBF also said the UK “does not have a sufficient talent pipeline” of builders to employ. It cited several recruitment constraints, including a poor perception and lack of training within schools, not enough apprenticeships and the costs of taking on apprentices. It also noted that the recruitment pool from the EU has largely dried up, following Brexit, and that up to 50% of skilled workers had also left the industry following the 2008 GFC and “restrictions” had made it harder to recruit from overseas. The independent think tank Centre for Cities also estimated the housebuilders will fall 388k short of the government’s 1.5 million, five-year target.

For the second consecutive month, UK inflation levels have headed north – this time by 0.3% in November to 2.6% – above the BoE 2.0% target; in October, it had risen from 2.0% to 2.3%. The main drivers behind the increase were higher annual cost of clothing, petrol and diesel, compared to last year, and costlier tobacco products also contributed to the change, after higher tobacco duty was increased in the October budget. On the flip side, plane tickets, had their largest monthly drop since records began. Other inflation indicators included core inflation, (measuring price rises excluding food and energy costs), and services inflation, (which is impacted by rising wages), which came in at 3.5% and 5.0% respectively – and lower than expected. Chancellor Reeves came in with the standard lame excuses such as the figures are a “reminder that for too long the economy has not worked for working people”, and “that’s why at the budget we protected their payslips with no rise in their national insurance, income tax or VAT, boosted the national living wage by GBP 1.4k, (US$ 1.77k) and froze fuel duty. “But I know there is more to do”.

Following a 0.7% decline in the previous period, in the four weeks ending 23 November, retail sales rose just 0.2%, and this despite discounting events in the run-up to Black Friday.  One of the main drivers was a marked decline of 2.6% in clothing sales – its lowest level since the pandemic lockdown month of January 2022. However, there were improvements noticed in food store sales, and supermarkets in particular, along with household goods retailers, most notably furniture shops. There is no doubt that higher energy bills had an impact on consumer spending, as did the fact that Black Friday took place after the close of the period.

High street retailer Shoe Zone, with two hundred and ninety-seven stores, employing 2.25k staff, has indicated a closure of stores, attributable to the negative impact of the Autumn budget. The company noted that it had experienced “very challenging” conditions recently, due to weakened consumer confidence and bad weather, and that it would incur “significant additional costs” due to the increases in employer national insurance contributions and the national living wage set out by the Chancellor in the budget. It expects its September 2025 EBIT to be “not less than” US$ 6.3 million, down from previous expectations of US$ 12.6 million, and it also cancelled its final shareholder dividend payout for 2023-24.

For the ninth consecutive month, UK car manufacturing posted another fall, with only 64.2k vehicles produced in November – over 30% lower on the year and the worst November figures since 1980. A government review of its EV mandate has not helped which has raised its target from its current 22% level to 80% of all sales by 2030; the industry has argued that the consumer demand is not there and EVs are costlier to produce. Separate figures from the Society of Motor Manufacturers and Traders has suggested a US$ 7.25 billion hit to the sector from the EV mandate, exacerbated by Chinese competition, high borrowing costs and comparatively more expensive raw materials. It does seem that the UK industry could be  On the Highway To Hell!

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An Awful Lot Of Coffee In Brazil!

Posted on December 13, 2024 by howesdubai

An Awful Lot Of Coffee In Brazil!                                           13 December 2024

According to Betterhomes’ Rupert Simmonds, Dubai’s rental market continued to be bullish this year, with average increases of up to 20%, but at a slower pace than the highs of 2022 and 2023. Looking to next year, he commented that, “we anticipate a moderation in the growth rate, with an expected rise of around 5% – 10% in rentals across the city. The cooling pace reflects increased supply from new property handovers and tenants’ growing preference for securing long-term leases at current rates.”  Industry experts also point to significant increases in certain localities – high-end areas due to limited new supply and strong demand from millionaires, and the outskirts of the emirate, as residents will relocate to those areas due to high rates in central locations. Another reason why rents are surging higher is the booming population. It is estimated that by the end of 2024, the emirate’s population will be 3.820 million – a 4.51% increase, (165k) for 2024, from the year’s opening 3.655 million. Since the influx of professionals, high-net-worth individuals, and people seeking greener pastures is expected to continue in 2025, rents in the emirate will maintain an upward trend in the coming year.

Meanwhile ValuStrat’s Haider Tuaima, noted that this year’s residential rents for new contracts increased 5% for villas and 16% for apartments, with “the next twelve months are likely to see villa rents stabilising, whilst apartment rents continue climbing up to 10%.” This is almost in line with Savills’ 2025 estimate of between 10% – 12%, and that apartments are likely to see higher growth than villas; the consultancy noted that “the overall demand for rental properties is expected to outweigh supply in most submarkets, keeping rental values on an upward trend.”

ValuStrat’s November report paints a rosy picture of Dubai’s realty sector, indicating that villa prices gained 31.9%, on an annualised basis, as the ValuStrat Price Index moved 1.8% higher on the month to 197.3 points. With a January 2021 benchmark of 100, the VPI indicated that villas had reached 253.7 points, (with monthly and annual gains of 2.1%/31.9%), and apartments 160.5, (1.6% monthly and 23.9% annually).

For villas, the top performing locations were Palm Jumeirah, Jumeirah Islands, Emirates Hills and Dubai Hills Estate, with annual price rises of 42.5%, 42.4% (which is now more than triple its value at the start of 2021), 32.7% and 32.2%. The lowest gains were seen in Mudon (15.1%) and Jumeirah Village Triangle (20.4%). For apartments, the major winners were The Greens, Palm Jumeirah, Discovery Gardens and The Views with price increases of 31.6%, 29.0%, 28.5%, and 27.6%. At the other end, the least capital value gains were found in International City (16.6%) and Dubai Sports City (17.2%).

Although falling 41.9% on the month, Oqood (contract) registrations were still 76.5% higher on the year and accounted for 64% of all home sales this month. The volume of ready secondary-home transactions also posted a monthly 8.9% decline but were up 3.2% on the year.

There were twenty-four transactions for ready properties priced over US$ 8.17 million, (AED 30 million), situated in Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, Al Barari, Dubai Hills Estate, and District One. The top five developers in the month – accounting for 39.3% of total transactions – were Emaar (14.7%), Damac (7.6%), Sobha (6.5%), Binghatti (5.9%) and Tiger Properties (4.6%).

Top off-plan locations transacted included projects in Jumeirah Village Circle (13.1%), Jumeirah Village Triangle (8.5%), Business Bay (5.4%), and Dubailand Residence Complex (5.1%). Meanwhile, most ready homes sold were located in Jumeirah Village Circle (10.2%), Dubai Marina (5.9%), Business Bay (5.1%), Downtown Dubai (4.7%), and Uptown Motor City (4.1%).

With an average sales price of just US$ 438 per sq ft, Dubai presents incredible value compared to London and New York. Despite its reputation for luxury and world-class amenities, Dubai’s property market remains accessible to a broader spectrum of buyers. Investors can enter a market that offers lavish lifestyles and state-of-the-art developments at a fraction of the cost of global counterparts.

Binghatti’s latest property delivery comprises six projects, consisting of 2.1k units, all located in record time in Jumeirah Village Circle:

  • Binghatti Orchid         303 units        studio, 1 B/R, 2 B/R
  • Binghatti Amber         640 units        1 B/R, 2 B/R
  • Binghatti Onyx            495 units        1 B/R, 2 B/R, 3 B/R
  • Binghatti House          270 units        plus 23 office spaces
  • Binghatti Lavender     164 units        studio, 1 B/R, 2 B/R
  • Binghatti Venus          190 units        1 B/R, 2 B/R

Damac Properties posted that on Thursday it sold over US$ 272 billion, (AED 10 billion), worth of properties in less than ten hours – not a bad return to end 2024. The developer, founded by Hussain Sajwani, sold 3.1k units, with all being located on Damac Islands which included six clusters – Maldives, Bora Bora, Seychelles, Hawaii, Bali, and Fiji. This must be the season to be merry for small and large developers – the latter seem to be selling their projects within hours, and the “smaller fish”, within days and weeks, with demand probably at its highest ever.

Handovers have started for the seven ultra-luxury Bvlgari Ocean Mansions on Dubai’s Jumeirah Bay island, with the homes currently having listing prices of US$ 49.0 million and over. Each five-bedroom mansion, encompassing almost 10k sq ft, features a ‘unique over-water design’ and ‘hug the curve of Jumeirah Bay Island’, making the residences appear to be ‘floating above the waves’.

This week, a five-bedroom beachfront Signature Villa, at Six Senses Palm Jumeirah, has been sold for over US$ 35 million – yet another indicator of how robust the Dubai ultra-luxury real estate market is. It is the highest sale achieved, in this particular project, and is one of the top ten most expensive branded residences sold in 2024. The villa boasts hand-selected Italian marble teakwood finishes, along with high-end branded fittings. Fully serviced and managed by Six Senses, the villa is expected to be ready by October 2025. George Azar, CEO of Dubai Sotheby’s International Realty, noted that “super prime branded residences have become one of the driving forces in the global real estate market, attracting the attention of buyers in key cities like Miami, New York, and London. Dubai, which has become an epicentre for luxury living, holds the distinction for having the highest number of branded residences in the world and continues to set new benchmarks in that very exclusive space.”

Branded properties’ increasing popularity is borne out by figures – in H1, their sales of US$ 7.85 billion were 44.0% higher on the year and accounted for 12.6% of Dubai’s total sales. Furthermore, in the prime and super-prime segments, new branded projects, between June 2022 and June 2024, increased by 43.0%, including seventeen new launches comprising 7.26k units in H1. This year, the firm has been involved in the most expensive villa sales in Jumeirah Bay Island – for US$ 48 million – and in Abu Dhabi, for US$ 35 million.

On the global investment stage, Dubai seems to reign supreme, compared to the likes of New York and London, offering gross investment yields of 7.0%, compared to New York’s 4.2% and London’s 2.4%. On an annual basis, the comparison on inflation-adjusted property price growth is similar – 16.5%, 8.1% and 1.6%. Apart from the financial advantages, Dubai offers other benefits, including a pro-investor ecosystem through initiatives such as visa reforms, zero property taxes, and its ambitious Dubai Economic Agenda D33, enhancing the emirate’s reputation as a hub for businesses, expatriates, and high-net-worth individuals. Add to the mix, the likes of its lifestyle offerings, blending safety, connectivity, and modern infrastructure, along with its position as a global travel hub, coupled with its family-friendly environment and favourable climate, makes it an obvious choice for many.

Beyond has launched a second project, following its first highly successful entrée into the Dubai realty market, with Saria. Its second project, Orise, located in Dubai Maritime City, and spanning a gross floor area of 62k sq mt, will comprise five hundred and thirty residences. Average unit sizes range from 758 sq ft, 1,284 sq ft, 1,658 sq ft, 2,023 sq ft and 2,465 sq ft for a one-bedroom, a two-bedroom, a three-bedroom, a two-bedroom chalet, and a three-bedroom chalet respectively. Simplex and duplex penthouses have an average area of 5,486 sq ft, while a signature collection of premium units averages 3,114 sq ft. The residences feature over thirty layout options and allow homeowners to choose their interior finishes, including custom colours for flooring, kitchens, and joinery, tailoring their homes to personal tastes.

MVS Real Estate Development becomes the latest European developer to move to the emirate, and take advantage of a bullish market, with its plans to deliver high-quality residential projects. The developer, with over eighteen years of international real estate construction experience, has a portfolio of more than 22k apartments, in forty-two buildings, delivered in Russia and the UK. It has also delivered four hundred and fifteen commercial real estate projects spanning 56k sq mt of leasable area including over twenty hypermarkets, two multifunctional family shopping complexes and storage facilities. Furthermore, it has developed two hotels in St Petersburg and operates them. It is expected to soon announce details of its first Dubai foray – a residential tower in one of the emirate’s most sought-after upcoming destinations. Ivan Baciu, its CEO, commented that Dubai “is a world-leading residential real estate market that provides high returns and unparalleled growth opportunities underpinned by a stable political environment and strong economic foundations”.

In the nine months to 30 September, it is estimated that the country’s tourism sector generated US$ 9.13 billion – a 4% increase compared to the same period in 2023. Average hotel occupancy rose to 77.8%, one of the highest globally, whilst hotel nights climbed 8.0% to 75.5 million.

With the Christmas rush nearly upon us, Dubai airport expects average daily traffic numbers to be at 274k, with Friday, December 20, anticipated to be the busiest day of the period, hosting nearly 296k guests. The weekend from December 20 to 22 will also see peak activity, with an estimated 880k passing through the airport. Of the 3.2 million expected to use DXB, over the festive period, 1.7 million will be arrivals and 1.5 million departures. Authorities also advised that “The Family Zone at Terminal 3 will transform into a winter wonderland featuring a unique fusion performance of carollers and beatboxers, a Magic Station offering gift-wrapping and photo opportunities, a Nutcracker marching band, and more.”

HH Sheikh Mohammed bin Rashid Al Maktoum, has approved a new initiative, named the Dubai Walk Master Plan (Dubai Walk), to turn Dubai into a pedestrian-friendly city, on par -and probably better – than the likes of London, Paris and New York. The groundbreaking and ambitious plan to transform the city for pedestrians will involve a series of walkways, together with vast areas of greenery, shaded areas, interactive screens, sports and entertainment spaces (with equipment included) and several art displays.  Set for final completion by 2040, it will result in a massive 6.5k km interconnected network, involving 3.3k km of new pathways and enhancing 2.3k km of existing structures. Connecting the city will also see one hundred and ten new pedestrian bridges and underpasses. Accessibility and safety will be prioritised.

The latest Comprehensive Economic Partnership Agreement is with the five members of the Eurasian Economic Union – Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. The Minister of State for Foreign Trade, Dr. Thani bin Ahmed Al Zeyoudi, commented that the CEPA reflects the UAE’s firm belief in constructive international cooperation and promotion of open rules-based trade, as a cornerstone of global economic growth and stability. He also noted that “with a combined population of some two hundred million people, and a GDP approaching US$ 5 trillion, the EAEU offers a rich seam of opportunity for our private sector, while the UAE and its growing network of global trade partners offers EAEU exporters streamlined access to the competitive, high-growth markets in the ME, Africa, Asia and South America”. In H1, the UAE shared non-oil trade worth US$ 13.7 billion with the bloc, representing a jump of 29.6% on the year. As with other similar agreements, already signed with an increasing number of nations, this deal aims to boost these figures through reducing or removing tariffs, eliminating technical barriers to trade, expanding market access, and aligning customs procedures. The EPA will also seek to harmonise digital trade and e-commerce in addition to creating new platforms SME collaboration.

November’s seasonally adjusted Dubai S&P Global UAE Purchasing Managers’ Index came in 0.7 higher on the month to 53.9 – slightly lower than the 54.2 level attained by the UAE PMI, which had nudged up by 0.1 on the month. Both indices were well above the 50.0 threshold which delineates contraction and expansion. Dubai’s return indicates that there was a marked increase in new order inflows – more robust than the national return. It was noted that even though sales headed higher, which resulted in an increase in business activity, employment levels dropped marginally for the first time since April 2022. Margins continued to tighten, whilst output expectations slipped to a twenty-three-month low.  There were falls with inventories, cut for the first time since July, with output charges falling for the second straight month despite a sharp uplift in input costs.

According to the Ministry of Finance, the 15% Domestic Minimum To-Up Tax, on large multinational companies operating in the country, will be effective for financial years starting on or after 01 January 2025. DMTT will apply to MNCs, with consolidated global revenue of US$ 793.50 million or more in at least two out of the four preceding financial years. This brings the country in Iine with the OECD’s two-pillar solution to implement a fair and transparent tax system and stipulates that large multinational firms pay a minimum effective tax rate of 15% on profits in each country where they operate. The Ministry is also considering the introduction of a number of corporate tax incentives, including one for R&D that would apply for tax periods starting in 2026, that could see a potential 30%-50% refundable tax credit depending on the size of the company’s operations in the UAE and revenue. It could also introduce a refundable tax credit for high-value employment activities, which aims to encourage businesses to engage in activities that deliver significant economic benefits, stimulate innovation, and enhance the UAE’s global competitiveness. Although tech companies would be an obvious beneficiary of the UAE’s move to offer tax refunds for those engaged in ‘high value’ employment activities, other sectors’ businesses could do likewise. This could apply to sectors with high-value investment, high employment generating activities, sustainable developments, and export-oriented industries.

Following recent regulatory updates, issued by the country’s Commercial Gaming Regulatory Authority, Emirates Draw has discontinued its operations in the country and announced its plans for a global expansion strategy. An Emirates Draw spokesperson noted that it had “shifted our focus to international markets, now reaching participants in over one hundred and seventy-five countries”, adding, “we now operate exclusively in the digital space, offering our products to international markets. However, UAE residents can no longer access the Emirates Draw website or participate in its draws, as the site is restricted within the country. Physical tickets are also no longer available in the UAE.” The GCGRA, established under Federal Law by decree, has introduced a new regulatory framework for lottery operations in the UAE, and has granted a licence to The Game LLC, operating as The UAE Lottery, to conduct lottery operations under their supervision. Currently, the law has ordered all pre-existing lotteries, with the exception of Dubai Duty Free and Big Ticket, (both airport-based lotteries), to cease operations immediately.

At this year’s Quality Infrastructure for Sustainable Development Index1, (launched, in 2022, by United Nations Industrial Development Organisation), the UAE managed to climb six places to fifth. The QI4SD Index categorised the UAE in the ‘L’ group that includes countries with GDP between US$ 100 billion and US$ 1 trillion such as Switzerland, South Africa, Singapore and Finland. The Index serves as a comprehensive framework converging multiple indicators that evaluate the readiness of national QI systems to contribute to sustainable development goals.  To progress further, the country’s National Committee for Quality Infrastructure has been established to oversee progress and provide strategic direction to activities related to the growth and development of QI.

As from 01 January 2025, Dubai is set to reinstate a 30% tax on the sale of alcohol, following a two-year suspension of the levy. The process of obtaining an alcohol licence in the emirate will be unchanged. This means that from next year, businesses selling alcohol – including off-licence chains such as MMI and A&E, as well as bars and restaurants – are required to pay the 30% levy on supplies received. Most will pass on the extra cost to the consumer, but the actual costs should not be as high as 30% on the selling price in the restaurant/bar; it does seem that some establishments did not alter their prices to reflect the tax cut in the first place two years ago.

The Landmark Group has opened the region’s first textile recycle facility at Dubai World Central. This follows the company’s initiative to introduce a takeback programme last year, across some of its larger UAE stores to receive – and reward – customers for bringing their used garments and textiles, regardless of the brand. The aim of the factory is to give a ‘second life’ to used fabrics, across fashion and home products, which will recycle the used items into a selection of fibres. These are then shipped to manufacturing units to be spun into yarn and transformed into new products across apparel and home furnishings. Renuka Jagtiani, Chairwoman of Landmark, said “our recycling facility is a crucial step in the region’s fashion and textile industry towards closing the loop on product lifecycles to achieve circularity.”

As part of its US$ 45 billion Trust Certificate Issuance Programme, Indonesia, for the fourth time this year, has listed a further US$ 2.75 billion with Nasdaq Dubai – US$ 1.1 billion 5.00% Trust Certificates, due 2030, US$ 900 million 5.25% Trust Certificates, due 2034, and  US$ 750 million 5.65% Trust Certificates, due 2054; the issuance was 1.8 times oversubscribed. The government now has a total of twenty-one listings, totalling US$ 24.6 billion, of Sukuk on the local bourse accounting for 24.87% of Nasdaq’s total of US$ 98.9 billion, which makes it the world leader for Sukuk issuances.

On Tuesday, shares in delivery firm Talabat debuted on the DFM and jumped 7.5% soon after the listing to US$ 0.463, (from its starting price of US$ 0.436 – AED 1.60), as over two hundred and twenty-eight shares, valued at US$ 106 million, changed hands. The 20% IPO, involving 4.658 billion shares, raised US$ 2.044 billion and valued the company at US$ 10.16 billion. The offering, which Talabat said was “the largest global technology IPO in 2024 to date”, attracted a double-digit oversubscription level last month. At the closing of the trading week, on 13 December, its share value was at US$ 0.409, (AED 1.50).

The DFM opened the week, on Monday 09 December, one hundred and twenty-eight points (2.7%) higher the previous week, shed twenty-four points (0.5%), to close the trading week on 4,830 points by Friday 13 December 2024. Emaar Properties, US$ 0.24 higher the previous four weeks, shed US$ 0.03, closing on US$ 2.61 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.76, US$ 5.35 US$ 1.84 and US$ 0.38 and closed on US$ 0.72, US$ 5.40, US$ 1.85 and US$ 0.37. On 13 December, trading was at two hundred and eighteen million shares, with a value of US$ 111 million, compared to five hundred and seventy-eight million shares, with a value of US$ 160 million, on 06 December.  

By Friday, 13 December 2024, Brent, US$ 3.93 lower (5.2%) the previous fortnight, gained US$ 1.46 (2.0%) to close on US$ 74.40. Gold, US$ 61 (2.2%) lower the previous fortnight, gained US$ 19 (0.7%) to end the week’s trading at US$ 2,676 on 13 December 2024. 

It may surprise readers that the value of Russia’s natural resources, at an estimated at US$ 100 trillion, is almost double that of the US. Igor Sechin, executive secretary of the Presidential Commission on Fuel and Energy Development strategy and environmental safety and head of Rosneft, noted that this unique resource base ensures the reliability of Russian supplies to foreign partners in the long term.

IATA’s October figures indicate that global passenger demand, in revenue passenger kilometres, was 7.1% higher on the year, with total capacity, measured in available seat kilometres, up 6.1% year-on-year; October load factor was 0.8% higher at 83.9%. International and domestic demand rose 9.5%/3.5%, capacity up 8.6%/2.0% and load factor up 0.6% to 83.5%/1.2% to 84.5%. Willie Walsh, IATA’s Director-General, noted that “average seat factors have risen from around 67% in the 1990’s to over 83% today.” All regions showed growth for international passenger markets in October 2024 compared to October 2023. On a regional basis, demand, capacity and load factor, Asia-Pacific, (17.5%, 17.2% and up 0.3% to 82.9%) – Europe, (2.2%, 2.5% and minus 0.2% to 80.2%) – N America, (3.2%, 2.9% and 0.3% to 84.2%) – Latin America, (10.9%, 11.6% and minus 0.6% to 85.3%) – and Africa, (10.4%, 5.3% and 3.4% to 73.2%).

There are reports that Sycamore Partners, the US private equity firm, is planning a US$ 10 billion plus bid for Walgreens Boots Alliance. If successful, it is expected to seek separate ownership for Boots that could trigger a fresh auction of Boots the Chemist after several failed attempts to sell the UK retail giant. WBA has seen its market value dip below US$ 8.0 billion this year. In the past it has orchestrated, and abort at least two processes to explore a sale of Boots in the last few years, deciding that offers from parties including Apollo Global Management did not offer sufficient value. John Boots opened his first herbal remedies store in Nottingham in 1849, and one hundred and seventy-five years later, it employs some 52k and has about 1.9k outlets. In 2012, Walgreens acquired a 45% stake in Alliance Boots, completing its buyout of the business two years later.

Last month, US based restaurant, Dave’s Hot Chicken, opened its first site in the UK – now it is the turn of Chick-fil-A which has announced plans to launch in the UK next year. Chuck E Cheese, which operates nearly six hundred child-friendly restaurants in sixteen countries, is known for its mouse mascot, pizza and arcade games – and sees the UK as a “key target market”. 

Following “challenges” including poor performance and increased competition across its last financial year, Poundland is to take a US$ 820 million hit in its accounts by writing back amortisation charges – thus reducing the goodwill value on the original acquisition of the chain. Pepco, the owner of the UK discount retailer, posted that this was due to several major headwinds including rising costs amid the budget burden facing businesses, a weaker economic outlook and higher costs. The group, with a 15k payroll, posted a US$ 700 million loss in its financial year ending 30 September 2024, with sales flat on the year. The private sector has widely warned of a hit to investment, jobs and pay on the back of the October budget which will see costs head north, with the retail sector, as a whole, warning of an almost US$ 9.0 billion hike to its costs next year.

The market is digesting the possibility of Mondelez International, which owns UK-based Cadbury, buying out US chocolate maker Hershey, (with brands including Hershey’s Kisses and Reese’s Peanut Butter Cups). Shares have jumped by more than 10% on the news. In 2016, Hershey rejected a US$ 23 billion offer from Mondelez, but if this deal were to go through, it would create a snack food giant, with combined annual sales of almost of almost US$ 50 billion. Any deal would need the approval of the Hershey Trust Company, that maintains voting control over the business. With consumer spending slowing, the packaged food industry has been impacted and especially chocolate companies having to face surging cocoa prices that had started the year at US$ 4.275k, rose to US$ 12.218k, on 19 April and is trading at US$ 9.972k on 10 December. The increased cost has largely had to be transferred to the customer, and last month, Hershey cut its revenue and profit forecasts.

GM, which owns about 90% of the Cruise self-driving taxi, has announced that it will stop funding its development and said it has agreements with other shareholders that will raise its ownership to more than 97%. The Detroit-based manufacturer’s chief executive, Mary Barra, has previously predicted that the Cruise business could generate US$ 50 billion in annual revenue by 2030. GM confirmed that it would now “refocus autonomous driving development on personal vehicles”, after citing the increasingly competitive robotaxi market as a reason for the move, and the “the considerable time and resources that would be needed to scale the business”. Although Ford and Volkswagen announced in 2022 that they would shut down Argo AI, their self-driving car joint venture, last October Tesla unveiled the electric car giant’s long-awaited robotaxi, the Cybercab. Furthermore, other tech giants such as Alphabet’s Waymo and Amazon are still players in this sector.

Exxon Mobil posted that it wants to raise its oil/gas output by 18% to between US$ 28.0 billion and US$ 33.0 billion in the five years from 2026 to 2030, (from its current US$ 22.0 billion to US$ 27.0 billion). Its plan will see the top US oil producer raise its earnings from their current US$ 20.0 billion to US$ 34.2 billion. Exxon’s profits have benefitted from its Guyana operations – generating huge profits – and its US shale business which is on track to double oil production this year through its acquisition of Pioneer Natural Resources. On the news, Exxon shares dipped 0.7% to US$ 111.92, with many of the projects and targets already known. The higher spending took analysts by surprise. Its prior capital spending, excluding Pioneer-related outlays, called for US$ 22 billion to US$ 27 billion a year through 2027. President-elect Donald Trump’s pledge to encourage US oil production and “get out of the way of the industry” bodes well for Exxon and energy producers.

It is reported that at least six banks are in discussions with Reliance Industries for a loan of up to US$ 3 billion to refinance debt due next year; terms have not been finalised yet and could be subject to changes. The Mukesh Ambani conglomerate has US$ 2.9 billion worth of debt falling, including interest payments, due next year. Only last year did Reliance return to the international market and raise over US$ 8.0 billion for the parent company and subsidiary Reliance Jio Infocom Ltd. Moody’s Ratings reaffirmed Reliance Industries’ rating at Baa2 last week, as the company’s credit metrics are “solidly positioned” and “are likely to remain so despite high ongoing capital spending”.

Q3 data shows that although it is still performing well on a global comparison with other countries, India’s latest GDP figures disappoint, with the economy declining to a seven-quarter low of 5.4%; the Reserve Bank of India had forecast 7%. There are several drivers behind this slump, including weakening consumer demand, continuous slowing private investment, a marked cut back in government spending and sluggish exports, (with only 2% of the global total). Furthermore, weak sales are seen in fast-moving consumer goods companies while salary bills, at publicly traded firms, dipped last quarter. Finance Minister, Nirmala Sitharaman, blamed the decline on the reduction in government spending during an election-focused quarter, and expects Q3 growth to offset the recent decline.

Having been found guilty of managing a tax fraud, that cost Denmark’s government up to US$ 1.25 billion, Sanjay Shah, has been sentenced to twelve years in a Danish prison cell, as well having assets worth US$ 1 billion seized, plus a string of properties. The UK hedge fund trader, who had been living in Dubai before his arrest in 2022, was extradited last December, received the heaviest penalty ever given out in Denmark for a fraud case. Prosecutors had accused Shah of being the mastermind of a so-called cum-ex scheme, using a series of complex trades in order to fraudulently reclaim more than US$ 1.25 billion in dividend tax refunds from the Danish treasury between 2012 and 2015. Previously, the Danish government has said cum-ex schemes have cost it more than US$ 1.8 billion, with Shah being one of nine British and US nationals accused of defrauding the state. Shah, who was the founder of London-based hedge fund Solo Capital Partners, also faces a parallel civil tax fraud case in London, filed by the Danish tax authority, that is due to conclude in April.

Because China’s State Administration for Market Regulation has accused Nvidia of violating its anti-monopoly law, US$ 100 billion, (about 3%), was wiped off its market value on Monday; it also accused the world’s largest chip maker of violating commitments it made when it acquired Mellanox Technologies in 2020. It is no coincidence that the imminent arrival of Donald Trump into the White House, (and the distinct possibility of more tariffs), has spooked Chinese administrators. This announcement followed the Biden administration blacklisting hundreds of Chinese semiconductor companies just days ago – the third crackdown in as many years on the sector.

