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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!

Posted in Categorized | Tagged al-ansari, ato, Boeing, david-lammy, Donald Trump, Dubai, Emirates, interest-rates, news, real-estate, tgif, travel, UAE, UK Budget | Leave a comment

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”.

Posted in Categorized | Tagged Albanese, Dubai, Dubai Housing, investing, news, real-estate, UAE | Leave a comment

Hang Your Head In Shame!

Posted on October 25, 2024 by howesdubai

Hang Your Head In Shame! 25 October 2024

Figures from the Land Department confirm that, in the week ending 18 October, the Dubai realty sector posted 4,475 transactions, valued at US$ 4.78 billion, with sales totalling US$ 3.85 billion. The top three sales transaction were all for apartments – the first at Six Senses Residences DXB Marina, selling for US$ 27.6 million, and the other two at Bulgari Lighthouse for US$ 21.2 million and US$ 18.8 million. Over the week, mortgage deals were worth US$ 806 million) and gift transactions were valued at US$ 117 million.

Following its recent integration of Nakheel and Meydan, Dubai Holding Asset Management announced a rebranding of Dubai Asset Management, to Dubai Residential. This unifying move will see the “new” Dubai Residential, with a 40k property portfolio, serving 150k Dubai residents, whilst reaffirming the group’s commitment to supporting the emirate’s continued development. Unified under the Dubai Residential brand, the portfolio spans 40k homes, serving over 150k residents. Dubai Residential’s comprehensive portfolio now includes City Walk Residences, Bluewaters Residences, Remraam, Shorooq, Ghoroob, Badrah, Manazel Al Khor, Ghoroob Square, Meydan Residence 1, Layan, Bayti Villas, Nad Al Sheba Villas, Dubai Wharf, Meydan Heights, The Gardens, Garden View Villas, Garden View Apartments, Al Khail Gate, and International City.

Launched in collaboration with Marriott International, Arada has unveiled W Residences at Dubai Harbour, comprising four hundred branded apartments in a US$ 1.36 billion, forty-storey complex. The three-tower luxury seafront development, with a world-class array of amenities, is slated for completion in 2027. W Residences at Dubai Harbour is master developer Arada’s third project in Dubai – following Armani Beach Residences at Palm Jumeirah and Jouri Hills at Jumeirah Golf Estates – and fifth branded residences project in the UAE.

H&H Development announced the expansion of its Eden House brand with a new waterfront community – Eden House The Park – on Dubai Water Canal. The development will feature low-rise buildings, (ranging from studios to luxurious four-bedroom suites, spacious garden duplex units and three exclusive penthouses), and lifestyle services. One of the most striking features of these homes will be the floor-to-ceiling windows.

The Endowments and Minors’ Trust Foundation in Dubai (AWQAF Dubai) has announced the distribution of US$ 8.3 million in profits from investments made on behalf of minors and those under guardianship for the year 2024; nearly 2.3k minors were beneficiaries of this profit – 12.1% higher on the year. Funds have been invested in real estate assets, commercial ventures, and financial stock portfolios, while adhering to Sharia principles, ensuring that the capital is not exposed to unnecessary risks. It strategically invests in a range of public joint-stock companies, including Parkin, Salik, DEWA, and other low-risk government entities. The total value of assets, managed by AWQAF Dubai on behalf of minors and those under guardianship, reached US$ 277 million by the end of 2023.

Sheikh Hamdan bin Mohammed has announced the master plan for the 100 km Saih Al Salam Scenic Route, for vehicles and bicycles, with a US$ 106 million investment in rural tourism activities and facilities including, luxury camping, new cycle routes, kayaking and hot air balloons. Saih Al Salam Scenic Route (Route 1) Project includes several projects and initiatives, such as providing facilities and services to visitors along the route, offering trips to the ancient sites of Saruq Al-Hadid and Al Marmoom Heritage Village, and other experiences including horse/camel riding and desert walks. Furthermore, camps and lodges in the form of glass domes, with panoramic windows, will be built along the route, with open lounges that will allow people to enjoy their stay beside the existing lakes in the area. Furthermore, the project will also include an outdoor cinema experience, in addition to events and art exhibitions and a Caravan Park. It is uniquely built, based on the Scenic Route concept, and it includes facilities to provide a holistic tourism experience. It aims to increase the number of activities, events and services, that promote desert tourism, whilst also offering investment opportunities for inhabitants and supporting local projects.

Dubai Customs is planning to roll out what it termed ‘Airbnb of warehouses’, the Warehouse Platform – a new digital platform allowing warehouse owners in the UAE to list their properties for leasing across the UAE. Owners of warehouses can list their properties on this platform which aims to simplify the process of registering and leasing various types of warehouses through a centralised system. It aims to provide users, looking for warehouse space, with multiple options, which they can sort based on size, location, type, and lease duration. Owners of both bonded and non-bonded warehouses, within and outside free zones, can list their properties for leasing on the platform against a fee which will be announced in due course. The new platform also offers the option of leasing a customs warehouse dedicated to storing goods under suspended customs duties. In H1, there was strong growth recorded because of the increased demand; the highest rental growth was registered in Jebel Ali Industrial, with average Grade B rates surging 38.5% on the year.

A study compiled by Oxford Economic indicated that aviation-led activity accounted for 631k jobs across Dubai – equivalent to 20% of all jobs in the emirate – with a further 29.3% to be added in the six years to 2030; in addition there are some 185k aviation-linked jobs. It is estimated that Emirates Group and Dubai Airport contributed US$ 25.61 billion and US$ 11.72 billion, tied to aviation-facilitated tourism. These figures are projected to increase steadily, with aviation activities facilitated by Emirates and Dubai Airports contributing US$ 53.40 billion, or 32% of Dubai’s forecasted GDP by 2030 (in 2023 prices). According to the report, international visitors flying to Dubai spent an estimated US$ 18.0 billion last year. Although the expansion of the US$ 35.0 billion Dubai World Central is not included in the study’s main impact results, its construction is expected to contribute an estimated US$ 1.66 billion to Dubai’s GDP in 2030, as well as to support 132k jobs. It will be five times the size of Dubai International Airport and when completed will consist of over four hundred aircraft stands, with capacity to serve 260 million passengers annually.

With five more jets ordered this week, Emirates is expecting a total of fourteen Boeing 777Fs, pending delivery from Boeing from now until end 2026. Furthermore, the airline has signed a multi-year lease extension with Dubai Aerospace Enterprise for four Boeing 777Fs in its existing fleet. When all are added, together with its current fleet of ten, Emirates Cargo will be operating a fleet of twenty-one production-built cargo planes, by December 2026. The carrier also remains invested in converting ten passenger Boeing 777-300ERs into freighters for further capacity and fleet growth. Emirates Chairman, Sheikh Ahmed bin Saeed Al Maktoum commented that “demand for Emirates’ air cargo services has been booming. This reflects Dubai’s growing prominence as a preferred and trusted global logistics hub, and also the success of Emirates SkyCargo’s bespoke solutions that address the needs of shippers in different industry sectors.” It will continue to utilise its wide-body passenger fleet to facilitate the fast, reliable and efficient movement of goods worldwide, offering customers more flexibility with a fleet mix comprised of 777s, 777-Fs, 747Fs, A350s, and A380s. Emirates plans to make a decision, this quarter, on its future freighter fleet for 2028/29 and beyond, with the Boeing 777-8F and Airbus A350-1000F as contenders. There are plans to make Al Maktoum International airport its base, to be the world’s largest hub in capacity – at twelve million tonnes. Logistics District will be located adjacent which is planned as an international base for global cargo and shipping companies.

As H1 bilateral trade between the UAE and Türkiye climbed 15% higher, it has now become the fastest-growing partner among the country’s top ten global trading partners; this follows a 107% 2023 surge, attributable to by the landmark Comprehensive Economic Partnership Agreement signed in March 2023. At the latest DMCC’s “Made For Trade Live” roadshow in Istanbul,Turkish companies were introduced to the trade and investment opportunities available through Dubai and DMCC, highlighting the infrastructure and trade facilitation arrangements made possible under the CEPA. DMCC posted an 11.0% rise, in Turkish companies.

Under the patronage of Sheikh Hamdan bin Mohammed, next week will see the three-day Healthcare Future Summit 2024, under the theme ‘Vaccination, Research & Development, Policy, and Delivery: Towards a Healthier Future’. Located at the Dubai World Trade Centre, the event will bring together over 3.5k participants and one hundred brands from more than twenty countries. The Summit will focus on cutting-edge innovations in vaccination and healthcare, including advancements in disease management and the application of advanced technologies like AI to enhance vaccine distribution and develop new strategies for future pandemics. Additionally, the Summit will feature several prominent international events, including the Dubai Otology, Neurotology & Skull Base Surgery Conference & Exhibition, the Annual Radiology Meeting Conference and Exhibition, and the International Family Medicine (IFM) Exhibition, all of which will have various scientific sessions and specialised workshops.

The three-day, eighteenth edition of Dubai International Food Safety Conference opened on Monday, featuring over 3k global experts and specialists in food safety. Under the theme of “Future Foresight in Food Safety”, the convention addressed proactive approaches to emerging challenges, in the global food sector, and the urgent need for sustainable and innovative solutions to ensure the safety of food systems for the future. Dawoud Al Hajri, Director-General of Dubai Municipality, noted that “the success of the conference reflects Dubai’s leading role in envisioning the future of food, both regionally and globally,” and highlighted “the need to continue developing modern technologies and harnessing them to enhance regulatory bodies’ capacity to predict potential risks and mitigate their impacts on communities, in addition to providing sustainable solutions based on scientific principles using AI and big data analytics”.

Based on the increase in the number of new cases, The Dubai International Arbitration Centre has had another progressive year, with a 4.4% hike, to three hundred and fifty-five; its 2023 Annual Report noted that total claims exceeded almost US$ 1.50 billion, with the highest individual case coming in at US$ 298 million. Key sectors that benefited from DIAC’s expertise included construction, real estate, banking/finance, logistics/transport, tourism, media, and technology/telecommunication. DIAC joined the Global Arbitration Review’s whitelist and is the only arbitration centre in the UAE, and one of only three in the MEA regions, to achieve this distinction. Sheikh Maktoum bin Rashid commented that “the emirate is solidifying its position as a top five global hub for arbitration and dispute resolution. This strengthens business confidence and attracts investment, directly supporting the Dubai Economic Agenda (D33) objective of doubling Dubai’s economy and establishing it among the world’s top three urban economies.”

A report from Statista shows the UAE leads the GCC, with over 5.6k, as a top hub for startups, as well as in the fintech sector, with more than five hundred and fifty fintech companies currently operating in the country. A report by Startup Genome notes that Dubai continues to lead regionally, with a start-up ecosystem valued at over US$ 23.0 billion by the end of last year. Dubai’s In5 initiative, a TECOM Group subsidiary, has supported over 1k start-ups and raised US$ 2.13 billion in funding since 2013.

The Central Bank of the UAE posted that the cumulative H1 balance of facilities and loans, extended by banks operating in the UAE, to SMEs reached US$ 22.13 billion. It also estimated that

loans to SMEs accounted for 9.5% of the total cumulative balance of financial facilities, (at US$ 233.16 billion), provided to the commercial and industrial sectors in the UAE. SMEs account for more than 95% of the total number of companies operating in the country and provide jobs to around 86% of the private sector’s workforce.

The latest listing on Nasdaq Dubai was for a US$ 500 million Sukuk issued by Dubai Islamic Bank and was substantially over-subscribed; the additional Tier 1 (AT1) Sukuk was issued at an annual profit rate of 5.25% – the lowest for an AT1 instrument globally since the 2009 GFC. DIB now has an outstanding value of over US$ 9 billion through eleven Sukuk listings on Nasdaq Dubai. This addition brings the bourse’s total outstanding Sukuk to US$ 93 billion, across one hundred and two listings, with a combined US$ 133 billion in capital market listings. The Sukuk is dual listed on Nasdaq Dubai and Euronext Dublin.

Majid Al Futtaim Properties have signed a five-year contract with Parkin Company for Dubai’s primary public parking operator to operate a new paid parking system at three of its operations – Mall of the Emirates, City Centre Deira and City Centre Mirdif. It is expected that current fees will remain unchanged. Under the new ‘barrierless parking’ system, the need to stop at barriers will be eliminated, as advanced cameras will capture license plates automatically, tracking each vehicle’s entry and duration of stay. This system, which will be implemented as from 01 January 2025, is expected to improve access for over twenty million vehicles annually, across a total of 21k parking spaces.

The Commercial Bank of Dubai (CBD) posted a 26.5% annual hike in nine-month net profit after tax result of US$ 608 million, with pre-tax profit 15.2% higher. Strong growth in loans during the first nine months of 2024 resulted in a solid net interest outcome, which was supported by non-funded income and lower cost of risk that more than offset higher expenses and the corporate tax charge. Operating income was 12.1% higher at US$ 1.13 billion, driven by a 7.3% rise in net interest income, on strong loan growth, and high market interest rates with other operating Income up 23.8%. Various factors – inflation, increased costs for governance and regulatory compliance, as well as investments in digitisation/technology – saw operating expenses at US$ 277 million. There were increases in total assets, net loans/advances and customers’ deposits of 8.7%, 10.1% and 11.8% to US$ 35.15 billion, US$ 24.99 billion and US$ 26.89 billion.

The DFM opened the week, on Monday 21 October, sixty-three points (1.4%) higher the previous fortnight, gained a further ten points (0.4%), to close the trading week on 4,479 points by Friday 25 October 2024. Emaar Properties, US$ 0.01 lower the previous week, gained US$ 0.03, closing on US$ 2.32 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.67, US$ 5.45, US$ 1.69 and US$ 0.34 and closed on US$ 0.67, US$ 5.20, US$ 1.66 and US$ 0.34. On 25 October, trading was at ninety-six million shares, with a value of US$ 59 million, compared to eighty-five million shares, with a value of US$ 61 million, on 18 October.

By Friday, 25 October 2024, Brent, US$ 5.66 lower (7.1%) the previous week, gained US$ 2.41 (3.3%) to close on US$ 75.96. Gold, US$ 70 (2.6%) higher the previous fortnight, gained US$ 22 (0.8%) to end the week’s trading at a record US$ 2,753 on 25 October 2024.

After a period of hope that Rection Engines, the UK hypersonic aviation pioneer, could be saved by funding from the Abu Dhabi-based Strategic Development Fund, discussions have stalled, leaving doubts that its collapse can be averted. There are reports that the problem stems around the question of the investment arm of the UAE’s Tawazun Council anchoring a recapitalisation of the company. It also appears that a number of City investors have, in the last two months, slashed the value of their stakes in the business, amid doubts about its survival, even though it had reportedly grew its commercial revenues by more than 400% last year and is understood to have a strong pipeline of contract and R&D opportunities. However, time is running out to secure a financial package that would prevent the company falling into administration, with Reaction requiring millions of pounds of funding support within days, with strategic shareholders BAE Systems and Rolls-Royce Holdings also said to have been asked to agree more flexible terms with the company.

Boohoo, whose brands include Debenhams, (bought for US$ 72 million in 2021), Karen Millen, (acquired for US$ 24 million three years earlier), and PrettyLittleThing, is planning a major restructure that could see the break-up of the struggling online fashion firm. Boohoo had been an early beneficiary, from the impact of the pandemic, but has since struggled from the likes of China’s Shein and Temu. Some analysts consider that its best way forward is to divest Debenhams and Karen Millen, (both now considered purely online players), to allow it to concentrate on a younger target market. Whilst admitting that its youth brands were struggling, including boohoo.com, boohooMAN and PrettyLittleThing, it posted that its business remained “fundamentally undervalued”, and that it expected to improve in H2; H1 August results showed that sales had declined 15% to US$ 809 million. Frasers Group are seeking to depose former CEO John Lyttle as a company director, as well as trying to install their founder Mike Ashley instead, complaining of a “complete failure to meaningfully engage” with Frasers.

Over recent times, it seems that Boeing is always in some sort of crisis; this week, there has been a “total loss” of a communications satellite, designed and built by the aerospace giant. The US Space Forces posted that it is “currently tracking around twenty associated pieces” of the satellite. The failure of its of iS-33e, which has affected Intelsat customers in Europe, Africa and parts of the Asia-Pacific region, is but the latest episode of Boeing mishaps. Recent examples include a crippling labour strike by more than 30k of its workers belonging to the International Association of Machinists Aerospace Workers, that has been ongoing since 13 September, (and voting this week to reject the new offer and continue the industrial action), as well as issues with its ill-fated Starliner spacecraft; this returned empty to Earth last month, after a considerable delay in space due to problems with its thrusters. Two astronauts had been stranded at the International Space Station after the Boeing Starliner capsule they arrived on in June, was considered unfit to return them to earth seven days later. To make matters even worse, Boeing’s boss Kelly Ortberg warned that the company is at a “crossroads” as losses at the firm surged to US$ 6.0 billion.

According to the Centers for Disease Control and Prevention, some forty-nine people have become ill after eating a McDonald’s Quarter Pounder sandwich, caused by E. coli, a type of bacteria that can cause serious stomach problems. Ten cases resulted in patients being admitted to hospital and one person has died. The CDC confirmed that “It is not yet known which specific food ingredient is contaminated,” but noted that McDonald’s has already “stopped using fresh slivered onions and quarter-pound beef patties in several states”. McDonald’s shares fell by about 9% on the New York Stock Exchange after the news broke on Tuesday but had regained some of those losses by the end of the day; its share value had lost 4.9%, equating to more than US$ 15.5 billion being wiped off its market cap.

With its revenue stream slowing, Brian Niccol, the new top man at Starbucks, has indicated that he will overhaul the global coffee chain’s menu, as he also announced the suspension of the firm’s 2025 financial forecasts due to the “current state of the business”. He noted that “we will simplify our overly complex menu, fix our pricing architecture, and ensure that every customer feels Starbucks is worth it every single time they visit.” The company expects Q3 US comparable sales to have fallen by 6.0% on the year, as customers cut back on spending, as the rising cost of living continues to squeeze household budgets. Probably more worrying is the 14.0% sales slump in China, where the economy is faltering. Starbucks shares fell by more than 4% after the announcement. There is a lot for the new chief executive, appointed last month, to mull over as he takes his daily 1.6k km commute from his New Beach Californian home to the coffee retailer’s Seattle headquarters.

Following four crash reports involving the use of Tesla’s “Full Self-Driving”, (FSD), software, the

National Highway Traffic Safety Administration initiated a preliminary investigation, indicating that the crashes involved reduced roadway visibility, with fog or glares from the sun. The enquiry will aim to determine if Tesla’s self-driving systems can detect and appropriately respond to reduced visibility conditions and will also examine if other self-driving crashes have happened under similar conditions. Unlike Waymo, the self-driving venture operated by Google-parent Alphabet, Tesla’s autonomous systems rely largely on cameras and AI and is a cheaper option when compared to Waymo’s high-tech sensors like Lidar and radar. The ultimate result could see the total recall of 2.4 million Tesla vehicles across multiple models manufactured between 2016 and 2024.

Yesterday, 24 October, Tesla shares soared 22%, lifting Elon Musk’s net worth by about US$ 26 billion to US$ 270 billion; this puts him US$ 58 billion ahead of his good friend and former Tesla board member Larry Ellison. Tesla had its second-best day ever on the stock market following earnings beat and an uplifting projection for 2025 growth.

There are reports that Barclays is in detailed discussions with Brookfield about it becoming a shareholder in its UK merchant acquiring arm; in February, the bank had indicated that it was exploring a sale or partnership of the division. The heavily structured deal would involve the Canadian asset manager bearing the costs associated with growing the business, rather than paying a significant up-front sum for the stake. Valuation estimates put the value of the unit at between US$ 1.0 billion to US$ 2.5 billion. Barclays shares have surged by 65% over the last year.

There are many who would agree with James Watt when he claims that entrepreneurs will abandon the UK, “for places like Dubai”, if capital gains tax is increased in next week’s budget. The founder of BrewDog also commented that a significant rise in the tax “will do far more damage to our economy” and deal a hammer blow to the prosperity of every family. Furthermore, he noted that any increase in the tax would lead to lower tax receipts, as “people who start businesses – they also pay national insurance, PAYE for their team, corporation tax”. The current CGT rate is set at 20% – by the end of the month, it could easily move to 25%.

In an opening gambit, HSBC’s new chief executive, Georges Elhedery, commented that he wants to “unleash our full potential and drive success into the future,” by splitting geographically into eastern and western markets amid increasing geopolitical tensions and an urgent requirement to cut costs, as well as simplifying operations by splitting into four key units. The bank will create separate business units in the UK and Hong Kong, with two other operations: “corporate and institutional banking” and “international wealth and premier banking”. Business in these operations will fall into either “eastern markets”, which includes the Asia-Pacific region and the Middle East, or “western markets”, covering the UK, continental Europe and the Americas. He also announced a reshuffle in its leadership ranks, including the appointment of Pam Kaur, who becomes the first female finance chief in the bank’s one hundred and fifty nine-year history.