The disappointing trade figures follow other indicators showing patchy growth in November, suggesting Beijing needs to do more to shore up a faltering economy that is only likely to face further challenges next year. Of immediate concern for authorities, imports shrank 3.9%, when expectations were for a paltry 0.3% increase – their worst performance in nine months. In the month, shipments grew 6.7% – down on the 8.5% forecast and 12.7% lower on the month. The administration has vowed to rectify the situation next year by revving up demand and enticing consumers back into spending. US President-elect Trump has already pledged to slap an additional 10% tariff on Chinese goods in a bid to force Beijing to do more to stop the trafficking of chemicals used to make fentanyl and has previously said he would introduce tariffs in excess of 60%. His rhetoric is of major concern to traders whose US market is in excess of US$ 400 billion a year. On top of that, there are also concerns with the EU over tariffs of up to 45.3% on Chinese-made EVs, and markets nearer home – including South Korea and Vietnam – having their own economic problems which will impact on their trade with China. It also has its internal problems, with household and business confidence impacted by an ongoing and huge property crisis. Despite all these problems, China’s trade surplus grew US$ 1.28 billion to US$ 97.44 billion last month.

In 2021, the Australian government made history by passing legislation to make giants like Meta and Google pay for hosting news on their platforms. Earlier this year, Meta said that it would not renew the payment deals, (leading to a roughly US$ 128 million loss in revenue for Australian publishers), it had in place with local news organisation; however, new rules announced this week will require firms that earn more than US$ 160 million, in annual revenue, to enter into commercial deals with media organisations, or risk being hit with higher taxes. It seems likely that the tax will impact companies such as Facebook, Google and TikTok, and already Meta has expressed its concern that the government was “charging one industry to subsidise another”. In addition, the new framework – known as the News Bargaining Incentive – will require tech firms to pay despite not having any agreements with publishers. This deal also aims to offset some of the losses traditional media outlets have faced due to the rise of digital platforms. Beginning next month, the new taxation model, which aims to make tech companies fund Australian journalism in exchange for tax offsets, and not to raise revenue – will be enacted once parliament returns in February.

The Australian Council of Social Service has released its 2024 Faces of Unemployment report, in which it sees a “mismatch” between those seeking jobs and the number of entry-level positions available, (which has locked more people into relying on income support long-term, and criticises “erroneous” support services; revealing that a total of 557k – of which 50% were related to illness – have been receiving unemployment benefits, (and also 190k for more than five years), it calls for a “complete overhaul” of the employment services system, making key policy recommendations. Furthermore, it is accused of “harming” Australians with “unrealistic” requirements and failing to get them into sustainable jobs and noted that unemployed Australians were relying on “punishingly low” support payments as job opportunities continue to decline. Interestingly, Australia has the lowest unemployment payment of all thirty-eight OECD countries — currently just at US$ 36 a day – which the organisation is urging the government to lift the rate of the unemployment payment to at least the US$ 53 pension rate. It estimates that 40% of people receiving JobSeeker have a partial capacity to work, with many unable to secure sufficient paid work to sustain a living, and that only 8% of people receiving support for more than five years, and 14% receiving it for more than a year, leave the support program. It is patently obvious that the longer a person has been receiving income support, the less likely they are to transition out of it. Those who do normally will move into “part-time or temporary employment”.

The other problem is unemployment services giving ‘little practical help’ with ‘onerous’ rules and that the country is well behind not only support payments but also on spending on programs to boost employment. The report opines that Workforce Australia focuses mainly on compliance and offers most people little practical help to secure employment, with very few being referred directly to employers and assistance to overcome barriers to employment. In the twenty-one months, to March 2024, figures show that only 12% of those using Workforce Australia services managed to obtain sustained employment. Furthermore, 38%, (256k), and 16%, (106k), of those registered had less than year 12 qualifications, and had only completed year 12 in September of this year, respectively.  ACOSS has made several recommendations including asking for increased payments, commitments to reform and employment targets, ending the “automated payment suspensions” in use by employment services and for an “independent quality assurance body” for employment services, and trialling partnerships between providers, training organisations, government and community services to assist people in finding sustainable work.

A report by the CSIRO indicates that building a nuclear power plant in Australia would likely cost twice as much as renewable energy, and that it found nuclear plants enjoyed relatively little financial advantage from their long lives, which could be double a solar or wind farm. The report is in contrast to the thinking of Opposition leader Peter Dutton who is on record saying that his nuclear policy would help bring down power bills; the CSIRO has consistently found renewables to be the cheapest option. Earlier in the year, the company found Australia’s first nuclear power plant would cost up to US$ 11 billion in today’s dollars and not be operational until 2040.

Yesterday, the ECB cut rates again, for the third consecutive month, by 0.25% to 3.0%, to try and stop an economic slowdown across the euro area, by helping stoke weakening demand in the twenty-nations bloc that use the euro; further monthly decreases are expected in the New Year. It noted that it now expects a slower economic recovery than in its September projections, by 0.7%, 1.1%, 1.4% and 1.3%, over the next four years from 2024. The hope is that this will be achieved by rising real incomes – which should then enhance household expenditure – and firms increasing investment. Meanwhile sterling was reaching an eight-year high against the euro, at 1.2134, driven by the fact the ECB shows no sign of slowing its pace of rate reductions, while the Bank of England is tipped not to touch rates until next year. It is not often that the world sees the ECB panicking and the UK economy, itself spluttering, but still ahead of its European neighbours, because of the dismal economies and political uncertainty facing the two powerhouses – Germany and France. Both are awaiting the daunting prospect of Donald Trump and more tariffs being introduced.  The former is facing snap elections in February, and is in a sorry state, whilst their exports head southwards because of falling demand and stiff global competition. Meanwhile Emmanuel Macron seems to be the lead in a French farce pushing his country into a self-made economic crisis, following the ousting of his Prime Minister, Michel Barnier, and his government, only appointed in September. Rising bond yields and an increasing number of insolvencies are making investors wary, with economic activity being impacted by the political stalemate – it has still not agreed a budget for 2025.

There are plans afoot in the UK to make online marketplaces, such as Amazon and eBay, pay their “fair share” of the costs of recycling electrical waste under new government proposals. Circular Economy Minister, Mary Creagh, wants to put more pressure on international suppliers to contribute to recycling costs and to ensure that foreign sellers, who have escaped these costs by selling online, pay their share and not leave domestic companies such as Currys ‘picking up the tab’.  Meanwhile, disposable vapes will be banned across the UK next year, with e-cigarette firms being asked to pay more, but any legislation will not start until 2026. Last year, the UN estimated a massive eight hundred and forty-four million vapes were thrown away every year – but noted that “seventy-seven times more e-waste” is generated from unwanted toys.

It seems evident that, following the October budget, the demand for new staff among businesses slumped to levels last seen in August 2020 and that firms have had to “re-assess their hiring needs”. There are other warnings from various business groups that measures introduced, including braising employers’ NI contributions 1.2% to 15.0%, and raising the living wage, has impacted badly on investment, pay and employment. Even the BoE governor, Andrew Bailey, has weighed in, commenting that the reaction of business to the budget is the “biggest issue” facing Bank policymakers.

Currys is yet another major retailer suffering from the Labour government’s first budget in October, as it warns of a drop in consumer sentiment over the past six months, and price rises to help offset the impact of the increase in the employers’ national insurance payment by 1.2% to 15.0% and a hike in the minimum wage. Chief executive, Alex Baldock, noted that progress in tackling financial pressures on households had “stalled in recent months”, when in summer UK consumers were looking at falling inflation, interest rates and rising confidence; the budget helped change all that, with some price rises now “inevitable”. Like many others in the retail space, customers faced price rises to help offset the estimated impact, which for Currys is estimated to be over US$ 40 million.

With many businesses still reeling from the Reeves’ October Budget, there was no surprise to see that the UK economy contracted – by 0.1% – for the second consecutive month in October, as concerns about the Budget continued to weigh on confidence. The Office for National Statistics said that activity had stalled or declined with pubs, restaurants and retail among sectors reporting “weak months”. The Chancellor was quick to defend herself, agreeing that the figure was “disappointing”, but adding, “we have put in place policies to deliver long-term economic growth.” However, it does seem that consumer confidence is low, not helped by Labour party figures talking down the economy, and part of the population unsure in which direction the Starmer government is heading. The reality is that the economy has grown just once over the past five months, since the election, and perhaps the October Budget posted the wrong message. In Q3, the UK economy grew by 0.1%, despite manufacturing and construction dropping 0.6% and 0.4%, with the services sector, which makes up the bulk of the UK economy, stalled with zero growth.

In the UK, Zoopla has come out with housing figures that indicate that renting a newly let property is on average 26% higher, at U$S 345 per month to US$ 1.62k, than at the end of the pandemic in 2021. It was then after the lockdown that demand skyrocketed resulting in a limited number of available properties; demand is nearly a third higher than before the pandemic. The good news for renters is that rents are rising at their slowest rate for three years, the bad news is that average earnings, over that period, have not kept pace with the steep rise in rents. The property portal – which covers more than 80% of the rental market – said there were signs of this market cooling, but warned that those with the lowest spend capability, including students, may now be facing the sharpest rent rises, as city rents are typically rising faster at the lower end of the market. Its latest forecast is for an average 4% increase next year.

The British Retail Consortium noted that cash use in the shops rose for a second year in a row, after a decade of falls, with currency being used in about 20% of all transactions; it also noted that the average amount spent dipped 1.2% to just over US$ 28. It seems that certain entities, including essential services, parking services, community venues, leisure centres and universities, have started to refuse to accept cash. For example, this has impacted on women in abusive relationships, whose partners use a bank account as a form of control or to track their movements, elderly people and those with mental health issues, more so since banks have started to close so many of their branches. The BRC confirmed that all large retailers were committed to accepting cash in their stores. A recent report from UK Finance noted that the number of people who mainly used cash for day-to-day spending hit a four year high owing to the cost of living. Banking data shows cash remains the second most popular payment method, after debit cards.

In September, the cost of Robusta beans hit record highs and on Tuesday, the price for Arabica beans did likewise reaching US$ 3.44 per lb, after surging over 80% YTD. The end result is the inevitability that coffee drinkers will be paying more, as traders predict that there will be a global shortage after crop shortages in the world’s two largest producers – Brazil and Vietnam – both impacted by bad weather conditions. In the past, it seems that coffee roasters and brands like JDE Peet (the owner of the Douwe Egberts brand), Nestlé and Lavazza had borne most of the price rises themselves but that could end with consumers now having to pay more, as the drink’s popularity continues to grow; for example, consumption in China has more than doubled in the last decade. The last record high for coffee was set in 1977 after unusual snowfall devastated plantations in Brazil, but this year the country experienced its worst drought in seventy years during August and September, followed by heavy rains in October. Vietnam, the largest producer of that variety, has faced similar weather patterns. No longer is there An Awful Lot Of Coffee In Brazil!

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Sick Man Of Europe!

Posted on December 6, 2024 by howesdubai

Sick Man Of Europe!                                                       06 December 2024

Latest data from Cushman & Wakefield Core, indicates that the Dubai property market is till firing on all cylinders and, that for the seventeenth consecutive quarter, continued moving higher, with Q3 posting a 20.0% annual increase; villas and apartments registered 23% and 19% rises in the period. The consultancy noted that suburban and affordable communities are leading the market. Highest price increases were seen in Discovery Gardens, Jumeirah Lakes Towers and Dubailand (Remraam) – with hikes of 43%, 34% and 28% – mainly attributable to relatively lower price points in these areas and the substantial price growth in central districts. There is a definite move that sees growing demand for value-driven investment opportunities in suburban areas, as prices, in nearer city areas, are becoming unaffordable for an increasing majority of the population.

Knight Frank also noted that 2024 average home prices have risen 20% – and it expects the bull run – that started post Covid, will continue into 2025. It sees residential values are set to rise 8% next year while they will increase 5% on average for luxury properties. To this observer, this seems very much on the low side.

The consultancy also calculated that nearly 20% of homes in Dubai are worth in excess of US$ 1 million. It estimated that “accidental millionaires”, were the result of owners who bought properties for less than US$ 1 million that are now worth more, purely due to price inflation; only homes that have not traded hands have been counted. It continued that “of the 530k homes sold since 2002, 95k are worth over US$ 1 million today, which equates to a combined total value of US$ 224 billion.” Further data shows that homes, valued at over US$ 1 million, have jumped from just 6.3% of all sales in 2020 to 18.1% today, and that. the total value of all homes sold in Dubai since 2002 currently stands at US$ 400 billion, which is up 221% since 2020.

Its report noted that house prices in Dubai were 19.9% higher on the year. Furthermore, factoring for potential downside risks to the market, the most significant of which is the threat of a global economic slowdown,” the study noted that Dubai’s prime residential market will see a more modest growth of nearly 5% next year. The consultancy expects a further 300k residential units over the next five years, equating to an annual 60k; the apartment/villa split will be roughly 81.5/18.5 or 48.9k/11.1k.  However, very rarely will all projections come to fruition and, that being the case, a more realistic figure would be around 20% lower at 39.1k/8.9k units.

November recorded another busy month, with a total of 13.5k property sales along with an overall value of US$ 10.90 billion. fäm Properties estimated that there was an annual 31.2% increase for apartment sales transactions to 10.9k, valued at US$ 5.42 billion. In contrast, villa sales volume was 35.8% lower, with 1.9k being sold for US$ 2.78 billion. Plot sale volumes were 39.6% lower at US$ 2.21 billion, whilst there was a 5% increase in volume for commercial sales, at three hundred and fifty-four, valued at US$ 354 million

The average property price per sq ft has continued its growth over the past four years; in 2021, the figure was at US$ 304, rising to US$ 357 the following year and then to US$ 374 by the end of 2023; its latest value is now at US$ 408. Dubai property sales for the month of November have now risen in volume over the last five years from 3.8k transactions (US$ 2.02 billion) in 2020 to 7.0k (US$ 4.88 billion) in 2021, 11.1k (US$ 8.45 billion) in 2022, and 12.2k (US$ 11.55 billion) in 2023.

In November, the top five performing areas in November were:

Jumeirah Village Circle           – 1,528 transactions               worth US$ 436 million

Dubai Marina                          – 838 transactions                 worth US$ 845 million

Business Bay                           – 809 transactions                  worth US$ 736 million

Jumeirah Village Triangle       – 717 transactions                 worth US$ 163 million

Wadi Al Safa 5                        – 672 transactions                 worth US$ 155 million

Vida Residences Club Point was the best-selling off-plan apartments project in terms of value, with two hundred and twenty-seven apartments, being sold for US$ 146 million. Greenridge was the top-selling off plan villas project, with one hundred and thirteen units being sold for US$ 102 million. For ready apartments and ready villas, Maya 3 saw one hundred and three transactions, valued at US$ 14 million, with fourteen villas, worth US$ 12 million, being sold. First sales outnumbered resales by 56:44 and 52:48 in volume and value. An analysis based on prices reveals:

below the US$ 272k mark                              32%

between US$ 272k – 544k                            32%

between US$ 545k – 817k                            17%

between US$ 817k – US$ 1.365 million        12%

more than US$ 1.365 million                         8%

Another factor involved in the current evolution of the Dubai realty sector is a marked uptick in the number of international investors finding interest in the emirate’s off-plan properties, which, compared to the likes of London, Sydney, New York, Hong Kong, Paris, and Singapore, are significantly cheaper. With demand increasing – both locally and globally – some developers are taking advantage, by introducing more aggressive payment plans. Such schemes ensure projects are being internally financed and that delivery times are met.  On the flip side, purchasing property is becoming more challenging for lower income families, (because of the need for a higher deposit).

The latest Savills study confirms Dubai’s retention as the global leader when it comes to branded residences. Currently, there are seven hundred and forty completed branded residences worldwide, with a further seven hundred and ninety anticipated by 2031, across one hundred countries. Of that total, Dubai can take claim for one hundred and forty projects, including completed and projected over the forecast period. These projects range from hotel-branded residences to non-hotel collaborations with known designers. The ME market is expected to dominate the global sector, expanding by 270%, over the next seven years. Rico Picenoni, Head of Savills Global Residential Development Consultancy, commented that “over the next five years, we anticipate the entry of sixty new brands into the market, with branded residences expanding into regions such as Romania and Tanzania. The ME, and particularly Dubai, remains at the forefront of this growth.”

Globally, hotel-branded residences accounted for 79% of developments this year, with two-thirds positioned in the luxury segment; Marriott International is the leading parent company, with The Ritz-Carlton being the most prominent hotel brand. For non-hotel branded residences, YOO stands out as the market leader.

As we come to the end of another mega-year for the realty sector, Dubai’s ultra-luxury real estate landscape shows no signs of a slowdown, that many “experts” had thought would occur. YTD, the highest values for an apartment and a villa sale have been US$ 65.5 million for a five-bedroom ready apartment, at The One Residences, Palm Jumeirah, and a seven-bedroom, off-plan villa at EOME Residences, Palm Jumeirah, selling for US$ 55.3 million in September.

An under-development, forty-storey DIFC tower, set for completion in 2028 and owned by H&H Development, has been acquired by Aldar for a reported US$ 627 million. The project encompasses a commercial and retail space split. This is not the first Dubai foray for the mega Abu Dhabi developer. It has already announced a new commercial tower on SZR, along with two upscale residential communities, and the ‘6 Falak’ in Dubai Internet City from Sweid & Sweid. 

Earlier this year, the government announced its real estate strategy, with the three main aims being to double the real estate sector’s contribution to Dubai’s GDP to US$ 19.89 billion, (AED 73.0 billion), increase real estate transactions by 70% to reach US$ 272.47 billion (AED 1 trillion by 2033), and to grow the value of real estate portfolios twentyfold to US$ 5.45 billion (AED 20 billion).

In H1, there was a 25.0% surge in the total value of real estate transactions, totalling US$ 48.38 billion, driven by the ongoing Expo 2020’s legacy impact, a slowly recovering global economy, and Dubai’s increasing appeal as a safe haven for investors amid global uncertainties. Over the next five years, it is estimated that some 19.8k properties, equating to just under 7.0% of the total upcoming inventory of 283.9k, will be priced in the US$ 1.36 million plus, (AED 5 million) sector; properties, with a value of over US$ 8.17 million, (AED 30 million), will account for less than 1.0% of the total builds. Both figures indicate that these two sectors will continue with increased demand because of the relative dearth in supply. If the estimated influx of UHNWIs reaches an annual 6.5k, then it is obvious that the estimate of 19.8k supply of properties, over five years, will be unable to satisfy demand which in turn will push prices higher in this sector.

Metropolitan Premium Properties is claiming that it has managed one of the ‘biggest single-unit rental deals’ in Dubai – the A penthouse at The Royal Atlantis Resort and Residences on Palm Jumeirah which has been rented out for US$ 1.2 million – becoming one of the ‘biggest single-unit rental deals’ in Dubai, and probably the ‘most expensive’ apartment lease in the city’s history. The tenant is a high-net-worth European family who is returning to live and work in Dubai after a stay abroad and moving into the 10k sq ft four-bedroom penthouse which includes a living and dining area, a library, and an exercise room – all fully furnished.  Furthermore, it boasts a 2.7k sq ft terrace and a transparent infinity pool, with use of all the hotel amenities.

Dubai-based luxury hotel chain Jumeirah Group, founded in 1997 and a member of Dubai Holding since 2004, has a global portfolio of twenty-six properties. This week, it announced that it has expanded into Africa, in partnership with Thanda Group to open two new destinations – Jumeirah Thanda Island in Tanzania, (an exclusive-use remote island), and South Africa’s Jumeirah Thanda Safari, located in in one of the Big Five private game reserves.

Over the past thirty years, HH Sheikh Mohammed bin Rashid has changed Dubai’s public services beyond belief, with the mantra, developed over the three decades, that the government is always ready to serve the people — online and offline. The Dubai Ruler noted that “we have established a culture of open doors for the people”, and “is a culture of having no doors at all before the people. Dubai’s global reputation today is a natural outcome of its swift services and an open work environment that prioritises people.” Part of his strategy, to maintain the very high standards that he has set, is to openly hold officials – from top to bottom – accountable. Following a recent “mystery shopper exercise”, HH noticed that three officers had gone as far as placing “managers, secretaries, and building security at their doors”, so he sent out a clear message –  “the key to our success lies in serving people, simplifying their lives, and maintaining constant communication with them. These are our governmental principles—they have not changed. And to those who think we have changed; we will change them.” In 2020, HH Sheikh Mohammed introduced the UAE Mystery Shopper app through which residents can help rate government services. This service allows people to evaluate their overall experience at government centres, including factors like employee attitude, waiting time, payment issues, and even parking management.

Today, HH Sheikh Mohammed appointed Marwan bin Ghalita as the new acting DG for Dubai Municipality; he is a graduate of the government’s leadership programme, with the Dubai Ruler noting that “he has a good reputation for his communication with the public, facilitating their affairs, and cooperating with other institutions.” He also recognised the former DG, Dawood Abdulrahman Al Hajri, who had been in the position since 2018, for “his efforts, work and dedication during the previous years in Dubai Municipality”. At the same time, he expressed his appreciation for Mattar Al Tayer, who has supervised a number of government institutions – including the DM and the Dubai Land Department – over the years. HH concluded by saying, “today, these institutions are starting a new phase in their service and economic work and are continuing their journey to make Dubai the best city to live in the world.”

Dubai Duty Free has announced its YTD sales had topped US$ 1.94 billion by the end of November – well on its way to exceed its 2024 target of US$ 2.0 billion; last month, it posted monthly revenue of US$ 205.67 million – the fifth best ever month in its forty-one-year history, with CEO, Ramesh Kidambi, commenting that “we look forward to achieving more milestones in December”. Perfume sales were 10% higher at US$ 362 million and gold sales up 2%, at US$ 195 million, with electronics sales reaching US$ 134 million.

In line with the government’s directives to transition 80% of taxi trips to e-hailing in the coming years, Bolt launched its operations in the UAE on Monday. The company, which operates in over fifty countries, will initially have a fleet of limousines, listed by reputed fleet partners on the Bolt platform, including Dubai Taxi Company vehicles. Using the user-friendly Bolt app, consumers can easily book rides, track their driver, and make payments through their app. The next phase of expansion will include the introduction of taxi services on the app, creating a versatile and sustainable mobility ecosystem in Dubai. The CEO of DTC, Mansoor Al Falasi, said, “since the announcement of the launch of Bolt in October this year, we are pleased to see its operations come to fruition”.

At the fifteenth session of the Arab Ministerial Council for Electricity, attended by electricity and energy ministers and delegations from twenty-two Arab countries, the launch of the Arab Common Electricity Market was announced; its main purpose is to achieve regional integration in the field of electrical energy. Two agreements were signed – the “General Agreement,” which defines the goals of the market and mechanisms for its development, and the “Market Agreement,” which sets the institutional and commercial framework for the market, including governance of operations and cooperation between member states.

The Dubai Commercial Court has dismissed a US$ 5.6 million lawsuit, filed by an Emirati plaintiff, against a real estate development company for allegations of financial mismanagement and failure to deposit US$ 6.4 million funds into the project’s escrow account, toward purchasing units in a real estate project in Dubai’s Al Barsha area. However, a court-appointed financial expert determined that the real estate company completed the project and that the plaintiff had resold most of the units for a profit, negating any claim of financial loss. The court ruled that there was no breach of obligations by the defendants and ordered the plaintiff to cover all legal costs of the case.

The UAE becomes the first country in the region to officially join the Eurasian Group on Combatting Money Laundering and Terrorist Financing (EAG) as an observer – a sure sign of the country’s commitment to enhance both regional and global efforts to fight money laundering and terrorist financing. The EAG, established in 2004, includes nine member countries across Eurasia – Belarus, China, India, Kazakhstan, Kyrgyz Republic, Russia, Tajikistan, Turkmenistan and Uzbekistan – and works closely with the FATF. The UAE’s new observer status joins that of sixteen other countries and twenty-three international organisations.

More than eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee, in 2020. The controls were removed in March 2021 to reflect the movement of the market once again. Last Sunday, retail prices saw price reductions of up to 4.9% for petrol, with diesel moving marginally higher, (after November’s slight 2.5% – 3.3% reductions for petrol and 11.0% for diesel). The breakdown of fuel prices for a litre for December is as follows

  • Super 98     US$ 0.711 from US$ 0.747              in Dec (down by 4.8%)         down 7.4% YTD US$ 0.768     
  • Special 95   US$ 0.681 from US$ 0.717             in Dec(down by 4.9%)          down 7.7% YTD  US$ 0.738         
  • E-plus 91   US$ 0.662 from US$ 0.695               in Dec (down by 4.7%)          down 7.9% YTD   US$ 0.719
  • Diesel         US$ 0.730 from US$ 0.7.28               in Dec (up by 0.03%)            down 10.6% YTD US$ 0.817

The DFM opened the week, on Wednesday 04 December, (after the National Day holidays), one hundred and twenty-one points (2.6%) lower the previous week, gained 128 points (2.7%), to close the trading week on 4,854 points by Friday 06 December 2024. Emaar Properties, US$ 0.20 higher the previous three weeks, gained US$ 0.04, closing on US$ 2.64 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.72, US$ 5.45 US$ 1.86 and US$ 0.38 and closed on US$ 0.76, US$ 5.35, US$ 1.84 and US$ 0.38. On 06 December, trading was at five hundred and seventy-eight million shares, with a value of US$ 160 million, compared to two hundred and ninety-five million shares, with a value of US$ 220 million, on 29 November.  

By Friday, 06 December 2024, Brent, US$ 2.23 lower (3.0%) the previous week, shed US$ 1.70 (2.3%) to close on US$ 72.94. Gold, US$ 44 (2.8%) shed the previous week, lost US$ 17 (0.6%) to end the week’s trading at US$ 2,657 on 06 December 2024. 

Earlier in the week, Russian gas producer Gazprom noted exports through Ukraine to Europe would be 40.8 million cu mt – 2.9% lower than the 42.0mcm noted in recent months. Russian gas exports, via Ukraine, are scheduled to stop on 31 December, as a five-year transit deal with Kyiv expires. Russia halted gas supplies to Austria’s OMV, in mid-November, due to a contractual dispute and a court decision to award the Vienna-based company, US$ 242 million relating to irregular supplies to its German unit in 2022. However, other unnamed companies stepped up to buy the remaining Russian gas, thus keeping the flows from Siberia stable.

Carlos Tavares, the chief executive of Stellantis – which owns brands including Vauxhall, Jeep, Fiat, Peugeot and Chrysler – has abruptly left the car giant, with Henri de Castries, its senior independent director, saying “Stellantis’ success since its creation has been rooted in a perfect alignment between the reference shareholders, the board and the chief executive. However, in recent weeks different views have emerged which have resulted in the board and the chief executive coming to today’s decision.” Only two months ago, the company had issued a profits warning and last week had also announced plans to close its Luton Vauxhall van-making factory.  When the news broke on Monday, Stellantis lost roughly US$ 3.09 billion in its market cap.

Mark Tucker joined HSBC, from Hong Kong-based insurer AIA, in March 2017, when Europe’s biggest bank broke tradition by choosing an outsider to replace veteran Douglas Flint. Seven years later, the bank has appointed head-hunters to start the recruitment of its next chairman and is open to existing non-executive directors and outsiders to succeed him. This comes at a time when Georges Elhedery, its new CEO, began a major restructuring of the bank, slimming down his management committee and has had hundreds of managers reapplying for jobs. In June 2019, Tucker was appointed board chairman of the private-sector membership body and industry advocacy group, TheCityUK, succeeding John McFarlane, and last year was named a member of the McKinsey & Company External Advisory Group.

In the UK, regulation expert Dr Maria Luisa Stasi has filed a claim against Microsoft, on behalf of UK businesses, that could reap, if successful, over US$ 1.27 billion; the case, filed with the Competition Appeal Tribunal, alleges that the tech giant overcharged firms for access to its products. It accused Microsoft of leveraging its dominant market position to induce customers into moving to its cloud computing services. She commented, “put simply, Microsoft is punishing UK businesses and organisations for using Google, Amazon and Alibaba for cloud computing by forcing them to pay more money for Windows Server. By doing so, Microsoft is trying to force customers into using its cloud computing service Azure and restricting competition in the sector.”

Despite having previously indicated that it thought that a merger between Three and Vodafone would see tens of millions of users paying more for their services, the Competition and Markets Authority has approved the creation of the UK’s biggest phone network; it will be contingent on the new entity spending billions to improve 5G internet services across the network, capping some mobile tariffs and offering preset contractual terms to mobile virtual network operators, mobile providers that do not own the networks they operate on, for three years.

Airbus will cut nearly five hundred jobs in the UK, as it announced that its global work force will lose more than 2k jobs, (5% of its employees), by 2026. The strategy is based on scaling back its space business and trying to trim its “fixed cost base”, as profits continue to dip, (by 22% to US$ 2.29 billion), despite revenue rising, (up 7% to US$ 56.68 billion); the space arm of its business will take the brunt of cuts, losing 56% of the total. The job cuts will also be spread out geographically, with Germany, France, UK, Spain and the rest of the world losing six hundred and eighty-nine, five hundred and forty, four hundred and seventy-seven, three hundred and three and thirty-four respectively.

Although still working at 100% production capacity, Guinness has had to limit the amounts pubs can buy in the run up to Christmas, after “exceptional demand” over the past three weeks. The main drivers behind this decision are that demand for the “black stuff” has been rising in popularity with women and young people, whilst recent rugby internationals have put a strain on supplies. It appears that Diageo is allocating supplies, on a weekly basis, with a spokesman adding “we have maximised supply and we are working proactively with our customers to manage the distribution to trade as efficiently as possible.” It has been expanding operations in its St James’s Gate brewery in Dublin and also building a new brewery in County Kildare. Figures show that between July and October, overall beer drinking was slightly down, but the volume of Guinness, consumed from kegs, was up more than 20%.

Orano, the French nuclear firm, confirmed that its uranium mining operations have been taken over by the recently installed military government in Niger. Having seized power in a July 2023 coup, the newly installed administration withdrew Orano’s permit to exploit one of the world’s largest uranium deposits, as well as expelling French troops. Orano, a 63% stakeholder, then suspended production. This week, authorities in the country took over control of its Somair uranium mine as the military-led government, (a 37% shareholder), continues to step up pressure on foreign investors in the West African country.

The Australian Competition and Consumer Commission has approved the alliance of Virgin Australia and Qatar Airways which will allow Virgin to commence twenty-eight new services a week between Australia and Doha. Qatar’s chief commercial officer, Thierry Antinori,commented that “we are pleased to be helping Virgin Australia launch these new services to Qatar and creating business opportunities for our travel trade partners.” The full deal between the airlines will see Qatar become a 25% shareholder in the Australian carrier.

Better late than never, Australia has introduced so-called “Tranche 2” laws that will stop real estate agents being able to accept suitcases full of cash as payment. It will bring Australia, (that had been only one of five countries globally to not include these high-risk professions in the AML/CTF regimes and was at risk of being ‘grey listed’), into line with similar nations, and stem the process of criminals converting illegal profits into money that looks legitimate. The Transparency International Australia CEO posted that, “for many years, Australia has been a go-to destination for kleptocrats, corrupt officials and organised crime gangs to wash their ill-gotten gains into our economy, particularly in the real-estate sector.” It did add “the carve-out for lawyers to claim legal professional privilege does create a risk of lawyers being the profession of choice for money launders and not reporting suspicious matters to AUSTRAC. Australia weak corporate transparency laws also enable corruption and money laundering to take place. In order to further safeguard Australia against money laundering and corruption, the parliament must pass strong beneficial ownership laws as promised by the Albanese government.”

Many Australians are raising concern about the amount of money, in its superannuation funds, being channelled to overseas construction activities when there is a need for the same kind of investment to plug the housing crisis at home. AustralianSuper, the country’s largest fund, is funnelling hundreds of millions of dollars into the development of a massive “new town centre” development, Canada Water, the first in London for fifty years; it will add 3k net-zero homes and office space for some 20k. In March 2022, AustralianSuper announced its 50:50 partnership with UK property developer British Land to work on this project. The fund’s initial investment is valued at US$ 325 million which some may argue would be better placed in its home country where there is the need to build “1.2 million homes over the next five years to address the national housing supply crisis”. As of 2024, the superannuation industry is worth about US$ 3.9 trillion, with only 6.7%, (a ten-year low), going into the property market. AustralianSuper has more than US$ 2.92 billion in the international property market — in the UK and North America — compared to more than US$ 5.20 billion in Australian and New Zealand properties. In November last year, Australia’s third-largest super fund Aware Super announced it invested more than US$ 6.50 billion in the UK and Europe, whilst Aware Super already has U$$ 1.62 billion invested in the international property market and US$ 4.86 billion in the Australian property market.

Interestingly, a twenty-three party of Australian business leaders, academics, urban planners and various consultants recently visited London to look at the project, which they concluded was facing the same challenges of delivering enough housing to keep up with population growth, as the Moore Point development in Liverpool, in south-west Sydney. Its leader, Christopher Brown, commented that, “we’d like to see Australian superannuation funds investing Australian workers’ money into affordable housing.” He also noted that, “ten years in, this project has finally been given the right to go on approval for the public to have a say, and that’s with a supportive council,”  comparing it to Canada Water’s project promises to deliver 11k homes and 23k jobs, with at least ten hectares of public spaces along the river, and that “crusty old England can move projects through from conception to development in a third of the time Sydney’s looking at.” He has called upon all levels of government to overhaul the planning system so that it “doesn’t take ten years to get from conception to exhibition and then another ten years to develop”. According to the federal government’s 2024 budget papers, Australia “has among the lowest number of homes as a proportion of the population in the OECD”.

Thanks to the election of Donald Trump on 05 November, the world’s biggest cryptocurrency, Bitcoin, reached US$ 100k, (valued at US$ 103.3k yesterday morning, having surged 7.9% over the previous twenty-four hours), for the first time. Since his victory announcement, it has risen by over 48% from its then value of US$ 69.4k. Five years ago to the day, Bitcoin was trading at US$ 7,521 – today it is trading at US$ 99,029, more than thirteen times higher.

The World Bank’s Fund for the poorest nations will be boosted by donor counties pledging US$ 100 billion, over a three-year period, that will give them a vital lifeline for their struggles against crushing debts, climate disasters, inflation and conflict; this is 7.5% higher than the US$ 93 billion IDA replenishment announced in December 2021 but short of the US$ 120 billion goal that some developing countries had called for. The International Development Association provides grants, and very low interest loans, to some seventy-eight low-income countries. About US$ 24 billion will be contributed directly to IDA, but the fund will issue bonds, and employ other financial leverage, to stretch that to the targeted US$ 100 billion in grants and loans through mid-2028.

According to the United Nations Conference on Trade and Development, 2024 will be a record year for global trade – 3.3% higher on the year to US$ 33 trillion – and this despite a rocky and slowing global economy. The main driver behind the improving results is trade services, with a 7.0% annual rise, (accounting for 7.0% of the increase), whilst there was only a 2.0% rise in goods trade. Q3 imports from developing nations dipped 1.0%, with the same result seen in South-South trade – trade between developing countries. Meanwhile, advanced economies led the global growth, with a 3% rise in imports and a 2% increase in exports. There were 14% and 13% rises noted in ICT (information and communications technology) and clothing sectors.

The October euro area seasonally adjusted unemployment rate came in 0.3% lower on the year, at 6.3%, and flat on the month. The EU unemployment rate was at 5.9% in October 2024, flat on the month and 0.2% lower on the year. Eurostat estimates that 12.971 million persons in the EU, of whom 10.841 million in the euro area, were unemployed in October 2024, with unemployment decreasing by 70k in the EU and by 3k in the euro area.

Japan imported 31.80 million barrels of oil from the UAE in October 2024, accounting for 47.8% of its total imports for the month. Total oil imports for the month reached approximately 66.53 million barrels of which 65.06 million barrels, (97.8%), came from Arab countries.

Japan’s October unemployment rate in October rose 0.1% on the month to 2.5%, after three months of reductions, with an increasing number looking to stay in employment after reaching retirement age. Following a dip in September, the total number of people with jobs climbed 0.2%, to a seasonally adjusted 67.98 million, while those without jobs gained 1.8% to 1.71 million. There was a 5.4% hike, to 390k, in the employees who were let go – including those who reached retirement age – whilst the number of people who voluntarily left their jobs decreased 5.4% to 700k. Data saw that there were one hundred and twenty-five jobs available for every one hundred job seekers.

With the greenback riding high, following the ascension of Donald Trump to be the incumbent US president, the Indian rupee sank to a lifetime low yesterday, trading at 84.7050 to the dollar. An added pressure on the rupee was the worry of the country’s slowing economy, (which hit a seven-quarter low of 5.4% in Q3), with a currency trader noting that the decline “has been without much resistance, relatively speaking”, adding that “the price action suggests that either the Reserve Bank of India’s intervention has been comparatively mild or that the underlying dollar demand is too much. Either way, it is a worrying sign (for the rupee).” The RBA is under political pressure to cut rates soonest, but, as its main aim is to get inflation down, it is unlikely to accede to the wishes of others.

Last Friday saw the reappointment of Ngozi Okonjo-Iweala as director-general of the World Trade Organisation, in which could be a difficult period for her, with the new Trump administration threatening hefty tariffs on goods from Mexico, Canada and China. No other candidates ran against her and all of the WTO’s one hundred and sixty-six members agreed by consensus to a proposal to reappoint her. The speed of her reappointment could be down to the fact that it could avoid any risk of it being blocked by Trump, whose teams and allies have criticised both Okonjo-Iweala,, and the WTO, in the past. In 2020, the Trump administration gave its support to a rival candidate and sought to block her first term and was only confirmed when President Joe Biden succeeded Trump in January 2021. However, over the past four years, efforts to revamp the WTO’s dispute settlement system, brought to its knees under Trump due to US opposition to judge appointments, have so far failed to deliver ahead of an end of December deadline; over the next four years, she will also have to deal with mounting tensions between the two superpowers, US and China, continuing trade supply problems and a slowing global economy.

Last week, President-elect Donald Trump threatened the BRICS bloc that “we require a commitment… that they will neither create a new BRICS currency, nor back any other currency to replace the mighty US dollar or, they will face 100% tariffs.” This was in response to discussions, at their recent summit in Kazan, about boosting non-dollar transactions and strengthening local currencies. The group, founded in 2009, comprised Brazil, Russia, India, China and South Africa, with recent new entrants being countries such as Iran, Egypt and the UAE. At the October meeting, there was a joint declaration, encouraging the “strengthening of correspondent banking networks within BRICS and enabling settlements in local currencies in line with BRICS Cross-Border Payments Initiative.”

Last week, President Volodymyr Zelenskiy enacted Ukraine’s first wartime tax increases, (personal tax rising from 1.5% to 5.0%), as the war against Russia enters its thirty-fourth month. The war tax for residents is currently paid on personal income and is being extended to tens of thousands of individual entrepreneurs and small businesses; other taxes will be on some rental payments and raising taxes on the profits of commercial banks and other financial institutions to 50% and 25% respectively. These amendments are expected to reap an extra US$ 3.4 billion for the war battered economy. Although controversial in some quarters, it does seem they were a vital step for Ukraine’s financial programme, with the IMF and the possibility of access to a further US$ 1.1 billion. Next year, the embattled country’s external financing requirements will top US$ 38.4 billion, with a 19.4%, to GDP, budget deficit, down from this year’s 21.0%. The government plans to cover next year’s deficit with financing from the IMF, the EU and also with funds from a long-awaited US$ 50 billion G-7 loan backed by frozen Russian assets.

A new report by the Centre of Inclusive Trade Policy indicates that there has been a 16.0% decline in the shipping of UK food and agricultural products to the EU across the three years since Britain left the single market, attributable to “mind-boggling” bureaucracy on an annual US$ 3.81 billion hit to food exports since Brexit. Although there may be other reasons, such as the war in Ukraine and the COVID pandemic, the report concludes that bilateral trade “demonstrate no recent signs of regaining previous levels”. The main cause of the decline seems to be added layers of regulation, required to send products to Europe since Brexit.

Nationwide posted that UK November house prices were growing far higher than expected, and at the fastest annual rate in nearly two years – 3.7% and 1.2% higher on the year and month. This was just 1% below the all-time highs recorded in the summer of 2022 when lockdown savings were being spent as Covid-19 restrictions were unwinding and borrowing rates were still reasonable.

There was an 0.4% decline in France’s October household consumption, driven by a significant 1.3% reduction in purchases of manufactured goods, a 5.1% decrease in clothing spending and energy consumption also dipping 1.2%. There was also a 0.6% decline in durable goods spending, (following a slight increase of 0.8% the previous month), down to lower purchases of electronic devices, such as computers and phones, as well as a drop in second-hand car sales. An 0.3% decline in energy expenditure in September was quadrupled in October to 1.2%. On an annual basis, household consumption of goods increased by 0.4% in October 2024, compared to the previous year, while food spending dropped by 0.6%. The Q3 economy grew by 0.4%, (double that of the 0.2% increases posted in Q1 and Q2), driven by the positive impact of the Paris 2024 Olympic and Paralympic Games.

It seems that the bain of Brexiteers has finally got his come-uppance. Michel Barnier, the EU’s former Brexit negotiator, has overseen France plunge into a political and economic crisis after a no-confidence vote brought down the government, after only three months – the shortest of any administration of France’s Fifth Republic. This has left the clueless president, Emmanuel Macron, with three problems – how can a budget be decided with France facing a growing public deficit, who can he appoint as prime minister and how long can he himself stay in power? He has ruled out resigning, calling such a scenario “political fiction”, but he has little support remaining, with the left and far right calling for his exit.

Perhaps more worrying for France is its deepening financial crisis. Barnier had tried, (by use of Article 49.3 of the Constitution to bypass debate), to reduce the country’s public deficit from an estimated 1.1% to 5% by 2025. He tried to save about US$ 52 billion because France has high – and rising – public debt, interest rates nudging higher again and soaring energy prices. Even credit agency Moody’s has warned of an escalating political impasse will have a negative impact on the economy. It is estimated thatthere will be a 16.1% hike in bankruptcies to 65k this year, even more layoffs and sluggish economic growth. Other factors point to the trouble facing Macron and his rudderless administration, including a foreign trade deficit touching US$ 106 billion, a rising number of the population, currently at nine million, below the poverty line, an increase in factory closures and a public debt that has risen by 60% in seven years to US$ 33.79 trillion. Europe’s second biggest economy has rapidly become the Sick Man of Europe!

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Would I Lie To You?

Posted on November 30, 2024 by howesdubai

Would I Lie To You?                                                        29 November 2024

By last week, and for the first time ever, Dubai’s residential real estate market saw total sales cross US$ 13.63 billion, (AED 50.0 billion), with transactions 80.0% higher at 19.6k. Engel &  Völkers noted that sales were driven primarily by the booming off-plan segment, which soared by 117% on the year, compared to the secondary market, where sales showed a relatively pedestrian 33.0% rise. Despite average prices increasing 1.7% on the month, the emirate is still a magnet for global investors, offering attractive rates of nearly 7.0%. In E&V’s latest report, they also listed Dubai’s top five most exclusive residential areas – Palm Jumeirah, Dubai Marina, Downtown Dubai, Dubai Hills Estate and Emirates Living.

Meanwhile, Dubai’s commercial real estate sector continued to post increasing returns for investors. In October, commercial sales posted their highest return of 2024, with sales of US$ 2.97 billion – 10.0% higher on the year – driven by rising transaction values and sustained interest in premium commercial spaces. With the average office price registering a 37% annual hike to US$ 410 per sq ft, along with a 24% annualised surge in sales, office rental prices rose 25.8% on the year, with retail rents posting a slower 6.9% rise. The firm expects further strong economic expansion amid an influx of businesses relocating or expanding within the city.

Scheduled for completion by 2028, the 132-storey, seven hundred and twenty-five mt high Burj Azizi is set to become the world’s second-tallest structure, after the Burj Khalifa. On completion, it will be able to claim five world records – having the highest hotel lobby, nightclub, observation deck, restaurant and hotel room. The structure will house a vertical shopping mall, a seven-star hotel, (with two hundred and fifty suites), residences that include penthouses, apartments, and holiday homes, wellness centres, swimming pools, saunas, cinemas, gyms, mini markets, resident lounges, a children’s play area and an adrenaline zone that will give visitors a feel of living “in the clouds”.

Burj Azizi is being built on a plot, located on SZR, that Azizi Developments purchased in 2017 that already had the seventy mt deep foundations for a former project – a five hundred and twenty-eight, one hundred and eleven-storey tower – were already complete when it was bought. The building is being built basically on a fifty-seven mt sq base, and considering its height, this gives the vertical-shaped building a ratio of being one of the narrowest in the world. The project will have more than forty-four elevators, along with multiple entrances from the road.

HRE Development and One Broker Group have successfully sold-out its US$ 177 million Skyhills Residences 2 in Jumeirah Village Circle. The development offers fully furnished modern apartments, ranging from studios to duplexes, featuring premium Bosch and Teka appliances, integrated smart home technology, and lifestyle-focused amenities such as indoor and outdoor gyms, a swimming pool, and lush green spaces. Consequently, the developer has unveiled Skyhills Residences 3, also located in JVC.  It will comprise five hundred and one residential units—spanning studios, (with average prices starting at US$ 202k), 1-bedroom, 2-bedroom, 3-bedroom, 4-bedroom apartments, along with twelve retail outlets. Handover is expected in Q2 2027.

Booming Dubai South confirmed that its luxury apartment development, South Living Tower, at The Residential District has sold out. The project comprises two hundred and nine units, including studios, one-, two- and three-bedroom apartments, as well as special-terraced units. Construction has already started, with a completion deadline of Q1 2027. Amenities include a swimming pool and deck area, state-of-the-art gymnasium, sauna, a versatile multi-purpose room, a kids’ library, a yoga deck, BBQ area, gazebo seating area, and artistically landscaped elevated gardens.  The Dubai government’s vision is to attract one million residents to Dubai South upon the completion of Al Maktoum International Airport.

This week, Azizi Developments, a leading private developer in the UAE, unveiled its mixed-use development – Azizi Venice – Monaco Mansions. Located in Dubai South, the project will be positioned entirely on a swimmable body of water and be one of the largest lagoons of its kind in the world. It will comprise one hundred and nine, four-level, ultra luxury mansions, (comprising between six to eight bedrooms), on plot sizes ranging from 10k – 20k sq ft; they will be available in eight distinct architectural styles. They will feature both road- and lagoon-facing exteriors, direct beach access, alongside dual swimming pools, a rooftop terrace, private cinema, lounges, bars, fitness centre, spa with Turkish Hammam, and multiple kitchens.

Azizi Venice itself will have 36k residences, across one hundred plus apartment complexes, and the Monaco ultra-luxury mansions. It is centred around a vast, crystal-blue lagoon that encircles its condominia, villas, and mansions, along with leisure, retail, and commercial spaces. The turquoise, desalinated waters will be bordered by sandy beaches, an eight km long cycling and jogging track, yoga and sports facilities, and a vibrant promenade featuring a variety of artisan eateries and boutiques.

Following the success of its first phase, Arabian Hills Real Estate Development has announced the official launch of Phase Two of Arabian Hills Estate. The development, located on the Dubai-Al Ain Road, spans two hundred and forty-four million sq ft and is valued at US$ 6.00 billion.

Singaporean investment fund First APAC Fund VCC and Dubai-based AMIS Development have signed an MoU that will see the Singaporean investment fund invest US$ 1.36 billion in AMIS Development which has several upcoming projects in major areas of Dubai. The financing will be used to further expand its growth, locally and internationally, by increasing its land bank, project pipeline, global brand partnerships, project team and investments in technology; it will focus on luxury developments. The fund is managed by Pilgrim Partners Asia, a Singaporean fund management company, licensed by the Monetary Authority of Singapore. AMIS Development recently sold out, within a week, its US$ 116 million Woodland Residences project, located in District 11 of Meydan. Handover of the project, which includes a one hundred mt swimmable lagoon, is expected in Q2 2026.

Over the first ten months of the year, Dubai Real Estate Corporation, and its subsidiary, Wasl Group, posted a 28% annual revenue hike. The Group’s diverse real estate portfolio includes over 55k residential and commercial units, more than thirty-five hotels, several premier leisure facilities such as golf courses, and more than 5.5k industrial land plots. Its Board met last Sunday, under the chairmanship of Sheikh Maktoum bin Mohammed bin Rashid, to also approve the 2025 budget. Furthermore, the sheikh reaffirmed emirate’s commitment to offering supportive measures and incentives, which are critical to consolidating its status as a preferred global investment destination, in line with the Dubai Economic Agenda D33 to transform the city into one of the world’s top three urban economies.

Finally, Emirates has received the first of its sixty-five A350s becoming the first new aircraft type to be added to Emirates’ fleet since 2008. The A350 flew in from Toulouse on Monday but its first official flight – to Edinburgh – will be next month.

The UAE has sent a relief aid plane to Zambia, with the landlocked country having experienced an ongoing drought, starting in January 2024, considered to be the worst to hit the country in at least two decades, leading to severe food shortages, water scarcity, and a national emergency declaration.  Triggered by El Nino, the drought has affected eighty-four of the one hundred and sixteen districts across Central, Copperbelt, Eastern, Lusaka, Northwestern, Southern, and Western provinces. It is pleasing to see the UAE send a plane, carrying fifty tonnes of food supplies to the country due to the drought that has affected the lives of thousands of people. Sultan Mohammed Al Shamsi, Assistant Minister of Foreign Affairs, commented that “the leadership of the UAE is keen to continue international efforts to support communities and assist countries on different continents of the world in such difficult circumstances and urgent times.”

The latest Q3 NielsenIQ Retail Spend Barometer indicated that there was a 4.8% annual hike, to US$ 3.7 billion, in consumer spending in the country in fast-moving consumer goods, and technology, with spends of US$2.1 billion, up 6.4% and US$ 1.5 billion, 2.5% higher, respectively. Over the three quarters, FMCG posted a marked increase in Q3 of 6.4%, compared to Q3 a year earlier, although Q1 registered a slowdown to 3.5%. compared to 9.4% in Q3 2023. However, Q3 saw a dip in growth for Tech/Durables at 2.5% of 7.7% in 2023. The figures show strong spending in Q3, attributable to back-to-school sales and the growing prominence of convenience retail.

MMI and Heineken have signed an agreement to build the Gulf’s first major commercial brewery in Dubai and, once all the paperwork is in place, construction will begin before the end of 2025, with the brewery slated to open by the end of 2027. Sirocco, the JV, will produce popular beer brands in Dubai, which will be available for sale in Dubai’s liquor stores. It will not be the first brewery in the country as last year; Craft by Side Hustle opened in Abu Dhabi, with the microbrewery and gastropub starting operations at the Galleria Al Maryah Island.

In the four days ending today, the Dubai World Trade Centre has been hosting the forty-fifth edition of Big 5 Global, the MEA and S. Asia’s largest and most influential construction sector event.  Over the period, this global gathering of industry professionals in urban development, construction, geospatial and facilities management, has welcomed more than 100k attendees, (from over one hundred and sixty-five countries), and more than 2.7k exhibitors from over sixty countries, showcasing more than 60k innovative products. It also hosted specialised events including. LiveableCitiesX, Future FM and GeoWorld, Heavy, Totally Concrete, HVAC R Expo, Marble & Stone World and Urban Design & Landscape. Sheikh Ahmed bin Mohammed bin Rashid toured the event on the opening day, where he highlighted the important role of the construction sector as a key pillar of the UAE’s economy, driving national growth.

YTD, the Dubai Financial Services Authority has taken eight enforcement actions and issued twenty-four alerts, against individuals and entities that undertook unauthorised financial services activities, misled investors, failed to comply with anti-money laundering obligations, and misled the DFSA or obstructed DFSA investigations. The independent regulator of financial services, conducted in, and from, the Dubai International Financial Centre uses a robust regulatory framework to ensure accountability, transparency, and compliance, fostering a secure and trustworthy financial services industry in line with the highest international standards. Overall, these actions resulted in fines exceeding US$ 2.5 million, split 52:48 between individuals and firms. Furthermore, three individuals were restricted and prohibited from operating within the DIFC, and the DFSA accepted an Enforceable Undertaking from another firm, committing it to take agreed remedial actions. Such action taken by the DFSA protects all stakeholders and safeguards the integrity of financial services within the DIFC.

Pursuant to Article 14 of the AML/CFT Law, the Central Bank of the UAE has suspended the currency exchange system of Al Razouki Exchange, an Exchange House operating in the UAE, for a period of three years and has closed its branches in Deira and Al Murar. The CBUAE, through its supervisory and regulatory mandates, works to ensure that all exchange houses operate within the law and global standards.

With YTD revenue nearing US$ 307 million, total assets of over US$ 580 million and a paid-up capital of US$ 322 million, MultiBank Group is aiming to grow further next year, by global expansion and adding new products to its portfolio. Its founder and chairman, Naser Taher, has also commented on achievements reached YTD, including a partnership with Mashreq to launch an API-enabled Instant Payment solution for corporate clients, as well as an agreement with Al Ansari Exchange, enabling its UAE clients to seamlessly deposit and withdraw funds via the exchange’s extensive branch network.  He also noted that Dubai was an ideal growth hub for finance, with its strategic location, forward-thinking policies, and reputation for stability and safety, whilst saying “the UAE’s visionary leaders have built a globally recognised business-friendly environment that attracted major financial institutions and made cross-border investment seamless.” This year, the firm has been granted exchange and broker dealer licences, by the Virtual Assets Regulatory Authority, and has launched MultiBank-AI, its dedicated AI division, focused on integrating AI to boost efficiency and enhance client experience.

Both Salik and Parkin are proposing, starting next March, to introduce dynamic pricing – raising prices at peak times and lowering them during off-peak hours. The fee for premium parking spaces will be US$ 1.63, (AED 6.0) per hour from 8am to 10am; and 4pm to 8pm, with other charges at US$ 1.09, (AED 4.0) per hour for all other public paid parking spaces. The new updated parking fee will be implemented in areas within five hundred mt of a metro station, those with high parking occupancy during peak hours, as well as markets and commercial activity zones. Premium parking spaces include, for example, commercial areas in parts of Deira and Bur Dubai, Downtown Dubai, Business Bay, Jumeirah, Al Wasl Road and other locations. Parking fees will also go up during major events, including, but not limited, to conferences, exhibitions, festivals and concerts to “to effectively manage the temporary surge in parking demand.” Free parking will still be available on Sundays/public holidays and between the hours of 10.00pm and 08.00am. The RTA also announced that a congestion parking policy, of US$ 6.81, (AED 25.0), will be rolled out initially around the Dubai World Trade Centre during major events, starting in February 2025. In the first nine months of the year, there were ninety-five million parking transactions. Parkin shares ended today on a record US$ 1.30, rising 14.97% on the day, following the news.

With their implementation of dynamic pricing, starting at the end of January 2025, Salik is expected to see revenue hiked by between US$ 16.3 million and US$ 30.0 million. The RTA confirmed that it will implement Variable Road Toll Pricing Policies, as part of the “comprehensive strategy to enhance traffic flow in the city,” and “to improve the travel experience of road users in Dubai.”

Salik toll fees will be adjusted, where motorists can enjoy toll-free passage between 1am and 6am. On weekdays, the toll will be 50% higher to US$ 1.63, (AED 6.0) during morning peak hours (from 6am to 10am) and evening peak hours (4pm to 8pm), and remain the same at US$ 1.09, (AED 4.0). For off-peak hours – between 10am and 4pm, and from 8pm to 1am – parking will be free. On Sundays, excluding public holidays, special occasions, or major events, the toll will be US$ 1.09, (AED 4.0) throughout the day and free from 1am to 6am. Salik shares have had a great YTD and ended today on US$ 1.51.

The DFM opened the week, on Monday 25 November, sixteen points (0.3%) lower the previous week, gained 121 points (2.6%), to close the trading week on 4,726 points by Friday 29 November 2024. Emaar Properties, US$ 0.16 higher the previous fortnight, gained US$ 0.04, closing on US$ 2.60 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 5.31 US$ 1.78 and US$ 0.38 and closed on US$ 0.72, US$ 5.45, US$ 1.86 and US$ 0.38. On 29 November, trading was at two hundred and ninety-five million shares, with a value of US$ 220 million, compared to one hundred and thirty-one million shares, with a value of US$ 109 million, on 22 November.  

The bourse had opened the year on 4,063 points and, having closed on 29 November at 4,726 was 663 points (16.3%) higher YTD. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, and has gained US$ 0.44, to close YTD at US$ 2.60. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.72, US$ 5.45, US$ 1.86 and US$ 0.38.

By Friday, 29 November 2024, Brent, US$ 3.16 higher (4.4%) the previous week, shed US$ 2.23 (3.0%) to close on US$ 72.94. Gold, US$ 150 (5.8%) higher the previous week, shed US$ 44 (2.8%) to end the week’s trading at US$ 2,674 on 29 November 2024. 

Brent started the year on US$ 77.23 and shed US$ 4.29 (5.6%), to close 29 November 2024 on US$ 72.94. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 676 (28.9%) to close YTD on US$ 2,674.

US car giant General Motors and TWG Global have reached an agreement in principle to enter Formula 1 in 2026, with its Cadillac brand, and to build its own engine “at a later time”. UAE national, Mohammed Ben Sulayem, the president of F1’s governing body the FIA, said, “General Motors is a huge global brand and powerhouse in the OEM (original equipment manufacturer) world and is working with impressive partners”. F1 said the application process would “move forward”.