Today, Kenya’s high court suspended a US$ 736 million public-private partnership between Kenya Electrical Transmission Company and India’s Adani Energy Solutions to build and operate power infrastructure including transmission lines; the deal, which was signed earlier in the month, would have seen a marked reduction in persistent national power blackouts and support economic growth. However, the Law Society of Kenya challenged the agreement saying it was “a constitutional sham” and “tainted with secrecy”. The Indian Group is also facing opposition, by the Law Society, to its plans for a PPP to lease the country’s main airport for thirty years in exchange for expanding it.

It does seem to the casual observer that Peru has had more than its fair share of corrupt despots, the latest being former President Alejandro Toledo, (in office between 2001 – 2006), n being sentenced to twenty years and six months in jail for corruption and money-laundering; it was alleged that he took US$ 35 million in bribes from Odebrecht, a Brazilian construction company, which was awarded a contract to build a road in southern Peru. In 2019, another former leader, Alan Garcia, (1985 -1990) shot himself when police arrived at his home to arrest him over bribery allegations involving Odebrecht.Two other former Peruvian presidents, Pedro Pablo Kuczynski and Ollanta Humala, (2011 – 2016) are also being investigated in the Odebrecht case. Probably the most famous was Alberto Fujimori, (1990 – 2000), who was forced from office amid allegations of corruption. He fled Peru for Japan and later moved to Chile where he was imprisoned. He was extradited from Chile to Peru in 2007 where he was convicted of multiple crimes in a series of trials; he died last month in Lima, aged eighty-six.

In what would be seen as a logical move, Vladamir Putin has proposed the creation of a BRICS grain exchange, as he pointed out that “BRICS countries are among the world’s largest producers of grains, legumes, and oilseeds”; he added that the exchange “will contribute to the formation of fair and predictable price indicators for products and raw materials, considering its special role in ensuring food security”. He added that a separate platform could be set up to trade precious metals and diamonds which could later be expanded to trade other major commodities. In his opening remarks to a summit of leaders of the BRICS countries, he also referred to the creation of a BRICS investment platform, which will facilitate mutual investment between BRICS countries and could also be used for investment in other countries in the Global South.

Octopus Energy, which rescued rival Bulb after its collapse in 2021, has repaid the final tranche of the US$ 3.9 billion government support provided to secure the deal. It is also reported that, although the government had spent more than US$ 2.0 billion, dealing with the Bulb crisis, the fall in wholesale energy prices had generated an unexpected US$ 1.95 billion profit for the Exchequer,

owing to a hedging arrangement which had been established at the time of the transaction, as well about US$ 260 million in interest payments.

Government borrowing was the third highest ever September return, attributable, in part, as a result of public sector pay rises, (including teachers and junior doctors), and continuing high interest payments on existing debt. Although tax receipts came in higher, there was a bigger increase in spending which was US$ 2.1 billion higher than in the same month a year ago. But the gap between what the government took in and what it spent was GBP 1.17 billion – less than expected. Public sector borrowing was expected to reach US$ 22.68 billion but came in US$ 1.17 billion less at US$ 21.51 billion – the sum excludes borrowing by public sector banks.

With all the adverse – and often deserved – criticism of water firms, it beggars belief that bonuses to water company bosses nudged 1.3% higher to US$ 12 million, and this despite record sewage discharges and financial woes at some of the utilities in England and Wales. When base pay and pension contributions are factored in, total payments to executives were 1.0% lower at US$ 26 million, although pension contributions rose 8.4% to US$ 2.2 million. Environment Agency data shows that discharges of untreated sewage, by water companies, doubled to 3.6 million, with individual spills 54.2% higher at 464k. Current legislation dictates that water companies can discharge sewage from storm overflows, but only during periods of heavy rain and under strictly permitted conditions.

According to water regulator, Ofwat, water companies in England and Wales are asking for water bills to be raised even higher by 2029-2030, with Thames Water requesting a 53% annual hike to US$ 866; Southern Water has asked for the highest increase – 84%. Of all eleven English and Welsh water and wastewater firms only Wessex Water is not seeking even higher bills than they first requested from the regulator in July. On average, the companies want bills to rise 40% and cost US$ 800 a year by 2030, compared to the current average bill of US$ 570 a year. Ofwat will make its final decision for how much water bills can rise on 19 December.

Meanwhile, Thames Water, the UK’s biggest water provider is in big trouble. Industry experts indicate that the company is “uninvestable”, as shareholders pull their investments, with its holding firm having defaulted on some of its US$ 20.77 billion debt pile. What did the company do when it is in such an economic mess – it lifted bonus payments which almost doubled to US$ 1.6 million. Legislators are calling for a bill that would put an immediate ban on bonus payments at all water companies while sewage outflows continue and want to crack down on pollution and financial mismanagement in the water industry; it also includes proposals that include the ability to jail executives and increased compensation for customers.

In a country that has a growing housing shortage, it is estimated that there are almost 700k empty and unfurnished homes in England, of which some 37% are counted as “long-term empty,” indicating that no-one has lived there for six months or more. Some argue that if they were brought back into use, the country’s housing crisis would be solved at a stroke and that the government would not have to build 1.5 million new homes. There are various reasons why they remain empty.

Often homes become empty when the owners pass away, leading to a long administrative process, known as probate, when their assets are divided up; even when that process is completed families can still be reluctant to part with a property for a host of reasons. Local authorities can charge extra council tax on homes that have been unoccupied for more than a year, under the Empty Homes Premium, and if that does not work, they can take enforcement action. Abandoned homes can be treated as environmental health issues – mainly from the Double “V-Whammies” of vermin or vandalism – which can impact on neighbouring properties. In some cases, the council is able to carry out emergency repair work on abandoned homes, and then force a sale at auction to recover its costs, with any gains going to the property owners; another option is to repair run-down properties, that have been vacant for more than two years, and then rent them out for up to seven years to recover costs. However, since many English authorities do not have the funds to carry such repairs, there are some who believe this should be a national government problem which should fund the operation which would go a long way to solve this age-old problem and put empty homes back on the market. In reality, so many local councils are teetering on bankruptcy, and the Starmer government hell bent on building 1.5 million homes, it is a good bet that come 2029, England will still have seven hundred thousand empty houses – during which time, a lot of green belts will have disappeared.

If The Employment Rights Bill were to become law, it would overhaul workers’ rights but will come with a cost estimated, by the government, to be in the region of US$ 6.5 billion; its main aim would be to overhaul workers’ rights, including low pay and poor working conditions. Other amendments would see granting workers protection from unfair dismissal from the first day of their employment, the right to statutory sick pay from the first day of illness, day one rights to paid and unpaid paternity leave, and the right to flexible working, including a four-day week. Furthermore, unions will also be given the right to access workplaces and there will be a ban on “exploitative” zero hours contracts. A further cost would see the volume of cases reaching mediation service and employment tribunal increasing by around 15%. No wonder the unions have praised the bill as “life changing” for millions of workers and say it will also benefit employers in the form of a healthier and happy workforce and boosted productivity. Many employers think differently.

Rishi Sunak must still be scratching his head, asking himself whether he went too early to the polls because since then there has been a raft of positive economic data which would have the seen the Conservative vote come in a lot higher! In what is their largest upward revision for any advanced economy, the IMF has raised its projection for UK growth this year to 1.1%; the latest forecast is 0.6% and 0.4% higher than the two previous figures of 0.5%, in April, and 0.7% in July; its 2025 projection remains unchanged at 1.5%. The IMF’s global take on the economic situation predicts strengthening growth as “falling inflation and interest rates” stimulate demand. The global body’s view of the UK economy comes on the back of August figures showing a return to growth after two months of stagnation and a dip in inflation to below the BoE’s target of 2.0% for the first time since early 2021. The global central bank did caution that after years of elevated borrowing, in response to the pandemic and post-COVID economic adjustment, governments need to improve growth prospects, stabilise debt and “rebuild much-needed fiscal buffers”.

Whether Labour will fudge promises made in its pre-election manifesto, (including not increasing taxes on “working people”, including National Insurance, income tax and VAT), will be revealed next Tuesday. The Chancellor has commented that it was important for the government to “get a grip on day-to-day spending” by making sure it was paid for through tax receipts and by reforming public services to make them more productive. If she follows this track, she will commit to a tighter financial rule requiring all day-to-day spending to be funded via tax receipts. That being the case, the lady faces a conundrum that she has to cut back on public spending and has to raise taxes; both will upset a lot of the population. A compromise seems to be what she was seeking when commenting that “we need to invest more to grow our economy and seize the huge opportunities there are in digital, in tech, in life sciences, in clean energy, but we’ll only be able to do that if we change the way that we measure debt.” One fact, that most will agree upon, is the urgent need for the UK to advance its current levels of public investment.

By making a technical change to the way public debt is measured, the Starmer government will change its self-imposed debt rules in order to free up billions for infrastructure spending. The chancellor admitted yesterday that she would rewrite the government’s fiscal rules in next week’s budget to allow her to increase borrowing for public investment in roads, railways or hospitals, by around US$ 65.0 billion. She added that the change was being done “so that we can grow our economy and bring jobs and growth to Britain”. She said the Treasury would “be putting in guard rails” on investment spending by having the National Audit Office and the Office for Budget Responsibility, the government’s financial watchdog, “validating the investments we’re making to ensure we deliver that value-for-money”. The extra room for manoeuvre for spending on investment projects will not be able to be used for extra day-to-day spending, because that will be funded from tax receipts.

In its manifesto, the Labour Party confirmed that it would “not increase taxes on the working people”. When asked for his definition of “working people”, and whether he would classify a working person as someone whose income derived from assets, such as shares or property, the prime minister said, “well, they wouldn’t come within my definition.” He did add that he believed a working person was somebody who “goes out and earns their living, usually paid in a sort of monthly cheque” but they did not have the ability to “write a cheque to get out of difficulties”. He separately told reporters a working person is someone who “works for a living and through that gets their income”. The Chancellor weighed in on the debate when she indicated that businesses face an increase in National Insurance, saying the “working people” pledge related to the employee element of the tax, as opposed to the sum paid by employers. The debate continues on who or what is considered a “working person”, exacerbated by several ministers refusing to rule out raising national insurance on employers. To say there has been lack of clarity over how the government defines “working people” is an understatement.

Two of the favourite tax increases relate to capital gains tax, that raises an annual US$ 19.45 billion, which could see a 5.0% rise to 25%, and inheritance tax. The latter, which has a current rate of 40%, that is charged on any amount above the US$ 423k (GBP 325k) threshold; it could see a marginal push up to 42.5%. It will be no surprise to see the Chancellor also tinkering with the likes of drinks and excise tax and tobacco in her quest to source a further US$ 51.87 billion of tax rises and spending cuts to fill the so-called ‘black hole’ in public finances. Then there is the possible scrapping of the tax break for wealthy foreigners that could raise about US$ 4.15 billion a year, but that could well see the super-rich either leaving the UK or finding ways to avoid the tax. One certainty is that she will lift the employer national insurance rates on pension contributions which would bring in a further US$ 15.56 billion.

Meanwhile, the US economy is projected to have grown by 2.5% this year, an increase of 0.2% on the July projection, before falling back to 2.2% in 2025, whilst the Euro area’s growth forecasts for this year and 2025 have been trimmed – down 0.1% to 0.8% and by 0.3% to 1.1% The report concluded that the “global battle against inflation has largely been won”, with average global rates due to settle at 3.5% next year, lower than the average between 2000 and 2019. Additionally, there are warnings that all is not well on the global stage and that the IMF has to face head on numerous challenges . They include regional conflicts including, those in the ME and Ukraine, the need to loosen monetary restraint, while tightening fiscal policy; a potential slowdown in China, which has already started, and the associated risk of protectionism and trade wars.

The global news surrounding the Israeli bombardment of Gaza seems to focus on the political and humanitarian losses, with little details of the economic costs facing the embattled nation. The overall unemployment rate in the Occupied Palestinian Territory, comprising Gaza and the occupied West Bank, climbed to an average of 51.1%, with the real GDP plunging by an average of 32.2% over the past twelve months. Furthermore, with unemployment levels reaching 34.9% and over the twelve months, to 09 October 2023, more than 42k have been killed, along with thousands injured. In the West Bank, employment plummeted by more than 28%, as more than 150k Palestinian men had been working in Israel. The economic downturn has devastated living standards, with real GDP per capita in three locations – Occupied Palestinian Territories, Gaza Strip and the West Bank – all slumping by 33.4%, 84.9% and 23.4% respectively.

On top of that, nobody really knows how long it will take to repair the damage to property, with a UN Trade and Development report commenting that the scale of devastation has far surpassed the impact of conflicts in 2008, 2012, 2014 and 2021. An April joint report, by the World Bank and the UN, estimated there had been US$ 18.5 billion of infrastructure damage in the first six months of this crisis which had started in October 2023 – a lot has happened since then and with continuing dithering by global powers, seemingly oblivious to the Israeli onslaught and destruction in the name of defence, still more to occur. It is difficult to disagree with the comment of Ruba Jaradat, ILO regional director for Arab states, “the impact of the war in the Gaza Strip has taken a toll far beyond loss of life, desperate humanitarian conditions and physical destruction.” There are some world leaders who should be told to Hang Your Head In Shame!

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Money (That’s What I Want)

Posted on October 18, 2024 by howesdubai

Money (That’s What I Want). 18 October 2024

Damac has launched Sun City, an exclusive new master community in Dubailand, featuring elegant four- and five-bedroom townhouses, ranging from 2.3k sq ft to over 3.3k sq ft. Prices start at US$ 205k, with a simple payment plan available – 20% deposit, 55% during construction and 25% on handover. There are several variants on the floor plans, with all units featuring spacious living areas, modern kitchens, and some with walk-in wardrobes and balconies.

Nakheel, has awarded three major contracts, valued at US$ 1.36 billion – to Ginco General Contracting, Shapoorji Pallonji Mideast, and United Engineering Construction Company – for the construction of seven hundred and twenty-three ultra-luxury villas on the first six fronds, (K, L, M, N, O and P) of Palm Jebel Ali, with completion expected within two years. Of the total, there will be five hundred and thirty-three nine 5 B/R and 6 B/R Beach Collection villas and one hundred and eighty-four 7 B/R Coral Collection villas. Each of these villas will have exclusive beach access. Ginco will build one hundred and ninety-seven villas on Fronds O and P, Shapoorji Pallonji will construct two hundred and seventy-five villas on Fronds M and N, and UNEC will develop two hundred and fifty-one villas on Fronds K and L. On completion, Palm Jebel Ali will feature 13.4k km of beachfront and sixteen fronds.

For its first new development since 2015, Union Properties has unveiled Takaya, located in Dubai Motor City, with its luxury services and cutting-edge amenities. With building having already started in May, delivery date is expected in Q4 2027. There are four types of units

Studio from US$ 205k 376 sq ft
One bedroom from US$ 327k 850 sq ft
Two bedrooms from US$ 436k 1,250 sq ft
Three bedrooms from US$ 599k 1,679 sq ft

Arabian Construction Company has been given the construction contract for Select Group’s renowned ultra-luxury project, Six Senses Residences Dubai Marina – an ultra-luxurious one hundred and twenty-two storey development. Aiming to set a new standard for residential health and wellness, it encompasses 61k sq ft of state-of-the-art fitness centres, dedicated longevity facilities, and landscaped social areas, along with many other facilities. Six Senses Homes Dubai Marina offers two hundred and fifty-one residences, including duplex and triplex Sky Mansions, half-floor penthouses, and deluxe residences with two to four bedrooms.

Dubai’s latest development will raise eyebrows – not because of its height but its width. Although 380 mt high, The Muraba Veil will be just one apartment wide, or 22.5 mt, earning it the distinction of being one of the narrowest skyscrapers ever built. Located along Sheikh Zayed Road and the Dubai Canal, the seventy-three-storey tower, designed by the Pritzker Prize-winning Spanish studio RCR Arquitectes, will house one hundred and thirty-one apartments, each spanning the full width of the building. The development will also feature amenities such as a spa, a fine dining restaurant, an art gallery, a private cinema, and even a padel court. The exterior will be a stainless steel “veil” that envelops the building, giving it a sleek, contemporary look. This development is the fifth collaboration between Muraba and RCR Arquitectes that stretches over a decade.

AE7 has been appointed the consultant for One Development’s flagship US$ 545 million project to be located in Dubai’s City of Arabia. Not only will the renowned architectural and engineering firm oversee all facets of the development’s master planning, but they will also be in charge of the project management, architecture, interior design, landscape architecture, AI innovation integration, development management, mechanical and electrical engineering, and integrated sustainability practices for this soon-to-be-unveiled project.

This week witnessed the highest ever leasing deal for a Dubai property. It is reported that a villa in Jumeirah Bay Island has been let for an annual sum of US$ 4.2 million, (AED 15.5 million). The leased property is a private mansion set on the waterfront, offering views of the ocean and the Bvlgari Resort & Residences. Recent data, from Prime by Betterhomes, shows that transactions exceeding US$ 4.74 million surged by 65% in Q3, further solidifying Dubai as a top destination for luxury residences.

At the end of last week, there were reports that DP World would not be attending the UK’s investment summit, following Transport Secretary Louise Haigh criticising the port operator and urging consumers to boycott the company relating to its ownership of P&O Ferries; after it sacked nearly eight hundred seafarers in 2022 and replaced them with cheaper workers. There was concern that DP World would be pulling out of the two-day event and not investing an expected US$ 1.0 billion for further expansion of its London Gateway port. The change came about after there had been “warm engagement” between senior figures in the firm and the government, with the PM distancing himself from his Trade Minister’s remarks, commenting that her comments were “not the view of the government”.

At the RTA’s latest open auction, its one hundred and sixteenth edition, ninety premium plates came under the hammer, raising US$ 19 million; all numbers ranged from two to five digits and included the letters AA, L, N, P, Q, R, S, T, U, V, W, X, Y, and Z. The top four plates – AA17, Y1000, V96 and AA333 – came in at US$ 2.2 million, US$ 1.2 million, US$ 1.1million and US$ 820k.

On Monday, HH Sheikh Mohammed bin Rashid toured GITEX Global 2024, the world’s largest tech and startup event; its forty-fourth edition, which boasted 6.5k exhibitors from one hundred and eighty countries, featured the world’s largest technology enterprises alongside governments, investors, experts, startups, academia, and researchers. The Dubai Ruler commented “as the UAE embarks on a new phase of economic growth, driven by strategic investments in future industries, the nation is rapidly consolidating its position as a global hub for advanced technologies such as artificial intelligence. We have a clear vision to advance the UAE’s leadership in the global digital and technology landscape, making it the world’s most future-ready nation”. He also added “GITEX Global 2024 also further accelerates the growth and innovation momentum created by our recent strategic initiatives like the ‘Dubai Universal Blueprint for Artificial Intelligence’. As the world’s top-ranked destination for foreign direct investment in AI, Dubai is creating an environment that nurtures innovation and empowers companies to explore the vast potential of emerging technologies.”

On Sunday, Sheikh Mansoor bin Mohammed bin Rashid inaugurated Expand North Star 2024, the world’s largest event for startups and investors, that ran for four days at Dubai Harbour. He emphasised that Dubai continues to intensify its efforts to strengthen its position as a vital player in shaping the world’s future, driven by its visionary leadership and a development model marked by sustainable growth, continuous efforts to raise excellence, and an environment that fosters innovation and creativity. He added that “we remain committed to developing a digital business ecosystem and infrastructure that empowers companies to grow and thrive, strengthening Dubai’s position as the most attractive city for investment and entrepreneurship.” Fully integrated with GITEX Global, the world’s largest and best-rated tech and startup event, this event brought together the world’s most sought-after founders, investors, entrepreneurs, and business leaders to explore exciting growth opportunities emerging in Dubai and catalyse the future of the digital economy. This year’s Expand North Star not only welcomed a record number of attendees but welcomed 1.2k investors, from over one hundred countries, with assets under management exceeding US$ 1 trillion.

According to Ahmad Bin Byat. Vice Chairman of the Dubai Chamber of Digital Economy, “the growth rate of the number of digital companies in Dubai is about 30%, while the growth rate of new companies operating in various sectors ranges between 13% – 15%”. He noted that there are at least 120k digital companies in Dubai, with a significant increase in the number of existing companies working on digital transformation, attributable to three main drivers – attracting global companies, local startups, and the transformation of many existing traditional companies to digital.