Stellantis has confirmed that it will close its one hundred and twenty-year old Luton Vauxhall factory and hopes to transfer “hundreds” of the 1.1k jobs to the Group’s Vauxhall site in Ellesmere Port, where it will invest a further US$ 63 million. It also added that it would offer “relocation support” and “an attractive package” to employees who want to transfer to Ellesmere Port. This announcement came as no surprise, with its then MD, Maria Grazia Davino, warning in June that, “Stellantis production in the UK could stop”, as more needs to be done to spur consumer demand for electric vehicles. This comes on the back of Ford’s decision last week to cut 800 roles in the UK, as part of a cull of 4k jobs across Europe. In the UK, financial penalties are currently levied against manufacturers if zero-emission vehicles make up less than 22% of all sales, rising to 80% of all sales by 2030 and 100% by 2035. As is happening in Europe, the UK is being impacted by a slowdown in EV sales and competition from China. The government is also backing the wider industry with over US$ 378 million to drive uptake of zero-emission vehicles and US$ 2.52 billion to support the transition of domestic manufacturing.

Having just announced its second profits warning in two months, Aston Martin is in the market to raise finance, (by issuing new share capital and debt of US$ 266 million), with the UK luxury car maker blaming a “minor delay” in deliveries of its ultra-exclusive Valiant models for the shortfall. Its earlier warning indicated that it had been hit by a fall in demand in China, as its economy slowed with the knock-on effect on sales of high-end goods. It expects its 2024 profit will come in 8.5% lower on the year at US$ 352 million. It now expects to deliver half of the thirty-eight Valiant orders by the end of next month but will end the year making 1k fewer vehicles than originally planned; in 2023, it sold 6.62k vehicles, with 20% for the Asia-Pacific region. Its market cap has more than halved YTD, trading today at Eur 12.54 – compared to Eur 27.16 on 25 March 2024.

It seems that the global electric flying taxi sector may have hit a financial glitch, with investors becoming extra cautious, when faced with the actuality of the massive cost of getting such novel aircraft approved by regulators and then building up manufacturing capabilities. One of the main entrants was Germany’s Volocopter, which had promised that its electric-powered, two-seater aircraft, the VoloCity, would be ferrying passengers around Paris during the summer Olympics – this did not happen, but they did make demonstration flights. It was reported that, in April, the company tried unsuccessfully to raise US$ 106 million from the government but recently hopes have been raised again that China’s Geely, could be interested to acquire 85% of the company for US$ 95 million. Another entrée, (and casualty) is Germany’s Lilium, with the company claiming to have global orders and MoUs for seven hundred and eighty jets. It had hoped to have three aircraft in production by the end of the year and noted that “we have also raised €1.5 billion”, (US$ 1.6 billion) – but then the money ran out. It has also failed to arrange a loan worth US$ 106 million from the German development bank, KfW, when the required guarantees from national and state governments never materialised. Last month, it went into administration and was delisted from the Nasdaq Stock Exchange. It is difficult to try to commercialise an electrical vertical and landing take-off vehicle, and if successful, the end result is that it may ease road traffic but just move the problem higher up to the skies.

However, the seven-year-old UK-based Vertical Aerospace seems to have made some progress, despite a remotely piloted prototype crash in August, after a propeller blade fell off, and one its main partners Rolls Royce pulling out of a deal to provide electric motors for the aircraft. The VX4, which its founder, Stephen Fitzpatrick reckons, “is one hundred times safer and quieter than a helicopter, for 20% of the cost”, recently completed successful take-off and landing tests. It plans to deliver one hundred and fifty aircraft to its customers by the end of the decade and expects to be capable of producing two hundred units a year, and to be breaking even in cash terms. It has recently agreed a rescue deal with its biggest creditor, US based Mudrick Capital, with the US firm investing a further US$ 50 million and converting its US$ 130 million loan into shares. The main shareholders are now Mudrick, with a 70% stake, and the founder with 20%, (down from his initial 70% holding).

There are reports that the Gold-family-owned Ann Summers, the lingerie and sex toy retailer, founded in 1971 is considering selling some or all of the company’s equity and is in talks to use Interpath, the corporate advisory firm, to work on a strategic review. David and Ralph Gold, which acquired the retailer in 1972 when it fell into liquidation, has eighty-three stores and employs over 1k. Its chair, Vanessa Gold, commented that, “we, like many other retailers, are dealing with the unhelpful backdrop to business of the decisions announced by the government at the Budget and the rising cost to retail”. There are reports that the Gold family had stepped in to provide several million pounds of additional funding to Ann Summers in the form of a loan.

Gail’s opened its first shop in 2005, and by 2021 had nearly one hundred stores, all within a fifty-five-mile radius of its Hendon central bakery and kitchen. Since then, it has expanded to the Manchester area, including Altrincham, Chester, Didsbury, Knutsford and Wilmslow, following new investment from Bain Capital Credit and EBITDA Investments, the food investment fund spearheaded by industry entrepreneurs Henry McGovern and Steven Winegar. Now, its owners are reportedly planning to sell the company via an auction next year, which could result in either a partial or full exit for the company’s existing backers. The company could be worth in excess of US$ 628 million.

On Wednesday, Typhoo Tea entered administration, but a buyer could already be poised in the wings to take over the struggling firm – Supreme, a wholesale distributor of products such as batteries, lighting, vaping and drinks. It had already submitted court papers two weeks ago advising it was preparing to enter administration. The firm, that dates back more than a century, has recently been beset by supply chain disruptions and cash flow problems, driven by falling sales, (down 25% to US$ 32 million), and a US$ 48 million shortfall; tea consumption is expected to decline by 8.0% over the next five years. Another problem was the August 2023 break-in and occupation of its Merseyside factory, rendering the site “inaccessible” and causing “excessive damage”, before being sold  the following year.

Founded in LA seven years ago, Dave’s Hot Chicken has already acquired two hundred sites since then and is now due to enter the UK market in London next week. However, it is facing a quandary, with concerns that one of its dishes – the ultra-hot rare ‘Reaper Chicken’ – maybe too much for the local palate. Those partaking are required to sign a waiver to try it – but the company says it is “unsure” about whether to add the dish to its UK menu after it left some tasters in tears. Its MD, Jim Attwood noted that “we are still in discussions as to whether the Reaper will make it onto UK plates. Of course, if the nation truly wants to test the hottest chicken in the world, we could be convinced.”

In 2019, LaRonda Rasmussen filed a case against Walt Disney, claiming pay discrimination when she discovered six men, with the same job title and duties, were earning substantially more than she was; one of them, with several years less experience, was earning US$ 20k more than she did. Following this action, 9k current and former female employees of the entertainment company eventually joined the suit, and although the entertainment giant tried to stop the case in its tracks, last December, a judge ruled that it could proceed. This week, Walt Disney agreed to pay US$ 43.3 million to settle a lawsuit; it was claimed that over an eight-year period, female employees in California earned US$ 150 million less than their male counterparts, with a study noting that between April 2015 and December 2022, female Disney employees were paid roughly 2% less than their male counterparts.

Amazing as it sounds, a rogue staffer, at US department store Macy’s, has seemingly been able to conceal more than US$ 130 million over the past three years. The retailer, also the owner of Bloomingdales and the make-up chain Bluemercury, has postponed the release of its latest quarterly sales update, whilst investigating the incident. It appears that a “single employee with responsibility for small package delivery expense accounting intentionally made erroneous accounting accrual entries”; the person was responsible for tracking expenses related to small package deliveries. Macy’s confirmed that its impact was limited and would not affect its payments to other firms – and that the amount was a small fraction of the more than US$ 4.3 billion in overall delivery expenses during that time. Not surprisingly, the person allegedly responsible is “no longer employed” at the firm. The country’s biggest department store chain posted an annual 2.3% sales decline in quarterly sales ending 02 November, as growth at Bloomingdales and Bluemercy was offset by declines at older Macy’s locations.

A slight problem has arisen in Australia, with Healthscope, the country’s second-largest private hospital operator, (with thirty-eight private hospitals across every state and territory), ending its contracts with Bupa and the AHSA, after they refused to pay a proposed US$ 65, (AUD 100), hospital facility fee. The cancellation would impact around 6.6 million Australians who have private health insurance with these companies, with CEO Greg Horan indicating it meant Bupa and AHSA members could pay hundreds of dollars more to be treated in a Healthscope hospital, after the termination dates – 20 February and 04 March 2025 respectively. Private Healthcare Australia has accused Healthscope, which is an offshoot of Canada’s private equity group Brookfield, of “throwing its toys out of the cot” and “unethical tactics”, whilst the counter argument says the fee would help cover the gap between health insurance payouts and the rising cost of hospital care. It also noted that private hospital cost inflation was a sector-wide challenge and in the last five years, seventy private hospitals had closed which showed the economics were “simply unsustainable”.

Two Western Australian miners were in the news this week. The CEO of Resolute Mining, along with two other employees, who were detained by the Mali government, have been released after the company had reportedly paid US$ 158 million to the Mali government to help resolve the dispute. They had been held for more than a week after travelling to the country for meetings with the nation’s tax and mining authorities and agreed to pay the money to help resolve the tax dispute. The Australian company, which has been working for years at Mali’s Syama gold mine, a large-scale operation in the country’s south-west, holds an 80% stake in the mine, with the local government holding the remaining 20% balance. They were not the first to be held by Malian authorities – four employees of Canadian company Barrick Gold also were detained for days in September. The military there seized power in 2020 and since then, the junta, in a bid to boost public revenue, has placed foreign mining companies under growing pressure.

The other mining company was Mineral Resources, with its CEO, Chris Ellison, announcing he would step down over alleged tax evasion, after telling the AGM that he had made mistakes and took “full responsibility”. He also told the meeting that the corporate scandal involving the company he founded twenty years ago was a “dark cloud over [his] life” and is something he will “live with forever”. Just prior to the meeting, Mr Ellison released a statement to the ASX saying he made mistakes but took “full responsibility”, and that “I made an error of judgement with reporting of personal tax. I deeply regret the impact this has had on our business and our people.” The chairman, James McClements, acknowledged that the last few months had “been difficult” and that it “wasn’t easy getting to the facts”, and that “from time to time, Chris lacked judgement and used company resources for personal matters.” He also defended the board’s decision to give the CEO a time frame up to 18 months to stand down. Little wonder then that he confirmed that he would step down from his role as chairman within the next twelve to eighteen months. However, the board also decided not to pay him over US$ 6.5 million, in planned executive remuneration, and ordered him to pay almost US$ 6 million in fines.

On his first day in office, president-elect Donald Trump has confirmed that, in a bid to crack down on illegal immigration and drug smuggling, he plans to impose 25% tariffs on all goods coming from Mexico and Canada, until both governments clamp down on drugs, particularly fentanyl, and illegal migrants crossing the border; he will also hit China with an additional 10% levy   until they take measures to stop trade in synthetic opioid fentanyl from the country. Mexico and Canada are the United States’ largest trading partners, with 83 % of the former’s exports and 75% of the latter’s going to the US in 2023. The Biden administration has been trying to convince China to stop the production of ingredients used in fentanyl, with estimates that it was responsible for some 75k deaths in the US last year.

By Tuesday, Donald Trump completed his cabinet postings, with the appointment of Brooke Rollins for Secretary of Agriculture; she currently heads the Maga-backed think tank, the America First Policy Institute. The President-elect noted that “Brooke will spearhead the effort to protect American Farmers, who are truly the backbone of our country.” A former White House aide during Trump’s first administration, she served as director of the Office of American Innovation and acting director of the Domestic Policy Council. In her new position she will be responsible for oversee subsidies, federal nutrition programmes, meat inspections and other facets of the country’s farm, food and forestry industries, as well as playing a key role in renegotiating the trade agreement between the US, Canada and Mexico.

With his twelve-member cabinet appointments now completed, they include:

Mario Rubio       State                         Scott Bessent    Treasury       Pete Hegseth   Defence

Pam Bondi         Attorney General     Doug Bergum     Interior        Brook Rollins  Agriculture

Scott Turner      Housing                    Sean Duffy          Transport    Chris Wright   Energy

Linda McMahon Education               Doug Collins       Veterans   Kristi Noem     Homeland

Last month saw a 0.2% monthly rise in the UK inflation rate – the first time in seventeen months that the inflation rate was higher than a month earlier. BRC figures also indicated that this could be the end of falling inflation given cost pressures being placed on big businesses.

Although the money was on 4.1% for the UK unemployment rate, for the quarter ending 31 October, it came in at a surprisingly high 4.3% from 4.0% in the previous quarter. This could be yet another indicator that the Chancellor may have overplayed her hand by hiking business taxes in her recent budget. The Office for National Statistics also added that average regular wages growth had fallen to 4.8% – its lowest level in more than two years, as inflation overall returns to normal levels. Alongside hiking taxes, the Starmer government announced plans for higher borrowing that it said would be invested in infrastructure projects to help drive UK economic growth.

Halifax has announced the launch of a new 1.5-year fixed-rate remortgage product, with a US$ 318 cashback, only to eligible customers who use their own conveyancer. It remains to be seen whether there is enough demand from borrowers to buy into this short-term strategy. It will be interesting to see whether its pricing is competitive enough so that customers are willing to take up a deal only six months shorter than the now standard – and popular – two-year fixes already dominating the market.

The BoE’s latest financial stability report reads bad news for some 4.4 million UK homes, showing they were set to refinance at higher rates. The good news was that about 25% of borrowers would benefit from lower rates, based on current market pricing, as rates have dropped from the highs seen in 2023. Its financial policy committee also identified a risk ahead – that higher trade barriers could hit global growth.

In the UK, the All-Party Parliamentary Group on investment fraud has branded the Financial Conduct Authority an “opaque and unaccountable organisation” with “profoundly defective” leadership, describing the City watchdog as “incompetent at best, dishonest at worst” and too slow to act on complaints from consumers. The damming three-hundred-and-fifty-page report, which included evidence from whistleblowers, victims and former FCA employees, detailing a “toxic” culture at the organisation with “incompetent” senior management; others reported allegations of bullying at the regulator. There was no surprise that the Group called for a clear-out of the boardroom, including chief executive Nikhil Rathi and chairman Ashley Alder, and equally no surprise to hear the FCA commenting that “we have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy.” What a cover-up exercise, almost on par with the Archbishop of Canterbury’s ultimately unsuccessful exercise to maintain his powerful position as head of the Church of England – with the apparent backing of all his bishops except for the Bishop of Newcastle, Helen-Ann Hartley, who was brave enough to put her head above the pulpit.

Despite being caught on camera confessing to illegally selling luxury perfume, the US$ 1.25k, (GBP 1k) bottle “Boadicea the Victorious”, in Russia, a UK businessman is not facing criminal charges. David Crisp is a lucky man, and despite having “ignored government edicts” and being arrested in 2023 by HM Revenue and Customs, the investigation was dropped earlier this year – and this, notwithstanding the discovery of evidence that he tried to conceal more than US$ 2.1 million of illegal sales. One has to wonder why there has not been a single UK criminal conviction for violating trade sanctions on Russia since Moscow’s full-scale invasion of Ukraine almost three years ago – and why there are regulations in place with a maximum prison sentence of up to ten years.

Appearing before the Treasury Select Committee, Giles Thomson must have cut an embarrassed face as he was asked about the impact of Russian sanctions since they had been introduced two and a half years ago. The Treasury’s economic crime chief said that despite the imposition of the most far-reaching set of sanctions on any country, his organisation had levied only one fine; this was for US$ 19k penalty on a company, called Integral Concierge Services, for aiding a designated person transfer and receive money. He had to admit it was a low number, given the scale of sanctions.

Louise Haigh has resigned as transport secretary after it emerged, she pleaded guilty to a fraud offence a decade ago. She had admitted telling police in 2013 she had lost her work mobile phone in a “terrifying” mugging, but later found it had not been taken; she was given a conditional discharge by magistrates, following the incident which happened before she became an MP. It seems that she declared her conviction to Kier Starmer when appointed to his shadow cabinet in 2020 but did not tell the government’s propriety and ethics team about it when she became a member of the cabinet after Labour won July’s general election. Downing Street has refused to say what the PM knew about Haigh’s conviction before stories about it appeared in the media yesterday evening. A Conservative spokesman noted that “in her resignation letter, she states that Keir Starmer was already aware of the fraud conviction, which raises questions as to why the prime minister appointed Ms Haigh to Cabinet with responsibility for a GBP 30 billion (US$ 38.18 billion) budget?” The 37-year-old was responsible for one of the government’s flagship policies, the re-nationalisation of the country’s rail network under Great British Rail. She was the first cabinet minister the PM publicly rebuked, over remarks about Dubai-based P&O Ferries last month, describing the firm as a “rogue operator” and urged people to boycott the company, sparking a row with the ferry company’s parent company DP World. When it then said it will pull a possible US$ 1.0 billion investment, the UK PM said Haigh’s comments were “not the view of the government”. The new government seem to be moving from one crisis to another whilst Ms Haigh should be wary in the future and remember that people in glass houses should not throw stones.

Last week’s blog (‘Spend! Spend! Spend!’) noted that retailers are looking at an additional US$ 8.8 billion in costs following October’s budget raising employers’ national insurance contributions by 1.2% to 15.0%, halving its threshold to US$ 6.28k and raising the minimum wage level. Naturally, the Chancellor has defended her position saying 50% of all businesses – roughly a million firms – are paying either less or the same national insurance contributions as they were before the budget. Moreover, Rachel Reeves has said that she had no other alternatives, when posting her budget but confirmed that there will not be another budget like it. She also added that there will be no more tax rises or borrowing for the duration of this government’s term, but we have heard this from her before. Would I Lie To You?

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Spend! Spend! Spend!

Posted on November 24, 2024 by howesdubai

Spend! Spend! Spend!                                                     22 November 2024

Betterhomes, noting that the Dubai October rental market is 15% lower on the year, commented there were a total of 42.1k leasing transactions, with notable shifts in tenant preferences. The total was split between renewals and leases 59:41, with Al Sufouh, Motor City and Dubai South increasing in popularity; Al Sufouh’s average apartment stands at US$ 34.1k and Motor City villas at US$ 86.3k. For apartments, Dubai Marina, Business Bay, and Jumeirah Lake Towers were the leading three rental communities, whilst Arabian Ranches 3, Damac Hills, and Dubai Hills 2 were the villa leaders. Statistics showed that average apartment, villa and townhouse rents in Dubai’s top communities were US$ 32.7k, US$ 43.3k and US$ 109.3k.

Meanwhile on the sales side, transactions, at 19.4k, were 77% higher on the year. Total transaction values reached US$ 13.70 billion, with the average price per sq ft climbing 17% to US$ 401k. 67% of sales were for off-plan properties. Community-wise, the three most popular apartment locations were Dubai Marina, Jumeirah Village Circle, and Dubai Hills Estate and for villas, Jumeirah Village Circle, Dubai Land, and Arabian Ranches. Average sale prices stood at US$ 401k  for apartments and US$ 807k for townhouses.

Another ‘new player’ in the sector seems to be the ‘island living’ concept, first introduced by Nakheel and Palm Jumeirah. It seems that the likes of Damac restarted the trend with its Lagoons project, post-Covid, and Al Futtaim have both jumped on the bandwagon. Damac Islands, located in Dubailand, has entry prices of US$ 613k (four-bedroom units, with a built up area of 2.21k sq ft) and US$ 1.72 million (six bedrooms and built-up area of 4.44k sq ft). At the other end of the scale would see Palm Jebel Ali and Jumeirah Bay villas starting at US$ 5.18 million upwards. There is also ‘Dubai Islands’ from Nakheel, while Tilal Al Ghaf by Majid Al Futtaim will have two ‘island’ hubs, where prices are already setting new record highs.

It is reported that Neymar Jr has paid US$ 54 million to acquire a penthouse at the Bugatti Residences in Dubai. The Brazilian footballer’s new home is part of the Sky Mansion collection within the project. The penthouse includes a private elevator, that transports vehicles directly into the unit, and a private swimming pool with views of the Downtown Dubai skyline. Binghatti Properties said that the deal was at the world’s first development featuring the branding of the iconic auto company.

Mercer, in its annual Total Remuneration Survey Overall, indicates that average salaries in the UAE, (across more than seven hundred companies, and several sectors), in 2025 will increase by 4.0%, across all industries; the study also forecast that 28.2% of companies were planning to increase headcount next year. Three sectors – consumer goods, the life sciences and technology – are expected to see increases higher than the 4.0%, at 4.5%, 4.2% and 4.1%. Employers across industries also said they plan to provide all employees, regardless of level, the same salary increases.

In the first nine months of 2024, Dubai International Chamber attracted an annual 68.8% increase in new companies, at one hundred and fifty-seven, including a 117% increase in multinational companies. Over the same period, it welcomed a total of one hundred and eighteen SMEs – a 57% rise on the year. It also supported the expansion of seventy-five local companies into new global markets – 241% annualised increase – by assisting them with increasing international exports or establishing a physical presence within their target markets. YTD, the chamber organised two trade missions to SE Asia and West Africa as part of the ‘New Horizons’ initiative, which enables Dubai-based companies to join trade missions to carefully selected international markets. More than eight hundred and thirty bilateral business meetings were organised between participating companies from Dubai and their counterparts in these markets to explore investment opportunities and joint economic partnerships. The Chamber signed four MoUs with several entities from Morocco and one with the Dakar Chamber of Commerce, Industry and Agriculture.

With DXB welcoming 68.6 million passengers in the nine months to 30 September (and 23.7 million passengers, a 6.3% annual increase, in Q3), it is set to break traffic records in 2024; the total flight movements for the first nine months were at 327.7k. There is every reason to believe that the airport will reach its annual budget of 91.9 million which would be a new record. India remained the top destination market, (with 8.9 million travellers) followed by Saudi Arabia, (5.6 million), the UK, (4.6 million), Pakistan, (3.4 million) and the USA, with the key city destinations being London, Riyadh, Mumbai, and Jeddah accounting for 2.9 million, 2.3 million, 1.8 million and 1.7 million respectively. Interestingly, around 60% of Q4 traffic is forecast to be direct, compared to 50% in Q3 and 55% for the full year.

Dubai’s inflation rate in October dipped 0.1% to 2.4%, mainly attributable to the fall in global oil prices so that transport prices fell 10 6% on the back of an 8.0% fall a month earlier; this downward trend is expected to continue in the short-term, with  price rises having eased to a fourteen-month low last month, as YTD, annual inflation averaged 3.3%. Other components in the “inflation basket” have seen marked slowdowns in 2024 such as household durables/maintenance – up 0.5% on the year/0.5% YTD/ compared to 8.3% in October 2023 – and food/beverages – 1.8%, 2.6% and 4.6%. The main driver behind Dubai’s inflation continues to be housing, with prices up 0.7% on the month and 7.2% on the year – marginally higher than the 7.0% registered in September. In October, capital values for apartments and villas were on average 19.8% and 20.24% higher on the year, with rental prices across villas and apartments 17.3% higher on the year.

Dubai Investments’ 9-month profits fell 16.3% to US$ 174 million but signs of improvement were noted in Q3 returns indicating a 12.7% rise to US$ 64 million; revenue in the nine-month period dipped 2.3% to US$ 796 million. The industrial zone operator noted that its two current investments were performing well – the Ras Al Khaimah resort project is progressing well, along with the latest investor in its flagship Dubai Investments Park habeing  Abu Dhabi’s Aldar recently announcing its first logistics real estate investment in Dubai. It has also started construction to develop an economic zone in Angola, and the ‘geographical expansion efforts are also gaining momentum’. Construction has started on DIP Angola.

The DFM opened the week, on Monday 18 November, three hundred and thirty-four points (7.6%) higher the previous six weeks, shed 16 points (0.3%), to close the trading week on 4,726 points by Friday 22 November 2024. Emaar Properties, US$ 0.12 higher the previous week, gained US$ 0.04, closing on US$ 2.56 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 5.26 US$ 1.79 and US$ 0.36 and closed on US$ 0.67, US$ 5.31, US$ 1.78 and US$ 0.38. On 22 November, trading was at one hundred and thirty-one million shares, with a value of US$ 109 million, compared to three hundred and fifty-one million shares, with a value of US$ 151 million, on 15 November.  

By Friday, 22 November 2024, Brent, US$ 1.29 lower (0.7%) the previous week, gained US$ 3.16 (4.4%) to close on US$ 75.17. Gold, US$ 155 (2.3%) lower the previous three weeks, gained US$ 150 (5.8%) to end the week’s trading at US$ 2,718 on 22 November 2024. 

A case being held in the Court of Session in Edinburgh will decide the outcome of the previous government’s approval of both the Rosebank, (in the Atlantic), and the North Sea’s Jackdaw fields, (with Shell saying the field would be able to provide gas to 1.4 million UK homes),  and the latter, a year later, which it is estimated  to contain three hundred million to five hundred million barrels of oil). Even before the case started, the two parties did agree on one thing – both were approved unlawfully! Lord Ericht, who is presiding over this judicial review of the UK government’s decisions to approve the fields, will have to decide what, if anything, should be done about it. One of the legal requirements to approve such proposals includes that the climate impact of emissions, caused by the process of extracting oil and gas, did not assess the impact of the greenhouse gases which would be released, known as downstream emissions. Despite this, stakeholders went ahead with pre-production spending and, during this case, the Rosebank backer, Equinor indicated that it would be investing US$ 2.78 billion, and provide employment for 4k people, with Shell investing US$ 1.39 billion and employing “at least 1k” people between 2023 and 2025.

However, a July UK Supreme Court decision put a spanner in the works; seen as a victory for climate campaigners, it ruled that, in a case that involved drilling oil wells near London’s Gatwick Airport, an environmental impact assessment must include downstream emissions. Notwithstanding this, the energy companies argued that they had provided all the environmental information required at the time of their applications and that they were told by the industry regulator not to assess downstream emissions; and they should not be “punished” for a Supreme Court decision which they say they could not have foreseen. The campaign groups argued that this Supreme Court decision could not have been predicted with one lawyer suggesting the oil companies had simply lost a bet. Both groups now want the judge to pause work on Rosebank and Jackdaw while the fields’ downstream emissions are assessed, so that a new decision could be made based on a fuller understanding of their contribution to climate change.

It is reported that SpaceX is looking to sell insider shares that could value the company at US$ 255 billion, 21.4% higher than its previous US$ 210 billion valuation; this makes Musk’s creation, the most valuable private company in the US, which could pave the way for employees, and some early shareholders, to make a healthy return on their investment. It is interesting to note that Musk’s ties with the Trump administration will lift the space company’s net worth, bearing in mind that Tesla’s shares have risen by more than 26%, whilst adding US$ 200 billion to its market cap, since the election. There are rumours that SpaceX is preparing to launch a tender offer next month that will sell existing shares in the business at about US$ 135 each.

Starting next month, embattled Boeing intends to cut almost 2.2k jobs, (about 3.3% of its workforce in Washington State), and has already sent out its first redundancy notifications this week. US legislation dictates that companies have to submit a “WARN” notice (Worker Adjustment and Retraining Notification) to local authorities sixty days before any layoffs. Last month, it announced culling 10% of its 170k global workforce. A company spokesperson confirmed they “are adjusting our workforce levels to align with our financial reality and a more focused set of priorities.”

Spanish authorities have fined five budget airlines – Ryanair, EasyJet, Vueling, Norwegian  and Volotea – a total of US$ 187 million for “abusive practices”, including charging for hand luggage; the first two named bore the brunt of the penalty with fines of US$ 113 million and US$ 30 million respectively. Spain’s Consumer Rights Ministry confirmed plans to ban practices such as charging extra for carry-on hand luggage and reserving seats for children.

Google is bound to go to court to try and stop the US Department of Justice, joined by a group of US states, introducing a series of remedies to stop its internet search monopoly in online search, by selling off its Chrome web browser. In addition, it was also recommended that Google should no longer enter into contracts with companies – including Apple and Samsung – that make its search engine the default on many smartphones and browsers. An anti-competition ruling in August found the firm was illegally crushing its competition in online search, as the DoJ argued the changes will help to open up a monopolised market. Unsurprisingly, it argued that “the DOJ’s wildly overbroad proposal goes miles beyond the Court’s decision.” Currently, it is estimated that its search engine accounts for about 90% of all online searches globally.

Although its Q3 figures indicated that demand for its top generative AI chips would continue to outrun supply, Nvidia has had a rocky time in recent months that has seen declines in its share price. This, despite Q3 revenue coming in at US$ 35.0 billion – well above the market’s US$ 33.0 billion expectation – and its shares a massive 190% higher YTD, equating to a ninefold increase over the past two years. It still retains its position as the most valuable listed firm. However, there are concerns worrying the investment world that there are delays to its next generation Blackwell chips, possible bottlenecks for its chip supply, fears that tech stocks are over-valued, increased competition and a possible slowdown in the global economy.

Ford has announced plans to cut 4k jobs across Europe – including 800 in the UK, and 2.9k in Germany – as the car maker, along with the industry in general, has increasing concerns in relation to weakening EV sales which, if they do not improve, will see many carmakers fined for missing government targets. Ford hopes that this cost-saving measure will bolster its competitiveness in Europe. The US company confirmed that its UK power unit plants at Dagenham and Halewood would not be affected, and that most of the retrenchments will impact administrative and support functions and product development. Ford said it was seeking a greater partnership with governments and others over the difficulties being encountered in the transformation away from petrol/diesel vehicles to EVS and hybrids. Firms face fines if electric cars fail to make up a percentage of their overall sales – a figure that stands at 22% for 2024; this percentage target rises year by year to 2030 when only some hybrid variants will get around the Labour government’s ban on diesel and petrol-powered models. The carmakers face a fine of US$ 18.8k for each non-zero-emission vehicle sold that exceeds the annual percentage target and it is expected that this year’s target will be missed by some 3.5%. The UK car industry lobby group, the SMMT, has highlighted the fact that there will be a US$ 2.51 billion investment in price drops this year.