The Federal Authority for Identity, Citizenship, Customs and Port Security Current is in the throes of introducing a quicker and seamless payment system using the palm of the hand. This ‘palm ID’ tech will replace the need of payments by the likes of credit cards and digital applications, which will soon be only found in the pages of history. This solution, part of the UAE Vision 2031 programme, is currently in the trial-and-development phase. With palm veins of each individual different, people will provide palm biometrics at the ICP platform, which will be linked to the personal profile of the individual. It will also make it easier for people to access services such as the Metro and other crowded places. The UAE will be the first country in the ME to introduce such technology.

In a recent study, carried out by Telegraph Travel, Emirates has been awarded the “World’s Best Airline” amongst ninety global carriers, in a recent comprehensive and methodological study. Thirty-plus criteria included punctuality, baggage allowance, route network, quality of home airport, age of fleet, value of rewards programme and tastiness of in-flight meals, while the results were calculated referencing data from more than eighteen independent and international awards, readers polls, ratings websites and expert reviews.

According to global rating agency S&P, the Dubai government has repaid about US$ 10.90 billion in debt and a further US$ 1.93 billion in bonds – making a total of US$ 12.83 billion, (AED 47.1 billion), over the past two years. Of that total, US$ 5.45 billion related to a partial repayment of a US$ 15.00 billion loan from Abu Dhabi and the Central Bank of the UAE. Over the period, the loan from the Dubai-based Emirates NBD bank has halved. The agency noted that “we expect Dubai’s gross general government debt will decline to about 34% of GDP (US$ 50 billion) by the end of 2024 from 70% of GDP in 2021.” Two factors have helped boost the emirate’s exchequer – the introduction of 9% corporate tax and estimated cash proceeds of about US$ 9.00 billion, (AED 33 billion). from partial sales (of up to 25%) of public entities such as DEWA, Salik, Empower, Parkin, Dubai Taxi Co and Tecom; four more “government” entities are still to be listed on the DFM which will help with liquidity. S&P estimates Dubai’s public debt at about 70% of GDP, including contingent liabilities of about 36% of GDP and general government debt of 34%. It also expects Dubai to get fiscal surpluses from 2024 to 2027, with no additional debt issuances for deficit financing over the next couple of years. These forecasts exclude the estimated US$ 35.0 billion Al Maktoum Airport expansion project and the US$ 8.2 billion Tasreef project (to build a rainwater drainage network which would be completed in phases by 2033).

A report by S&P Global Market Intelligence notes that the UAE has posted YTD the second-largest number of private equity deals in the ME, (a bloc of twelve countries), behind Israel. In Q3, it was estimated that the region attracted US$ 2.28 billion – 0.5% higher on the quarter and 91.6% up on Q1. However, the annual total is likely to fall well short of the $11.60 billion of capital attracted last year, not helped by the continuing regional military conflicts. The region’s largest deal in 2024 has been the acquisition of a 49% stake in ICD Brookfield Place, for US$ 735 million, by Lunate and Olayan Financing Co WLL; both companies each took a 24.5% share. The other two leading deals were the US$ 600 million agreement for 50% of the iron blending and distribution company, Vale Oman Distribution Centre LLC, by Apollo Global management and Silver Rock Group’s US$ 325 million investment in UAE-headquartered generative AI company Pathfinder Global FZCO.

Late last week the General Commercial Gaming Regulatory Authority granted its first-ever commercial land-based casino gaming licence to Wynn Resorts. The licence has been issued for Wynn Al Marjan Island Resort, currently under construction in Ras Al Khaimah. Another interesting development came with the news that, last month, MGM Resorts had submitted an application for a similar project to be located in Abu Dhabi. The Wynn Al Marjan Island Resort, set to open in 2027, is a multi-billion dollar project, featuring a gaming floor, over 1k hotel rooms, convention facilities, shopping outlets, and various dining options.

Emirates NBD posted a flat Q3 net profit of US$ 1.42 billion, unchanged from the corresponding 2023 period, and missing a mean analyst estimate of US$ 1.63 billion. Dubai’s biggest bank by assets, and majority owned by the Government of Dubai, had further mixed results, posting an 8.0% hike in net interest income but a 15.0% fall in non-funded income; earlier in the year, when talk was on the unwinding of the high interest rates, the bank had started focusing on expanding its non-income income. By the end of Q3, total assets had climbed 14.0%, to US$ 253.68 billion, gross loans by 6.0% to US$ 138.42 billion and deposits by 13.0% to US$ 170.03 billion. The bank’s ratio of non-performing loans improved by 0.7%, down to 3.9% on the year from last year’s 4.6%, boosted by “strong recoveries, writebacks, write-offs and repayments”. By today, its share value was at US$ 5.45 – US$ 0.75, (16.0%) higher YTD from its 2024 opening price of US$ 4.70.

Meanwhile, Emirates Islamic posted an impressive 52% record profit surge, to US$ 681 million, in the nine months to 30 September 2024 – and a net profit margin of 4.5% – with income 14.0% higher at US$ 1.12 billion; the main drivers behind the results were marked expansion in both funded and non-funded income, along with a 24.0% increase in customer financing. Q3 saw profit 92.0% higher at US$ 227.52 million, as total income grew 16.0% to US$ 381 million. Its total assets rose to US$ 29.16 billion, with further rises for both customer financing, up 24.0% to US$ 18.26 billion and customer deposits, 21.0% higher at US$ 20.16 billion.

The DFM opened the week, on Monday 14 October, thirty-three points (0.7%) higher the previous week, gained a further thirty points (0.7%), to close the trading week on 4,469 points by Friday 18 October 2024. Emaar Properties, US$ 0.07 higher the previous week, shed US$ 0.01, closing on US$ 2.29 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 5.40, US$ 1.66 and US$ 0.34 and closed on US$ 0.67, US$ 5.45, US$ 1.69 and US$ 0.34. On 18 October, trading was at eighty-five million shares, with a value of US$ 61 million, compared to eighty-nine million shares, with a value of US$ 60 million, on 11 October.

By Friday, 18 October 2024, Brent, US$ 7.23 higher (10.0%) the previous fortnight, shed US$ 5.66 (7.1%) to close on US$ 73.55. Gold, US$ 7 (0.2%) higher the previous week, gained US$ 63 (2.4%) to end the week’s trading at a record US$ 2,731 on 18 October 2024.

A study by Action Fraud indicates that Revolut – named in 9.8k fraud reports – was involved in more fraud complaints than any major UK bank last year; this was about 2k more than Barclays and Lloyds, and double the number received about Monzo. The bank responded that it “takes fraud and the industry-wide risk of customers being coerced by organised criminals incredibly seriously.”

It seems that a US industrial technology group is in line to acquire a division of UK’sDe La Rue, a London listed company – and a major player in the currency printing sector – currently responsible for supplying at least forty global central banks. Crane NXT is planning a US$ 390 million investment for De La Rue’s authentication arm, that will leave the company, founded in 1813, being just a pure-play currency printer. However, it will result in it being able to eliminate its debt and include an unspecified sum to be injected into the company’s pension scheme; in 2023, the firm was forced to seek breathing space from its pension trustees by deferring tens of millions of pounds of payments into its retirement fund. There are reports that it may well be interested in acquiring the whole De La Rue enterprise. On Monday, 14 October, shares in De La Rue closed at the equivalent US$ 1.22, giving a market cap of US$ 240 million – 50% higher over the past twelve months.

Following trading in Mothercare’s shares having been suspended since the beginning of the month, the retailer is closing in on a US$ 39 million deal with India’s Reliance deal in a bid to solve its financial woes; it is likely that the troubled retailer will receive US$ 20 million in cash to refinance the company’s debt. The joint venture would see Mothercare’s Indian operations in the hands of the conglomerate. At the turn of the century, the UK company was one of UK’s leading listed retailers by market cap but has since seen a relentless decline, with a current value of US$ 26 million. To make matters worse, it was continuing to pay an interest rate, on its loan facility, of over 19%, along with a pension deficit larger than its market capitalisation. Reliance, which owns Hamleys, recently struck a brand licensing deal with Superdry to acquire the British fashion brand’s intellectual property assets in India.

This year, over two hundred and sixty companies in India have raised more than US$ 9 billion through IPOs, higher than the US$ 7.42 billion raised in2023. The latest issue involves Hyundai Motor India, with its US$ 3.3 billion issue, fully subscribed, mainly driven by institutional investors. This deal is the South Korean company’s first such arrangement outside of its home base, and India’s biggest ever, and the world’s second-largest IPO this year. The issue prices India’s second carmaker at about twenty-six times earnings, close to twenty-nine times for market leader Maruti Suzuki.

Chief executive, Kelly Ortberg has advised that Boeing will cut 17k jobs – equivalent to 10% of their current workforce – which will include executives, managers and employees. He said the downsizing is necessary to “align with our financial reality”, after an ongoing strike by 33k workers, on America’s West Coast, halted production of its 737 MAX, 767 and 777 jets. He also confirmed that it will also delay the rollout of the new 777X plane to 2026 instead of 2025 and will stop building the cargo version of its 767 jet in 2027, after finishing current orders. It is estimated that it has lost US$ 25.0 billion over the past six years, with Q3 results showing that it had burned through US$ 1.3 billion in cash and lost US$ 9.97 per share.

Last week Boeing announced major redundancy plans – this week it seems to the turn of Airbus, as it plans to cut up to 2.5k jobs in its Defence & Space division – equating to 7% of that division’s payroll – after spiralling losses on satellite projects. It had been impacted by heavy charges in space systems, including OneSat, and delays and rising costs in defence. The announcement follows a longstanding efficiency review, code-named ATOM. It has also been drawing up a specific turnaround plan for its struggling Space Systems business.

A deal could be in the offing that would see three of the world’s biggest cigarette companies – Philip Morris, British American Tobacco and Japan Tobacco – paying US$ 23.6 billion to smokers and health departments in Canada under the terms of a settlement put forward by a court mediator. This comes after a 2015 Quebec court ruling that the companies were long aware of the links, between cigarettes and cancer, but failed to warn their customers, and ordered them to pay US$ 10.87 billion in damages; this decision saw the cigarette companies placing their Canadian units into bankruptcy, followed by nine years of negotiations. The proposal sends roughly US$ 4.71 billion directly to smokers and their heirs hit by illnesses, such as lung or throat cancer, with US$ 2.90 billion reserved for victims in Quebec who first brought the suit; this equates awards of up to US$ 72k per person. On top of that, government health departments would also receive about US$ 17.38 billion in funds over time.

In a bid to boost AI-assisted content moderation, TikTok has announced that it will cut hundreds of its 110k global jobs, without giving more specific details, but is expected a significant number of, but less than five hundred, positions being in Malaysia. The company, owned by ByteDance, noted “we expect to invest US$ 2.0 billion globally, in trust and safety, in 2024 alone and are continuing to improve the efficacy of our efforts, with 80% of violative content now removed by automated technologies”. The layoffs also come as tech giants face increased regulatory pressure in Malaysia, where a surge of malicious content on social media, including online fraud, sexual crimes against children and cyberbullying, was reported earlier this year.

Following a slump last year, global merchandise trade moved higher in H1, with an annual 2.3% increase, which should be continued well into H2. With consumption increasing, as banks start to cut interest rates, WTO economists now anticipate 2024 and 2025 increases, in the volume of world merchandise trade, of 2.7% in 2024 and 3.0%. It estimates that global GDP growth, at market exchange rates, will be flat at 2.7%, over the two years. The forecast comes with the caveat that there are possible downside risks, including regional conflicts, geopolitical tensions and policy uncertainty. It is expected that growth in ME exports will be the second largest, at 4.7%, behind Asia’s impressive 7.4%, but ahead of South America’s 4.6%, the CIS region’s 4.5%, Africa’s 2.5%, North America’s 2.1% and Europe’s minus 1.4%. However, the ME, (with a 9.0% growth) leads the world on the import side, followed by South America’s 5.6%, Asia’s 4.3%, North America’s 3.3%, the CIS region’s 1.1%, Africa’s 1.0% and Europe minus 2.3%.

Wine fraud has existed from time immemorial but of late it seems that stakes have been raised. In days gone by, it was left to dedicated experts, counterfeiting labels and wax seals, in order to pass basic wine off as something fancier. Now with best grand crus costing thousands – and the demand from newish markets, such as China, rising – the market is ripe for the experts, who understand wine, and can forge labelling, create old bottles and understand corks so that they can fool the professionals. The result is that this particular crime has become more technical and better organised, with much higher profits. Italy ticks all the boxes – including wine know-how, artisans, who know everything about labelling, corks and old bottles, as well as a criminal underworld willing to get involved in this profitable venture – making it the hub of wine fraud. These artisans are so good at what they do, that, in some cases, the vineyards themselves are often unable to spot a fake. International buyers, especially in China, are willing to spend US$ 26k or more on a top-quality bottle and have been scammed by the criminals filling the bottle with cheaper wine. French and Italian police say they have busted an international fraud ring, led by a Russian mastermind, that was passing poor quality bottles of wine off as vintages worth up to US$ 16k each. Europol noted that items recovered during seizures included a “large amount of wine bottles from different counterfeited Grand Cru domains, wine stickers and wax products, ingredients to refill wine, technical machines to recap bottles”, as well as electronic equipment and over US$ 108k in cash.

According to the IEA’s Renewables 2024 report, “MENA countries’ combined ambition is to reach 201 GW of renewable capacity by 2030”. While the main-case forecast falls 26% short of this ambition, not all countries will miss their announced ambitions. Saudi Arabia, Egypt, and Algeria are responsible for nearly 60% of the region’s total ambition, and although the outlook is more optimistic than last year in these markets, the IEA forecast indicated that installed capacity still falls short of their 2030 ambitions. Growth in the region could be 60% (152 GW) higher than in the main case – nearing the realisation of the 2030 ambition – if countries meet three key challenges – faster auction implementation, improving the regulatory and policy environment for distributed solar PV, (by implementing reforms to allow self-consumption and introduce remuneration for excess electricity generation), and more growth.

The IMF managing director, Kristalina Georgieva, noting that although inflation is indeed heading south, has cautioned that growth will not deliver the tax revenues required to service debt and fund investment in the energy transition, adding that “inflation rates may be falling but the higher price level that we feel in our wallets is here to stay.” She also warned that “medium-term growth is forecast to be lacklustre”, but that it was “not enough to eradicate world poverty. Nor to create the number of jobs we require. Nor to generate the tax revenues that governments need to service heavy debt loads while attending to vast investment needs, including the green transition.” She also took a side swipe to the US and China, warning that trade disputes risked further dampening growth, and that “major players, driven by national security concerns, are increasingly resorting to industrial policy and protectionism, creating one trade restriction after another.”

At this week’s Made in Russia Export Forum, Prime Minister Mikhail Mishustin noted that “China, India and Egypt are the key destinations, with Vietnam developing at a good pace”. He also commented that “the government proactively facilitates the expansion of communications between our businessmen and counterparties from friendly countries. Various types of lending are stipulated. Insurance of contracts is also in effect. Owing to these and other measures, deliveries to such countries increased by about a third in four years – up to 86% of total domestic exports, according to data for seven months of this year”. In the first eight months of 2024, he also confirmed that the country’s GDP had increased by 4.2%.

For the third time in 2024, the Egyptian government has raised fuel prices; this time, the diesel price has been raised 17.0% to US$ 0.2279 per litre, and petrol prices – by between 11% – 13% – with 80, 92 and 95 increasing to US$ 0.2321, US$ 0.2574 and US$ 0.2689 per litre. The increase in prices in part of an IMF bailout deal which plans to rid the country of fuel subsidies by 2025. Since January 2022, the Egyptian pound has lost around 50% of its value against the greenback, whilst almost 30% of Egyptians live in poverty.

With New Zealand now entering its third recession in just two years, it seems that an increasing number of Kiwis are moving across the Tasman for a better life. The country is going through a triple-dip recession, with three episodes of two negative quarters of GDP in a row. In comparison, Australia had its first recession, in thirty years, in the early 2020 days of Covid-19. Last year, there was a net migration 27k people from New Zealand to Australia, according to Stats NZ. In the decade to 2013, this annual figure averaged 30k, before slumping to 3k for the years to 2019..

After years of being the kingpin of the European economy, Germany is fast becoming the “the sick man of Europe”, following back-to-back recessions and further bad news on the horizon. Despite its government projecting a miserly 0.3% growth in 2024, it is increasingly likely that it will be in negative territory, at minus 0.2%, come 31 December. If this event were to occur, it will see the country suffering only its second two-year recession this century. More worryingly, it is possible that Germany will be the only G7 country in contraction. There are many factors in play that have resulted in the former European powerhouse sliding down the economic ladder – soaring energy prices, the end of reliance on cheap Russian energy, China’s changing role in the global economy the Ukraine war, other geopolitical tensions, (especially in the ME), a weak global economy, the aftermath of the pandemic, demographic change, digitisation and decarbonisation. Traditionally, 50% of Germany’s growth emanated from exports but pressure from the likes of China has begun to bite into their global market share of exports. On top of that, pollical instability has worsened since Angel Markel ceded power in December 2021, after eighteen years as Chancellor. Since then, infighting in the coalition government, a surge in support for the far right, a fast-approaching general election, a skills shortage, and long-term issues of excessive red tape and underinvestment in infrastructure have exacerbated the problems.

Despite these problems, the German economy still retains its position as a major driver for economic development throughout the EU. The IMF estimates that the economy, with a GDP of US$ 4.6 trillion, equates to the cumulative GDP of Poland, Sweden, Croatia, Austria, Norway, Romania, Czech Republic, Hungary, Finland, Slovakia and Bulgaria. Germany remains the “most distressed” European market and looks to be retaining this title for the near future and this in turn will have a negative impact on neighbouring nations’ economies.

The newly created National Wealth Fund, (which also absorbs the UK Infrastructure Bank), has struck a US$ 1.30 billion deal with Barclays and Lloyds Banking Group to retrofit thousands of homes to upgrade their energy-efficiency; an official announcement is expected in coming days. More clarity is needed on the scale of the loan guarantees. A separate deal with the Housing Finance Corporation, valued at about US$ 195 million, is also expected to be announced. It is reported that the Treasury intends to inject US$ 7.46 billion into the NWF, less than the US$ 9.50 billion that Labour pledged in its election manifesto.

With wage growth slowing – down 0.2% to 4.9% – in the quarter to 31 August, it seems inevitable that there will be a further BoE rate cut, possibly only 0.25%, to 5.0%, next month; the obvious driver being that although pay is still rising faster than inflation, it is heading south, along with slowing economic growth. Over the period, the unemployment rate slipped to 4.0%, whilst in the September quarter, the number of job vacancies decreased again, declining to 841k – but still above pre-pandemic levels. The Office for National Statistics said the rate of people considered “economically inactive” – defined as those aged between 16 to 64 years old not in work or looking for a job – edged lower to 21.8%. However, the estimated jobless rate among the 18 – 24 year age group, which has been on the move upwards, over the past two years, stood at 12.8% in the August quarter, higher than pre-pandemic levels.

Although he would have probably lost the election, Rishi Sunak must be wondering what would have happened if he had gone to the electorate in November. Since July, when the Tories were hammered in the polls, there has been a raft of positive economic news, the latest being that inflation, at 1.7%, has finally fallen from its 11% level in 2022 to below the Bank of England’s 2.0% target – its lowest rate in three-and-a-half years. It now boasts being the strongest G7 economy – after the US – with many other positive indicators as interest rates have started to decline. Meanwhile, the Chancellor continues with her budget plans which will include finding US$ 52 billion, (GBP 40 billion), to avoid real-terms cuts to government departments.

Even though many of the commitments were known in advance, the Starmer government claims that the two-day mega international investment summit raised US$ 81.9 billion, (GBP 63.0 billion) – short of its target of US$ 130 billion, (GBP 100 billion). There is no doubt that some companies are holding off until they digest the ramifications of the Reeves budget. Furthermore, if Elon Musk had been invited to the summit, his companies may have helped increase the “pot”. Some of the new investment pledges from firms on Monday include:

Manchester Airports Group – US$ 1.43 billion into Stansted Airport to expand the airport’s terminal by a third, creating more than 5,000 jobs
Eli Lilly – US$ 364 million from US pharmaceutical giant to tackle “significant health challenges”, such as obesity
Macquarie – US$ 26.2 billion over the next five years for various infrastructure projects including an electric car charging network. (The Australian conglomerate has been blamed for saddling Thames Water with unsustainable debts when it was its biggest shareholder)
DP World – US$ 1.3 billion to create four hundred new jobs and make London Gateway the UK’s largest container port within five years

Speaking at the summit, Kier Starmer told the attendees that he would scrap regulation that “holds back investment” and would ask regulators to prioritise economic growth. Commenting that greater security for workers would lead to better growth in the economy, he defended the government’s plans to overhaul and increase workers’ rights as “pro-growth”. The Employment Rights Bill includes proposals that would see people being able to get sick pay from the first day they are ill and claim unpaid parental leave as soon as they start a job. He also said he wanted to “rip out” bureaucracy obstructing investment in the UK, and that simplification would give the economy a welcome boost.