Former Wall Street investor, Sung Kook “Bill” Hwang, has been found guilty of lying to major investment banks, (as he secretly amassed large bets on several companies), has been sentenced to eighteen years in prison in a massive fraud case that cost banks billions of dollars. The case is linked to the failure of his investment fund Archegos Capital Management in 2021, when it was unable to repay its lenders, it prompted a mass sell-off of stocks and the fund quickly collapsed in less than a week, making it one of the largest hedge fund collapses since the 2008 GFC. Hwang’s lawyers had called for him not to be punished saying his wealth, which at one point was valued at an estimated US$ 30 billion had fallen to an estimated US$ 55 million. Some hope!

In a bid to try and change the Barcelona administration’s decision to shut all short-term rentals, by 2028, Airbnb has urged Barcelona’s mayor to rethink a widening crackdown on short-term rentals, arguing that it only benefits the hotel sector while failing to address overtourism and a housing crisis. The June decision, made by Mayor Jaume Collboni on the basis that that it could contain soaring rents for residents, is being challenged in courts. Airbnb argued that measures taken, in 2014, to impose strict limits on new tourist accommodation licences in the city centre have proved to be effective, and that ten years later, short-term rentals numbers have fallen, and that challenges related to housing and over-tourism are worse than ever. Over the ten-year period, long-term rents have jumped by more than 70% and hotel room prices by 70%, whilst the number of short-term rental homes halved to 8.84k in the four years from 2020. Although there has been a sharp increase in demand, estimates show that, over the past ten years, Spain has built fewer houses since 1970, whilst official data showing that vacant homes outnumbered short-term rentals eight to one in Barcelona.

Criminal fraud charges have been filed against Indian billionaire, Gautam Adani, in the US, claiming that he had overseen a US$ 250 million bribery scheme and concealing it to raise money in the US. It is alleged that the Adani Group had agreed to the payments to Indian officials to win contracts for his renewable energy company, expected to yield more than US$ 2.0 billion in profits over twenty years. It is alleged that their enquiry has been obstructed and that executives had raised US$ 3.0 billion in loans and bonds, including from US firms, on the back of false and misleading statements. Last week, on social media, Mr Adani congratulated Donald Trump on his election win and pledged to invest US$ 10.0 billion in the US. Shares of Adani Group firms fell more than 10% in yesterday’s morning trade – losing around US$ 30 billion in market cap.

There was no surprise to see that the current head of the SEC will leave his post before he could be fired by Donald Trump on 20 January 2025. The agency’s thirty-third chairman posted that “I thank President Biden for entrusting me with this incredible responsibility. The SEC has met our mission and enforced the law without fear or favour.” The president-elect has long made his feelings known on the departee, especially after he had taken controversial legal action against crypto firms and had already revealed plans to sack Mr Gensler on “day one” of his new administration.

Bitcoin nearly touched the US$ 99k mark during the week, closing the week at US$ 98.7k, driven by expectations that US President-elect Donald Trump will introduce pro-cryptocurrency measures. Since his success in the presidential election, at the beginning of the month, it has seen its value skyrocket by more than 40% after the new incumbent vowed to make the US the “bitcoin and cryptocurrency capital of the world”. There is no doubt that Bitcoin is here to stay and will play a key role in changing regulations and the role of traditional banking.

In a blind tasting, organised by Which?, prestigious Moet & Chandon Champaign (GBP 44) was beaten by  a Tesco Finest Premier Cru Brut Champagne (GBP 25), after a panel of four independent wine experts blind-tasted a selection of non-vintage champagnes. Natalie Hitchins, Which? home products and services editor noted that “our taste tests show that you don’t have to spend over the odds for a supermarket champagne or sparkling wine that delivers on quality and value for money, making it the perfect Christmas tipple.”

In a rare case of corporate cheating in Singapore, 82-year-old Lim Oon Kuin, the founder of collapsed oil trading firm Hin Leong Trading Pte Ltd, was sentenced to nearly eighteen years in jail for defrauding HSBC out of millions of dollars in one of the country’s most serious cases of fraud. OK Lim’s firm was among Asia’s biggest oil trading companies before its sudden and dramatic collapse in 2020. There is no doubt that this case has dented the island state’s reputation, as a leading Asian oil trading hub, but has undermined stakeholders’ confidence in Singapore’s oil trading industry. The businessman faced a total of one hundred and thirty criminal charges involving hundreds of millions of dollars but was only tried on three, including two of cheating HSBC by tricking the bank disbursing nearly US$ 112 million by telling the bank that his firm had entered into oil sales contracts with two companies. In 2020, Lim revealed the oil trader had “in truth… not been making profits in the last few years” – despite having officially reported a healthy balance sheet in 2019 and admitted that his firm had hidden US$ 800 million in losses over the years, while it also owed almost US$ 4 billion to banks.

On his way to the G20 meeting in Rio, President Xi Jinping stopped over in Peru for two reasons – the first to attend the annual meeting of the Asia-Pacific Economic Co-operation Forum and the other to attend the inauguration of the US$ 3.5 billion Chancay port on the Peruvian coast, led by China’s state-owned Cosco Shipping. Latin America seems to be a region to have been overlooked by the US since the 1970s. The US’s increased interest in Latin America was as a result of the Cuban Revolution, which was perceived as a threat so that the US worked to stop the spread of what it called “Communist subversives” leading to them to support right-wing governments. By the end of the 1970s, much of South America was ruled by military dictatorships, called juntas.

China has readily stepped in to fill the vacuum and this new China-backed megaport, which will be able to handle larger ships, could well be the hub of a whole new trade route that would bypass North America entirely; shipping time to Shanghai would also be reduced by twelve days to twenty-five. China’s official Communist Party newspaper, the People’s Daily, called it “a vindication of China-Peru win-win co-operation”. Once Chancay is fully up and running, goods from Chile, Ecuador, Colombia and even Brazil are expected to pass through it on their way to Shanghai and other Asian ports. There will be robust two-way trade, more so because Chile and Brazil have scrapped tax exemptions for individual customers on low-value foreign purchases of cheap Chinese goods bought online.

It is interesting to note SMEs account for some 99% of all German companies and provide around 59% of all the country’s jobs. Now what was once seen as the powerhouse of European industry has fallen on hard times and is in a deep crisis – some of their own making but others from external drivers, such as steep energy price rises, on the back of Russia’s 2022 invasion of Ukraine, soaring general inflation, and increased competition from China. Five bigger problems appear to be that fact that the global economy is shifting rapidly, (and the government being too slow to realise it), Germany’s aging infrastructure and crumbling, its bureaucracy is too pedestrian to change, inconsistent government decision-making / political flip-flopping from Berlin and high labour costs.  Germany has for so (and probably too) long been the home of European cars but now it has had to meet head-on the challenge from Chinese-made vehicles. With Chinese production lines growing by the year, not only is it able to service its local market, (which in turn reduces the number of imports), it has seen its EV exports surge 1,150% over the past four years; if all motor vehicles were taken into the equation, Chinese vehicle exports came in 600% higher – over the same period German vehicle exports were up  60%. Consequently, Volkswagen, Germany’s largest private-sector employer, is planning plant closures for the first time in its eighty-seven-year history, which would inevitably see thousands of retrenchments.  Last month, the country’s three biggest carmakers posted worrying bulletins – Volkswagen registering a 64% slump in Q3 profits, Mercedes Benz a 54% fall, and BMW issuing a profits warning. Whether the present administration has the capacity and foresight to replicate another economic miracle – on the scale seen post war Germany – remains to be seen.

Another casualty of the Chinese EV influx – with Germany again bearing its brunt – is Bosch who has announced that it will be cutting 5.5k jobs, largely down to slow EV sales and competition from Chinese imports. Furthermore, demand has weakened for the driver assistance and automated driving solutions made by the German manufacturer. The company said a slower-than-expected transition to electric, software-controlled vehicles was partly behind the cuts, which are being made in the car parts division. The world’s biggest car parts supplier has already committed to not making layoffs in Germany until 2027 for many employees, with the Gerlingen site near Stuttgart then set to lose some 3.5k jobs.

It is reported that Russia’s Gazprom will stop delivering its natural gas to Austria’s OMV, with immediate effect; this move had been expected and the country has set already up new agreements with Germany, Italy and the Netherlands. The Austrian Chancellor, Karl Nehammer, noted the country had a secure supply of alternative fuel and that “no one will freeze”, and that “our gas storage facilities are full, and we have sufficient capacity to obtain gas from other regions”. Earlier, OMV had been awarded US$ 242 million by the International Chamber of Commerce, in a contractual dispute with Gazprom.

Japan’s economy grew an annualised real 0.9% in Q3, (compared to 0.7% in the Q2), driven by solid consumer spending on the back of a one-off income tax cut and higher summer bonuses. Accounting for more than 50% of the economy, private consumption rose 0.9% – the second consecutive quarterly increase.

Education is Australia’s fourth biggest export, trailing only mining products, with the University of Sydney, an example of how important foreign students are to the country’s economy. Like other educational institutions, foreign students pay nearly twice as much as their Australian peers and account for over 40% of the institution’s revenue, which helps subsidise research, scholarships, and domestic study fees. Last semester, there were 793.3k international students and this has presented Prime Minister Anthony Albanese a major problem – he needs to cut record levels of migration, partly to ease both the country’s troublesome housing and cost-of-living crises. He has proposed a cap of new foreign enrolments at 270k for 2025, which is a return to pre-pandemic levels, and this reduction is required to make the US$ 32.0 billion education industry more sustainable. He is also suggesting that there will be tougher English language requirements on student visa applicants, and greater scrutiny on those seeking further study. Furthermore, non-refundable visa application fees have also been doubled.

Education Minister Jason Clare says each higher education institution will be given an individual limit, with the biggest cuts to be borne by vocational education and training providers. Of the universities affected, those in capital cities will see the largest reductions. The government says the policy will redirect students to regional towns and universities that need them, instead of overcrowded big cities. Matthew Brown, deputy chief executive of the Group of Eight (Go8), a body which represents Australia’s top ranked universities, notes that “it sends out the signal that Australia is not a welcoming place,” and that the changes could ravage the economy, cause job losses and damage Australia’s reputation. The Go8 has called the proposed laws “draconian”, while others accused the government of “wilfully weakening” the economy and of using international students as “cannon fodder in a poll-driven battle over migration”. It is suggested that the Australian prime minister should look at the circumstances surrounding Canada’s decision to introduce a similar cap earlier. Since then, industry bodies have confirmed that enrolments have fallen well below that, because nervous students would rather apply to study somewhere with more certainty.

Noting that the EU economy is finally returning to modest growth, the European Commission’s Autumn Forecast is expecting 2024 growth figures coming in at 0.9% and 0.8% for the EU and the euro area; over the next two years, the increases will be 1.5%/1.8% and 1.8%/1.6% in 2026. The EU inflation levels have seen the figure decline over the four years from 2023 – 6.4%, 2.6%, 2.4% and 2.0%. Employment growth and recovery – in real wages – continued to support disposable incomes, but household consumption was restrained, whilst households were seen to save an increasing share of their income. H1 2024 witnessed a deep and broad-based contraction across most Member States.

In a bid to raise a further US$ 657 million, the UK government introduced amendments to inheritance tax that will see death duties payable by some farmers on agricultural and business property. Farmers and campaigners say they threaten the future of thousands of multi-generational family farms. This tax, levied at the 40% rate, post the US$ 411k threshold, with a further US$ 221k of relief given if a home is left to children or grandchildren. Currently around 4% of estates are liable for IHT. For the past forty years, farmers and agricultural land and business owners have been exempt from IHT, thanks to a series of tax “reliefs” that can be applied to estates. From 2026 those 100% reliefs will end, replaced by limited relief for farmers on more generous terms than general IHT.  Estates will receive relief of US$ 1.26 million, with up to US$ 632k of additional relief, as with non-farming estates. If a farm is jointly owned by a couple in a marriage or civil partnership, the relief doubles from US$ 1.90 million to US$ 3.80 million. Any tax owed beyond the level of relief will be charged at 20%, half the standard 40%. If farms are gifted to family members at least seven years before death no IHT is payable.

There is no doubt that this an emotive issue but some “non-farming” sectors will lose out including those who have used generous reliefs to make agriculture an attractive investment for seeking to shelter wealth from the taxman.  Then there are the private and institutional investors, (so-called “lifestyle” farmers) funding purchases from previous careers, that now dominate agricultural land purchases. Land Agents, Strutt & Parker, show that in 2023, just 47% were bought by traditional farmers and in the nine months of 2024, the figure is down to 31%, compared to 35% of purchases made by private investors. Meanwhile Resolution Foundation figures indicate that the most valuable estates also receive the lion’s share of tax relief, with 6% of estates worth more than US$ 3.16 million claiming 35% of Agricultural Property Relief  and 4% of the most valuable accounted for 53% of Business Property Relief, in 2020. The Chancellor expects that about 25% of farms will be impacted by the changes, based on the annual tally of claims for APR and BPR made in the event of a farm owners’ death.

Many other sectors were not enthused by Rachel Reeves’ late October budget including the seventy-nine signatories to the British Retail Consortium’s response warning of dire consequences for the economy and jobs in the sector. It estimates that the higher costs, from measures such as higher employer National Insurance contributions and National Living Wage will see costs surge by US$ 8.85 billion in 2025. These costs will have to be covered and will result in rising prices, lower margins, weaker investment and employment redundancies. BRC also noted that “retail is already one of the highest taxed business sectors, along with hospitality, paying 55% of profits in business taxes”.

It is going to be a dire few years following thirteen austerity years of mostly inept governance by various Tory administrations. Even after only four months of rule, Kier Starmer, along with his Chancellor and other cohorts, have managed to unnecessarily alienate a growing number of the electorate that voted Labour to a landslide victory. In what should be an era of recovery, the population has been told that tough times are ahead again. As at April 2024, UK median weekly pay for full-time employees in the UK was US$ 912 (GBP 728), and after adjusting for inflation (to obtain figures “in real terms”), this is 2% lower than in 2010. The government has decided to Tax, Tax, Tax rather than Spend! Spend! Spend!

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Hold On To What You’ve Got!

Posted on November 15, 2024 by howesdubai

Hold On To What You’ve Got!                                                 15 November 2024

There is no doubt that residential rents have been heading north at speed, with the emirate’s ultra-luxury real estate market leading the pack. This week, a US$ 2.3 million, two year rental agreement of a Umm Al Sheif villa was signed; the deal for the 24k sq ft villa on a 15k sq ft plot was a record for the exclusive residential community in the western part of Dubai. With a further 6.7k millionaires moving in to make Dubai their new home, and with a limited supply of ultra-luxury villas available, it is patently obvious that sales prices and rentals will have to rise. (DXB Interact reports that of the 61.6k villas set for completion over the next three years, only three hundred and seventy-nine are priced at US$ 16.3 million, (AED 60 million), or higher, eight hundred and thirty-three fall within the US$ 8.2 million to US$ 16.3 million, (AED 30-60 million), range, and two thousand, eight hundred and fifty-four are priced between US$ 4.1 million to US$ 8.2 million, (AED 15-30 million) range. Demand for resale properties is also high, with a 25.0% annual rise in total transactions, in the US$ 2.7 million to US$ 3.4 million, (AED 9.8 -12.4 million) range. According to DXB Interact data, there was a massive 1,245% surge in the ultra-luxury apartments and villas sector, between 2016 and 2023, with sales rising from US$ 1.74 billion to US$ 23.46 billion over the seven-year period.

This week, H&H Development launched its US$ 1 billion Eden Hills project, with prices for the uber-luxury villas starting from US$ 4.77 million and going up to US$ 26.43 million, which will cater to the high-net-worth individuals. The project, which comprises three hundred and twenty-seven five, five plus and six-bedroom villas, including twenty-nine customisable plots, will be completed in three phases. Up to one hundred and four villas went on sale in phase 1 in the gated community, which will be ready for handover by Q4 2027. Eden Hills provides access to premium dining, high-end retail, leisure destinations, top-tier educational institutions, and on-site healthcare facilities, ensuring convenience and connectivity. The project is located near Dubai Hills Estate on Al Khail Road.

This announcement comes at a time when Knight Frank indicated that the number of luxury property listings in Dubai dropped in Q3, as demand continued to outpace supply; the latest quarter saw four hundred deals being registered in the city’s prime locations, 18.2% lower when compared to Q3 2023. However, there were ninety-two deals in Q3, seven more than in Q2.

ValuStrat’s October data saw capital values of Dubai villas gaining 32.4% on the year and 2.2% on the month. Its report noted that villas in Jumeirah Islands were now three times more expensive than they were in 2021, followed by Palm Jumeirah (42.5%), Dubai Hills Estate (33.7%), and Emirates Hills (33.1%); the lowest gains were seen in Mudon (17.1%) and Jumeirah Village Triangle. Meanwhile, average monthly and annual price rises for apartments came in at 1.7% and 24.3% respectively. The locations, where annual apartment rises were at their highest, included The Greens (32.4%), Discovery Gardens (30.9%), Palm Jumeirah (29.9%), and The Views (28.4%), whilst the lowest capital gains were in International City (16.8%) and Dubai Sports City (17.5%). Last month, the ValuStrat Price Index rose by 28.3%, on an annual basis, and 2.1% monthly, to 193.8 points. The Index had a 100-point base mark from January 2021.

There was a monthly 13.1% hike in Oqood (contract) registrations for off-plan homes – and 99.7% annually, equating to almost 75% of all October home sales. The volume of ready secondary-home transactions was up 11.7% on the month and  30.1% annually. The month also witnessed twenty-one transactions for ready properties, priced over US$ 8.17 million, (AED 30 million), situated in Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, Al Barari, Dubai Hills Estate, and District One. The influx of high-net-worth individuals remains strong, driven to Dubai for a raft of reasons, including it being seen as a safe haven in a turbulent world, the introduction of long-term residencies for property investors and a surging non-oil economy. Long may it continue.

According to Issa Abdul Rahman, CEO of Kasco Developments – and also to this, and many other observers – there is no oversupply in the Dubai property market, as demand for new residential units continues to be persistently strong. One major factor supporting this, is that if there were an oversupply, then property prices would not be witnessing consistent double-digit growth. He also noted that “property prices are rising in Dubai and it looks like the boom will continue despite some tailwinds. Dubai has become a globally relevant city. When we compare Dubai to other major metropolitan cities, around the world, like Hong Kong, London, New York and Singapore, real estate is still cheaper here. There is no oversupply”.

Damac Air is set to become the first airline to be established by a private UAE developer. It has already announced six sought-after holiday destinations – Bali, Bora Bora, Fiji, Hawaii, Maldives and Seychelles. According to its website, “we offer unparalleled journeys capturing the essence of the world’s most coveted tropical paradises”. Damac Air’s entry into the market will position it against competitors like Beond, (which, in April, launched its maiden flight to the Maldives ex DWC), Rotana Jet, and others. Damac Air is a subsidiary of Damac Properties which last year saw its Moody’s ratings, on its corporate credit, and its US$ 600 million senior unsecured trust certificates due 2027, at Ba2, with its outlook nudging higher from stable to positive. In H1, Damac Properties awarded over US$ 1.9 billion in contracts for various projects within its portfolio.

At the ULTRAs 2024 Awards, Emirates won the “Best Airline in the World”. They are among the most respected awards in the industry, and they recognise travel leaders in multiple categories, with winners determined from the votes of a global network of active and affluent travellers. Emirates’ “fly better” travel experiences have also been recognised by more than twenty awards this year, including “World Best Airline” by Telegraph Travel, ranking first amongst ninety global carriers, and “Best Airline” by The Times and Sunday Times Travel Awards.

Over the past seven years, Emirates and flydubai have operated more than 1.5 million flights since the partnership started on 14 November 2017, carrying more than nineteen million passengers across the joint network; the carriers have a combined network of more than two hundred and twenty-five destinations in more than one hundred countries. The partnership sees Emirates customers exploring more than one hundred and eighteen flydubai destinations, while flydubai passengers can access more than one hundred and thirty-six Emirates destinations. Furthermore, customers can choose from two hundred and seventy-five codeshare flights each day.

In a post on X, Dubai’s Crown Prince, Sheikh Hamdan bin Mohammed bin Rashid, noted that Dubai’s Q2 and H1 GDPs rose 3.3% to US$ 31.61 billion and 3.2% to US$ 62.94 billion.  He also added, “we thank all teams and partners for their exceptional contributions to achieving the D33 Agenda’s goal of establishing Dubai as one of the world’s top three urban economies.”

This week, Dubai International Financial Centre fully repaid its US$ 700 million 2014 sukuk. The leading global financial centre in the MEASA region announced the full redemption and on-schedule repayment of the sukuk. Essa Kazim, Governor of DIFC, noted that “over the past ten years, we have invested in high-quality commercial infrastructure, and this has helped position DIFC as the region’s preferred centre for business and finance”.

Although available in countries such as in Hong Kong, Japan, the Philippines, Singapore, Thailand and Vietnam, Visa confirmed that it was rolling out a flexible payments feature in the UAE and US. This would then allow customers to use a single card to pay from different funding sources, as customers are increasingly prioritising convenience and flexibility in payments. An in-house study found that 51% of card users wanted to access multiple accounts and funding sources through a single credential. Visa has teamed up with Liv Bank for the UAE expansion and has plans to expand into Europe in H1 2025.

With a 15.0% market share of the global diamond international trade, the UAE ranks third behind India and the US. Juma Al Kait, Assistant Undersecretary for International Trade Affairs at the Ministry of Economy, commented that the value of the UAE’s diamond trade will exceed US$ 40 billion this year, and that diamonds account for 5.5% of the country’s non-oil trade, with the value of diamond trade reaching almost US$ 39 billion last year, after it had reached about US$ 20 billion in H1. He also highlighted the growing role that the diamond sector plays in the UAE’s economy and the sector’s continued ability to innovate and adapt. The growth of the diamond sector reflects the UAE’s position as a global destination for trade and investment and reinforces the government’s vision to diversify the economy.

In its attempt to acquire Silk Logistics Holdings Limited, DP World Australia has entered into a binding Scheme Implementation Deed for 100% of its issued share capital, at an offer of US$ 1.41 per share; this values the equity of the company at US$ 115 million. Silk Logistics is a comprehensive port-to-door logistics services provider which operates twenty-one logistics hubs and twenty-five warehousing sites across five Australian states; it operates two main business segments – Port Logistics, which offers seamless wharf cartage services between Australia’s major ports, and Contract Logistics, which provides warehousing and multimodal distribution solutions to support complex supply chain needs.

With enabling works and piling contracts now completed, Dubai World Trade Centre has initiated the first phase of the Dubai Exhibition Centre expansion at Expo City Dubai. The US$ 2.72 billion masterplan will transform Dubai Exhibition Centre into the region’s largest indoor events venue upon completion. When completed by 2033, it will see Dubai  double the number of large-scale events hosted annually to over six hundred. The DEC will enhance the establishment of Dubai’s new urban centre, comprising Expo City Dubai – the UAE’s first fifteen-minute city – the overall Dubai South community, and Al Maktoum International Airport (DWC). Phase 1 of the construction project is massive, beginning with foundation work, involving five hundred and fifteen piles to support the structure, 14k tonnes of structural steel – equivalent to the weight of two Eiffel Towers – and 48k cu mt of reinforced concrete. The expanded exhibition centre will be covered with 78k sq mt of roof sheeting – an area comparable to sixty-two Olympic-size swimming pools.

It seems that the next DFM IPO off the blocks could be the twenty-year old Talabat, the ME business of Germany’s Delivery Hero, which could see the largest food ordering business in the region sell stock worth more than US$ 1 billion. Over the past twenty years, it has extended its reach from its Kuwait base to the UAE, Oman, Qatar, Bahrain, Jordan, Iraq and Egypt, with over six million active customers as of the end of July; besides food, it provides deliveries of groceries and other goods including health and beauty products. The German parent company, which acquired a majority stake in Talabat in 2015, will retain a majority shareholding. However, Delivery Hero has seen its shares fall over 74% from their January 2021 highs. This comes on the back of a retail spending boom, with a surfeit of public listings, with the latest being only last week – with Lulu Retail raising US$ 1.72 billion on the Abu Dhabi bourse.

Emaar Properties posted impressive nine-month financials with revenue, net profit before tax and EBITDA all moving markedly higher – by 30% to US$ 6.49 billion, by 24% to US$ 3.38 billion and by 17% to US$ 3.43 billion respectively. Property sales came in 60% higher on the year at US$ 13.62 billion, for the nine-month period, which then boosted it revenue backlog figure to US$ 27.25 billion – up 45% from September 2023 and 12% from June 2024.

Emaar Development, specialising in build-to-sell assets, and majority-owned by Emaar Properties, maintained strong momentum during Q3. The company posted nine-month figures – to 30 September – with property sales up 66.1% to US$ 13.08 billion, revenue 69.0% higher at US$ 3.41 billion and EBITDA up 35.0% to US$ 1.60 billion. Emaar sales backlog, (to be recognised as future revenue), reached US$ 22.81 billion – 47.0% higher than in December 2023; by the end of Q3, it had registered fifty successful project launches in 2024.

In the first nine months of 2024, Emaar’s malls and commercial leasing operations posted revenue of US$ 1.14 billion and an EBITDA of US$ 954 million. Over the period, the retail sales performance of its tenants grew more than more than 6% on the year. Emaar Malls prime assets boasted occupancy of over 99% as of 30 September 2024. Over the same period, Emaar’s international real estate operations recorded property sales of US$ 517 million and revenues of US$ 436 million, mainly attributable to operations in Egypt and India. Revenues from international operations represented 7% of Emaar’s total revenue. Emaar’s hospitality, leisure, and entertainment divisions recorded a 7% annual rise in revenues to US$ 708 million, driven by the steady growth in the tourism industry and strong domestic spending. Emaar’s UAE hotels, including those under management, reported an average occupancy of 77%. All of Emaar’s recurring revenue-generating portfolio, listed above, generated US$ 1.85 billion, equating to 29% of Emaar’s total revenue.

In the first nine months of the year, DEWA posted cumulative revenue, up 6.20% at US$ 6.40 billion, EBITDA of US$3.22 billion – 4.71% higher, net profit after tax of US$ 1.50 billion and cash from operations, up 17.83% to US$ 3.16 billion; for Q3, the revenue was 4.75% higher at US$ 2.70 billion, EBITDA was flat at US$ 1.39 billion and cash from operations was 34.20% higher at US$1.61 billion. The utility’s Q3 power generation – at 19.6 TWh – was 3.98% higher on the year, with 9.18%, or 1.8 TWh, sourced from green energy source; the Hassyan power plant, Warsan Waste Management Company and its gas-fired portfolio accounted for 3.25 TWh, 0.32 TWh and 14.3 TWh respectively. There was a 3.41% increase in its quarterly peak demand, on the year, reaching 10.76 GW, with the Q3 gross heat rate of 7,923 BTU/kWh, being the best achieved so far in DEWA history.  There was a total desalinated water production of 40.5 billion Imperial Gallons, 4.64% higher on the year, with the daily demand, increasing by 4.92%, to reach a record 455 million Imperial Gallons. As Dubai’s population rose, (by 3.49% in the nine month period to 3.782 million) so did DEWA’s customer accounts by 4.16% to 1.250 million. In Q3, two 132 kV substations were commissioned, along with four hundred and twenty-six substations. By September 2024, the company’s installed generation capacity was 16.779 GW, with 2.86 GW (17.0%) of this capacity representing renewable energy; by 2030, this should have risen to 20.0 GW. Its installed desalinated water production capacity was unchanged at 495 MIGD and is expected to reach 735 MIGD by the end of the decade. DEWA distributed its US$ 845 million H1 dividend to its shareholders on 31 October 2024.

As expected, Salik Company produced fine Q3 financials with all indicators heading higher – revenue 6.2% higher, on the year, profit before tax 19.6% higher at US$ 83 million, and EBITDA, up 14.0% to US$ 100 million – the highest ever Q3 return.  In the nine-month period to 30 September, net profit was 12.5% higher at US$ 246 million, with the main revenue drivers being toll usage, fines, (on the quarter, and YTD, up by 7.9% to US$ 16 million, and 7.6% to US$ 48 million), and tag activation fees, (on the quarter, and YTD, up by 11.3% to US$ 3 million, and 23.3% to US$ 8 million). The number of revenue-generating trips rose in the nine-month period by 5.1% to 356 million, and in Q3 by 5.7% to US$ 128 million. Revenue from toll gates has also seen strong growth with Jebel Ali, Airport Tunnel and Al Safa up by 16%, 9% and 7%. Future revenue will be bolstered by the addition of two new toll gates – Business Bay gate and Al Safa South gate — which will be operational from 24 November , and bring the number of gates to ten – and the fact that Salik’s inaugural parking solution at Dubai Mall, (with a Q3 revenue stream of US$ 700k, whilst processing some 3.8 million transactions), is now fully operational. Revenue-generating trips are expected to increase in the range of 24% – 25% in 2025, including the contribution from the two new gates, and up to 8.0% this year.

For the first nine months of the year, Parkin posted that the total value of fines rose 26.1% to US$ 47 million, with net profit increasing by 4.9% to US$ 29 million. Perhaps Parkin will better that figure next year, as it plans to add a further twenty-four more smart cars, by year-end, to step up parking inspections. By the end of Q3 2024, the inspection cars had scanned 56.7% more vehicle registration plates, at 4.7 million. The company also upgraded the software on their handheld inspection devices in July 2024, resulting in a marked increase in the number of vehicle plates being scanned and the number of fines issued, compared to prior periods.

Spinneys posted positive nine-month, to 30 September, results, with an 11.4% hike in revenue to US$ 627 million, a 27.1% surge in profit before tax to US$ 55 million, and net profit 14.6% higher at US$ 50 million. Gross profit was up 12.0% on the year to US$ 258 million – equating to a stable gross profit margin of 41.2%, achieved through efficient sourcing and supply chain management. Sunil Kumar, CEO, commented, “All at Spinneys remain firmly committed to delivering on our ambitious growth plans as we widen our footprint in the UAE, accelerate our expansion in Saudi Arabia, roll-out new concepts and deepen our ecommerce offering.”

The DFM opened the week, on Monday 11 November, two hundred and thirty-three points (5.4%) higher the previous five weeks, gained a further 101 points (2.2%), to close the trading week on 4,740 points by Friday 15 November 2024. Emaar Properties, US$ 0.01 lower the previous week, gained US$ 0.12, closing on US$ 2.52 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.69, US$ 5.23, US$ 1.73 and US$ 0.34 and closed on US$ 0.68, US$ 5.26, US$ 1.79 and US$ 0.36. On 15 November, trading was at two hundred and thirty-one million shares, with a value of US$ 134 million, compared to three hundred and fifty-one million shares, with a value of US$ 151 million, on 08 November.  

By Friday, 15 November 2024, Brent, US$ 0.52 higher (0.7%) the previous week, shed US$ 1.29 (2.0%) to close on US$ 72.01. Gold, US$ 60 (2.3%) lower the previous fortnight, shed US$ 95 (4.6%) to end the week’s trading at US$ 2,568 on 15 November 2024. 

A 2021 climate court ruling, that Shell must sharply reduce its carbon emissions, by 45% to 2030, (compared to 2019 levels), has been overturned by the Court of Appeal in the Netherlands; the original ruling was put in place to protect Dutch citizens. The emissions curbs included those caused by the use of Shell’s products, but the judge, in the appeal, dismissed all the claims against Shell, with the petro giant arguing that the 2021 ruling was flawed on many grounds. It was noted that only nation states can set such sweeping demands and that such a cut to its business would only shift output towards its competitors, without any benefit to the planet. However, the court did agree with the climate control activists that Shell had an obligation to cut its greenhouse gas emissions to protect people from global warming; it also noted that Shell was on target to meet required targets for its own emissions.

Volkswagen Group and loss-making Rivian have launched a JV, with the German car giant increasing its investment in the partnership, from an initial US$ 5.0 billion to US$ 5.8 billion. This arrangement comes at a time when the EV sector is struggling, not helped by slowing global demand and increased competition from Chinese rivals. However, both companies will benefit from this JV – Rivian will have a new supply of funding, ahead of the launch next year of its sports utility vehicle R2 model, and VW will be able to use Rivian’s technology in its own range of vehicles. The first VW models, equipped with Rivian technology, are expected to be available to customers as early as 2027. There will be further saving as the two companies plan to reduce development costs and scale new technologies more quickly, with developers and software engineers from both firms initially working side by side in California. Like other major European car makers, VW, which includes the likes of Audi, Lamborghini and Porsche, is struggling with rising costs, slowing sales, increased competition from Chinese EV makers and a slower-than-expected move away from petrol and diesel vehicles.

The UK defence giant BAE Systems is a case to prove that every cloud has a silver lining, having picked up total orders, worth more than US$ 31.8 billion for this financial year alone. Six months ago, it was carrying an order book, valued at US$ 19.1 billion, but like other major defence companies, earnings have shot higher, fed by global conflicts in many locations such as the ME, Ukraine and the Red Sea. Indeed, shares in the firm have grown by more than 115% since the invasion of Ukraine in 2022. 

The EC  has fined Meta  US$ 839 million for breaking competition law by embedding Facebook Marketplace within its social network, which has led the EC noting that this meant alternative classified ads services had faced “unfair trading conditions”, making it harder for them to compete; in addition, it ordered the social network site, which said it would appeal, to stop imposing these conditions on other services, with Meta commenting  that the  Commission had provided “no evidence” of harm either to competitors or consumers. The case arose in 2021, after Meta’s rivals complained that Facebook Marketplace gave it an unfair advantage.

The UN Food and Agriculture Organisation posted that October global food prices hit their highest level in eighteen months, noting that vegetable oils, (with a 7.3% monthly hike), led the increases in most basic food commodities; international prices of a basket of food commodities, were 2.0 points higher on the month at 127.4, with only meat not posting a gain. Sugar prices were 2.6% higher, lower than expected because of production concerns in Brazil, whilst price of dairy products rose by about 2.0%, supported by increased demand for cheese and butter, amid tight supplies; cereal prices nudged up 0.8%, following wheat prices moving higher amid concerns about farming conditions in the northern hemisphere and after an unofficial minimum price for Russian exports, and maize prices, increased.

This week, DIY chain Homebase called in administrators, following a failed attempt at a sale that will result in 55.6% job redundancies, equating to 2.0k.  The remaining 44.4%, (1.6k), will remain after The Range, a general merchandise specialist, acquired seventy-five of the one hundred and thirty stores in a so-called pre-pack deal. Forty-nine other stores will continue to trade while alternative offers are explored.

In a bid to deliver a further US$ 65 million reduction in costs, Direct Line is planning a 5.5k retrenchment among its 10k staff. It is also planning to save further costs, via improvements in procurement, technology and a simplified operating model. This follows a 35.7% reduction in Q3 total gross written premium and associated fees, to US$ 1.08 billion, compared to Q3 2023; YTD the figure was 3.0% higher. There is no doubt that the insurer, whose brands also include Churchill and Privilege, has struggled in the motor insurance sector in what is seen as a tough market. It is estimated that a further 71k own-brand motor customers, (many of whom were online operators, with lower cost bases), were lost in Q3, as average premiums were 3% higher than in 2023. Earlier in the year, Belgian rival Ageas was interested in a US$ 4.09 billion takeover.

It seems that Sanjeev Gupta is to seek court approval for a restructuring plan for his Speciality Steel division in the UK (SSUK) – the bulk of the steel tycoon’s remaining UK operations; if successful, that would significantly reduce its debts. The process is being implemented under Part 26A of the 2006 Companies Act, and it will have no impact on the 1.5k payroll of SSUK but it would require approval of 75% of its creditors – and this could be a problem because the owner has ‘form’ and has been involved in a series of restructuring and cost-cutting measures, including a GBP 170 million request for government assistance which was subsequently rejected. Mr Gupta’s efforts to turn around the business are said by allies to have been hampered by its deep relationship with Greensill Capital, the controversial financial group which collapsed in 2021.

In Australia, a Gold Coast businessman David McWilliams was in court last week, accused of gambling US$ 26 million from funds invested into his NDIS property development company. He, and his wife, have seen the Federal Court ban them from leaving the country and freezing their assets, whilst appointing receivers to thirteen companies run by the NDIS property developer. The action was taken after a tipoff that McWilliams had placed US$ 26,015,695 worth of bets at Star casinos between October 2022 and February 2024, gambling between US$ 329k and US$ 3.29 million per month. His gambling losses, during the period, totalled US$ 2.50 million. The accused, who is also suspected of providing financial services, without a licence, is the sole director of ALAMMC Developments, a company offering investment opportunities for purpose-built, NDIS housing development schemes across Australia. It is reported that investors have deposited more than US$ 45 million on the promise that offered them fixed returns of 10% per year, plus a 15% bonus payment upon completion of the development. It also seems that his good lady, Laura Mary Fullarton, withdrew US$ 1.64 million from company accounts during the same period and it appeared she also used investors’ money to purchase a luxury vehicle and a unit on the Gold Coast. A judgement from Justice Patrick O’Sullivan confirmed that McWilliams could not explain where the money he had gambled came from, and that the scope of the couple’s “suspicious conduct” in the management of investor funds could be described at best as “incompetence or carelessness”, and at worst as “serious breaches of trust”.

Just when the Federal Reserve thought that they had inflation under control, and edging closer to its long-standing 2.0% target, the election of Donald Trump has thrown a spanner in the works. Amid signs of cooling prices and a weaker labour market, the Fed started cutting interest rates in September by 0.50%, and by 0.25% last month, with inflation over the two months being 2.4%, rising to 2.6% in October; in June 2022, the rate had topped 9.0% – a four-decade high. However, with the upcoming Trump administration, there could well be measures taken that could move the inflation temperature higher, including a mix of tax cuts, tariffs and migrant deportations that will maintain pressure on businesses and consumers. Although the overall trend is still moving lower, there are some outliers such as the heavily weighted (in the US price index), housing costs, including rents, rising 4.9%, car insurance at 14%, medical care and education.

In the quarter to September, the UK unemployment rate came in 0.3% higher on the month to 4.3%, whilst the average regular earnings growth fell to its lowest level, since Q2 June 2002, easing 0.1% to 4.8%. There was a 5k decline in the numbers in payrolled employment during the month of September. Furthermore, it appears that the earnings growth rate was propped up only by public sector pay rises, suggesting that private sector awards were continuing to ease. However, others point that there could have been an influence from the new government’s claims, since late July, of a dire economic inheritance including a US$ 28.0 billion black hole in the public finances. Since the late October budget, the private sector has expressed its concerns that some of the measures, mainly a 1.2% hike to 15.0% to national insurance contributions by employers, will hit investment, hiring and pay awards. What the Starmer government does not seem to realise is that job cuts are inevitable in an environment where employer NI contributions have risen and there are further rises in the national living wage. The Labour growth agenda will not be worth the paper it is written on, if these additional costs restrict hiring and cause jobs to be lost.

Despite noting that he had previously avoided commenting on the topic, because of the Bank’s independence from Westminster politics, the BoE governor seems to be following in the steps of his predecessor Mark Carney, by offering his thoughts the EU and Brexit. Many thought, at the time, that the Canadian banker should have been fired for warning about the economic dangers of leaving the EU prior to the vote. He even had to apologise for being proven wrong. Now Andrew Bailey has gone beyond his remit espousing that the UK must “rebuild relations” with the EU “while respecting the decision of the British people” who voted to leave in 2016, adding that one of its consequences has been weaker trade. He added “the impact on trade seems to be more in goods than services… But it underlines why we must be alert to and welcome opportunities to rebuild relations while respecting that very important decision of the British people.” He seems to be unaware that the Starmer government remains opposed to rejoining the EU.

Dismal news for the Chancellor, with the UK economy slowing and nudging 0.1% only higher in Q3, but actually shrinking in September, with uncertainty about the Budget being blamed for the weak growth. Even more galling for the new administration was that under the Tory administration Q2 growth was at 0.5%. It was no surprise to hear Rachel Reeves saying she was “not satisfied” with these latest figures which cover the first three months of the new government, especially with Labour making boosting economic growth its top priority. Since the Budget, the government has been widely criticised for tax rises which some reckon will lead to higher prices and fewer new jobs.; on top of that, many leading retailers may well have to increase prices because of the changes. The CBI noted that firms had widely reported “a slowdown in decision making” prior to the Budget, and that once it had been announced it had “set off warning lights for business”. It also added that the increase in National Insurance Contributions for firms, together with other measures such as the rise in the minimum wage, “is expected to trigger a more cautious approach to pay, hiring and investment”. The Office for National Statistics said Q3 growth in the UK was “subdued across most industries”, with the main contributor being the services sector, growing by only 0.1%. In October, Reeves presented what she called a “Budget for growth” which the government’s independent forecaster, the Office for Budget Responsibility, indicated that the Budget measures would only “temporarily boost” the UK and, more worryingly, that the size of the economy would be “largely unchanged in five years”, compared with its previous estimate.

During the UK week, several major banks – including HSBC, Santander, Nationwide, TSB and Virgin – decided to hike mortgage interest rates; this comes hot on the heels of the autumn budget, which many analysts considered inflationary, as many of the costs will have to be borne by employers. Last week, the BoE cut the base rate to 4.75% but struck a cautious note, saying further rate cuts would be “gradual” – and this after high street lenders have been gradually lowering their rates for months. But it is obvious that some banks have not read the message and have started tweaking rates marginally higher – mainly around the 0.3% level.

Using evidence from Canada and Australia, Chancellor Rachel Reeves seems convinced that reforms to the pensions market could “unlock GBP 80 billion” (US$ 101.3 billion) of investment, based on the theory that fewer, but larger funds, can get greater returns. Her idea is that pension schemes get increased returns when they reach around US$ 25.31 billion to US$ 63.29 billion, as they are “better placed to invest in a wider range of assets”. Part of the Starmer government’s plan to boost economic growth is to invest in infrastructure and almost ninety local government pension pots will be grouped together, with defined contribution schemes merged and assets pooled together. Evidence from Canada and Australia shows that the former’s schemes were investing four times more in infrastructure, and Australia three times more, than the UK’s defined contribution schemes. It is also argued that larger pension schemes are able to invest “in a more diverse range of assets, including private equity, which are higher risk, but over time give a higher return”. It also appears that the average Canadian/Australian investor is more likely to be investing in UK infrastructure, or a UK high growth company, than the average UK investor.  The Local Government Pension Scheme in England and Wales will manage assets worth around US$ 633 billion by 2030, currently split across eighty-six different administering authorities, with local government officials and councillors managing each fund. The plan is to move these management funds from councillors and local officials to “professional fund managers”.

By the start of the week, the price of Bitcoin had lifted its head above the parapet to, a new record, of over US$ 80k, mainly attributable to Donald Trump’s election victory; in the build up to it, Trump had pledged to make the US “the crypto capital of the planet”, and to create a strategic bitcoin stockpile. His party also won the trifecta – Presidency, Senate and Congress. Other cryptocurrencies, including dogecoin – which has been promoted by high-profile Trump supporter Elon Musk – are also making gains. One inevitability of his success is the end of the current SEC chair, Gary Gensler, a Biden 2021 appointee, who led the watchdog’s crackdown on the crypto industry to be replaced with digital asset-friendly financial regulators. YTD, Bitcoin has gone 123% higher from its 01 January opening US$ 40.0k to today’s US$89.3k and even topped US$ 90.0k earlier in the week. Over the past month it has surged 36.5% and since the 05 November presidential election, it has climbed 30.7% over the past ten days. The advice is Hold On To What You’ve Got!

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The Man Is Back In Town!

Posted on November 8, 2024 by howesdubai

The Man Is Back In Town!                                              08 November 2024

To quieten the doomsayers in Dubai, the real estate market had a booming month, with October transactions totalling over 20k, (20.46k), for the first time ever, and 13% higher on the month, which itself was a record month. The recent trend of off-plan and under-construction properties continued and again accounted for the majority of sales at 73%, with the usual drivers including reduced interest rates, a surge in new projects, more people choosing to buy rather than rent, and a surging influx which has already seen an additional 142k people in the first ten months to 3.797 million. Property Monitor’s October report posted those residential transactions comprised nearly 95% of sales, totalling over 19.4k deals. The highest-priced transaction in the month was a villa at Jumeirah Bay, sold for US$ 48 million, whilst a villa at Eome, in Palm Jumeirah’s western crescent, topped the off-plan sales price, at US$ 46 million. The three top developers for off-plan sales were Emaar Properties, Damac Properties and Sobha.


The property boom continued into October, with records posted on the number of monthly transactions and also their value – with a 71% annual jump to 20.7k, and by 56% to US$ US$ 16.76 billion. Research carried out by Property Finder shows people’s preference:

Apartments                             – studios, 1 B/R and 2 B/R    (14%, 32% and 36%)

Desired Locations              – Dubai Marina, Downtown Dubai, Jumeirah Village Circle,   Business Bay, and Palm Jumeirah

      Furnished/Unfurnished    –  65% and 34%

      Tenancy Preferences        – studios, 1 B/R and 2 B/R    (23%, 35% and 32%)

Tenancy Locations                       – Dubai Marina, Downtown Dubai, Business Bay, and Jumeirah Village Circle and Jumeirah Lake Towers

Villas/townhouses                – 3 B/R and 4 B/R                  (38% and 49%)

Desired Locations            – Dubai Hills Estate, Al Furjan, Palm Jumeirah, Dubai Land and        Mohammed Bin Rashid City

      Furnished/Unfurnished    –  53% and 46%

      Tenancy Preferences        – 3 B/R and 4 B/R                  (41% and 38%)

Tenancy  Locations           – Jumeirah, Dubai Hills Estate, Damac Hills 2, Al Barsha and Umm Suqeim

The split between the existing and ready markets show that the former posted a record 27.5% hike in transactions, to 7.14k, valued at US$ 9.18 billion, (surpassing the previous record peak in July, by 11%), and the latter saw a 109% surge in the number of transactions to 13.53k, with the value 102.4% higher on the year at US$ 7.55 billion.

Recent surveys, such as Knight Frank’s Wealth Report, show that the majority of HNWIs not only consider the actual state and stature of a building, but are also taking more interest in environmental and sustainability factors crucial when making their final decision where to live. Other studies, from the likes of Sotheby’s International Realty and Christie’s International Real Estate, back up similar findings. Furthermore, the Global Sustainable Investment Review has highlighted the rise in investments in sustainable real estate funds by HNWIs – a major change from the previous mantra of wealth creation. Their preference for sustainable communities, over conventional luxury properties, reflects a growing awareness of how individual choices impact the environment. A good local example is the Al Barari development – one of the first to integrate high-end living with green spaces, renewable energy, and a holistic approach to health and well-being. Such properties, built on the principles of sustainability and resilience, are likely to retain and even increase their value, as environmental regulations tighten and consumer preferences evolve. Moreover, the addition of organic farms, wellness centres, open spaces, nature walks, play areas etc, in sustainable communities, also add to the quality of life. Will the isolated luxury, often associated with gated mansions and high-rise penthouses, soon become a thing of the past?

With Driven Properties investing US$ 138 million to acquire Emaar Square Building 3, in Downtown Dubai, the location posted its biggest property deal of the year. The building, spanning 379k sq ft, provides premium office spaces and is already home to several prominent businesses. Hadi Hamra, managing partner at Driven Properties noted that “relocating the company’s headquarters to Emaar Square 3 not only signifies growth but also reinforces Driven Properties’ reputation as a trusted and influential player in Dubai’s competitive real estate market.” This latest acquisition adds to their current portfolio which includes the Sea Mirror Villa on Jumeriah Bay Island and Rixos Financial Center Road Dubai Residences.

Octa Properties aims to add fourteen new branded projects under management in Dubai, valued at US$ 2.45 billion, by the end of H1 2025. The real estate development management company indicated that it had collaborated with top-tier brands, like Missoni, Hilton, Elie Saab, W, and Franck Muller, in the region, offering developer management services. It also launched its new branded interior design and branded marketing communications vertical – House of Octa. The company currently has 4.6k pipeline units, over one hundred employees, and works with over 1.6k brokerage firms. According to Savills, Dubai accounts for 12% of the global supply of branded residences, with the wider EMEA region accounting for nearly 30%.

Dubai-based Deyaar Development has launched its first residential project in Abu Dhabi – RIVAGE – located on Al Reem Island. This is with a strategic partnership between Deyaar and Arady Properties PSC. The project will comprise 1, 2, and 3-bedroom luxury residences, opulent duplexes, bespoke Sky Villas and Sky Palaces. Completion is slated for Q4 2027.

Savills’ Q3 2024 Dubai Office Market report noted that specific locations, like Business Bay and Downtown, experienced annualised hikes of 44% and 36 % during the quarter. In H1, Dubai welcomed some 24k new companies – equating to a 5% annualised growth. Little surprise to see the likes of DIFC, Downtown, and Business Bay now having occupancy rates of between 95% and 97%. It estimated that new projects – such as DIFC Square and Immersive Tower – are set to add over ten million sq ft of premium office space by 2028. There is no doubt that Dubai is fast becoming one of the top global business hubs and this can only see the sector burgeoning for the rest of the decade and beyond, as new business registrations rise markedly and existing entities expand.

Emirates H1 profit hit a new record of US$ 2.64 billion (before the newly implemented corporate tax) – 2.0% higher on the year; its profit after tax was US$ 2.37 billion. Revenue – including other operating income – was up 4.5%, on the year, to US$ 16.95 billion, attributable to consistently strong travel and air cargo demand across markets. The Emirates Group announced its best-ever half-year financial performance, with posting a profit of US$2.53 billion) after corporate tax. The Group posted a pre-tax H1 profit before tax of US$ 2.83 billion, with a marginally lower EBITDA of US$ 5.56 billion, driven by Group revenue being 5.2% higher on the year, at US$ 9.29 billion. By 30 September 2024, the Group’s cash position was at US$ 11.91 billion, compared to US$ 12.83 billion in 31 March 2024. The Group also paid US$ 545 million in dividends to its owner, as declared at the end of its 2023-24 financial year. Sheikh Ahmed bin Saeed, Chairman and Chief Executive of Emirates Airline and Group, noted that “we expect customer demand to remain strong for the rest of 2024-25, and we look forward to increasing our capacity to grow revenues as new aircraft join the Emirates fleet and new facilities come online at dnata.”

Some events during H1 included:

  • increased scheduled flights to eight cities – Amsterdam, Cebu, Clark, Luanda, Lyon, Madrid, Manila and Singapore
  • restarted daily services to Phnom Penh, via Singapore
  • launched daily services to Bogotá, via Miami
  • opened a new route to Madagascar via the Seychelles
  • took its passenger and cargo network to one hundred and forty-eight airports in eighty countries
  • entered into new agreements with seven codeshare, interline, and intermodal partners – AirPeace, Avianca, BLADE, ITA Airways, Iceland Air, SNCF Railway, and Viva Aerobus
  • Emirates SkyCargo transported 1.198 million tonnes – up 16% on the year
  • Emirates SkyCargo added capacity – one new Boeing 777 freighter and two additional wet-leased Boeing 747Fs. Emirates placed orders for ten additional Boeing 777 freighters to support its growth

This week, Sheikh Mansoor bin Mohammed bin Rashid opened the tenth edition of Gulfood Manufacturing, the world’s leading annual meeting, covering the entire food manufacturing ecosystem. Located at the Dubai World Trade Centre, the three-day event took place alongside Gulfhost, the MENA region’s premier hospitality and foodservice equipment event. Both Gulfood Manufacturing and Gulfhost provided an unparalleled opportunity for almost 3k global F&B manufacturing and foodservice brands to showcase their latest products and solutions to a global audience.

The UAE has signed its latest Comprehensive Economic Partnership Agreement with Australia, which will open new avenues for economic cooperation for both countries; this comes after talks concluded in September. As with the other CEPAs, already signed, the agreement features a tariff reduction and elimination of up to 96% across customs tariff lines.

Once ratified, the deal will be Australia’s first trade agreement with a country in the MENA region and represents an important addition to the UAE’s CEPA programme. The deal is expected to propel bilateral non-oil trade to over US$ 15 billion by the year 2032 – a more-than threefold increase on the US$ 4.23 billion recorded last year. Bilateral non-oil trade reached US$ 2.3 billion in H1 2024, an increase of 10.1% on the year. Furthermore, there are more than three hundred Australian businesses operating in the UAE in sectors such as construction, financial services, agriculture, and education. In addition to the CEPA, six further agreements were signed including an Agreement to Promote and Protect Investments between the UAE and Australia, and five Investment Cooperation memoranda of understanding to facilitate and promote two-way investment in sectors of national priority including Green/Renewable Energy, Infrastructure/Development, Data Centres/Artificial Intelligence Projects, Minerals/Mining, and Food/Agriculture.

October’s S&P Global UAE PMI was at its fastest, at 54.1, pace since April, with many firms having raised output in response to higher sales volumes, healthy work pipelines and robust client numbers; the index had nudged 0.3 higher from September’s return of 53.8. However, disappointing news came with the growth of new orders softening to its lowest since February 2023, which contributed to both weaker job creation and a renewed drop in selling charges. However, business sentiment headed in the right direction picking up from the previous month’s eighteen-month low, with many respondents indicating that they expect further growth in the coming months, as the rate of input cost inflation dipped to its lowest since April. There was also a marked expansion, last month, in activity levels, whilst there was an increase in intakes of new work. Input purchasing growth remained sharp however, particularly as businesses faced further efforts to overturn the recent trend of backlog accumulation. A slower rise in backlogs was down to a stronger improvement in supplier delivery times. Further good news saw non-oil firms posting the softest increase in overall input costs, (for both wages and purchase prices), for six months.

In Dubai, there was a slowdown with the PMI, still in positive territory, but 0.9 lower at 53.2. New business intakes rose at the softest rate since the beginning of 2022, attributable to tougher market conditions and increased numbers of competitors. Although the pace of employment growth also ticked down, output growth accelerated slightly to a five-month high. Dubai non-oil firms posted a drop in average selling prices for the first time since April, linked to strong competition. It was noted that firms were still seeing a long pipeline of work backlogs and ongoing contracts, so much so that even if sales momentum slows further, the non-oil economy can continue to grow, albeit at a slower pace.

Earlier in the week – and in line with directives from Sheikh Ahmed bin Mohammed bin Rashid, the Chairman of Dubai Media Council – its MD, Mona Al Marri, met with TikTok’s CEO, Shou Zi Chew. The aims of the meeting were to strengthen Dubai’s position as a global hub for media innovation, and to explore new partnership opportunities, focused on media advancement and knowledge exchange. The meeting highlighted Dubai’s commitment to fostering the growth of new media platforms that can positively impact communities. These initiatives aim to position Dubai as a global leader and an ideal place to live, work, and visit.

In the latest study, where people dream of moving, travelling or exploring, released by Numbeo, ranks the UAE as seventh in the world’s top countries behind the US (5.31%), the UK, Canada, Spain, Germany and Italy. The UAE came in with 2.56% of searches, ahead of Australia, France, Switzerland and the Netherlands. There is no doubt that the country has recovered so well post-pandemic and has become a safe haven for those looking to invest in stable and growing markets and for professionals searching for a greener, safer and more lucrative environment. The Dubai government has made no secret of its intention to make the emirate the best place, in the world, to live and work for residents. Meanwhile, for UAE residents, the dream destinations to relocate and explore are the UK followed by Canada, the US, India, and Australia.

In their latest World Economic Outlook, the IMF posted that “for the GCC, continuing to diversify revenue sources and implement tax reforms (through the introduction and expansion of value-added, personal income, and corporate income taxes) remain key priorities.” It also noted “notably, after adopting or committing to adopt a value-added tax, some GCC countries are now in the process of introducing a corporate income tax, in part amid the implementation of the global minimum corporate income tax. In addition, Oman is in the final legislative stages of adopting a personal income tax on high-income earners.” 5% VAT and 9% Corporate Tax were introduced in the UAE in 2018 and 2023; Oman has proposed to levy income tax on the rich. It is obvious that the introduction of tax has given the UAE a tax base to increase its revenue stream that could provide the funds needed to meet social and developmental needs. The IMF added that “in the case of UAE, the country has an almost fully automated revenue administration with one of the best systems of tax collection, tax refund and so on.”

For the first time in history, the total capital and reserves of banks operating in the country topped half a trillion dirhams; the Central Bank posted that this figure, for July, was actually US$ 136.95 billion, 10.5% higher on the year and by 2.7% YTD. Although this balance does not include loans, (secondary deposits), they do include the current year’s profits. National banks accounted for about 86.3% of the total capital and reserves of banks operating in the country, 10.4% higher on the year at US$ 118.17 billion; foreign banks accounted for the remaining 13.7%, with a value of US$ 18.77 billion. The report noted that investments of banks operating in the country posted a record US$ 188.34 billion, up 19.3%, at the end of last July. Bonds held until maturity accounted for the largest share of banks’ investments, at around 48.3%, 0.5% higher, at US$ 90.98 billion. The share of banks’ investments in “debt bonds” amounted to about 41.9% of total investments, reaching US$ 78.88 billion at the end of last July – 3.5% higher on the month and 15.8% on an annual basis. Bank investments in stocks came in 36.0% higher on the year and 1.8% on the month, at US$ 4.63 billion; other bank investments amounted to US$ 13.84 billion – a 1.7% monthly decrease but an annual 1.0% increase.

The Dubai Financial Services Authority has fined Vedas International Marketing Management US$ 100k for unauthorised and deceptive Financial Promotions related to the Multibank Group. It was alleged that Vedas Marketing directed the promotions to individuals located in the Dubai International Financial Centre. It had also engaged in misleading and deceptive conduct by representing that certain entities in the Multibank Group were regulated by the DFSA, when in fact, none of the promoted entities were. The DFSA made no allegations against the Multibank Group itself in the Decision Notice. In June 2024, Vedas challenged the conclusions in the DFSA’s Decision Notice by referring it to the Financial Markets Tribunal which directed that the reference should be struck out due to Vedas Marketing’s failure to pay the required filing fee for the referral.