There was no surprise to hear that Rachel Reeves commenting that when “we do the budget that those with the broadest shoulders will be bearing the largest burden” – “you know, non-doms, private equity, the windfall tax on the big profits the energy companies are making and putting VAT and business rates on private schools.” Although critics have already pointed out that a crackdown on non-doms could lead to an exodus, she noted that “previously when taxes on non-doms have been changed you haven’t seen that flight”. Leading business groups have also raised concerns over the potential tax rises could have a negative impact on economic growth and badly damage the hospitality sector.

The money appears to be on that the upcoming budget will see an increase in the amount of money companies pay in National Insurance – with both the PM and Chancellor declining to rule this out, with the latter noting that Labour’s election pledge not to increase National Insurance on “working people” related to the employee element, as opposed to the sum paid by employers. Employers pay NI at a rate of 13.8% on all employees’ earnings above US$ 227 per week, but pension contributions made by employers are currently exempt from the levy. (In its election manifesto, it had also ruled out increasing VAT and income tax). However, there is some concern there is – and will be – labour shortages that will impact the economy and, that being the case, any NI increases for employers may well deter them recruiting; also, many are concerned that any tax hikes could damage economic growth and play havoc with the hospitality sector.

This week, the Chancellor reiterated that her budget would be “tough” but felt that it would have little impact on inward foreign business investment, noting that she would be giving firms long-term certainty about the levels of taxation they will face. The chancellor did hint that she might change the government’s borrowing rules to free up billions of pounds more in spending for big projects. She reconfirmed that there would be no raising taxes on “working people” – and corporation tax would be pegged at 25% at least for the next five years. Capital Gains Tax is a certainty to be touched, with the PM only suggesting that a rise as high as 39% were “wide of the mark”.

Currently when it comes to public spending, the amount of money that can be borrowed for investment is restrained by the amount of debt it has, along with a self-imposed rule that public debt must fall in five years’ time. However, it seems that the new Starmer administration is set to change this in order to borrow billions to fund new infrastructure projects. The Treasury Chief Secretary, Darren Jones, has indicated that independent checks on spending for major building work will be introduced to allow the government to borrow for investment “more efficiently”. “Guardrails” will be introduced for infrastructure spending which will form part of its aim to encourage the private sector to invest in UK projects, and that, “expert-led checks and balances” will determine the quality of government borrowing for investment. With a relaxation of the former rules, the Treasury noted that the “guardrails” on spending would allow the government to borrow for investment “more efficiently going forward”. A new National Infrastructure and Service Transformation Authority, that will oversee a ten-year strategy for a pipeline of major projects, aligned with a series of Spending Reviews, and long-term budgets for investment in, for example, buildings, roads and rail, whilst the National Audit Office and a new Office for Value for Money, will also offer ongoing appraisals of “mega projects”, such as major train lines. The hope is that future project investments will give genuine value for money, bring a return on investment, and deliver for communities. Jones’ comments come alongside the government’s introduction of a “taskforce” for infrastructure spending – a group of private sector bosses including from HSBC, Lloyds, and M&G – who will advise government on where to invest for infrastructure.

There are reports that several ministers – including Deputy Prime Minister Angela Rayner, Justice Secretary Shabana Mahmood, and Transport Secretary Louise Haigh – have gone against protocol by side tracking the Chancellor and going directly to the PM, appealing for a rethink of the spending review that have seen many departmental budgets slashed. There are fears that steep spending cuts, some as high as 20%, will be needed to meet a US$ 52.18 billion, (GBP 40 .0 billion) much vaunted funding gap. It is reported that the PM and his Chancellor have already agreed on the spending cuts, due to be announced at the 30 October budget, but negotiations are ongoing with individual departments about their specific allocations. Money (That’s What I Want).

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Bite The Hand That Feeds You!

Posted on October 11, 2024 by howesdubai

Bite The Hand That Feeds You. 11 October 2024

September’s ValuStrat Price Index posted that Dubai apartment and villa prices have risen at an annual rate of 24.8% and 33.1%. Its September index improved by 2.1% on the month, (compared to 2.2% in August), reaching 190.1 points. Over the past twelve months, the valuation-based index – benchmarked at 100 points in January 2021 – was up by 28.9%; villas reached 243.2 points, while apartments recorded 155.4 points. Overall, positive gains were noted in monthly capital values of Dubai homes, albeit at a slower pace than posted in August. Ready sales saw double digit growth, while off-plan registrations reached a record triple digit annual increase.

In the villa sector, monthly and annual capital gains were at 2.3% and 33.1%, with the best performing locations being Palm Jumeirah, Jumeirah Islands, Dubai Hills Estate and Emirates Hills – all higher on the year by 42.8%, 42.3%, 35.3% and 33.8% respectively. At the other end of the scale, but still making tidy gains, were Jumeirah Village Triangle and Mudon, with increases of 20.0% and 20.4%. Meanwhile, apartment prices came in 1.9% and 24.8% higher on a monthly and an annual basis, led by marked price jumps of 33.5%, 33.0%, 30.9% and 30.0% noted in Discovery Gardens, The Greens, Palm Jumeirah and Al Quoz. Least capital value gains were found in Jumeirah Beach Residence (17.6%) and Dubai Sports City (17.8%).

Almost 75% of Oqood (contract) registrations for off-plan homes grew 9.1% on the month and a record 254.2% on the year. The volume of ready secondary-home transactions also grew by 10.9% monthly and 19.0% annually. Last month, there were sixteen transactions for ready properties over US$ 8.17 million, (AED 30 million), situated in Palm Jumeirah, Emirates Hills, Jumeirah Bay Island, Dubai Hills Estate, and District One. Five developers accounted for 48.8% of total sales – Emaar – 18.8%, Damac – 14.7%, Sobha – 7.4%, Azizi – 5.0%, and Binghatti – 2.9%. Top off-plan locations transacted included projects in Jumeirah Village Circle (8.5%), Damac Hills 2 (8.0%), Bu Kadra (6.9%), and Dubai Hills Estate (6.2%), whilst most ready homes sold were located in Jumeirah Village Circle (12.2%), Business Bay (5.2%), Dubai Marina (5.2%), and International City (3.4%). This month, Jumeirah Village Circle also broke its individual record with the highest number of ready homes traded in one month.

An Emirates NBD Research report indicates that Dubai is expected to see 110k residential units coming onto the market in the next fifteen months to December 2025; in the nine months to September 2024, 21.3k units have hit the market, with 25k under construction, and that 76k will be delivered next year. If these figures come to fruition, then that would certainly help to ease pressure in prices/rentals and greatly help to find some sort of equilibrium between supply and demand. This blog uses an apartment to villa ratio of 82:18; recent official figures show 2020 to 2023 figures at 581k:131k (712k), 618k:139k (757k), 639k:145k (784k) and 661k:152k (813k); these figures indicate that residential units have risen by 37k:8k (45k), 21k:6k (27k) and 22k:7k (29k) over the three years to 2023. That being the case, 2025 handover of 75k will begin to balance the supply/demand equilibrium, and start to stabilise prices, which many would hope to be the case!

Another assumption is that the average number of occupants in an apartment and a villa is 4.85 and 4.25 persons; this estimate also takes into account the fact that there will be up to 9% vacant properties for a variety of reasons, including Airbnb, second homes, semi-retirement renovations or just left empty. Today’s Dubai population stands at 3.788 million and taking the estimates above that would indicate that 3.205 million live in apartments, (661k * 4.85), and 646k live in villas (152k * 4.25) which equates to 3.851 million. YTD, the population has grown by 3.68% so it could likely expand 4.85% to 3.832 million by year-end. In 2023, the number of apartments rose by 3.44% to 661k and villas by 4.82% to 152k; this figure could see residential units 5.66% higher at 859k, with apartments and villas up by 5.70% to 698.7k and 5.46% to 160.3k.

MAG Lifestyle Development has announced the launch of MAG 777, a US$ 95 million, twenty-two storey residential tower located in Dubai Sports City. The project, which is already 60% complete, will comprise two hundred and sixty-one fully fitted studio, 1 B/R and 2 B/R apartments; handover is slated for Q4 2025. The entire twentieth floor will be a comprehensive health club featuring a large gym, yoga room, Pilates room, steam room, sauna, and a cold plunge room, whilst the rooftop will have an infinity pool, with lake views, a BBQ deck, and serene relaxation zones.

It is no secret that Dubai is a magnet for high-net worth individuals for a myriad of reasons including its tax advantages, strategic location, and political neutrality; this year, it is expected to welcome 6.7k millionaires. Furthermore, other benefits include its premium real estate, investor-friendly frameworks, large industrial goals, and a highly sought-after residence by investment initiative. With a projected net inflow of over 6.7k millionaires in 2024 – more than any other country in the world – the UAE will maintain its position as the number one destination, well ahead of second place USA’s 3.8k. The number of HNWIs in the UAE has surged by 55% over the past decade, reaching approximately 68k HNWIs last year.

A 50:50 JV between Abu Dhabi’s Aldar and Expo City Dubai will result in a six-building mixed-use residential, office, and retail project development, with a gross development value of more than US$ 477 million. It will encompass a combined gross floor area of 103k sq mt and Aldar will be responsible for the asset management of the development, once completed. The buildings are located beside Dubai Exhibition Centre, which is set for a US$ 2.72 billion expansion that will more than triple the exhibition space to 180k sq mt by 2031, making it the largest indoor exhibition and events destination in the region. There is no doubt that Aldar sees Dubai as a viable market, having already established a JV, with Dubai Holding, to develop prime residential communities, a partnership, with DP World, to build a landmark logistics park, and a planned development of a Grade A office building adjacent to the Dubai International Finance Centre.

To take advantage of Dubai’s current status, JP Morgan becomes the latest entrée to set up a Dubai base to serve a diverse clientele, including individuals, family offices, charities, and family foundations. In June, UBS said it was strengthening its wealth management team in the Middle East with ten new hires joining expansion efforts by other Western banks and Asian wealth managers including Deutsche Bank and Lombard Odier.

The largest ever budget in the history of the UAE was approved by the federal cabinet, chaired by HH Sheikh Mohammed bin Rashid; the balanced budget saw both revenue and expenses pegged at US$ 19.48 billion. Its approval is part of the multi-year financial plan (2022-2026). As in past years, the 2025 budget is allocated across key sectors, including Social Development and Pensions, Government Affairs, Infrastructure and Economic Affairs, and Financial Investments, alongside other federal expenses, representing 39.0%, 35.7%, 3.6%, 4.0% and 17.7% of the total 100% budget amount, and in monetary terms US$ 7.59 billion, US$ 6.97 billion, US$ 0.701 billion, US$ 0.780 billion and US$ 3.44 billion.

In advance of its much-awaited Airbus A350s joining the fleet, Emirates Airline has invested US$ 48 million in full suites of the latest equipment and systems to support both pilot and cabin crew training. The suites include three full flight simulators, integrated with innovative pilot support systems (PSS), a fixed base training device, a cabin emergency evacuation trainer and a door trainer. The airline’s first A350 full flight simulator received a level D qualification, the highest for this type of simulators, from the European Union Aviation Safety Agency. Currently, the airline has trained nearly thirty pilots, (with a further fifty by the end of next month), and eight hundred and twenty cabin crew. Emirates has sixty-five A350s in its order book.

Jebel Ali Free Zone was awarded five major accolades at the fDi Global Free Zones of the Year 2024 awards, including the top position in the overall ranking of free zones, as well as the Industrial Zone of the Year and the Top Sustainable Zone in both global and ME categories.

Dubai’s Roads and Transport Authority has posted that its 2023 digital revenues were up by an annual 16.8% to US$ 1.00 billion, as the total number of digital transactions, conducted through RTA’s channels, nudged 1.0% higher to eight hundred and twenty-one million. There was a 29.0% expansion in transactions, via smart apps, to 15.299 million, and 20% growth in the number of registered users to 1.404 million; 3.056 million RTA apps were also installed during the year.

With the potential to boost economic growth by almost US$ 2.2 billion, Digital Dubai launched the “Dubai Cashless Strategy,” with a target to account for 90% of all transactions by 2026. Director-General of Digital Dubai, Hamad Obaid Al Mansoori, said, “cashless payments are integral to daily life. We aim to establish Dubai as a global digital capital and an attractive investment destination.” By the end of last year, 97% of Dubai government transactions were digital. The strategy seeks to provide a seamless payment experience for customers and merchants, facilitating diverse payment methods and gradually reducing acceptance fees.

Earlier in the week, Dubai World Trade Centre hosted the two-day, seventh edition of the Forex Expo Dubai 2024 which saw over two hundred global exhibitors, highlighted the latest trends, technologies, and opportunities in trading. This year’s event, focusing on innovation, education, and connectivity, also offered a platform for industry leaders and investors to network, learn, and explore the latest trends in online trading.

Next week sees the four-day Future Blockchain Summit 2024 taking place from 13 – 16 October at Dubai Harbour. An expected 1.2k investors from fifty countries will be in attendance at the summit expected to host several discussions, surrounding the integration of blockchain with AI, the Internet of Things, and the growing role of non-fungible tokens. Global industry leaders will also be discussing how the direction of these industries is changing. One of the more popular presentations will see the COO of The Sandbox, Sebastien Bourget and the Executive Chairman of Animoca Brands Group, Yat Siu, deliberating about the future of gaming, decentralised game development and the rise of eSports.

A Comprehensive Economic Partnership Agreement has been signed with Serbia, which is the first the UAE has signed with a country that is not a member of the World Trade Organisation. 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. He also expected that the agreement will add US$ 351 million to the UAE’s GDP by 2032, to top US$ 500 million in non-oil foreign trade. President His Highness Sheikh Mohamed bin Zayed was present and witnessed the signing the Comprehensive Economic Partnership Agreement.

Two days later, on Sunday, President His Highness also attended the signing of a CEPA with Jordan – a deal that is expected to boost bilateral trade to exceed US$ 8 billion by 2032, as well as to reduce trade restrictions and non-tariff measures on commodities and services. The UAE minister noted that “the agreement will come into effect later this year after its ratification, and will mark the culmination of a long-standing, deep-rooted relationship between the two brotherly countries and their peoples.” It is hoped that the agreement will enhance opportunities across multiple sectors including renewable energy, industrial projects, manufacturing, transport, pharmaceuticals, and food processing. Last year, bilateral non-oil trade reached over US$ 4.2 billion and in H1 a credible US$ 2.7 billion – 36.8% higher on the year. The UAE is Jordan’s top foreign investor, whilst Jordan is currently the UAE’s third-largest Arab trade partner outside of the GCC; mutual investment between the two nations is estimated to be around US$ 22.5 billion.

The third agreement of the week saw the Minister of State for Foreign Trade confirming the conclusion of negotiations towards a CEPA with Malaysia. As with other similar agreements, it will result eliminating or lowering tariffs, reducing trade obstacles and setting up new investment opportunities. Last year, bilateral trade hit US$ 4.9 billion and, in H1, rose 7.0% to US$ 2.5 billion, and Malaysia is the UAE’s twelfth-largest Asian trading partner, and fifth among ASEAN countries, while the UAE accounts for 32% of that country’s trade with Arab nations. The CEPA programme’s principal target is to increase the country’s non-oil foreign trade to US$ 1.09 trillion, (AED4 trillion), by 2030.

The DFM opened the week, on Monday 07 October, one hundred and fifteen points (2.5%) lower the previous week but gained thirty-three points (0.7%), to close the trading week on 4,439 points by Friday 11 October 2024. Emaar Properties, US$ 0.15 lower the previous fortnight, gained US$ 0.07, closing on US$ 2.30 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 5.44, US$ 1.66 and US$ 0.35 and closed on US$ 0.68, US$ 5.40, US$ 1.66 and US$ 0.34. On 11 October, trading was at eighty-nine million shares, with a value of US$ 60 million, compared to one hundred and fifty-seven million shares, with a value of US$ 100 million, on 04 October.

By Friday, 11 October 2024, Brent, US$ 6.07 higher (8.4%) the previous week, gained US$ 1.16 (1.5%) to close on US$ 79.21. Gold, US$ 13 (0.5%) lower the previous week, gained US$ 7 (0.2%) to end the week’s trading at US$ 2,668 on 11 October 2024.

Austrian consumers, affected by the ‘dieselgate’ scandal, have finally settled with Volkswagen for a sum of US$ 25 million. The German carmaker admitted, that in 2015, it had installed software to rig emissions levels in millions of diesel vehicles worldwide. VKI, the country’s consumer protection watchdog, filed sixteen complaints for 10k Volkswagen customers in “the largest wave of complaints ever filed” in Austria, pointing to the fact that “the people affected paid too much for their vehicles”. Volkswagen said it “welcomed the solution found with the VKI”. The original claim was higher at US$ 66 million, based on the value of the vehicles had fallen by 20%. To date, the scandal has already cost VW around US$ 33.0 billion in fines, legal costs and compensation to car owners, mainly in the US.

Because it allowed drug cartels and other criminals to transfer hundreds of millions of dollars in illicit funds, TD Bank has agreed to pay more than US$ 3.1 billion, (including US$1.8 billion to the Justice Department and US$ 1.3 billion to the Treasury’s Financial Crimes Enforcement Network), after pleading guilty to charges in the US. Prosecutors claimed that one of Canada’s biggest lenders operated with inadequate guards against money laundering for nearly a decade, failing to act even when staff flagged obvious cases of abuse, such as a customer making daily deposits of US$ 1 million in cash. Its chief executive, Bharat Masrani, said that the bank was taking “full responsibility” for its failures, but that it had the financial strength to weather the situation and would be making “the investments, changes and enhancements required to deliver on our commitments”. TD Bank is the largest lender in US history to plead guilty to failures under the Bank Secrecy Act and the first to plead guilty to conspiracy to commit money laundering. It was claimed that by 2018, it failed to monitor more than 90% of the transactions on its network, activity worth more than US$ 18 trillion. Worryingly, TD is the sixth largest bank in North America by assets and serves over 27.5 million customers around the world.

There are reports that HSBC, the largest lender in Europe, is planning to save up to US$ 300 million by reducing top management layers, as it mulls over the possibility of merging its commercial and investment banking units; it currently has a global payroll of some 214k. In H1, the total group expenses came in 5.0% higher, on the year, at US$ 16.3 billion. In recent years, the bank appears to have focussed more on Asia, where it has scale, and has been slashing businesses in the western hemisphere, including US, France and Canada.

GSK announced that it has settled 93% of all cases, by paying US$ 2.2 billion, relating to the discontinued version of its heartburn drug Zantac causing cancer. Despite not admitting wrongdoing, the UK pharma has managed to reach agreements with ten legal firms who represented around 80k claimants. GSK also stated that while there is “no consistent or reliable evidence” the drug increases the risk of cancer, the settlements “remove significant financial uncertainty.” It will also pay US$ 70 million to resolve a whistleblower complaint by a laboratory that alleged the drugmaker defrauded the US government by concealing Zantac’s cancer risks. The drug was first introduced in 1983 and, within five years, was posting annual sales of over US$ 1.0 billion. In 2019, UK doctors were told to stop prescribing Zantac as a “precautionary measure”, and a year later US regulators followed suit. As well as being sold by GSK, the drug has also been marketed by other major pharmaceutical firms including Pfizer, Sanofi and Boehringer Ingelheim, the first two of which have already agreed to settle cases.

A rescue attempt by Breal Capital and Calveton, has bailed out TGI from going out of business and saved some 2.4k jobs, (equating to about 70% of the payroll), and fifty-one of its eighty-seven outlets. The deal only involves the UK operations of TGI Fridays and would result in the buyers, which also jointly own the upmarket restaurants business D&D London, (as well as Byron Burgers and Vinotica), and acquiring a majority shareholding. Hostmore, the parent company, and the trading subsidiary which owns the TGI Fridays UK franchise, has also filed a notice of intention to appoint administrators, blaming “a very challenging set of circumstances” for its collapse.

Earlier in the year, Manchester City launched legal actions against the English Premier League claiming that their associated party transaction rules on the grounds they were anti-competitive. (This is a separate issue to the one hundred and fifteen charges faced by the football club, alleging that it had failed to provide accurate financial information over a nine-year period). Both parties claimed victory with the City saying the tribunal had declared the APT rules “unlawful” and that the league had abused a dominant position under competition law; the EPL claimed that the majority of the club’s challenges in the case were “rejected” but added: “The tribunal did, however, identify a small number of discrete elements of the rules which do not, in their current form, comply with competition and public law requirements”.