Dubai Islamic Bank posted a nine-month pre-tax profit of US$ 1.64 billion, 23% higher on the year, with group net profit 13.0% higher at US$ 1.48 billion, driven by a 16.8% hike in total income reaching US$ 4.63 billion; net operating revenues grew 6.3% to US$ 2.48 billion. In Q3, DIB’s pre-tax profit was 32.1% higher at US$ 622 million, as impairment charges fell 62.4% to US$ 144 million. From the balance sheet, there were increases across the board:

  • Net financing and sukuk investments             up 7.0%          to US$ 77.95 billion
  • The bank’s balance sheet                               up 4.7%          to US$ 89.65 billion
  • Customer deposits                                          up 6.7%            to US$ 654.8 billion

Tecom Group posted record Q3 financials, with both revenue and net profit surging – by 12.0% to US$ 166 million, and by 20% to US$ 93 million; over the first nine months, the figures were up by 10% to US$ 463 million, and by 23% to US$ 257 million. According to its CEO, Abdulla Belhoul, the main drivers behind these impressive returns have been “high occupancy rates across our diversified portfolio of premium commercial, industrial, and land lease assets;” its current occupancy rate is 94%. So far in 2024, it has invested US$ 545 million, including a land bank of 13.9 million sq ft for industrial leasing at Dubai Industrial City and two operational Grade-A office buildings, as well as the launch of the Innovation Hub Phase 3 in Dubai Internet City.

Dubai Taxi Company posted a 13.0% annual hike, to US$ 436 million, in revenue during the first nine months of 2024, driven by positive performances across all its segments, that has been helped by Dubai’s positive macroeconomic environment, increased tourism and population growth. Net profit declined by 7.0%, to US$ 67 million, attributable to the introduction of corporate tax in the UAE and increased interest costs. Profit before tax and interest costs increased 19% year-on-year to US$ 87 million. There was a 20% year-on-year increase in earnings for interest, taxes, depreciation and amortisation, (with a 27% margin), to US$ 118 million. DTC’s taxi segment increased 12% on the year to US$ 379 million, attributable to an increased number of trips and average trip length, The company expanded its operating fleet by 8.5% to 5.66k at the end of September. Last month, a further 0.3k vehicles has been added and rolled out. The Company’s taxis and limousines completed thirty-six million trips – a 5% year-on-year rise during the period. Driven by demand and an increase in supply of vehicles. DTC’s bus segment posted a robust 27.0% growth during the period, with new service contracts secured and seventy-seven vehicles added to its fleet bus revenue.

Today, the DFM announced the completion of three major transactions involving Al Ansari Financial Services and Ajman Bank, totalling US$ 10.5 million involving thirty-five million shares. The first major transaction involved 29.1 million Al Ansari shares, valued at US$ 7.8 million, executed at a price of US$ 0.264 per share in a single trade, and the other involving  5.95 million Ajman Bank shares, valued at US$ 2.771 million, executed at a price of US$ 0.466 per share in two separate trades. It seems that these large direct transactions are executed outside the regular order book and do not impact the closing price of the respective shares, the price index, or the highest and lowest prices recorded during the trading session and over the past fifty-two weeks.

By last Sunday, Dubai had maintained its position as the GCC’s top performing equity market in October – for the fifth consecutive month – gaining 1.9% to close the month on 4,591 points; it was 13.1% higher YTD. Four out of the eight sectors posted growth during the month, with real estate the driving sector, growing 1.7%, with a little help from large-weighted Emaar Development (6.3%) and Deyaar Development (4.0%).  However, Taaleem was the stand-out October performer, gaining 11.3%. Over the month, National International Holding topped with a gain of 117.3%, followed by Dubai Insurance and Emirates Refreshment Company with gains of 31.8% and 25.1%, respectively. On the flip side, Takaful Emarat Insurance topped with a decline of 53.6%, followed by Emirates Investment Bank and Al Mazaya Holding Company, with declines of 16.7% and 13.5%, respectively.

The DFM opened the week, on Monday 04 November, two hundred and fifteen points (5.0%) higher the previous four weeks, gained a further 18 points (0.4%), to close the trading week on 4,639 points by Friday 08 November 2024. Emaar Properties, US$ 0.12 higher the previous fortnight, shed US$ 0.01, closing on US$ 2.40 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 5.27, US$ 1.71 and US$ 0.34 and closed on US$ 0.69, US$ 5.23, US$ 1.73 and US$ 0.34. On 08 November, trading was at three hundred and fifty-one million shares, with a value of US$ 151 million, compared to one hundred and twelve million shares, with a value of US$ 75 million, on 01 November.  

By Friday, 08 November 2024, Brent, US$ 2.66 lower (3.5%) the previous week, gained US$ 0.52 (0.7%) to close on US$ 73.30. Gold, US$ 7 (0.3%) lower the previous week, shed US$ 53 (2.0%) to end the week’s trading at US$ 2,693 on 08 November 2024. 

Iran has approved a plan to increase oil production by 250k bpd, with the oil ministry announcing, “Iran’s Economic Council has approved a decision to finance an urgent oil production increase plan using resources from the National Development Fund of Iran.” Iran is a member of OPEC and is responsible for 3.2 million bpd – about 3.0% of the global output.

Yesterday, and as widely expected, the BoE cut interest rates to 4.75% from 5.0%, but there is every chance that rates will not drop as quickly, as formerly thought, but could even go in the other direction if – and when – inflation creeps higher after last week’s heavy spending Budget. Last week’s Budget included plans to borrow an additional US$ 36.23 billion a year, as well as US$ 51.78 billion in tax-raising measures. The independent OBR and the BoE set out that as a result of Labour’s choices in the Budget last week inflation will be higher. This will be aided and abetted by the triple whammy of more public borrowing, a rise to 15% for employers’ national insurance and a higher national living wage. Even the BoE governor cautioned that rates were likely to “continue to fall gradually from here”, but they could not be cut “too quickly or by too much”. The consensus seems to be rates to dip to 3.5% by early 2026.

Later in the day, the US central bank reduced interest rates for the second time in a row – and only the second time in four years – with a 0.25% cut to 4.50%. US inflation fell to 2.4%, not far off the Fed’s 2% target, whilst the weakest jobs report of the Biden administration was posted in September. Unlike the BoE, the Fed is tasked with both maintaining price stability and maximum US employment and commented that the US economic activity has continued to expand at a solid pace and labour market conditions have generally eased.

Speaking at the opening ceremony of the fortieth edition of ADIPEC, the UAE Minister of Industry and Advanced Technology, Dr Sultan Ahmed Al Jaber says the energy sector needs an annual investment of US$ 1.5 trillion to meet the increasing energy requirements driven by AI. Within two years, it is expected that AI will utilise 4% of global energy – equating to the same amount of electricity use by all of Japan.  The minister also warned that no single source of energy is going to be enough to cater for this demand, noting that “wind and solar will expand seven times. LNG will grow by 65%. Oil will continue to be used for fuel and as a building block for many essential products. And as the world becomes increasingly urban, demand for electricity will double.” In January, the International Energy Agency estimated that, added together, data centres, cryptocurrency, and AI used almost 2% of global energy demand in 2022, and that demand for these uses could double by 2026.

The International Air Transport Association posted creditworthy September global air cargo figures continuing strong annual growth in demand which, when measured in cargo tonne-kilometres, rose by an annual 9.4%; this was the fourteenth consecutive month of growth. Capacity – measured in available cargo tonne-kilometres (ACTKs) – increased by an annual 6.4%; this was mainly attributable to the growth in international belly capacity, which rose 10.3% – which has posted double digit growth for the past forty-one months extending the trend of double-digit annual capacity growth to 41 consecutive months. Yields were also seen to be improving, up 11.7% in 2023 – and 50% above 2019 levels.

As part of their investigation, that started in November 2022, into tax fraud, a tie-up between French and Dutch authorities have raided Netflix offices in Paris and Amsterdam, the headquarters of the company’s operations in Europe and the MEA. The streaming giant has yet to comment on the raids, but insists it complies with tax laws wherever it operates. The French investigation is being carried out by the National Financial Prosecutor’s office, a special unit used for investigations into high-profile white-collar crime. The French investigation relates to suspicions of “covering up serious tax fraud and off-the-books work”; it is also under investigation for tax filings for three years to 2021. Last year, French media outlet La Lettre reported that until 2021, Netflix in France minimised its tax payments by declaring its turnover generated in France to the Netherlands; its annual declared turnovers in France in 2020 and 2021 were US$ 51.3 million and US$ 1.30 billion. The report also confirmed that the investigation was looking into whether Netflix continued to attempt to minimise its profits after 2021.

After striking for seven weeks, thirty thousand Boeing workers finally got what they wanted – a 38% pay rise, over the next four years, and a one-off US$ 12k bonus. The embattled plane maker is hoping that this finally draws a line in the sand and some sort of normalcy returns, after years of mishaps, mostly self-inflicted. Its current financial woes have been exacerbated by the strike, which has cost US$ 10.0 billion, whilst last month posted Q3 losses of US$ 4.0 billion. Last week, it launched a share sale to raise US$ 20.0 billion. Boeing’s chief executive, Kelly Ortberg, commented that “there is much work ahead to return to the excellence that made Boeing an iconic company.” She is spot on!

Having to cut costs in the face of declining sales, mainly in China, (with growing competition from local manufacturers), and the US – where inflation and high interest rates have hit sales of new vehicles – Nissan has announced 9k global retrenchments, as it reduces global production by up to 20%; it also cut its 2024 profit forecasts by 70%. (The carmaker employs more than 6k at its manufacturing plant in Sunderland and last year announced a US$ 2.6 billion plan to build three electric car models there). Its chief executive Makoto Uchida commented that “Nissan will restructure its business to become leaner and more resilient.” On the news today, shares on the Tokyo market ware trading 6.0% lower.

Privately-owned TriArtisan Capital Advisors, TGI Fridays, the American casual dining chain, has finally filed for Chapter 11 bankruptcy protection, following months of financial problems, and after a deal with UK-based Hostmore collapsed. In the bankruptcy filing, it listed both assets and liabilities in the range of US$ 100 million to US$ 500 million. TGI Fridays, owner and operator of thirty-nine domestic “Thank God it’s Friday!” restaurants, confirmed that they were still operational, adding that it had secured a financing commitment to support operations. Rohit Manocha, executive chairman of TGI Fridays, confirmed that “the primary driver of our financial challenges resulted from Covid-19 and our capital structure”, and “this restructuring will allow our go-forward restaurants to proceed with an optimised corporate infrastructure that enables them to reach their full potential.”  Following a decision by the UK restaurant operator not to buy TGI Fridays, and after it was removed as the manager of TGIF Funding, which owns the right to collect royalties from the restaurant chain franchise, Hostmore’s share value tanked 90% on the news, and then, last month, announced its intention to enter administration, overwhelmed by debt. It has been confirmed that normal operations will continue in all of the franchise locations both in the U.S. and internationally. TGI Fridays Franchisor, which owns the brand and intellectual property, has franchised TGI Fridays to fifty-six franchisees in forty-one countries. The restaurant operator said those stores are independently owned and are not part of the Chapter 11 process.

With Harland & Wolff desperate for a rescue deal, reports indicate that Spanish shipbuilder Navantia is in urgent talks, with the UK government, to negotiate more favourable terms for a deal to build three Fleet Solid Support ships (FSS) for the Royal Navy. In September, H&W collapsed into administration after the Starmer administration rejected their plea for taxpayer support. It seems that the Spanish company has been drip-feeding H&W, on a week-by-week basis, since the company’s filing for administration. If the deal were to go through Navantia would acquire all four of H&W’s shipyards in Belfast; Appledore in Devon Arnish on the Isle of Lewis; and Methil in Fife.

It is not too often that you seethe Competition and Markets Authority saying that a merger has “the potential to be pro-competitive for the UK mobile sector”, but now it has, with a reference to a potential US$ 19.47 billion merger of Vodafone and Three. It seems that the merger between two of the UK’s biggest mobile networks could get the green light – reliant on their commitments to invest in the country’s infrastructure. The competition watchdog also noted that it had “the potential to be pro-competitive for the UK mobile sector”, although earlier it had warned that the twenty-seven million users of mobile phone users could end up with more expensive bills if the merger went ahead. However, plans are in place to protect consumer pricing and boost network investment. To get the CMA’s seal of approval, both telecoms must commit to freezing certain tariffs and data plans for at least three years to protect customers from short-term price rises in the early years of the network plan. If the networks want the merger to go ahead, the watchdog requires Vodafone and Three to:

  • deliver a joint network plan to set out network upgrades and improvements over eight years
  • commit to keeping certain existing tariff costs and data plans for at least three years to protect customers from price hikes
  • commit to pre-agreed prices and contract terms so Mobile Virtual Network Operators (MVNOs) – mobile providers that do not own the networks they operate on – can obtain competitive wholesale deals

Pension trustees at NatWest Group have come to a deal, (thought to be the UK’s biggest-ever deal to outsource pension payments to a specialist insurance company), with Rothesay to outsource pension payments. It is reported that after fifteen years in partial taxpayer ownership, the bank is divesting roughly U$ 14.13 billion of its corporate pension scheme to Rothesay, the England cricket team’s Test match sponsor. Its group retirement scheme has about US$ 43.17 billion in assets, while it had roughly 190k members at the end of September.

The latest deal was disclosed – without reference to Rothesay – in NatWest’s third-quarter results statement published last month but has not been publicly reported.

Over the summer, Warren Buffett and Berkshire Hathaway divested 25% of their Apple portfolio, noting that it had sold, in Q3, about one hundred million of his previous four hundred million shareholding. However, it still retains being Apple’s largest investor at US$ 69.9 billion. Over the period it sold US$ 36.1 billion worth of stock – and only acquired US$ 1.5 billion worth of shares. Over the previous seven quarters, it had been a net seller of stocks. Furthermore, the firm also conducted no stock buybacks for the first time since Q2 2018, and did not repurchase stock in the first three weeks of October. The message to the average punter is that if Warren Buffet is selling, then he must have concerns that the market may be on the turn – or he thinks that some stocks have become too expensive – otherwise he would not be holding on to a record US$ 325.2 billion in cash; another reason is a possible change in CGT. interestingly, the nonagenarian has made no major acquisitions of whole companies for his US$ 975 billion company since 2016.

There are reports that KKR, one of the world’s largest investment firms, which has more than US$ 550 billion of assets under management, is in discussions in talks with embattled Thames Water to save the utility from possible liquidation and nationalisation. It seems that the US global investment firm, which currently owns 25% of Northumberland Water, is considering participation in a US$ 3.88 billion share sale as part of a recapitalisation plan to save the utility, that is saddled with US$ 24.55 billion of debts. Other interested parties include Carlyle and Castle Water, the latter of which is controlled by Graham Edwards, the Conservative Party treasurer, and Global Infrastructure Partners, which is owned by BlackRock, Brookfield and Isquared. The share sale process is being run in parallel to an attempt to raise up to US$ 3.88 billion in debt financing from hedge funds and other investors.

In true Australian parlance, Prime Minister Anthony commented that “social media is doing harm to our kids and I’m calling time on it,” and “I’ve spoken to thousands of parents, grandparents, aunties and uncles. They, like me, are worried sick about the safety of our kids online.” He said the age limit would take effect a year after the law is passed, with platforms – including Facebook, Instagram, X, TikTok and possibly YouTube – using those twelve months to work on how to exclude Australian children under sixteen. There is no doubt other major powers will take great interest on how the government can actually ban children under the age of sixteen from social media. Albanese added that:

  • platforms will be penalised for breaching the age limit, but underage children and their parents will not
  • “the onus will be on social media platforms to demonstrate they are taking reasonable steps to prevent access. The onus won’t be on parents or young people”
  • there will be no exemptions for children who have parental consent, or who already have accounts

In its latest report, (for the fiscal year ending 30 June 2023), The Australian Tax Office noted that 1.0% of companies did not pay a cent in tax for various reasons, including companies making an accounting loss or claiming tax offsets that reduced their tax bill to zero. It also noted – and named – 1.2k large companies that paid no tax. The ATO confirmed that, in the current tax year, it had issued one hundred and twenty-four companies tax assessments to the value of US$ 1.81 billion, with twenty-four, (19.4%) of those accounting for US$ 1.64 billion of that total. About US$ 1.46 billion, (80.4%), of the total was being disputed, by fourteen different taxpayers, and some of that money has been paid to the ATO under what’s known as a 50:50 arrangement.

The ATO’s tenth corporate tax transparency report, which covers 3,985 entities, (46.9% or 1,272 higher on the year), that lodged tax returns in 2022–23, found that while the amount of tax collected increased due to higher mining and oil and gas company profits, there were still 1,253 entities (31.4%) that did not pay tax. It is the first year that data for Australian-owned private entities, with total income between US$ 66 million, (AUD 100 million), to US$ 132 million, is being reported, which is why there is now close to 4k entities included in the report. Of that total, 2,732 (69%) entities actual paid tax, with the balance of 1,251 not paying for various reasons.

Of the 3,985 corporate entities covered:

  • 1,646 are foreign-owned companies with an income of US$ 66 million, (AUD 100 million) or more
  • 600 are Australian public entities with an income with US$ 66 million or more
  • 699 are Australian-own resident private companies with an income of US$ 132 million or more
  • 1,040 are Australian private entities with income between US$ 66 million and US$ 132 million

Of all the entities included in the report, their total taxable income was 11.3% higher at US$ 252 billion, and of that total, the ATO collected a 16.7% increase to US$ 65.0 billion, from 69% of entities that did paid tax. More than one hundred Australians earned more than US$ 660k, yet paid no tax in 2021–22. The mining sector paid more tax than all other sectors combined, paying more than five times than they did in 2014-15, as the “mining, energy and water” segment accounted for 55.9% (US$ 36.1 billion) of the total, 29.5% higher on the year. The other two sectors with high “contributions” were “wholesale, retail and services” and “banking finance and investment” with totals of US$ 12.6 billion and US$ 10.6 billion. The ATO also published a list of tax paid by all large corporations.

The ATO, along with a further one hundred and forty nations, has welcomed the Organisation for Economic Cooperation and Development’s “Global Minimum Tax” deal, to ensure companies globally pay a minimum effective rate of 15% on corporate profits: at the same time, it notes “it’s not going to solve Australia’s global profit shifting issues” – not helped that the Australian tax is double at 30%. It seems that the ATO is focussing on global profit shifting companies that “misprice” or “mischaracterise” during cross border dealings.

With Donald Trump’s presidential election victory, the financial world was hit by the treble whammy of US shares hitting record high, the greenback posting its biggest gain in eight years against pound sterling, to 1.289, and bitcoin topping record highs at US$ 75.4k, with Trump promising to make the US the “bitcoin and cryptocurrency capital of the world”. However, on the flip side, many analysts are looking at both inflation and interest rates nudging higher. On the news of his victory last Wednesday, markets and currencies around the world have shifted sharply following the US election news:

  • The dollar was up by about 1.75% against a host of different currencies, including the pound, euro and the Japanese yen
  • The major US stock indexes soared as trading opened, with banks performing particularly well
  • The pound sank 1.41% against the US dollar to its lowest level since August
  • The FTSE 100 index, comprising the largest companies listed in the UK, was up 0.1% on Wednesday afternoon
  • The euro dived 2.24% against the US dollar to its lowest level since June
  • In Japan, the benchmark Nikkei 225 stock index ended the session up by 2.6%, while Australia’s ASX 200 closed 0.8% higher
  • In mainland China, the Shanghai Composite Index ended 0.1% lower, while Hong Kong’s Hang Seng was down by around 2.23%

With the election duly won, there is speculation that Donald Trump may want to change the head of the US central bank. When President, he had appointed Jerome Powell as chairman of the Federal Reserve in 2017, but soon fell out with him and the Fed. During his first term, Trump called bank officials “boneheads” on social media and reportedly consulted advisers about whether he could fire Mr Powell. Following the Fed meeting yesterday and in answer to a question, Powell said he would not step down if Trump asked and that it is “not permitted under law” for the White House to force him out. The independent agency’s future becomes uncertain under a second Donald Trump presidency. For example, he has promised interest rates would go down under his presidency, something he does not have power over while the Fed operates independently of government. Furthermore, US politicians tend to avoid comments about monetary policy to respect the Fed’s independence.

Furthermore, the “Make America Great Again” president will probably be quick off the mark to dramatically increase trade tariffs, especially on China, and also the eurozone and the UK economies. There is every chance that the UK would be dramatically impacted, with some economists forecasting that the country’s economic growth would slide from 1.2% to 0.4%.

One of the main throwbacks of last week’s UK budget was the Chancellor’s plans for increasing employer NI. Some of the amendments to NI had been trailed prior to last week’s announcement as Rachel Reeves not only raised the rate, by 8.7%, that companies had to pay from 13.8% to 15.0% but also lowered the threshold, by 45%, from US$ 11.8k to US$ 6.5k. Companies to pay NI at 15% on salaries above US$ 6.5k from April, up from 13.8% on salaries above US$ 11.8k. This is expected to raise an additional much needed US$ 32.44 billion a year for the exchequer – but at what cost? As last week’s blog noted:

“Although most employees may not notice an immediate change in their pay, larger businesses will be impacted as they contribute more to fund public services, which employers will have to recover either from employees (loss of job and pay reductions) or consumers (increased prices)”.

In one step, the Starmer administration managed not only to spook financial markets but also to give many business leaders sleepless nights as they digested the cost.  Rachel Reeves, the Chancellor, unnerved business leaders by saying she would raise an additional US$32.44 billion annually by hiking their national insurance contributions. Her lowering of the threshold, to just US$ 6.5k, will probably result in a wave of redundancies and even insolvencies across labour-intensive industries, including the retail and hospitality sectors, where part-time employees predominate. To make matters worse, the Office for Budget Responsibility, assuming that initially employers would absorb 40% of the increase in lower profits and the balance by a combination of lower wages and higher price, the increase in revenue would come in at a lower US$ 20.81 billion.

There are some who think that the budget will be the driver behind a further rise in inflation which had only dipped below the BoE 2.0% target. It seems that leading retailers could be hit by at least US$ 130 million after the employer NI contribution rose 1.2% to 15.0%. It seems the only option would be price rises as current margins are almost wafer thin. This despite the Chancellor commenting that “businesses will now have to make a choice, whether they will absorb that through efficiency and productivity gains, whether it will be through lower profits or perhaps through lower wage growth”. The grocery industry is expected to be among the hardest-hit by the changes to employer NICs, particularly after the chancellor slashed the threshold at which businesses become liable for it to just US$ 6.5k., from the current US$ 11.8k.

The honeymoon is well and truly over for the Labour administration, not helped by last week’s budget. Business Secretary, Jonathan Reynolds, called a private virtual meeting last Monday, with representatives of some leading retail and hospitality companies, including Burger King UK, Fuller Smith & Turner, Greene King, Kingfisher and the supermarket chain Morrisons. It is reported that the minister had acknowledged that Rachel Reeves inaugural fiscal statement had “asked a lot” of British business. Several attendees voiced their concern and the impact of employers’ national insurance (NI) contributions on their finances. They included the chief executive of Greene King, who highlighted that the increase in employers’ NI contributions would cause “a £20m (US$ 26 million) shock” to the company, while Fullers is understood to have warned that it would be forced to halve annual investment from US$ 78 million to US$ 39 million, as a result of increased cost pressures. On top of that, the Morrisons chief executive commented that the budget had exacerbated “an avalanche of costs” for businesses next year, and asked what the government could do to mitigate them. Sources also noted that the CBI, the employers’ group, said its impact would be “severe”, while the British Beer & Pub Association added that there was now a disincentive to invest and flagged “a tsunami” of higher costs.

Trump’s revival has given both the new Prime Minister, and his Foreign Secretary, something to think about. David Lammy is on record stating that “Donald Trump was a racist KKK and Nazi sympathiser” and described him “as a tyrant and a woman-hating, neo-Nazi sympathising sociopath” and a “tyrant in a toupee”. In a vain attempt to defend himself, the Foreign Secretary said his comments were “old news” and many politicians had said some “pretty ripe things” about Trump in the past. He added that “I think that what you say as a backbencher and what you do wearing the real duty of public office are two different things”. What a tosser!

In June 2018, he tweeted: “Humanity and dignity. Two words not understood by President Trump.” The following year, he said: “An endorsement from Donald Trump tells you everything you need to know about what is wrong with Boris Johnson’s politics.” Commenting on Joe Biden and Kamala Harris’ victory in the 2020 US election, Sir Keir said: “their victory is one for hope and unity over dishonesty and division”, and “It is a chance to reassert America’s place as a force for good on the world stage.” Records show that in 2016 Kier Starmer was not a fan of the US president even before he took the top job  in 2016 when he said, “We are united in condemning the comments of Donald Trump on issues such as Mexican immigrants, Muslims and women,” adding that comments made by Mr Trump were “absolutely repugnant,” and that “Of course I would not want to have Donald Trump round for dinner to express his views”.

This week we have seen both two-faced men putting on their new visages, now they realise the The Man Is Back In Town!

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A Rush Of Blood To The Head!

Posted on November 2, 2024 by howesdubai

A Rush Of Blood To The Head!                                                  01 November 2024

This week, The Dubai Real Estate Sector Strategy 2033 was launched, outlining a focused roadmap to elevate the sector’s economic impact on the emirate by significantly increasing transaction volumes and reinforcing its appeal as a premier destination for international investors. In the first nine months of 2024, the real estate sector posted over 163k transactions, valued at US$ 148.23 billion. It is noted that there is always concern that when records continue to be broken, the sector may become overheated, and speculation takes over. This time, the market is at a mature stage, so that growth is being managed and controlled and kept within set limits.

The newly-released Dubai Real Estate Sector Strategy 2033 contains the following KPIs:

  • doubling the real estate sector’s contribution to Dubai’s GDP to approximately US$ 19.89 billion
  • increasing home ownership rates to 33%
  • growing real estate transactions by 70%
  • raising the market value to US$ 272.48 billion
  • expanding the value of Dubai’s real estate portfolios twenty times to US$ 5.45 billion

The strategy aims to inspire a transformative shift in Dubai’s real estate sector by fostering sustainability and solidifying Dubai’s role as a regional and global leader in real estate. Investing in Dubai extends beyond property acquisition – it offers a high-quality lifestyle, further enhancing market appeal and attracting long-term investment.

As posted in a recent blog, CBRE noted that there were more than 125k residential transactions in the nine months to September 2024 – 36% higher, compared to the same period a year earlier, driven by a 50%+ annual growth rate in the number of off-plan transactions, with no obvious slowdown for the immediate future. More than half of Dubai’s real estate sales are now off-plan, attracting investors, for quick handover, with 22.6k off-plan unit launches occurring in Q3; in that quarter, Allsopp & Allsopp estimated that off-plan sales accounted for 56.5% of market activity in Dubai, fuelled by unprecedented demand and a lack of supply of readily available property. Other property players opine that many end-users, who initially bought off-plan units intending to reside in them, are also choosing to sell, driven by the substantial returns such assets yield, noting that the majority of off-plan resales these days are for properties that are within twelve months of completion. However, it appears the days of flipping are well and truly over because the Dubai realty sector is now a more mature marketplace, with the days of some 100% mortgages, along with generous long-term payment terms, consigned to history books.  Furthermore, the markets are well aware that what was experienced in the mid-2000s are long gone, thanks to more informed investors and self-regulating controls by developers, with many of them – including Emaar Properties, Nakheel, Dubai Properties, Meraas and Dubai Holding – owned, or majority-owned, by the emirate’s government. In addition, some developers have imposed more stringent payment conditions, such as 50% of the total property payment must be made before any subsequent transactions are permitted. There is also no doubt that strings are being pulled by the regulators, as well as developers themselves, controlling and better managing the supply side of the equation which reduces the chance of a property bubble forming, as had been the case in the past when the supply tap was switched on willy-nilly.

Despite regional instability and geopolitical conflicts in Palestine, the Lebanon and the Red Sea, Dubai’s property sector has shown its resilience, attributable to demand from local and international investors and several progressive visa reforms that have provided stability. This week, S&P came out with (some may think questionable) findings that the market will maintain its stability, at least until H2 2026, which could be followed by a marked stabilisation of prices because of the increased supply of new housing units. The fear is that if the expected number of units, some 182k, which the agency expects to be handed over in the next two years, it could saturate the unfulfilled demand, and lead to lower prices and rents; this figure is more than double the average annual supply of the preceding five years. The study noted that the pace of new launches will decrease over the next twelve – twenty-four months, as the market absorbs the supply so far but that this does not seem sustainable over the long run. Some analysts will consider that S&P have been far too conservative in their approach, and this is one observer who thinks that this particular cycle has at least thirty months before it runs out of steam. Even then, the market will not crash, as has been the case in the past.