In the first eight months of 2024, China Development Bank issued about US$ 31 billion in loans for road projects across the country, as it continued to increase medium- and long-term financial support for the transport sector. Loans issued this year have focused on renovation and expansion of busy sections of the national expressway network, as well as the construction of inter-provincial road sections that were yet to be connected. The Xi Ping administration is keen to accelerate the establishment of a modern road infrastructure system. At the end of last year, the country had the world’s longest expressway network, at 184k km, whilst the total road mileage topped 5.44 million km. As at the end of 2023, the mileage of the nation’s expressways had totalled 184k km, and in the decade to 2023, there had been an annual 8.1% growth in investment in the transport sector – and road investment by an annual average of 10.1%.

In a bid to reverse the worrying slowdown in its economy, late last month China’s central bank announced a new stimulus programme to grow its struggling economy; three of the main measures were a cut in interest rates on loans to commercial banks, rate cuts on new and existing mortgages, to 15%, and a reduction in the amount of money banks are required to reserve. Growth had been slowing in the world’s second largest economy, as it continued to face a property market slump, falling prices and other challenges. The Chinese government has been trying to boost confidence in the world’s second largest economy, as concerns increase that it may miss its own 5% annual growth target. Initial market reaction was positive but the rally fizzled out, as a highly-anticipated announcement on plans to boost the country’s ailing economy disappointed investors., Shares had jumped by more than 10%, as trading restarted after the Golden Week holiday, (which had begun on 01 October), but fell back after a news conference by the country’s economic planners. Investors, who had been hoping for more information about how the government plans to support economic growth, were disappointed with the lack of detail and questioned whether the policies will be enough to fix China’s economic problems. Maybe only a more comprehensive strategy – and major reform changes – are needed to push the economy forward.

Probably the most famous of Indian tycoons, Ratan Tata, has died aged 86; he had overseen the running of the Tata Group, with annual revenues exceeding US$ 100 billion. During his tenure, as chairman of the Tata Group, the conglomerate made several high-profile acquisitions, including the takeover of Anglo-Dutch steelmaker Corus, UK-based car brands Jaguar and Land Rover, and Tetley, the world’s second-largest tea company. In 2011, The Economist called him a “titan” responsible for transforming the family group into “a global powerhouse”, and “most powerful businessman in India and one of the most influential in the world.”

A year ago, Mohammed Muizzu, the President of The Maldives was blasting India on his election campaign which centred on an ‘India Out’ policy, demanding that Delhi withdraw its troops from the island nation. Currently, with his country in dire need of finances – with its foreign exchange reserves having dropped to US$ 440 million, just enough for seven weeks of imports – his country needs a bailout of hundreds of millions of dollars. Moody’s has said that “(foreign) reserves remain significantly below the government’s external debt service of around US$ 600 million in 2025 and over US$ 1 billion in 2026”. Last month, the ratings agency downgraded the Maldives’ credit rating, saying that “default risks have risen materially”. After two years in power, during which time, bilateral relations were strained, Perhaps Muizzu has finally realised how his country is so dependent on India’s support.

India has become the fourth global economy, after China, Japan and Switzerland, to surpass US$ 700 billion in foreign reserves, after adding US$ 12.6 billion in the week ended 27 September. The Bank of America commented that the third largest Asian economy’s reserves were strong compared to other emerging markets and forecast that the reserves could increase to US$ 745 billion over the next eighteen months. Its build-up in reserves is supported by a balance-of-payments surplus, aided by a narrower current-account deficit, with the Reserve Bank of India realising the importance of maintaining a forex buffer to protect the economy during periods of market volatility. Prime Minister Narendra Modi added that India is not only preparing to reach the top spot, but also to sustain it for a long time. The International Monetary Fund has indicated that India’s GDP is on track to hit US$ 4 trillion in 2024. It is estimated that it took India seventy-five years to reach a per capita income of US$ 2.73k but it will only take five years to add another US$ 2k.

Last year, the EU imported US$ 524 billion worth of high-tech products – slightly lower on the year, whilst exports were 3.0% higher at US$ 506 billion. 55% of the bloc’s imports emanated from China (32% at US$ 170 billion) and the US (23% at US$ 118 billion). Other imports were from Switzerland (7% – US$ 34 billion), Taiwan (6% – US$ 31 billion), UK (4% – US$ 22 billion) and Vietnam (US$ 21 billion). Electronics-telecommunications accounted for the largest share of high-tech imports from non-EU countries (39%), followed by both computers/office machines and pharmacy accounting for 15% of high-tech imports, most of which came from China and the US respectively. For Switzerland, pharmaceuticals were the largest category accounting for 70%, (US$ 24 billion), of high-tech whilst aerospace from the US and the UK accounted for 65% of aerospace imports – 35%, (US$ 41 billion), and 30%, (US$ 7 billion). The US was the top trading partner (28% – US$ 140 billion) for high-tech exports to non-EU countries, followed by China, (11% – US$ 54 billion), the UK (10% – US$ 48 billion), Switzerland (6% – US$ 31 billion), Japan (3% – US$ 16 billion) and Türkiye (US$ 15 billion).

Australia is a big country and there are thousands of small stores scattered over the vast continent. Although there is currently no specific legal requirement for smaller stores to display prices, for goods on the shelf, consumer law dictates that only larger stores – i.e. those with a physical size of more than 1k sq mt – are required to display price per unit costs for all goods sold. The federal government is considering whether to make visible pricing mandatory as it develops a remote community food strategy. Consumer groups complain that the lack of pricing in smaller outlets is leaving shoppers “flying blind” and struggling to budget, with authorities wanting all stores to display prices, but there doesn’t appear to be legislation specific enough to enforce this requirement.

A landmark High Court ruling could radically reshape how Australian corporations are held responsible for wrongdoing and that anyone in senior management, that has visibility over systems of conduct and patterns of behaviour, could be held liable. The ruling potentially makes it easier to pin blame on individuals who have had oversight of failures by corporate or government bodies or had knowledge of wrongdoing even if they have not been doing it themselves. Previously corporate fraud was difficult to prove, in as much as guilty individuals needed to be explicit and deliberate in their wrongdoing, or found to have taken money.

The case was centred on a dodgy training college, with the High Court dismissing an appeal against a finding of “systemic unconscionable conduct”, i.e. that it had engaged in a course of conduct or a pattern of behaviour, which is, “in all the circumstances, contrary to commercial norms”. The court found corporations think and behave through their systems, policies and practices, so if a company had a “predatory business model”, it can be assumed this was a knowing and deliberate strategy — and that can be penalised through the courts. What the ruling indicates is that an executive who knows all of the facts, sufficient for a finding of unconscionability against the company, could themselves be subject to a finding of unconscionability.

The EU seasonally adjusted Q2 current account of its balance of payments recorded a surplus of US$ 143.21 billion, equating to 2.9% of GDP, compared with a surplus of US$ 145.40 billion (or 3.0% of GDP) in Q1, and a surplus of US$ 85.77 billion (1.8% of GDP) on the year. Estimates recorded current account surpluses with the UK (US$ 74.24 billion), offshore financial centres (US$ 42.06 billion), Switzerland (US$ 30.20 billion), Hong Kong (US$ 12.08 billion), Canada (US$ 11.09 billion), Brazil (US$ 9.55 billion), USA (US$ 9.33 billion), Japan (US$ 2.97 billion) and Russia (US$ 1.54 billion). Deficits were registered with China (US$ 30.42 billion) and India (US$ 3.62 billion). Direct investment assets of the EU decreased by US$ 93.34 billion and direct investment liabilities decreased by US$ 179.77 billion. Consequently, the EU was a net direct investor to the rest of the world, with net outflows of US$ 86.43 billion, with a portfolio investment recording a net inflow of US$ 100.59 billion, while other investment recorded a net outflow of US$ 150.45 billion. Fifteen Member States recorded surpluses, eleven recorded deficits and one Member State had its current account in balance in Q2. The highest surpluses were observed in Germany (US$ 68.42 billion), Ireland (US$ 38.99 billion), the Netherlands (US$ 26.69 billion), Denmark (US$ 25.0 billion), Sweden (US$ 15.04 billion), Spain (US$ 14.28 billion) and Italy (US$ 9.34 billion). The largest deficits were recorded for Romania (US$ 8.46 billion), France (US$ 6.70 billion) and Greece (US$ 4.94 billion).

In the US, the Department of Justice seem to be pushing for remedies that would see a downsizing of Google’s hold on the market in which it processes 90% of US internet searches and creating an illegal monopoly at the same time. It is possible that action could be taken to divest parts of its business, such as its Chrome browser and Android operating system, which will give its competitors more room to grow. If nothing is done, then Google would grow even bigger and expand their market share nearer to 100% – and then what would happen? In 2021, Google made annual payments of US$ 26.3 billion to companies including Apple, and other device manufacturers, to ensure that its search engine remained the default on smartphones and browsers; this may become a thing of the past if the DoJ has its way.

Following weeks of mortgage rates edging lower in the UK, it seems that some lenders, including Coventry and Co-operative Bank, are becoming nervous and have started withdrawing their lowest rates or announcing hikes. Rising tension in the ME is probably the main driver, as it could impact on oil prices moving higher and the subsequent inflationary contagion. Other signs of the possibility of rates moving higher are recent rises in swap rates, mixed messages emanating from the BoE and fears of a slowdown in the global economy.

In the UK, a study by Hampton found that Gen Z are paying almost twice as much as older generations did in mortgage payments, mainly attributable to a combination of record-high house prices and relatively high interest rates. The inflation-adjusted research showed that those born in the late 1990s will be paying US$ 2274, compared to just US$ 1,129 that the Millennial generation before them paid; baby boomers, those born between 1946 and 1964, would have forked out US$ 1,013 a month. Halifax’s latest House Price Index shows the average cost of a new home in the UK is now nearly US$ 384k.

The eighteenth Post Office Travel Money Report lists the global destinations, with the best value for UK holidaymakers. This year, the report indicates that 90% of the PO’s best-selling currencies are currently weaker against sterling than a year ago, which in turn means price falls in many of the world’s more popular destinations – with food/drinks and other items cheaper in twenty-five of the forty resorts and cities surveyed; local prices are up year-on-year in 80% of destinations. Best value destinations in 2024 were Hoi An – Vietnam, Cape Town, Mombasa, Tokyo, Algarve, Sharm-El Shek, Sunny Beach – Bulgaria, Marmaris -Turkey, Paphos, Penang, Phuket, Delhi, Costa del Sol and Montego Bay. Tamarindo, (Costa Rica) is the most expensive destination, with annual prices up 13.2%, whilst also on the flip side, Sydney’s prices for the likes of coffee, local beer and a three-course meal, with a bottle of wine, are more than triple those found in Cape Town.

The fear that the upcoming autumn budget, later in the month, may see changes that will impact the rich has spooked the London multi-million-pound property market, with demand and deals having declined in recent months. Although July UK house prices posted a 2.2% hike in the year, there has been a 22% decrease in multi-million-pound house sales in the year. It seems that those in the very top income brackets are staying put, as they wait to see what Chancellor Rachel Reeves has in store. Sales in London were 36.0% lower, on the year, at US$ 3.62 billion, compared to the twelve months to July 2023; there were ten transactions above US$ 39.21 million (GBP 30.0 million), compared to thirty-eight, a year earlier.

According to the Institute for Fiscal Studies, the Starmer administration will have to find a further US$ 20.90 billion, in addition to the US$ 11.76 billion tax rises already set out in the Labour manifesto, to meet its pre-election promises of no return to “austerity” for public services and a boost to government investment, designed to kickstart growth. Chancellor Rachel Reeves will have to explain, in her budget speech later in the month, how she plans to meet a raft of manifesto promises against a tangle of self-imposed restrictions on borrowing, spending and debt. Following the government’s strange decision to slash to all but the poorest pensioners the winter fuel payments, it is expected that she will go to the other end of the scale and start to squeeze the high earners. For what it is worth, at the election, Labour promised not to increase taxes on “working people” and said it would not raise VAT income tax or National Insurance. So it was no surprise to anyone to hear Prime Minister, Sir Keir Starmer, on Wednesday, not ruling out a possible increase in National Insurance contributions paid by employers. The influential think tank noted that she had inherited an “unenviable” situation, with the public finances, and faces battles on all fronts – higher debt following the pandemic, higher interest payments to finance that debt and continuing sticky inflation. She has to make do with falling revenues from fuel and tobacco duties and try to pump more money into the likes of the NHS, other public services, local government, higher education etc. The new government has also pledged to boost investment, which will be financed from further borrowing – and as a separate exercise to the day-to-day spending

The UK government is investigating a reported thirty-seven unnamed UK-linked businesses for potentially breaking Russian oil sanctions; a further fifteen cases had been concluded, but no fines had been handed out. The facts that no fines have yet to be handed out and that Russia has one of the world’s fastest growing economies, must be of concern to the Treasury. Financial sanctions on Russia were introduced by the UK and other Western countries following the invasion of Ukraine in 2022. It included a US$ 60 a barrel cap on the price of Russian oil, designed to ensure that oil can keep flowing without Russia making large profits.

After two months of stagnation, the UK economy popped its head above the parapet and posted a modest 0.2% GDP increase, with all major sectors – except wholesaling and oil extraction – heading north, with accountancy/professional services (4.3% higher), retail and many manufacturers having strong months. The UK’s total underlying trade deficit widened by US$ 3.92 billion to US$ 13.06 billion in the quarter to August, driven by an increase in imports of goods. On Monday, the PM and the Chancellor will host a two-day, hard-sell Investment Summit in London will bring together CEOs from private companies, investment houses and sovereign wealth funds. It is noteworthy that that Rachel Reeves did not talk down the UK economy after discussing the August figures, finally realising that foreign capital investment is so important to pull the economy forward – and negative remarks may well deter potential investors.

Kier Starmer seems to be jumping from one crisis to another in his early days as PM , including the apparent mismanagement of the winter fuel allowance, Lord Ali’s generosity dressing him and his wife with a US$ 28k ‘allowance’, ‘giftgate’ etc. Now with the Summit two days away, DP World has ‘paused’ a scheduled announcement of a US$ 1.3 billion investment in its London Gateway container port, following criticism by members of Sir Keir Starmer’s cabinet; this was supposedly to be the centrepiece of Monday’s event. This follows criticism, by Transport Secretary Louise Haigh and Deputy Prime Minister Angela Rayner, of its subsidiary P&O Ferries, which two years ago made a business decision that did not go down well with the then Tory Minister of Trade, Grant Shapps. In a sign of a divided cabinet, it seems that both Deputy Prime Minister Angela Rayner and Transport Secretary had not read the script and decided to lay into the Dubai conglomerate. Announcing new legislation to protect seafarers on Wednesday, she described P&O, owned by DP World, as a “rogue operator” and said consumers should boycott the company, and in a press release issued with Ms Rayner, said P&O’s actions were “a national scandal” and Ms Rayner described it as “an outrageous example of manipulation by an employer”. It would appear that the two women will have to eat a little humble pie or face redundancy and should know that one ‘does not Bite The Hand That Feeds You.

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Charity Begins At Home!

Posted on October 5, 2024 by howesdubai

Charity Begins At Home! 04 October 2024

fäm Properties posted that Q3 overall sales transactions topped 50.4k, (37.9% higher on the year and 16.6% to the good on the quarter). Volume wise, the 39.1k apartment sales accounted for 77.0% of the Q3 total, (and 43.9% higher on the year), with a value of US$ 19.21 billion, whilst 8.2k villas were sold, with a value of US$ 10.68 billion – 16.6% higher on the year and 18.4% on the quarter. The surge in the sector can be gleaned from the various median prices over recent times – US$ 277, US$ 321, US$ 383 and US$ 412 (all in per sq ft) in 2021, 2022, 2023 and 2024. For plot sales, there were 42.3% and 45.9% rises in volumes. on the year and the quarter, at 2.1k plots, valued at US$ 8.15 billion. Commercial real estate posted a 12.1% annual rise to 1.11k sales, valued at US$ 627 million.

It is interesting to note Q3 property sales over the past five Q3s, to 2024, read US$ 4.93 billion, US$ 11.55 billion, US$ 18.94 billion, US$ 29.75 billion and US$ 38.66 billion; transactions over that period were 8.6k, 15.9k, 25.5k, 36.7k and 50.4k. Over the period, the top five performing locations were Jumeirah Village Circle, Dubai South, Business Bay,, Wadi Al Safa and Dubai Hills, with 4.5k, 2.9k, 2.7k, 2.4k and 2.3k sales, valued at US$ 1.45 billion, US$ 2.25 billion, US$ 1.97 billion, US$ 1.44 billion and US$ 2.01 billion. In Q3, the most expensive sale, at US$ 749 million, was for an apartment at the One at Palm Jumeirah. A breakdown by value – below US$ 272k, US$ 272k-US$ 545k, US$ 545k-US$ 817k, US$ 817k-US$ 1.36 million and US$ 1.36 million plus – with 29%, 31%, 18%, 14% and 8% of sales. When it comes to primary versus secondary sales, the volume ratio was 68:32 and by value 67:33.

The latest Cavendish Maxwell report indicates that in the eight months YTD, new project launches neared 86k units, with an aggregate sales value of US$ 58.23 billion which augurs well for the year end figures beating last year’s record of US$ 74.11 million; a further 40k is expected by year-end, bringing the total to some 126k. Sales transaction volumes in August reached 16.15k with Oqood, (off-plan), registrations accounting for 64.8% of all transactions, up by 6.5% month-on-month. The consultancy anticipated “that new launches will maintain their historically high levels throughout the remainder of 2024 and for a further 35k-40k units to enter the off-plan market.” The more popular areas for apartments are Dubai Islands, Jumeirah Garden City, Dubai Maritime City, Motor City, and Dubai Land Residence Complex, and for villas – The Valley, The Acres, The Oasis, and The Height Country Club. August witnessed the total volume of sales transactions increasing 0.28%, at 16.15k transactions – the second-highest month on record overall. Seven of the eight months of 2024, (with the exception of April), were record-setting months.

Property prices continued climbing to all-time highs, reaching US$ 390 per sq ft – 82.4% above April 2009’s nadir and 16.0% above the peak of September 2014. With the usual caveats, Cavendish Maxwell noted that, on an annual basis, prices have increased by 17.7% in August and now marks forty-two straight months of year-on-year increases.

With demand outstripping supply, it was no surprise to witness an 18.2% decline to four hundred deals registered in Dubai’s four prime areas. Over Q3, the number of home listings in the four prime areas declined by 52% – an obvious indicator that supply is failing to keep pace with the rapidity of sales. The number of US$ 10 million-plus home listings more than halved to 3.3k, whilst the number of sales rose 8.2% to ninety-two – a rise of 8.2%. Over the nine-month period to 30 September, home sales of over US$ 10 million nudged 1.8% higher to two hundred and eighty-two, valued at US$ 4.50 billion. The leading location continues to be Palm Jumeirah, with nineteen Q3 deals, totalling US$ 344 million, followed by Dubai Silicon Oasis and Dubai Hills Estate. Knight Frank’s data showed that nine sales worth more than US$ 10 million were recorded on the Palm Jebel Ali, totalling US$ 97 million in Q3 2024, and US$ 1.1 billion YTD, equating to 24.4% of Dubai’s total value of luxury home sales. As the demand for such homes heads north, there is a knock-on short-term impact that sees US$ 10 million plus listings slumping – YTD figure are 51% lower compared to 2023. However, despite this, the ratio of US$ 10-million-plus home sales to listings has climbed from 2023’s 10.7% to 17.1% this year.

In Q3, the average transacted price for a home in Dubai’s prime neighbourhoods stood at US$ 3.5 million, with Palm Jumeirah accounting for 90.4% of Q3 prime deals, followed by Jumeirah Islands (6.1%), Emirates Hills (2.2%) and Jumeirah Bay Island (1.4%).

Buoyed by the success of its initial entrée into Dubai’s residential market sector, Franck Muller Aeternitas Tower, London Gate, the leading Swiss luxury watch manufacturer, has now unveiled Franck Muller Vanguard Tower. Located in the heart of Dubai Marina, the US$ 436 million luxury thirty-four floor development will house seven hundred and twenty-two units – ranging from studio, (with sizes of between 414 sq ft– 674 sq ft) to three bedrooms, (spanning between 1.77k sq ft – 1.86k sq ft). Prices will start at US$ 341k, with handover expected within three years. According to Morgan’s 2024 report on Dubai’s Branded Residences, the number of units built in 2024 has risen by 50% from 2022 – equating to 7.2% of all property transactions in Dubai.

A new entrant to the burgeoning Dubai residential sector is Reef Luxury Developments, who will invest US$ 3.81 billion, to build thirty projects in the emirate – and 5k residential units – by the end of next year. It confirmed that is has already bagged a land bank across various places and will launch US$ 1.36 billion of projects by the end of 2024. All Reef apartments will have temperature-controlled sunken balconies, a developer-patented innovation that allows residents to enjoy year-round outdoor living. The developer has invested US$ 11 million in R&D to lead the real estate industry for innovation and provide more value to its customers focusing on technology and design.