According to Property Monitor’s September report, new off-plan development project launches remained at record highs, with just over 13.5k off-plan units added to the market for sale, with an anticipated combined gross sales value of US$ 7.87 billion. During the first nine months, new project launches reached slightly less than 100k units and US$ 66.13 billion, in aggregate sales value. This surpasses the volume of units launched in 2023, however, falls short by US$ 8.17 billion in sales value by comparison.

Reports indicate that all but two of the twenty-four uber-luxury villas to be built on Amali Island, located on the World Island, have been sold. It is estimated that twelve of the villas were priced around US$ 13.6 million, (AED 50 million), nine at US$ 20.4 million, (AED 75 million), two at US$ 27.2 million, (AED 100 million) and one at US$ 54.5 million, (AED 200 million).  The three most expensive villas were sold in one deal. If someone wants to live on “the Maldives in Dubai”, the last two villas are available – one at US$ 13.6 million and the other at US$ 20.4 million. Amira Sajwani, COO and co-founder of Amali Properties, noted that“the diversity of nationality that we have on the island is incredible. We have a real mix of buyers. There is an increase in British buyers. Then there are Indians, Pakistanis, Lebanese and Cypriots,” adding that “across the buyers, we do have some special newsworthy names. We have an international footballer who purchased a villa matching his jersey number.”  Answers on a postcard.

As part of its vision to double its project portfolio to over US$ 27.25 billion in the next eighteen months, Binghatti Developers has launched ‘Binghatti Skyrise’; it is reported that 50% of the development sold out in the first twenty-four hours. The project, located in Business Bay, will comprise 3,333 residential units, including two thousand, two hundred and fifty-six studios, nine hundred and ninety-six one-bedroom units, twenty-four two-bedroom units, twenty-six three-bedroom units, and thirty-one retail spaces. Future residents will be able to enjoy over fifteen high-end amenities, including luxury swimming pools, a private golf course, tennis courts, a fully equipped gym, kids’ water park, and dedicated yoga and relaxation areas. With the addition of Binghatti Skyrise, Binghatti’s portfolio now exceeds US$ 10.90 billion.

A US$ 190 million Roads and Transport Authority contract has been awarded to construct five bridges, spanning a total of 5k metres for its Trade Centre Roundabout Development Project; it will also convert the existing roundabout into a surface intersection to improve the flow of traffic inbound from Sheikh Zayed Road to 2nd December Street and the southbound traffic from Al Mustaqbal Street to Sheikh Zayed Road. Mattar Al Tayer, Chairman of the Board of Executive Directors stated, “The Trade Centre Roundabout Development Project is part of a broader development plan that also includes the Al Mustaqbal Street Development Project, which will be awarded this November. This project will double the intersection’s capacity, cut the delay time from 12 minutes to 90 seconds, and shorten the travel time from Sheikh Zayed Road to Sheikh Khalifa bin Zayed Street from six minutes to just one minute.” The DWTC Roundabout Development Project is being undertaken concurrently with another road development project in the area. RTA has recently awarded the contract for the Oud Metha and Al Asayel Streets Development Project, which includes upgrading four major intersections and constructing bridges, spanning 4.3k mt, along with roads extending 14 km.

In his capacity as the Ruler of Dubai, HH Sheikh Mohammed issued Decree No. (62) of 2024 on the Board of Directors of the Dubai Electronic Security Center, chaired by Awad Hader Al Muhairi. Accordingly, Tamim Mohammed Al Muhairi will serve as Vice Chairman, with other Board members including Hamad Obaid Al Mansoori, Tariq Mohammed Al Muhairi, Saeed Al Muhairi, Ayesha AlWari, along with the CEO of the Center. This Decree is effective from the date of its issuance and will be published in the Official Gazette.

Tuesday saw the twenty-fifth anniversary of Dubai Internet City which was unveiled to the business/IT world by HH Sheikh Mohammed bin Rashid on 29 October 1999. At the time, it was a revolutionary move, but it has evolved into a vibrant hub for multinational corporations, start-ups, and Fortune 500 companies. It is now home to over 4k mainly IT businesses, employing some 31k professionals, and has become a leading global hub for innovators. It has been a launchpad for tech pioneers and a leader in the regional digital economy, with its MD, Ammar Al Malik, noting that “for twenty-five years, we’ve enabled impactful innovation and contributed significantly to digital transformation, particularly in AI and advanced technologies.”

The UAE has signed its latest Comprehensive Economic Partnership Agreement with Vietnam, which will open new avenues for economic cooperation for both countries. As with the other CEPAs, already signed, the agreement features a tariff reduction and elimination of up to 96% across customs tariff lines. The UAE Minister of State for Foreign Affairs, Dr Thani Al Zeyoudi, noted that the initiative comes in light of the significant potential to increase non-oil trade between the two nations, and that the agreement will contribute to launching a new era of bilateral cooperation and stimulating sustainable growth of the economies of both countries. Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, indicated that “by removing trade barriers and improving market access, this agreement will not only boost bilateral trade but also create new investment opportunities, supporting growth, diversification, and solidifying our position as a global hub for trade and investment.” Vietnam is recognised as a strategic partner and a leading economic power in Asia. With Vietnam’s 2025 GDP expected to increase by 6.0% higher to almost US$ 500 billion, the country offers significant potential for UAE exporters and investors which will be helped by this CEPA.

Dubai’s 2025-2027 budget was approved this week by HH Sheikh Mohammed bin Rashid which he announced on his X account:

“Today, we approved Dubai Government’s budget for 2025-2027, with revenues of AED 302 billion, (US$ 82.29 billion) and expenses of AED 272 billion, (US$ 74.11 billion), marking it as the largest budget in the emirate’s history. A substantial 46% of next year’s budget is allocated to major infrastructure projects, including roads, bridges, energy, and water drainage networks, alongside the construction of a new airport. A 30% of the budget is dedicated to health, education, social development, housing and other essential community services”

“Next year’s budget will achieve an operating surplus of 21% of total revenues for the first time, aiming to establish long-term financial sustainability for the Government of Dubai” 

“This year, we also launched a AED 40 billion, (US$ 10.90 billion), portfolio for public-private partnerships. Our goal is to preserve and safeguard our financial surpluses for future generations. Maktoum bin Mohammed is leading this dossier with competence, and we reaffirm our confidence in him and his team. Dubai moves confidently toward the future, with solid, resilient, and sophisticated financial sustainability. The next phase promises even greater progress, and the best is yet to come”

With expenditure for the fiscal year 2025 at US$ 23.50 billion, and revenue of US$ 26.61 billion, the budget shows a US$ 3.11 billion surplus. The budget also includes a general reserve of US$ 1.36 billion in revenues, underscoring the emirate’s commitment to supporting development projects, stimulating the overall economy, and achieving the ambitious goals of the Dubai Plan 2030, the Dubai Economic Agenda D33, and the Quality-of-Life Strategy 2033.

More than eight years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee, in 2020. The controls were removed in March 2021 to reflect the movement of the market once again. Today, retail prices saw slight increases, after average 8.6% October reductions. The breakdown of fuel prices for a litre for November is as follows:

  • Super 98      US$ 0.749   from US$ 0.725   in Nov (up by 3.0%)        down 2.5% YTD  US$ 0.768     
  • Special 95    US$ 0.717   from US$ 0.692   in Nov (up by 3.5%)        down 2.8% YTD  US$ 0.738         
  • E-plus 91     US$ 0.695   from US$ 0.673    in Nov (up by 3.3%)        down 3.3% YTD   US$ 0.719
  • Diesel           US$ 0.727   from US$ 0.7.08    in Nov (up by 2.7%)       down 11.0% YTD US$ 0.817

Dubai Aerospace Enterprise Ltd is to invest US$ 500 million to acquire ten narrow-body, next-generation aircraft on lease to four airlines in four countries. Furthermore, DAE has initiated and managed the purchase and sale of equity interests in thirty-six managed aircraft from existing investors to new investors, managed for institutional investors by its own Aircraft Investor Services division, that also supports a global investor base in managing over one hundred aircraft across various investment strategies. Firoz Tarapore, CEO of DAE, commented, “we look forward to welcoming a new airline customer to our lessee base, as well as further deepening our relationship with another three airline customers” and that “we are continuing to expand our footprint, managing a diverse pool of assets for multiple investors”. All aircraft are expected to close by the end of 2024.  It also posted financials for the nine months to 30 September – with total revenue 2.8% higher, at US$ 1.02 billion, with operating profit, (before exceptional items), up 10.2% to US$ 512 million and profit before tax an impressive 57.4% higher at US$ 327 million. At the end of the period, total assets had risen by 4.1% to US$ 12.771 billion.

In an effort to improve service quality and to adapt to global developments, The Ministry of Energy and Infrastructure has announced a marked reduction in bureaucracy, by eliminating over 745k government procedures across twenty-one services, resulting in a 75% decrease in service delivery time. On top of these amendments, it is estimated that twenty-one million hours have been saved by customers and visits to the Ministry cut by 75%.

With consolidated revenue, profit and EBITDA, all heading north in the nine months to 30 September, by 9.0% to US$ 11.63 billion, by 9.0% to US$ 817 million and to US$ 5.29 billion, e&’s telecom footprint was extended to twenty countries, bringing its overall reach to thirty-eight markets.  In Q3, revenue, net profit and EBITDA came in 10.0% higher on the year, at US$ 3.92 billion, US$ 817 million and US$ 1.77 billion. Earnings per share for the period and Q3 were US$ 0.264 and US$ 0.093.  Its total subscriber base rose 6.0% to 177.3 million, with a 5.0% increase in the total number of e& UAE subscribers to 14.7 million.Over the period, the telecom completed the acquisition of a controlling stake in PPF Telecom Group, (its first foray into Central and Eastern Europe), further expanding its global horizon, impacting the lives of over one billion people across the MEA, Asia, and now parts of Europe.

Emirates Integrated Telecommunications Company PJSC (du) announced its Q3 financial results, with growth recorded across the board – revenue by 9.1% to US$ 981 million, EBITDA by 16.9% to US$ 463 million, (with a record 48.3% EBITDA margin), and net profit by an impressive 42.7% to US$ 191 million, (its highest quarterly profit in more than three years). This growth, coupled with solid performances in both local and international markets, drove consolidated net profit to reach US$ 2.32 billion, up 10.0%, during the first nine months. Furthermore, consolidated EBITDA reached US$ 5.29 billion, resulting in an EBITDA margin of 45%.

In the nine months to 30 September, Mashreq posted a pre-tax, 9.0% annual increase in net profit of US$ 1.77 billion – and this despite a US$ 136 million increase in corporate income tax; however, a 13.0% surge in net interest income, allied with a 21.0% year-on-year increase in non-interest income, helped the cause. The three main drivers were strong business growth, with healthy margins, the benign interest rate environment, and relative low risk costs. In Q3, there were increases noted for both customer deposits, (7.0%) and lending (12.0%).

The DFM opened the week, on Monday 28 October, seventy-three points (1.8%) higher the previous three weeks, gained a further 142 points (3.2%), to close the trading week on 4,621 points by Friday 01 November 2024. Emaar Properties, US$ 0.03 higher the previous week, gained US$ 0.09, closing on US$ 2.41 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 5.20, US$ 1.66 and US$ 0.34 and closed on US$ 0.68, US$ 5.27, US$ 1.71 and US$ 0.34. On 01 November, trading was at one hundred and twelve million shares, with a value of US$ 75 million, compared to ninety-six million shares, with a value of US$ 59 million, on 24 October.  

The bourse had opened the year on 4,063 and, having closed on 31 October at 4,591 was 528 points (13.0%) higher YTD. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, and has gained US$ 0.21, to close YTD at US$ 2.37. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started the year on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed YTD at US$ 0.68, US$ 5.18, US$ 1.70 and US$ 0.35.

By Friday, 01 November 2024, Brent, US$ 2.41 higher (3.3%) the previous week, shed US$ 2.66 (3.5%) to close on US$ 73.30. Gold, US$ 92 (3.4%) higher the previous three weeks, shed US$ 7 (0.3%) to end the week’s trading at a record US$ 2,746 on 01 November 2024. 

Brent started the year on US$ 77.23 and shed US$ 4.42 (5.7%), to close 31 October 2024 on US$ 72.81. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 676 (32.6%) to close YTD on US$ 2,750.

Monday saw oil global crude benchmark Brent prices tank more than 4.3% after Israel’s strikes on Iran – and this despite avoiding Tehran’s energy infrastructure; Iran said the strikes caused “limited damage”. Iran accounts for up to 4.0% of global oil supplies and if its oilfields had been hit, then oil prices would have moved north very quickly.

September IATA figures show that ME carriers posted a 4.4% year-on-year increase in demand, whilst the capacity of the regional carriers rose by 4.6%; load factors dipped 0.1% on the year to 81.4%. A regional breakup sees:

Asia-Pacific           plus 18.5% demand              plus 17.7% capacity         plus 0.5% to 82.6% load factor

Europe                     plus 7.6%                             plus 7.4%                                  plus 0.2% to 85.0%

N America              plus 0.5%                               plus 1.9%                                  minus 1.1% to 84.4%

Latin American    plus 12.4%                            plus 13.9%.                              minus 1.1% to 84.3%

Africa                       plus 11.9%                            plus 6.6%                                 plus 3.6% to 76.0%

In September, total demand, international demand and capacity, measured in revenue passenger kilometres was up 7.1%, 9.2% and 3.7% on the year compared to a year earlier. Total capacity, measured in available seat kilometres was up 5.8%, 9.2% and 3.7% on the year, with load factor, up 1.0%, at 83.6%, 0.1% at 83.8% and 2.4% at 83.3%.

In a bid to strengthen its finances –  and to preserve its investment-grade credit rating – embattled Boeing launched a stock offering that could raise up to US$ 24.3 billion; it was offering 112.5 million shares in common stock, and US$ 5.0 billion in mandatory convertible securities, after their finances continue to suffer greatly from the ongoing strike which has halted production of models including its cash-cow 737 MAX aircraft. The plane maker said it had priced its stock offering at US$ 143 per share, a 7.75% discount to its close on Friday, before the deal was announced. Boeing shares closed 2.8% lower at $150.69 on Monday. Boeing has never fallen below the investment-grade rating – you never know what can happen to this company that has tripped from one crisis to another! Last week, the company reported a US$ 6 billion Q3 loss and said it would burn cash next year, as the strike is costing Boeing at least US$ 1.0 billion every month.

It has taken BHP and Vale nine years to agree to a US$ 30 billion settlement with the Brazilian government for the 2015 Mariana dam collapse that caused the country’s worst environmental disaster; the dam was owned by Samarco, a JV between Vale and BHP. With its collapse, toxic waste and mud flooded nearby towns, rivers and forests which killed nineteen and left hundreds of others homeless and poisoned the river. During the intervening period, a foundation was established to compensate people; it has already carried out billions of dollars’ worth of repairs, including building a new town to replace one of the towns that was destroyed. However, not everyone has been satisfied with the response and there are other legal proceedings in Brazil, and more than 620k people had taken BHP to court in the UK, where BHP was headquartered at the time, seeking about US$ 47.0 billion in damages in the civil trial that started last week; about 70k complainants are also taking Vale to court in The Netherlands.

As part of its major overhaul of its stores, M&S will introduce larger self-service conveyor belt checkouts in some of the food halls, as well as adding self-checkouts to its changing rooms across one hundred and eighty clothing stores; it expects to have them installed in more than one hundred stores by early 2028. The retailer noted that “we’d like customers to be able to walk straight into the fitting room, with no queue, try on what they’ve chosen, then pay there and just walk out.” Coincidentally, these moves came at the same time its chairman, Archie Norman, noted that theft among middle-class customers was “creeping in” because of faulty self-checkouts.

Following a one year of it having launched its anti-subsidy probe, the EC will set out extra tariffs ranging from 7.8% for Tesla to 35.3% for China’s SAIC, on top of the EU’s standard 10.0% car import duty; they took effect on Wednesday, 30 October. This move has not only irked Beijing to consider retaliatory measures but has split the European car making nations; Germany, the EU’s biggest economy and major car producer, opposed tariffs in a vote this month in which ten EU members backed them, five voted against and twelve abstained. The argument for tariffs is that they will counter what it says are unfair subsidies, including preferential financing and grants as well as land, batteries and raw materials at below market rates. It also notes that China’s annual spare production capacity of three million EVs is twice the size of the EU market. China has a choice to either target the US and Canadian markets, where they have to already pay 100% tariffs or target the “cheaper” European market. The China Chamber of Commerce is not well pleased of the “protectionist” and “arbitrary” EU measures as well as being dismayed by the lack of substantial progress in negotiations. As a riposte, Chinese regulators, in the first nine months of 2024, China’s EV exports to the EU were 7.0% lower on the year, but did surge by more than a third in August and September, ahead of the tariffs. Beijing launched its own probes this year into imports of EU brandy, dairy and pork products in apparent retaliation, and has also raised the issue with the WTO. It is estimated that a Chinese vehicle is on average 20% lower than its European counterpart and that their market share has risen from 1% in 2019 to its current level of 8% and could touch 15% next year.

Although Tesla sold more EVs than its Chinese rival in Q3, BYD’s actual revenue surpassed that of the US company’s for the first time ever; its US$ 28.2 billion revenue stream was 11.9% higher than Tesla’s US$ 25.2 billion return. The 24% annual revenue increase came on the back of the government subsidies to encourage consumers to trade their petrol-powered cars for EVs or hybrids. Latest figures show that 1.57 million applications had been submitted for a national subsidy of US$ 2.8k per each older vehicle traded in for a greener one.

There was inevitability that Reaction Engines, the British hypersonic aviation pioneer, would crash into administration, after weeks of talks with potential backers failed to result in a rescue deal. Several weeks ago, hopes were that US$ 26 million funding would be sourced from the UAE’s Strategic Development Fund, but with main shareholders, BAE Systems and Rolls-Royce Holdings, unwilling to provide enough capital to bail the company out, the UAE link soon lost interest. Thirty-five of Reaction’s staff have been retained temporarily at its Oxfordshire base “to complete a number of existing orders and support in winding down operations,” with one hundred and seventy-three being made redundant yesterday, 31 October.

Shell posted higher than expected Q3 profits of US$ 6.03 billion, (but 3.0% lower, when compared to the same period in 2023), with LNG sales, 13.0% higher, a drop in debt and strong cash flow, offsetting a 70% slump in oil refining. The company said it would buy back a further US$ 3.5 billion of its shares, before the end of January 2025, at a similar rate to the previous quarter. Its dividend was unchanged at US$ 0.34 per share. Net debt dropped to its lowest in nine years at US$ 35 billion, while its debt-to-market capitalisation ratio declined 1.6% to 15.7% from 17.3% a year earlier. Shell shares were up 1.1% in early London trading. Meanwhile TotalEnergies’ Q3 profits were at a three-year low of US$ 4.1 billion, attributable to collapsing refining margins and upstream outages, The same outcome befell BP which posted a 30% decline in Q3 profits to US$ 2.3 billion – its lowest in almost four years.

The Albanese government has brought to an end a fifty-year business of live sheep exports to ME markets, such as Kuwait, which will permanently stop by the end of 2028. The ME importers are duly concerned about the economic damage that this move will have on their business, including the Kuwait Livestock Transport and Trading Company which says local demand for processed meat does not match live sheep; consequently, it will continue to import live animals from other countries.  The state-backed KLTT is the main importer of sheep, mainly from WA, and is responsible for sending them across the region. Its acting chief executive, Ahmed Ayoub, noted that the ban would have a huge impact in the ME, and that “we are really not very happy with this decision that Australia made,” adding “it’s very disturbing for us to end the business like that … after fifty years of working with Australia.” It is not only the ME players who are upset with this move, but it also impacts Australian sheep farmers; the federal government has set up a US$ 92 million support package for affected farmers. 2023 bilateral trade between the countries reached US$ 330 million, according to the Department of Foreign Affairs and Trade, with Australia exporting not only sheep, but also barley, dairy and fruit, and importing petroleum products and fertiliser. The federal government said the export frozen boxed meat would take the place of the live trade, but Mr Al Majed said it was not what consumers wanted, or a practical choice for the region, with “the majority of the people, they don’t prefer to have frozen or chilled meat … they want fresh meat.”

With its deal to acquire Premier Investment’s clothing division Apparel Brands, Myer now has ownership brands such as Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E, which will give the major Australian department store seven hundred and eighty stores across Australia and New Zealand, with 17.3k employees. Premier will retain its Smiggle stationery brand and sleepwear label Peter Alexander. The deal will see Myer issue new shares to Premier, which it will distribute to its investors, equating to more than 51% of its shareholding.

Another iconic Australian fashion entity, Mosaic Brands, with 3k employees and seven hundred stores, including Rivers, Katies, Millers and Noni B, has entered voluntary administration. In September, Mosaic posted that it would shut down five of its brands – Rockmans, Autograph, Crossroads, W.Lane and BeMe – adding that this could “capitalise on and invest in” these brands, as part of a broader operational restructure. However, this move was thrown out of the window on Monday when it said voluntary administration was the “most appropriate way to restructure” after failing to secure the support of “a small number of parties” during discussions over “the past few weeks”. The company said it would continue to trade despite being in administration and would focus on “the key Christmas and holiday trading period”. In the four years to February 2024, Mosaic Brands’ share price slumped 87.0%, from US$ 1.51 to US$ 0.13, and prior to its shares being suspended in August was trading at has been steadily declining since the beginning of January 2020, when it was trading at $2.30. Prior to its suspension from trade on the ASX in August, its shares last traded at US$ 0.024 — giving the company a total market cap of US$ 4.2 million.

The former Australian federal minister of transport, and now the country’s PM, Anthony Albanese has been accused of asking for free personal flight upgrades directly from the former, and now disgraced, CEO of national carrier Qantas. A new book by Joe Aston alleged that he requested, and received, upgrades on twenty-two flights, taken between 2009 and 2019. The PM has retorted “in my time in public life, I have acted with integrity, I have acted in a way that is entirely appropriate and I have declared in accordance with the rules,”  and that he had been  “completely transparent” with his disclosures. Last year, the Albanese government faced questions for denying a request by Qatar Airways to increase flights to Australia – a move that aviation analysts said favoured Qantas. Criticism over that decision has now resurfaced as some opposition leaders have been questioning Albanese’s personal relationship with Joyce.

A week before the presidential election, there was some good economic news for the Democrats that the country grew at an annual rate of 2.8%; although marginally down on the previous quarter’s 3.0%, indicators are that it is on track for one of the strongest economic performances of any major economy in 2024. In normal times, this should prove positive for the Harris campaign, but economic sentiment remains downbeat, mainly attributable to the fact that, over the past four post pandemic years, there has been a 21% jump in prices. In a recent poll, 62% of Americans viewed the economy overall as “bad”, whilst 61% of Democrats thought the economy was good, compared with just 13% of Republicans and 28% of independents. However, Q3 witnessed mainly positive news – including lower energy prices, higher wages, rebound in job growth rising faster than prices, stabilising supermarket prices, dipping inflation rates and increasing and growing optimism about future business prospects and income. However, the share of people worried about an economic recession also fell to the lowest level since the organisation started asking the question in July 2022. This Thursday will see the conundrum solved.

Probably the October hurricanes and strikes in the US were the main drivers behind jobs growth slowing last month; the number was a surprisingly low 12k, compared to the 223k number in September, with the unemployment rate held steady at 4.1%. The Labor Department noted that healthcare and government roles continued their rising trend last month, but fewer new manufacturing jobs were added due to strike activity.

In the UK, the Office for National Statistics Rent considers that paying anything more than 30% of income on rent is considered unaffordable. That being the case, then ever since records began in 2015, the typical private sector renter, on a typical wage in England, has always paid a figure deemed to be unaffordable. Latest figures indicate that renters on a median income – the midpoint between the highest and lowest – paying to live in a median-priced rented home in England spent more than 34.2% of their income on rent, with those living in London paying nearly 40%. The latest regions joining the rent unaffordability ranks are the SE and NW, where rents are now costing people more than 30% of incomes – at 31.9% and 31.6% of incomes respectively. Wales, on the other hand, has always had affordable rent, with the latest figures showing 27.2% of median income spent on median rent. The most affordable area to rent was in N Lincolnshire (with 18.8% of median income going on the media rent), while the least affordable was Kensington and Chelsea (at 52.2% of median income).

Chancellor Rachel Reeves has delivered Labour’s first Budget since 2010, after the party’s return to power in July’s general election. She announced tax rises worth US$ 51.91 billion to fund the NHS and other public services. The OBR calculated that budget policies will increase UK borrowing by US$ 25.44 billion this year and by an average of US$ 41.92 billion over the next five years. The budget also included US$ 15.31 billion allocated to compensate victims of the infected blood scandal with, and not before time, US$ 2.34 billion set aside for wrongly prosecuted Post Office sub-postmasters.

The budget covered many different aspects with some of the main ones for expats listed below:

  • No change to the existing income tax, personal National Insurance contributions and VAT rates – the current thresholds will stay the same until 2028/29, when they will be unfrozen and will rise in accordance with inflation 
  • Employers’ National Insurance contributions are going up – although most employees may not notice an immediate change in their pay, larger businesses will be impacted as they contribute more to fund public services, which employers will have to recover either from employees (loss of job and pay reductions) or consumers (increased prices) Companies to pay NI at 15% on salaries above US$ 6.5k from April, up from 13.8% on salaries above US$ 11.8k, raising an additional US$ 32.44 billion a year
  • Basic rate capital gains tax on profits from selling shares to increase from 10% to 18%, with the higher rate rising from 20% to 24%
  • Rates on profits from selling additional property unchanged
  • Inheritance tax threshold freeze extended by further two years to 2030, with unspent pension pots also subject to the tax from 2027
  • Employment allowance – which allows smaller companies to reduce their NI liability – to increase from US$ 6.5k to US$ 13.0
  • Tax paid by private equity managers on share of profits from successful deals to rise from 28% to up to 32% from April
  • Main rate of corporation tax, paid by businesses on taxable profits over US$ 324k, to stay at 25% until next election
  • Air Passenger Duty to go up in 2026, by US$ 2.60 for short-haul economy flights and US$ 15.57 for long-haul ones, with rates for private jets to go up by 50%
  • Vehicle Excise Duty paid by owners of all but the most efficient new petrol cars to double in their first year, to encourage shift to electric vehicles
  • New tax of US$ 2.85 per 10 ml of vaping liquid introduced from October 2026
  • Tax on tobacco to increase by 2% above inflation, and 10% above inflation for hand-rolling tobacco
  • Tax on non-draught alcoholic drinks to increase by the higher RPI measure of inflation, but tax on draught drinks cut by 1.7%
  • Stamp duty surcharge, paid on second home purchases in England and Northern Ireland, to go up from 3% to 5%
  • Companies to pay NI at 15% on salaries above US$ 6.5k from April, up from 13.8% on salaries above US$ 11.8k, raising an additional US$ 32.44 billion a year
  • Employment allowance – which allows smaller companies to reduce their NI liability – to increase from US$ 6.5k to US$ 13.0k
  • Tax paid by private equity managers on share of profits from successful deals to rise from up to 28% to up to 32% from April
  • Main rate of corporation tax, paid by businesses on taxable profits over US$ 324k, to stay at 25% until next election

The Office for Budget Responsibility has indicated that Wednesday’s budget will only “temporarily boost” the economy, estimating that 2025 growth will be at 2.0%, before slipping to 1.5% in the following year. It also posted what most economists already knew – that in the short term the Budget would push up inflation and interest rates, with a knock-on impact on growth. (This could be an early blow for the Lady Chancellor who seems to have pinned her reputation – and that of the Starmer government – on delivering growth, arguing that a new approach to investment would underpin a better economic performance and “more pounds in people’s pockets”). The end result is that the size of the economy will be “largely unchanged in five years”, compared to its previous growth forecast. The OBR said in the longer-term, investment, planning reform and greater economic stability should help to boost growth, “in a sustainable way”, but not until 2032.

The Resolution Foundation has indicated that following the budget disposable income and wages will stagnate further over the next five years, adding that living standards, will be the worst under any Labour government since 1955 when inflation is factored in. It also opined that pay will stagnate in the middle of the parliament, as higher inflation lessens pay rises and growth is slowed in an already challenging economic environment. The think tank also estimated that, in 2028, pay adjusted for inflation – real wages – is forecast to have grown on average by just US$ 16.80 a week over the past twenty years. One consolation seems to be that households’ disposable income will grow more throughout the five-year parliamentary term than the last – by an expected 0.5% a year, compared to 0.3% under the Conservative government. The rise in NI will be a major factor in prices rising, as well as economic growth weakening.

The aftershocks, following the budget, saw the yield on UK ten-year bonds, known as gilts, (basically the rate that the exchequer has to pay on its repayments), head northwards, and despite some dips has been on an upward trend since then. Although an interest rate cut is still on the cards next Thursday, the likelihood of one has dropped 11% but it is still at a high 83%. Furthermore, sterling tumbled by 2.0%. Credit rating agency Moody’s said borrowing plans announced in the budget were an “additional challenge”, as the new government has just committed itself to far higher lending – about US$ 181 billion more borrowing in the coming years, while tax-raising measures will bring in an extra US$ 52 billion. In short, the markets have already turned hostile and Labour may soon rue the time they had a “Rush Of Blood To The Head”.

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