This week saw the release of ‘Under Real Estate Strategy 2033’, with the aim of increasing the emirate’s real estate transactions by 57.7% to US$ 272.5 billion over the next decade. It also expects to raise the homeownership rate to 33% and implement programmes for affordable housing, whilst focusing on transparency and global marketing. New initiatives and policies will encourage people to buy more properties and turn to ownership, bring more transparency to the market, and enable developers to launch more affordable developments.

Although the sector has surged in recent years – and has now surpassed the record 2014 figures – it is hoped that the introduction of more affordable units as part of the Real Estate Strategy 2033 will open up opportunities for more people to own properties and help tenants transition to ownership. Ari Kesisoglu of Property Finder commented that the real estate market had seen a remarkable surge in property ownership over the past two years, and that this initiative “aligns perfectly with our long-held belief that strategic investments and cross-industry collaboration can enhance trust, technology, transparency, and talent in the real estate sector”. He also noted that the Dubai’s vast land availability presents a unique opportunity – a ‘blank canvas’ for real estate development.

Dubai’s September S&P Purchasing Managers’ Index Report saw the emirate’s overall activity rising at its fastest pace in four months, in contrast to the latest PMI Report for the country that showed the weakest expansion in business activity for three years; this was despite a slowdown in new business volume. The report noted that “the expansion led non-oil businesses to increase staffing and inventories to greater degrees than in August. Supplier performance also improved, though to a less extent amid reports of customs delays.” There was a marked jump in overall input costs, albeit with the rate of inflation easing to a five-month low, with the latest rise in charges being the quickest since the start of 2018. Output prices also increased, as firms attempted to pass-through costs to customers.

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. On Monday, retail prices saw declines, after average 8.6% September reductions for petrol. The breakdown of fuel prices for a litre for October is as follows:

Super 98 US$ 0.725 from US$ 0.790 in Oct (down by 8.3%)
Special 95 US$ 0.692 from US$ 0.757 in Oct (down by 8.6%)
Diesel US$ 0.673 from US$ 0.757 in Oct (down by 8.9%)
E-plus 91 US$ 0.708 from US$ 0.738 in Oct (down by 6.5%)

Financial Times Ltd’s ‘fDi Markets’ has once again ranked Dubai as the world’s leading city, (for the sixth consecutive half-year period), for attracting Greenfield Foreign Direct Investment projects, ahead of London, Singapore and New York; in H1, Dubai’s five hundred and eight Greenfield FDI projects saw Dubai’s global share of the market 0.5% higher to 6.2%. Sheikh Hamdan bin Mohammed, Dubai’s Crown Prince, praised the city’s evolving economic policies and infrastructure as key factors in its appeal to investors and multinational corporations. India was the source country with the highest total estimated FDI capital into Dubai, accounting for 19.9%, followed by Switzerland (19.6%), US (12.0%), UK (8.3%) and France (7.4%).

A number of telemarketers in the UAE have been fined after authorities discovered over 2k violations. Under Cabinet Resolutions No. 56 and 57 of 2024, individuals are prohibited from using their personal numbers for marketing purposes, with penalties of US$ 1.36k, US$ 5.45k and US$ 13.62k for first, second and third violations respectively.

Because a takaful insurer failed to meet its legal minimum capital requirement, the Central Bank of the UAE has banned it operating in the UAE, from issuing or concluding new, or renewing, motor and health insurance contracts. The regulator, (which through its supervisory and regulatory mandates, works to ensure that all insurers, their owners and staff abide by the UAE laws), has given the unnamed institution six months to remediate the solvency position and comply with its directions.

The DFM opened the week, on Monday 30 September, three hundred and twenty-nine points (7.8%) higher the previous six weeks but, not surprisingly because of increased regional tensions, shed one hundred and fifteen points (2.5%), to close the trading week on 4,406 by Friday 04 October 2024. Emaar Properties, US$ 0.01 lower the previous week, lost US$ 0.14, closing on US$ 2.23 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.69, US$ 5.65 US$ 1.73 and US$ 0.37 and closed on US$ 0.68, US$ 5.44, US$ 1.66 and US$ 0.35. On 04 October, trading was at one hundred and fifty-seven million shares, with a value of US$ 100 million, compared to one hundred and fifty million shares, with a value of US$ 191 million, on 27 September.

The bourse had opened the year on 4,063 and, having closed on 30 September at 4,503 was 440 points (10.8%) higher YTD. Emaar started the year with a 01 January 2024 opening figure of US$ 2.16, and has gained US$ 0.22, to close YTD at US$ 2.38. 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$ 0.70, US$ 5.53, US$ 1.71 and US$ 0. 36.

By Friday, 04 October 2024, Brent, US$ 2.71 lower (3.6%) the previous week, gained US$ 6.07 (8.4%) to close on US$ 78.05. Gold, US$ 179 (5.8%) higher the previous four weeks, shed US$ 13 (0.5%) to end the week’s trading at a record US$ 2,668 on 04 October 2024.

Brent started the year on US$ 77.23 and shed US$ 5.47 (271%), to close 30 September 2024 on US$ 71.76. Meanwhile, the yellow metal opened 2024 trading at US$ 2,074 and gained US$ 576 (27.8%) to close YTD on US$ 2,650.

As with most luxury carmakers, Aston Martin has been impacted by supply chain issues, falling sales in China and increased competition in the sector, after warning that its 2024 revenue and profits will be lower than expected; last year sales were at 6.6k vehicles, with about 20% of that total bound for SE Asia. This year, it expects production levels at round 1k less than originally planned. Monday’s announcement sent its shares tumbling by as much as 14%. Stellantis, the owner of brands such as Peugeot, Citroen, Fiat and Jeep, also saw its share price plummet on Monday, after a profits warning, noting that its profit margins would be significantly lower than previously thought this year. Other European carmakers are facing similar problems including Volkswagen, Mercedes-Benz and BMW having already downgraded their profit forecasts. The problems at Stellantis and Aston Martin reflect a wider malaise in the European car industry. According to data from the European Automobile Manufacturers Association, August sales of battery-powered cars were down nearly 44% on the year, while their share of the market dropped from 21.9% to 14.4%.

Despite its like for like sales growth slowing, Tesco posted a 4.0% hike in total Q2 sales, excluding fuel, at US$ 41.33 billion – with its adjusted operating profit at US$ 2.05 billion. The country’s biggest supermarket put this improvement down to its focus on value amid the continuing squeeze on shoppers’ budgets, and higher demand for its Finest premium ranges, which were almost 15% higher on the year

Liverpool-based Applied Nutrition has posted plans for a US$ 669 million, (GBP 500 million), flotation on the LSE, with a retail offering to private investors being coordinated by RetailBook, enabling them to acquire millions of pounds of stock at the IPO price. Issuing its Emerging Issues Task Force’s document will enable shares in Applied Nutrition to begin trading before the Budget in late October. There are reports that the company wanted the IPO before the budget because of the possibility that existing shareholders could incur a higher rate of capital gains tax post budget. Applied Nutrition’s largest brands include ABE – All Black Everything – which is a pre-workout range now stocked by Walmart, and BodyFuel, a hydration drink. The company formulates and makes premium nutrition supplements for professional athletes and gym enthusiasts and is the official nutrition partner of a range of English football clubs, including Premier League side Fulham, and the Scottish Premiership side Glasgow Rangers; it also has partnerships with professional boxers, MMA stars and in sports including basketball, cycling and rugby league. It sells its products in over sixty countries.

Although Harland & Wolff Group Holdings, with fifty-nine employees, has formally entered administration, for the second time in five years, its four operational companies, which run the yards, will continue to trade; their main yard is in Belfast with two more in Scotland, Methil and Arnish, and Appledore in England. The shipbuilder said, “the Administrators will unfortunately be required to reduce the headcount upon appointment. The company has also reconfirmed that the administration process means that shareholders in Harland and Wolff will see the value of their investment wiped out. It does seem that, in 2020, the previous Norwegian owners had withdrawn support, and the business fell into insolvency, having not built a ship in a generation, with the business then taken over by Infrastrata. It was a small London-based energy firm which did not have significant experience in marine engineering, but then changed the name back to Harland and Wolff and in 2022 won a major Royal Navy contract as part of a consortium led by Navantia, Spain’s state-owned shipbuilder. However, finances did not improve – the 2021 accounts, covering a seventeen-month period, posted a US$ 33 million loss, in 2022 a US$ 37 million turnover, with a US$ 93 million deficit, (with the auditor’s opinion of “material uncertainty” about the firm’s ability to continue as a going concern), and last year a yet to be audited US$ 57 million loss. The nail in the company’s coffin came in July when the Sunak government confirmed there would be no support as there was “a very substantial risk that taxpayer money would be lost”.

A former owner of Misguided, Alteri Investors, the youth fashion brand, is in talks to buy Kurt Geiger, the upmarket shoe and accessories retailer. Several other parties are also considering bids for the sixty-one-year-old footwear and accessories brand, which has been owned by Cinven, the private equity firm, since 2015. Kurt Geiger, which could raise US$ 535 million in any sale, has around seventy stores, and multiple concessions within department stores, including Harrods and Selfridges.

A US$ 110 million proposed takeover bid, by Mike Ashley’s Frasers Group, has been rejected by the struggling UK luxury brand, Mulberry whose main shareholder is Singapore-based Challice; the potential buyer is already a 37% shareholder, but the bid was turned down because it did not recognise the company’s “substantial future potential value”. It claimed to be acting to prevent “another Debenhams situation” after apparently being kept in the dark over a move by Mulberry, last Friday, to raise cash. It has become a casualty of the global slump for luxury goods, such as handbags, which has also badly impacted the whole industry. Its latest accounts indicated that a “material uncertainty which may cast significant doubt on the group and parent company’s ability to continue as a going concern.” Mulberry shares were trading 3% lower on Tuesday morning.

Recent Chinese measures, to kickstart its economy, will not be helped by news that its largest EV market, the EU, has decided to implement measures, first introduced in summer, for the next five years. The charges were calculated based on estimates of how much Chinese state aid each manufacturer has received following an EU investigation. The EC set individual duties on three major Chinese EV brands – SAIC, BYD and Geely. Although German carmakers opposed the new tariffs, (with Volkswagen saying it was “the wrong approach”), and several member states abstained, the likes of France, Italy, the Netherlands and Poland backed the import taxes. The proposal was approved because it could only be rejected if a qualified majority of fifteen members voted against the motion.

Figures show that in August this year, EU registrations of battery-electric cars fell by 43.9% on the year, in the UK, demand for new EVs hit a new record in September, but orders were mostly driven by commercial deals and by big manufacturer discounts. The Society of Motor Manufacturers and Traders expressed concern that firms had “serious concerns as the market is not growing quickly enough to meet mandated targets”. It is obvious that improved incentives are required to help the domestic industry, as the Starmer administration has pledged to ban the sales of new petrol and diesel vehicles by 2030, after the former government had moved the timetable back to 2035. Under the Zero Emission Vehicle mandate, at least 22% of vehicles sold this year must be zero-emission, with that target expected to hit 80% by 2030 and 100% by 2035; any manufacturer not meeting the target could be hit with a US$ 19.7k fine per car. BMW, Ford and Nissan have already advised Chancellor Rachel Reeves that they were likely to miss these targets, claiming that higher energy/material costs and interest rates had meant electric cars remained “stubbornly more expensive and consumers are wary of investing”; the average cost to buy an electric car is UK 63.0k.

43% of Zambia’s population of twenty million are connected to the national electricity grid and now the country is facing its worst-ever blackout, sometimes for three days at a time; a national disaster was called last February. This is the country home to the Zambezi, Africa’s fourth largest river, and the massive hydro-powered Kariba Dam. Because of the drought, that has led to parts of the river drying up, only one of the six turbines at Zambia’s power station is operating, resulting in the generation of a paltry 7% of the 1,080 MW installed at Kariba. But this year, it has been hit by one of the severest droughts in decades – caused by the El Niño weather phenomenon – which has decimated the country’s power-generation capacity. Only 13% of Zambia’s electricity emanates from coal, 3% from solar, diesel and heavy fuel oil are even lower, accounting for 3%, with 84% from water reservoirs such as lakes and rivers. Lack of finances has seen the country unable to pay for imported energy since suppliers insisted on advance payment. A financial crunch also severely restricted the government’s ability to import power, as suppliers wanted payment upfront. On Wednesday, its only coal-fired power plant, Maamba Energy, returned to maximum capacity after several weeks of maintenance and now Zambians will have at least three hours of electricity a day.

Today, the Labor Department posted that the US jobless rate dipped 0.1% to 4.1%, with employers adding a further 254k jobs – almost more than 70% of the 150k estimate some analysts had forecast; these figures give comfort that the economy will not be heading into decline. This was also good news for the Biden administration, which has created sixteen million in its almost four-year tenure to date, with the presidential election edging nearer. However, surveys indicate that the public is still wary about the state of the US economy as a 20% price hike in prices since 2021 still impact consumer sentiment. Furthermore, since October 2023, job growth has slowed and unemployment rate has been edging higher, though it remains at historically low levels. A triple whammy of the impact of Hurricane Helene, the Boeing labour strike and the start of a new school year could easily move the October figures downwards, which could be to Biden’s detriment.

Under new legislation, and starting at the end of this month, UK banks will have the power to pause payments for up to four days, replacing the old law that transfers must be processed or declined by the end of the next business day. This will give financial institutions more time to investigate fraud. It is no secret that bank fraud is on the rise and it is estimated that it accounts for a third of all crime in England and Wales, from various means such as by impersonating a genuine trader to trick victims into transferring money, or through the increasingly popular romance scams.

The former chairman of the Post Office, who was sacked after fourteen months in the job, told the public inquiry on Tuesday that the institution was in a “mess”, run by executives and government appointees who “dragged their feet” in efforts to compensate and exonerate sub-postmasters. Henry Staunton also claimed that the organisation had a “huge cultural problem” with a lack of ethnic and gender diversity – and had overseen “vindictive” investigations into two sub-postmasters who served on the company board. After taking the position in December 2022, he said he found a culture of chaos in senior management that immediately required more than the two days a week he had been told was required. He also indicated that he thought that executives did not fully accept the findings of the High Court judgment that established the role of the Horizon computer system in hundreds of flawed prosecutions. He also commented that initially a “ridiculous” amount of his time was taken up with requests for a pay rise from chief executive Nick Read, who he previously told a Parliamentary inquiry was unhappy and threatening to resign.

I am sure that Lord Mervyn King does not read this blog, but if he had maybe he would have come up earlier with the idea that the BoE (and several other central banks) had been too slow to press the button to push rates higher. Lost in France – 22 July 2022, was but one of many blogs that criticised the BoE of being too dilatory and their vacillating attitude has probably cost the UK taxpayers billions.

At the beginning of H1, UK interest rates stood at 1.25%, having risen by only 0.1% in H1, but many analysts consider that rate rises have still some distance to go before they will have any control over inflation which currently stands at 9.1% – a forty-year high. This observer has espoused that the Bank of England has left it too late so if, and when, it takes more positive action, and pushes rates higher, it, like the ECB, will be a case of too little too late. Economics 101 teaches that when rates move higher, it becomes more expensive for consumers and businesses to borrow, so that businesses and consumers start spending less, which in turn slows demand for goods and services and then the pace of price rises slows. The problem this time is the cost of soaring energy prices – and any rise in rates will have little impact on prices and must be gauged against the backdrop that the economy earlier this year was in excess demand. In fact, the real economy is slowing when inflation erodes real income and real spending,

The good Lord noted that record high inflation was caused by the Bank of England keeping interest rates too low for too long, and whilst noting that inflation had been tamed, he criticised all central banks for failing to act fast enough initially. Additionally, when he was asked if the Bank of England kept rates “too low for too long”, replied “Yes, and that’s why we had inflation.” He concluded that “they raised interest rates like all other central banks – it wasn’t just the Bank of England – and inflation is now back under control.”

He suggested that the BoE could be a “bit more aggressive” on cutting interest rates, but that the speed at which borrowing costs are reduced will depend on the rate of inflation, and it was “vital” it remained low. He also cautioned that if the latest ME crisis could be a catalyst, in particular any movement in oil prices which could fuel inflation. His remarks on Tuesday saw the pound dip over 1.0% to US$ 1.317.

On Tuesday, a new law, benefitting three million service workers in England, Scotland and Wales, but not N Ireland, will see all tips, whether by cash or card, from customers should be paid to the workers and not to the establishment owners. It applies across industries, but is expected to benefit those working in restaurants, cafes, bars, pubs, hairdressers, or as taxi drivers the most; if not applied, staff will be able to bring claims to an employment tribunal. Staff can now request a breakdown of how tips are being distributed every three months. Unfortunately, the tax law remains – workers will still have to include tips on their tax returns.

In 2005, the then thirty-five-year-old supermodel Naomi Campbell founded Fashion for Relief; this week, she was disqualified from being a trustee for five years by the Charity Commission. The inquiry found that between April 2016 and July 2022, it was found that between April 2016 and July 2022, the charity, merging fashion and philanthropy, raised just 8.5% of the its overall expenditure. Fashion For Relief had been dissolved and removed from the register of charities earlier this year. The charity’s mission was to make grants to other organisations and give resources towards global disasters in a bid to relieve poverty and advance health and education, by generating income from hosting fundraising events to generate income, including in Cannes and London. The Charity Commission recovered US$ 456k, as well as protecting a further US$ 130k of charitable funds, whilst finding serious mismanagement of funds; this included using charity funds to pay for Campbell’s stay at a five-star hotel in Cannes, France, as well as spa treatments, room service and cigarettes. The model said she was “extremely concerned” by the findings and an investigation on her part was under way.

There is no doubt that most charities are well managed and most of the funds raised will go to benevolent causes; however, there are some where too much money is paid to the senior “management”. One recent example was The Captain Tom Foundation, set up in 2022, which raised over US$ 51 million but, in 2022 was the subject of a Statutory Inquiry, launched by the Charity Commission. There were concerns about several seemingly dubious arrangements between the family and the Foundation, along with the issue of a ‘spa building’ constructed at the family home. For some it seems that Charity Begins At Home!

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Masters of War

Posted on September 28, 2024 by howesdubai

Masters of War 27 September 2024

Nakheel, part of Dubai Holding Real Estate, has awarded a US$ 470 million contract, to Alec by Nakheel, to construct its seventy-five-storey Como Residences on Palm Jumeirah. This luxury development will only have a maximum two units per floor and will comprise a total of eighty-one residences, ranging from two- to seven-bedroom apartments, including a spacious duplex penthouse. Each apartment will have 180-degree views of the sea and skyline, while those on levels twenty-three and above having 360-degree panoramas. Two-bedroom prices start at US$ 5.72 million. The development includes elevated private sandy beaches, alongside communal and private pools on many levels, along with a rooftop infinity pool and observation deck on the seventy-fifth floor. Additional amenities will include private parking, an onsite spa, a fully equipped gym, green spaces, and children’s play areas. The project is set for handover in the Q2 2028.

LMD announced the launch of The Pier Residence, valued at US$ 204 million, in Dubai Maritime City. Slated for completion by Q2 2027, the project will comprise two hundred and seventy-four 1 B/R to 3 B/R apartments, all with views spanning the Arabian Gulf, and the Downtown Dubai skyline. The usual amenities will be available, including a premium gym, a padel court, jogging/walking tracks, a luxurious residents’ lounge, and a children’s play area. Devmark has been appointed the exclusive agent for the project, with the real estate developer partnering with the National Bank of Fujairah. The developer also carries on business in Spain, Greece and Egypt.

MS Developments has commenced construction on its latest luxury project, Iluka Residences, located within the exclusive Dubai Islands; it will feature a range of one to four-bedroom apartments. Each apartment will have a fully equipped Miele kitchen, Italian boutique brand Gessi sanitary fittings, and refined flooring featuring Italian tiles.

Citi Developers launched Allura Residences, its second project, at a cost of US$ 82 million, in Jumeirah Village Circle. It consists of a ground floor, five parking levels, and twenty-nine floors with a private business centre, along with a private pool for every 2 B/R and 3 B/R apartment, located at a corner of the building. Allura Residences will feature the largest lobby ever, at approximately 8k sq mt, in Jumeirah Village Circle which will also house a dedicated business centre. Residential units will be handed over to customers in Q2 2027, with a 1% monthly payment plan until delivery.

This week, HH Sheikh Mohammed bin Rashid has approved the US$ 2.72 billion master plan for the expansion of the Dubai Exhibition Centre in Expo City; this will almost treble the exhibition space from 58k sq mt to 180k sq mt. It is estimated that the number of annual events will double to six hundred, with an annual impact of up to US$ 14.71 billon by 2033. This project is an important cog in the government’s strategy to ensure that Expo City becomes a dynamic economic hub, driven by global exhibitions and events. By 2030, the third and final phase of the project will be completed and will feature twenty-six halls on a single contiguous level that spans 1.2 km, and will accommodate one mega event or up to twenty simultaneous smaller events. It will also include a 300+ key hotel, retail outlets, commercial offices, and an industrial kitchen for fully integrated operations. The Dubai Ruler also commented that “this iconic venue will not only become the largest indoor exhibition and events destination in the region but also set new global standards for excellence in the industry. We are committed to consolidating Dubai’s status as a global leader in the events and exhibitions sector and the top destination for mega events.”

Rizwan Sajan, the founder of Danube Properties, estimates that over the next five years, there will not be an oversupply of residential units because the high demand will continue to absorb all the new supply, as there is an increasing influx of investors. He also thinks there will be a positive knock-on effect when the Ras Al Khaimah gaming resort opens in 2026, commenting that, “I believe that once the gaming resort in Ras Al Khaimah opens in the next few years, the influx of tourists to Dubai will be massive,” and “I don’t see an oversupply in the next four-five years, because the opening of the gaming resorts will likely double the number of tourists”.

There is no doubt that the residential property building sector is booming, with preliminary numbers, released by Cavendish Maxwell’s Property Monitor, indicating that launch projects in the emirate numbered one a day. In March, the thirty projects launched that month will add a further 10k units to the market. Some in the market espouse that property is becoming more expensive – which it is when compared to local recent prices – but not when compared to properties in other major global cities. Latest data from Savills research shows Dubai prices of US$ 800 per sq ft lags well behind the likes of Hong Kong’s US$ 4k, US$ 2.6k – New York, US$ 2.6k – Geneva, US$ 2.1k – Shanghai, US$ 1.9k – London, US$ 1.8k – Singapore, US$ 1.6k – LA and US$ 1.1k – Mumbai.

A European UHNWI has acquired an off-plan, five-bedroom 15k sq ft villa for US$ 34 million at Jumeirah Bay Island’s Sea Mirror community; this becomes the most expensive off-plan villa sale of the year. The community will be home for eighteen residences, designed by international architects Jacobsen Arquitetura and Studio MK27, while the interiors are designed by Patricia Urquiola, a Milan-based designer. The properties are equipped with expansive indoor and outdoor spaces, complemented by world-class amenities from the neighbouring Bulgari Resort, Marina, and Yacht Club.

UBS has put a slight damper on the Dubai property market by elevating its status from ‘fair-valued’ last year to ‘moderate bubble risk’, with the UBS Global Real Estate Bubble Index 2024, seeing Dubai’s score increasing from 0.14 in 2023 to 0.64 this year. Since the market started its current turbo-charge in early 2021, the bank’s report noted that “transaction numbers have reached new all-time highs each year and excess supply has been absorbed. In the last four quarters, real housing prices increased by almost 17% and are 40% higher than in 2020. A high proportion of likely speculative, off-plan transactions, and an elevated new supply, could trigger a moderate price correction in the short term.” In August, Property Monitor said Dubai property price growth experienced its second-highest monthly gain of the current market cycle, with a monthly 2.48% gain recorded. This is more than double the rate of growth compared to last month as well as the average monthly growth experienced YTD.

In H1, Dubai delivered twelve new hotels, and over 2.7k new hotel rooms, as indicators showed a buoyant hospitality section, with a further 10.1k rooms and forty properties, set to come on to the market over the next fifteen months; currently a further 4.75k rooms are expected to be added between 2026 – 2027. Occupancy, at 78%, was higher than pre-Covid levels, with ADR at US$ 196 – its highest level in six years. By the end of June 2024, Cavendish Maxell estimated that there were seven hundred and sixteen establishments and 149.75k rooms. Of the total, Cavendish Maxwell indicated that 67% of inventory was in the luxury, upper upscale or upscale classification and 27% in the upper midscale and midscale category; the balance was in the economy range. 75% of new supply in H1 was for the top end of the market, with hotels being opened including The Lana Dubai Dorchester Collection, SIRO One Za’abeel, One & Only Za’abeel, FIVE Lux JBR and the Address Palace Dubai Creek Harbour. Leading source markets were Western Europe (20%), South Asia (17%), Eastern Europe (15%), GCC (14%) and Mena 12 (12%).

In its Dubai Office Market Review, Knight Frank posts that the average Dubai lease office rates had risen by an average 22.4%, in H1, with the DIFC continuing as the most expensive area for office rentals in the city. The main factors pushing costs higher is a combination of rising demand and limited supply. The consultancy notes that the demand can be seen across the city’s top office submarkets, and that Grade A office occupancy levels currently exceed 90%. Over the next four years, it is estimated that a further 4.2 million sq ft of new office space will be added. Meanwhile, D&B Properties reckons that Dubai’s office rental market has seen a 19.0% in Q2.

Knight Frank notes that the three most expensive locations, for office rentals are DIFC, Trade Centre District and Downtown at US$ 97 per sq ft, US$ 95 and US$ 64. Over the past twelve months. The Greens (77%), Sheikh Zayed Road (West) (77%), and Jumeirah Lakes Towers (67%) have also experienced double-digit growth rates, with rents now exceeding US$ 55 per sq ft.

The first ever global gathering of the global diamond industry will take place in Dubai from 11 -15 November and will encompass three key events – DMCC’s Dubai Diamond Conference, the Kimberley Process Plenary Session, and the Jewellery, Gem & Technology in Dubai trade show. The biennial DDC, opening the week on 11 November, will focus on critical discussions about the industry’s most pressing challenges, and will be followed by the three-day JGT Dubai; this year’s event will bring together gemstone dealers, jewellery manufacturers, tech solutions, and service providers for three days of networking and trading. The 2024 Plenary Session of the UN-led Kimberley Process (KP), running from 12 -15 November, will benchmark progress against the programme’s priorities and adopt key administrative decisions, as part of the KP’s efforts to regulate the international diamond trade and prevent conflict diamonds from entering the market.

Another week and news of yet another Comprehensive Economic Partnership Agreement for the UAE; this time, it is New Zealand with negotiations having been concluded. According to New Zealand’s Trade Minister, Todd McClay, “the trade deal will remove duties on 98.5% of NZ’s exports with that proportion expected to rise to 99.0% within three years”, and “this will create new opportunities for New Zealand businesses in the dynamic UAE market, contributing to our ambitious target of doubling exports by value in ten years.” The UAE Minister of State for Foreign Trade, Dr Thani Al Zeyoudi, added that “the UAE is committed to expanding opportunity for our private sector by enhancing market access to key economies, and with its well-developed agriculture and food-production sectors, New Zealand is a nation that holds outstanding potential across a number of industry verticals.” In H1, bilateral trade was valued at US$ 790 million.

YTD, Dubai Maritime City has docked almost three hundred vessels – a 16% annual hike in dry berth occupancy. DMC, with a two hundred and forty-nine-hectare waterfront platform, is the region’s premier maritime cluster, providing world-class service and facilities for luxury yacht and commercial shipbuilding/repair companies. Following comprehensive upgrades, including the retrofit of DMC’s ship lifts, (doubling its annual ship handling capacity by 150% to 1k vessels), the introduction of new ship cradles, and the activation of state-of-the-art substations and shore power supplies, will support more complex shipbuilding and repair projects.

In a meeting with Andrey Slepnev, Minister in charge of Trade for the Eurasian Economic Commission, in Moscow, Dr Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade noted that the UAE has been exploring ways to expand trade and investment ties with the Eurasian bloc, which includes Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan. The ministers discussed the progress of ongoing negotiations for a Comprehensive Economic Partnership Agreement, which are currently at an advanced stage and aim to establish a solid framework for cooperation. Key sectors identified for potential growth include logistics, manufacturing, agriculture, and transport, along with opportunities for a north-south trade corridor, linking the UAE and Russia. In H1, non-oil trade between the UAE and the EEC reached US$ 13.7 billion – 29.6% higher, compared to the same period last year.

Latest H1 data, issued by the Central Bank of the UAE, sees national airports posting a 14.2% increase in passenger traffic to 71.7 million travellers. DXB posted an annual 8.0% increase to 44.9 million.

Latest reports from the UAE Central Bank show that the country’s 2024 economy is expected to grow by a further 0.1% to 4.0%, compared to its June estimate, whilst 2025 figures have been upgraded to 6.0%. In H1, the country posted a record US$ 381.5 billion in non-oil foreign trade. Future growth will also benefit from several global economic agreements, with various nations, over the past eighteen months; CEPAs have been signed with the likes of India, Turkey, Israel, Indonesia, Cambodia, South Korea, Chile, Mauritius and Australia, (with that agreement being signed by year-end). It is expected that the economy will benefit from these agreements to the tune of US$ 41.65 billion by 2031. Earlier in the month, the Ministry of Economy posted that the Q1 economy grew by 3.4% to US$ 117.07 billion, with the non-oil sector up by 4.0%. The report noted that the boost to GDP reflects the “improved performance of the oil sector”, but growth forecasts continue to be “driven by tourism, transportation, financial and insurance services, construction and real estate, and communications sectors”. However, it did warn that “we see risks from escalation of some of the current geopolitical tensions or eruption of new ones (including the Russia-Ukraine conflict, the war in Gaza, and the disturbances in the Red Sea) … from a global economic deceleration resulting from the extensive period of high interest rates and from potential further oil production cuts by Opec+.” It also lowered its 2025 inflation forecast by 0.1% to 2.2% but noted that may be revised downward if disinflationary trends in food, beverages, and key non-tradable components continue to persist.

Meanwhile, Dubai Statistics Centre posted that the emirate’s August inflation that inflation rose by 0.06%, month-on-month. On an annual basis, CPI inflation rose 0.06% to 3.38%, after annual Inflation has been running at an average 3.6% in the year to August, compared to 3.3% in 2023. Housing, (which accounts for over 40% of the “inflation basket”), has risen by more than 6.0% year-on-year each month in 2024, with the August housing/utilities component of the basket rising by 6.9%, year-on-year. Other increases were noted in transport costs, (which account for about 9% of the “inflation basket”), up by 0.3% month-on-month, food/beverage, up by 0.6% on the month and 2.8% on the year, recreation prices, up 4.6%, month-on-month, financial services, up 5.9% on the year and education fees which have been stable at 3.1% year-on-year for the last five months. Emirates NBD expects 2024 Dubai CPI inflation to be 0.2% higher at 3.5% year-on-year.

According to the Securities and Commodities Authority, UAE public joint stock companies distributed a total of US$ 16.82 billion in cash, split between dividends, (US$ 15.81 billion), and bonus shares, (US$ 1.01 billion), during the past year. The leading sectors for dividend payments included banking, energy, telecommunications and utilities with cash dividends of US$ 5.00 billion, US$ 3.09 billion, US$ 2.38 billion and US$ 3.09 billion, followed by real estate, transportation, services, insurance and investments/financial services. The banking sector also dominated bonus share distributions, totalling US$ 937 million, followed by the services sector with US$ 77 million.

The DFM opened the week, on Monday 23 September, two hundred and forty-four points (3.2%) higher the previous six weeks and gained eighty-five points (1.9%), to close the trading week on 4,521 by Friday 27 September 2024. Emaar Properties, US$ 0.03 higher the previous week, shed US$ 0.01, closing on US$ 2.37 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 5.54 US$ 1.671and US$ 0.35 and closed on US$ 0.69, US$ 5.65, US$ 1.73 and US$ 0.37. On 27 September, trading was at one hundred and fifty million shares, with a value of US$ 77 million, compared to three hundred and nine million shares, with a value of US$ 191 million, on 20 September.

By Friday, 27 September 2024, Brent, US$ 3.53 higher (5.0%) the previous fortnight, shed US$ 2.71 (3.6%) to close on US$ 71.98. Gold, US$ 145 (5.8%) higher the previous three weeks, gained US$ 34 (1.3%) to end the week’s trading at a record US$ 2,681 on 27 September 2024

The benchmark price of oil had risen earlier in the week mainly attributable to expected global economic growth and possible supply problems, with China’s latest stimulus package also helping to boost confidence. By the end of the week, negative factors, following the latest Israeli bombing in Lebanon, dampened the market. 0.000173 per LITH.

Several new mines were opened in recent years to take advantage of the surging prices being paid for lithium, spurred on by rising demand and prices for rechargeable batteries, of which lithium is the key component. Often referred to as ‘white gold’, it was trading at CNY/T 631k in early November 2022 but had fallen to just under CNY/T 400k in June 2023, and yesterday it was hovering around the CNY/T 72.5k – an 85% slump in just fifteen months – with the two main drivers being a global oversupply of the commodity and declining demand, as sales of EVs are heading south. The main casualty is Australia, mainly because it supplies 52% of the world’s total production. It also has the second largest reserves of the mineral, (after Chile). Not surprisingly 2024 has been littered with more closures including Core Lithium suspending mining at its Finniss site in Darwin, in January, (due to “weak market conditions”), WA’s Kemerton lithium processing plant scaling back production in August, and Arcadium Lithium’s Mt Cattlin mine being mothballed, blaming low prices. Some analysts have warned that oversupply will keep the market under pressure until at least 2028.

A study by Good Food Nation rates air fryers as the third most-used appliance in 58% of UK kitchens, after toasters and microwave ovens, which are used by 77% and 75% of those polled.

Indian-owned Jaguar Land Rover, UK’s largest car manufacturer, will invest an extra US$ 669 million in its Halewood plant, to bolster future production of EVs; production is expected to start in H1 2025. Currently, the plant, (which currently makes hybrid, diesel and petrol-powered Range Rover Evoque and Discovery Sport models) is being expanded for EVs and already has a production floor space. It is yet unknown what electric models will be made at the plant but it is widely expected that it will be a mid-sized vehicle under the Range Rover brand. The production lines will also utilise seven hundred and fifty autonomous robots and laser alignment technology, overseen by cloud-based digital plant management systems.

Julian Dunkerton is not happy with the way that its competitor, Shein, is being treated by the UK tax authorities, with him complaining that the fast fashion giant was enjoying an unfair advantage because import duties are not charged on the low-value parcels, up to US$ 180, (GBP 135k) it sends direct to customers from overseas. The Superdry supremo said it would be in the UK’s interests to get rid of this tax “loophole”, adding that “the rules weren’t made for a company sending individual parcels [and] having a billion-pound turnover in the UK without paying any tax.” Shein has previously said it complies fully with all its UK tax liabilities. US and EU authorities are considering looking at whether to tighten tax policies to bring Shein and other direct-to-consumer businesses, like Chinese retailer Temu, into the tax net.

Earlier in the week, China’s central bank announced a new stimulus programme to grow its struggling economy; three of the main measures were a cut in interest rates on loans to commercial banks, rate cuts on new and existing mortgages, to 15%, and a reduction in the amount of money banks are required to reserve. Housing remains its number one concern and after twenty years of seemingly non-stop building, the administration has finally realised that it built too much too fast and has now resulted in many of these residential units being left empty or unfinished; the end result is that millions of Chinese have lost their life savings and some of the country’s largest real estate companies have either gone bust or are close to it. These measures are intended not only to address the property market slump but also to boost weakened consumer demand. Not since the pandemic has such an intervention taken place, but the jury is out whether this will be enough.

In an ongoing strategy to speed up the flagging economy, Xi Jinping’s administration has been promoting investment in green energy, EVs, solar panels, lithium batteries and advanced technology, such as AI and semiconductors. For example, it has been manufacturing more EVs than the world can absorb and dumping them for cut-throat prices, on the European and US markets, much to the chagrin of other global manufacturers. A tit for tat trade war is ongoing. Earlier in the year, China had already introduced a range of measures to help its economy, including allowing local governments to buy distressed real estate as well as reducing housing deposits.

Under new rules, introduced by the Payment Systems Regulator and effective from 07 October, UK banks must refund fraud victims up to US$ 114k (GBP 85k) within five days. Most High Street banks and payment companies voluntarily compensate customers who are tricked into sending money to scammers. This moves the previous higher maximum compensation of US$ 555k but it was noted that the new balance would cover more than 99% of claims. It also added that once a bank or payment company had refunded a customer, it could claim half back from the financial institution the fraudster used to receive the stolen money. The new legislation also covers victims of authorised push payment fraud; this occurs when scammers pretend to be legitimate businesses, such as their bank or a tradesperson, or by selling goods that do not exist.According to UK Finance, the number of cases of this type of fraud rose by 12% to 232.4k, with losses totalling US$ 615 million. Of that total, there were only eighteen instances of people being scammed for more than US$ 555k, and four hundred and eleven, where they lost more than US$ 114k.

Even though the new Starmer administration made its position on non-domicile tax status clear by seemingly advocating is abolition, it seems that the Treasury might be thinking otherwise. It is reconsidering parts of Labour’s manifesto plan on account of concerns over how much money will be raised, should wealthy foreigners simply leave the UK. (“Non-dom” describes a UK resident whose permanent home – or domicile – for tax purposes is outside the UK). In March, the revenue raised was assessed by the Office for Budget Responsibility to be highly uncertain. Treasury officials acknowledge that scrapping two concessions made by the previous government might not raise the US$ 1.34 billion they thought it would, or indeed any money at all. In its pre-election manifesto, Labour planned to put this money for extra hospital and dental appointments and school breakfast clubs. It seems that some watering down or phasing in of the decision to apply inheritance tax to trusts, and a discount on bringing in foreign income next year, is being considered. However, it did comment that “we are committed to addressing unfairness in the tax system so we can raise the revenue to rebuild our public services”, and “that is why we are removing the outdated non-dom tax regime and replacing it with a new internationally competitive residence-based regime focused on attracting the best talent and investment to the UK.”

The OECD has adjusted its earlier dismal 2024 May forecast for the UK economy from 0.4% to 1.1%, putting it in the same bracket as Canada and France – but behind the US; 2025 sees growth at 1.2%, in fifth place, but ahead of Germany and Italy. The four main reasons for this sudden improvement are down to a more stable political backdrop, following the demise of the chaotic Sunak administration, an uptick in the global economic climate, the August cut in interest rates, the end of the train/doctor strikes and – following public sector wage increases – and a more stable political outlook, following July’s general election. The final caveat from the OECD was that “significant risks remain. Persisting geopolitical and trade tensions could increasingly damage investment and raise import prices.” Consumer prices this year, and in 2025, are expected to come in at 2.7% and 2.4% – a faster rate than the other six OECD members. The quandary facing the Chancellor, Rachel Reeves, is whether to increase borrowing rise for a time, which would boost growth and reduce debt over the longer term, or slash public expenses to try and maintain the public debt hovering around 100% of GDP.

After as good as eradicating Gaza, Israeli forces turned their attention to fighting the Hezbollah in neighbouring Lebanon. There, the week started with the deadliest day of Israeli attacks in more than a decade, killing almost five hundred people, as the Israeli military conducted air strikes on Hezbollah sites; tens of thousands of Lebanese were forced to flee for safety. Meanwhile, Iran warned Israel it had ‘crossed its red lines’ and branded the attack a ‘game-changing escalation’, further stoking fears of an all-out war in the region. The Israelis responded by resuming attacks today, with explosions reported in parts of the city and three buildings reduced to rubble. Today the Lebanese capital has become a blazing hellscape, as Israel continues to pound it with missiles overnight.

Lebanon’s economy was in dire straits even before this week’s events, not helped by twelve months of border fighting and years of “economic mismanagement”. Two of its major sectors – hospitality and agriculture – are in tatters; even before the latest incursion, occupancy in the country’s fifty thousand hotel rooms was at just 10%, whilst much of its agricultural land lays in ruins, following rocket attacks and enforced absence of much needed farming. Remittances, which accounted for up to 30% of GDP, have almost dried up, whilst foreign direct investment will share the same fate. If there is no money available, imports will be severely restricted whilst the currency will take a pounding. Its GDP, already in negative territory, could contract up to 25%, if the fighting keeps going, and infrastructure continues to be destroyed. On top of that, power, medical, utility, education, transport and retail sector, already hit by low purchasing power, will only worsen.

It is time for the superpowers to wake up, stop talking and take action to stop this senseless and mindless killing.Nobody seems able to second guess the Israeli prime minister, who to all intents and purposes, appears to only stay in power as he rides roughshod over the Israeli people – and most of the world. He thinks he has carte blanche to attack any ME state and seems oblivious to the consequences of his actions. How this warmonger can get away with killing over 50k people in Gaza, (many of whom were innocent women and children), and claim this was acceptable because he was defending his country, beggars’ belief. The same is now happening in Lebanon. History will not treat him well but will note that he was one of the century’s Masters of War.

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History Repeats Itself?

Posted on September 21, 2024 by howesdubai

History Repeats Itself? 20 September 2024

Reports indicate that Emaar is to build a new super tower and that it could be on par to compete with its sister tower, Burj Khalifa, to become the world’s biggest building – if it is to top 828 mts. Early design concepts reportedly include bold and futuristic visions — ranging from glass tube-style structures to rocket-inspired forms — further cementing Dubai’s ambition to stay at the forefront of global architectural innovation. Location details have yet to be released. ( Rumour-mongers are out in force indicating that this news could be a precursor of a pending recession, as coincidentally happened around the time of the building of the Burj Khalifa and the GFC).

Danube Developers recently introduced Bayz 102, a new project. Situated in Business Bay, this towering structure will rise one hundred and two levels and will come with a helipad for air taxis. It will provide residents with over forty amenities, such as a health club, swimming pool, sky bar, sports arena and outdoor cinema – features that are becoming increasingly popular with developers.

Dutco Construction Co LLC has been awarded a US$ 232 million contract by Meraas, to construct the twenty-seven-storey residential Bvlgari Lighthouse on Jumeirah Bay Island; construction is soon expected to start, with marine works now completed, and completion is slated for Q2 2027. Designed by the renowned architecture firm Antonio Citterio Patricia Viel, Bvlgari Lighthouse is poised to become one of Dubai’s most prestigious addresses, adding a touch of elegance to the island. Inspired by the Italian jeweller’s legacy, the Bvlgari Lighthouse will feature opulent four- and five-bedroom penthouses, along with a unique eight-bedroom Sky Villa on the top three levels, which will include expansive private rooftop gardens, a private pool, and stylish lounge areas.

Over the next six months, SOL Properties, the real estate development arm of the Bhatia Group, will launch of a series of high-end projects, with an anticipated Gross Development Value of US$ 3.27 billion. It has acquired four million sq ft of prime land for ultra-luxury projects and affordable luxury projects, with two ultra-luxury developments, valued at US$ 2.23 billion, in the West Crescent of Palm Jumeirah and the Fairmont Residences Solara Tower Downtown Dubai. Two million sq ft of land has been bought for affordable luxury projects in Jumeirah Village Circle, Jumeirah Village Triangle, along with a 500k sq ft plot in Abu Kadra. Recently, the developer has completed and handed over the affordable luxury project, Oakley Square Residences in JVC, which has been fully sold.

Having launched a new development company – Beyond – Omniyat Group has unveiled an eleven million sq feet strategic project on the Jumeirah coastline, of which eight million square feet will be dedicated to Beyond, a development company focused on the wider luxury real estate market. Mahdi Amjad, founder and executive chairman of Omniyat, commented that, “Omniyat is proud to partner with Dubai Maritime City to bring this visionary development to life”.

Recent studies show that property owners are opting for short-term rentals in prime locations because of strong occupancy and higher returns, and that there is growing demand in the emirate, attributable mainly to digital nomads and visitors from European and Asian countries. Anna Skigin, CEO of Frank Porter, noted, “listings are growing across the UAE as more and more guests come to experience the region.” Although rates continue to remain stable, with a slight increase due to more listings coming into the market and competitive rates from hotels, they are still higher, at a nightly average of around US$ 136, compared to many other global locations. However, rates in Dubai are still significantly higher than in the rest of the world, averaging around US$ 136 per night, but ranging from US$ 54 to US$ 27k. The fact that Dubai is a tourist, financial and global hub makes the emirate even more appealing to a raft of international visitors; add to that, the allure of staycations among residents, also boosting the popularity of this sector. It is estimated that UAE, Indian, Bangladeshi, Pakistani and GCC residents make up about 70% of visitors and business owners. According to Frank Porter, the most popular areas for short-term rentals are Dubai Marina, Jumeirah Beach Residence, Downtown, Jumeirah Village Circle, and Palm Jumeirah. Owners can earn a nightly average of US$ 1.22k per night, with Dubai Marina, Jumeirah Beach Residence, Palm Jumeirah, and Downtown Dubai providing the highest rate per night for short-term rentals. Frank Porter also estimates that the short-term rental market provides a 20% higher return than long-term rentals, noting that “long-term lets, and other types of investment such as bonds and stocks tend to be more rigid and have a lower level of flexibility.”

In an attempt to double the group’s turnover to US$ 10 billion over the next five years, Sobha Group’s founder, PNC Menon, has announced that it will be is venturing into jewellery and furniture sectors, setting up Sobha Jewels and Sobha Furniture. The seventy-six-year-old entrepreneur has turned Sobha Realty into a US$ 5.0 billion realty business and has recently announced that he would be stepping down as chairman of the US$ 5 billion Sobha Realty. Meanwhile, his son Ravi has taken over the reins of Sobha Realty, with projects in Dubai, Muscat and India, and plans to expand further across the US and Australia. Over the next few years it expects to expand its workforce by 40% to 35k; it also has a lighting fixture business and a ‘design studio’ in Dubai where it employs over five hundred architects and engineers, as well as a contracting company and a pod manufacturing business.

The RTA has confirmed that electric air taxis will be operational in the emirate as from Q1 2026, operating from four vertiports – at Dubai International Airport, Palm Jumeirah, Dubai Marina and Dubai Downtown. The vehicles, designed to carry a pilot and four passengers at 320 kph, will be considerably less noisy than normal helicopters with a sound level of no more than forty-five decibels, which is said to be less than the sound of rain. A further benefit is said to be the reduction in the level of traffic across Dubai., (but that would need a raft of such vehicles that could snarl air traffic). The new heliports will be designed and developed in collaboration with air mobility infrastructure firm Skyports and will include dedicated take-off and landing areas, electric charging facilities, a dedicated passenger area. It is reported that the RTA has given Joby Aviation six years exclusive rights to operate air taxis.

The first-ever Aviation Future Week will take place next month, sponsored by Emirates and the Museum of the Future which will be the three-day event’s venue. The meeting will include keynotes, panels and workshops and be attended by UAE ministers, senior government officials and industry leaders from across the aviation and aerospace, airfreight, Maintenance, Overhaul & Repair (MRO) and logistics ecosystem. Day one will address air travel demand and airport infrastructure, day two will be dedicated to developments within airfreight and logistics, and the third day will navigate the boundary-breaking potential of Web3, AI and XR infused solutions to drive workflow efficiencies and service delivery.

The latest report from the Baltic Exchange and Xinhua News Agency has confirmed Dubai’s fifth position, as a global maritime leader, in its 2024 International Shipping Centre Development Index. This is the fifth year in a row that it has achieved this placing behind Singapore, London, Shanghai, and Hong Kong, whilst it still remains the only Arab city in the top twenty. It also notes the emirate’s efforts to enhance transparency in local container fees, through the Dubai Maritime Authority’s new directive, which requires service providers to list fees on the unified Dubai Trade portal.

Under the soon to be signed comprehensive economic partnership agreement, Australia will export more than 99% of its products to the UAE without tariffs. The bilateral deal is expected to boost trade and investment ties and will “streamline trade processes, eliminate tariffs on a wide range of goods and services, create new opportunities for investment, and encourage private-sector collaboration in priority sectors”. The treaty is expected to be signed later this year. Australia exports many products to the UAE, including alumina, coal, steel, meat, dairy, oil seeds, seafood, canola seeds, nuts and honey, whilst, on the flip side, the antipodeans will cut import tariffs on UAE-produced furniture, copper wire, glass containers and plastic.

The UAE’s energy and infrastructure minister, Suhail Al Mazrouei, posted that clean energy production now accounts for 27.83% of the country’s total energy mix last year; these figures show that the UAE is well on its way to meet its 30% target of its energy requirements through clean sources by the end of the decade. In the four years to 2022, the country succeeded in doubling its renewable energy capacity as part of the UAE Energy Strategy 2050 to triple the installed capacity by 2030. The minister noted that in 2023, the UAE achieved a remarkable growth of 70% in installed renewable energy capacity, which reached 6.1 gigawatts. The Arab world’s second largest economy has invested heavily in clean energy projects, ranging from nuclear to solar, to achieve net-zero emissions by 2050; in 2021, its Net Zero 2050 Strategic Initiative launched a US$ 163.49 billion plan to invest in clean and renewable energy sources over the next three decades.

Following the Fed’s decision to cut rates, the Central Bank of the UAE has followed suit and decided to cut the Base Rate applicable to the Overnight Deposit Facility (ODF) by fifty basis points, from 5.40% to 4.90% effective from yesterday. The central bank has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at fifty basis points above the Base Rate for all standing credit facilities.

The Central Bank (CBUAE) on Monday imposed a fine of US$ 1.36 million on an unnamed bank operating in the UAE for violating anti-money laundering laws and for funding illegal organisations. The sanction was in line with articles 89 and 137 of the Federal Decree Law No. (14) of 2018 regarding the Central Bank & Organisation of Financial Institutions and Activities and its amendments, and article 14 of the Federal Decree Law No. (20) of 2018 on Anti-money Laundering and Combating the Financing of Terrorism and Illegal Organisations. It directed the bank to present the Central Bank’s action to the board of directors of its overseas headquarters.

The DFM opened the week, on Monday 16 September, one hundred and eighty-eight points (1.9%) higher the previous five weeks and gained fifty-six points (1.3%), to close the trading week on 4,436 by Friday 20 September 2024. Emaar Properties, US$ 0.02 lower the previous week, gained US$ 0.03, closing on US$ 2.38 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 5.45 US$ 1.68 and US$ 0.35 and closed on US$ 0.68, US$ 5.54, US$ 1.71 and US$ 0.35. On 20 September, trading was at three hundred and nine million shares, with a value of US$ 191 million, compared to, eighty-five million shares, with a value of US$ 54 million, on 13 September.

By Friday, 20 September 2024, Brent, US$ 0.55 higher (11.0%) the previous week, gained US$ 3.08 (3.4%) to close on US$ 74.69. Gold, US$ 109 (5.8%) higher the previous fortnight, gained US$ 36 (1.4%) to end the week’s trading at a record US$ 2,647 on 20 September 2024.

Qantas has revealed it will pay former CEO Alan Joyce an extra US$ 2.3 million for his last two months in the role, which will partly offset the US$ 6.03 million, he ‘lost’ because, on his shift, there were several scandals including Qantas illegally sacking 1.7k workers during the pandemic period, and the ACCC suing the airline for cancelled “ghost flights”. He resigned earlier than expected last September and two weeks later, the airline made its first ever apology to the 1.7k ground staff it illegally sacked, asking the case to be heard in the Federal Court and High Court. The disgraced former supremo could also receive a further US$ 1.6 million from the airline, as he is still part of a long-term incentive plan scheme, which is valid until 2026. This is on top of the US$ 10.0 million received in 2022-23, his last full year as chief executive.

Amazon is the latest major international group to ordering its 1.5 million global staff back to the office five days a week as it ends its hybrid work policy; the move starts on 01 January 2025. Other global companies, such as JP Morgan, UPS and Dell, seem to agree and are liklely to demand full-time office attendance. Amazon’s chief executive, Andy Jassy, posted that “we’ve decided that we’re going to return to being in the office the way we were before the onset of Covid,” to be “better set up to invent, collaborate, and be connected enough to each other”. He is also concerned that its corporate culture is being diluted by flexible work and too many bureaucratic layers. HO staff staged a protest last year as the company tightened the full remote work allowance that was put in place during the pandemic. Amazon said it would end hot-desking in the US, although that will continue in most of Europe. Amazon’s stance contrasts with the UK government’s approach, which has promised, (for what it is worth), to make flexible working a default right from day one as part of a new employment rights bill due to be published next month, with Business Secretary, Jonathan Reynolds, wanting to end the “culture of presenteeism”, noting there were “real economic benefits” to people working from home. A US summer report indicated that about 12% of full-time employees were fully remote and a further 27% reported having hybrid work policies in place.

In H1, data from PwC showed the fragility of the UK economy, with their estimate that every week, eighteen chemists, sixteen pubs and nine banks closed over the period. The latest high profile casualty could be TGI Fridays, with Hostmore saying the sales process was in an “advanced stage”, but added it was unlikely to “recover any meaningful value” of its assets, as bids to date have failed to meet the chain’s liabilities. The hospitality group added that “the sale process remains ongoing, with no decisions having been made to close any existing stores, and TGI Fridays continues to operate normally across the country”. It had tried to buy the US operator of TGI Fridays for US$ 236 million but that deal collapsed.

Regular coffee drinkers will know that Robusta and Arabica beans are now trading at near-record highs but may not know why this is so. The fact that the cost of unroasted beans traded in global markets is now at a “historically high level” attributable to a 2021 freak frost that wiped out coffee crops in Brazil, (the world’s largest producer of Arabica beans – those commonly used in barista-made coffee). The resulting deficit resulted in buyers searching for Robusta beans, that are used to make instant coffee blends, in countries such as Vietnam which subsequently was impacted by the region’s worst drought in nearly a decade. Now it appears that because of falling yields (and loss of revenue for coffee producers), many are turning to a smelly yellow fruit – durian – that is banned on public transport in in Thailand, Japan, Singapore and Hong Kong because of its odour. Stocks of Vietnamese coffee is “near depleted”; in contrast, Vietnam’s durian market share in China almost doubled between 2023 and 2024, and some estimate the crop is five times more lucrative than coffee. Furthermore, June Robusta coffee exports were down 50% on the year. Although exporters in Colombia, Ethiopia, Peru and Uganda have raised production, it is still not enough to ease a tight market. The end result is that end users can expect further price increases when they visit their local coffee outlet, even though it is estimated that beans contribute less than 10% of the price of a cup of coffee.

With China facing an ageing and shrinking population, along with a dwindling pension fund, China has introduced new regulations including that retiring before the statutory age will not be allowed and that the country will “gradually raise” its retirement age for the first time since the 1950s – from fifty to fifty-five for women in blue-collar jobs, from fifty-five to fifty-eight for females in white-collar jobs, and for men an increase from sixty to sixty-three; the change will take place from 01 January 2025. Starting 2030, employees will also have to make more contributions to the social security system in order to receive pensions, and by 2039, they would have to clock twenty years of contributions to access their pensions. A population slowdown, (as its birth rate continues to decline for a second consecutive year), and a weakening economy, are disturbing news and have been brought about by a decades-long one-child policy; to add to their woes its average life expectancy has risen to 78.2 years, and that by 2040, 33% of the population, (some 402 million), will be above the age of sixty by 2040 – 58.3% higher since 2019’s 254 million. It is estimated that over the next decade, about three hundred million people, who are currently aged fifty to sixty, are set to leave the Chinese workforce.

August data from the US Commerce Department indicated that consumers spent 0.1% more than a month earlier, after surging the most in eighteen months in June; sporting goods stores, online retailers, (1.4% higher), health/personal care, (up 0.7%), and home/garden stores all reported higher sales. This is in contrast to gas sales, dipping 1.2%, and auto sales declining, whilst being flat for restaurants and bars. Despite all the financial problems, (including soaring inflation and higher interest rates), for the average US household, it seems that it had not any direct bearing on consumer demand.

A report from the National Association of Realtors showed existing home sales fell 2.5% in August to a seasonally adjusted annual rate of 3.86 million units, the lowest in ten months. The median existing home price increased 3.1% from a year earlier to US$ 416.7k, the highest on record for any August. Maybe the latest rate cut may see more homeowners putting their homes on the market, as most homeowners have mortgage rates below 4% and when rates start to head south, this could stimulate demand that has been largely dormant. However, as Jerome Powell pointed out. “the real issue with housing is that we have had and are on track to continue to have not enough housing,” adding “this is not something that the Fed can really fix, but I think as we normalise rates, you will see the housing market normalise.”

The US central bank has lowered interest rates, by 0.50% to the range of 4.75%-5.00%, for the first time in more than four years. Fed’s Jerome Powell commented that the move was needed as price rises ease and job market concerns grow. He also added that the cut was intended to make sure that high borrowing costs, put in place to fight inflation, would not end up hurting the US economy. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq jumped after the initial announcement but ended the day modestly lower.

In contrast, the BoE Interest rates did nothing – exactly what happened some three years ago when they probably too slow at not pushing rates higher. Andrew Bailey, the BoE governor, noted that they are “now gradually on the path down”, adding that inflation had “come down a long way” but warned the Bank would need to see more evidence that it will remain low before cutting rates further. With inflation, at 2.2%, nearing the BoE 2.0% target, it is highly likely that there could be two 0.25% cuts in Q4. Has the BoE got it right this time or will History Repeats Itself?

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What A Shambles!

Posted on September 14, 2024 by howesdubai

What A Shambles! 13 September 2024

Knight Frank’s Q2 Dubai Residential Market Review confirms that average residential prices increased by 21.3% over the past twelve months and again villa prices surpassed those of apartments. Over that period, villa sale prices grew by 24.3%, reaching US$ 516.62 per sq ft, equating to being 28% over the 2014 peak. Dubai’s luxury residential sector has also witnessed strong growth., with ‘Prime Dubai’, (covering The Palm Jumeirah, Jumeirah Islands, Jumeirah Bay Island, and Emirates Hills), accounting for 89.3% – eight hundred and fifty three homes – 5.0%, 3.6% and 1.1% respectively); there was a 7.0% rise in average transacted prices, which stood at US$ 1,009 per sq ft at the end of H1.

The study noted that the number of residential listings in Q2 fell by 22.8% on the year, and for the first time in over two years, the number of unique home listings in a single quarter has fallen below 100k. This trend was more marked in in ‘Prime Dubai’, with a 47% decrease in the supply of luxury homes in those four locations to 2.85k properties. Some of shortage is down to in an increase in ‘buy to stay’ and ‘buy to hold’, with purchasers increasingly focussing on buying for their own use, or as a second home, as opposed to being purely investment-driven to those looking to purchase for personal reasons.

Knight Frank has indicated that the total number of homes planned or under construction now stands at 308.1k and expects that to translate to some 51.4k homes a year up to 2029. Of these, 82% will be apartments, with the remainder being villas. This translates into an average of approximately 51.4k homes per year for the next six years, higher than the long-term completion rate of around 30k homes per year. The figure still falls short of the annual 73k homes the consultancy estimates will be required for the next sixteen years to accommodate Dubai’s vision of a population of 7.8 million by 2040

Yesterday, Dubai’s population was at 3.774 million – a 3.28% increase YTD on 01 January, when the population was clocked at 3.654 million. Extrapolating, the population at the end of the year could be 3.806 million, with an annual population increase of 4.16%. At that rate, the emirate’s population could well be 4.666 million – a 22.60%, (860k), rise over the next five years. This blog estimates that the apartment to villa ratio is 82:18; the latest official figures, in 2022, showed that there were 783.6k units – 639.0k apartments and 144.6k villas in Dubai – and assuming 50k unit increases in the seven years to 2029, that would give a 2029 year-end total of 1,133.6k, comprising 926k apartments and 207.6k villas. Further surmising that the average villa and apartment has 4.85 and 4.25 occupants, and the 2029 population grows 860k (27.66%) from 3.655 million to 4.666 million, then the updated units will accommodate 4.942 million – 3.935 million living in apartments (926k units*4.25 persons) and 1.007 million in villas/townhouses ( 207.6k units*4.85 persons).This figure, 4.942 million, is 5.9% higher than the expected 2029 population of 4.666 million but there are several caveats:

it is highly unlikely that 50k units will be built every year
the number of empty properties could be as high as 10%
some properties are used as second homes
some properties are being renovated
an increasing number of properties are being used for Airbnb

When these factors are added to the equation, there may be a tight residential market come 2029, but in the meantime, demand will continue to outstrip supply. This cycle will not continue forever and it is almost certain that an “adjustment” will occur this decade – but it will not be as severe as those of 2008 and 2015.

Binghatti Ghost becomes the developer’s first project in Al Jaddaf this year, and its first at this location in over two years. Binghatti Development’s latest project, valued at US$ 1.09 billion, features seven hundred and seventy residential units. In addition to these sought-after living spaces, Binghatti Ghost will also include six premium retail shops, enhancing the community’s commercial appeal. The project features a hotel-style swimming pool and amenity floor as well as a children’s pool and play area. It will also feature a fully equipped gym, multi-purpose lawn, scenic jogging lane, and a viewing deck, offering panoramic views of the city. It will also include six premium retail shops, enhancing the community’s commercial appeal.

A new entrant to the Dubai property sector is Majid Developments, who plan to invest US$ 136 million in five new projects by 2025, to cash in on the rising demand for new units. Its first project will be Mayfair Gardens in Jumeirah Garden City, with a further two slated for same location and the other two in Jumeirah Village Circle and Arjan. Thereafter, it is looking “to launch at least twenty projects in Dubai and then move to the other emirates”, according to Mansoor Majid, CEO of Majid Developments.

One Beverly, located in Arjan, is offering three hundred and eighty-one apartments which include studio, one-bedroom, and two-bedroom units, with prices starting from US$ 177k, along with eight commercial shops. HMB Homes’ flagship project will also have the usual array of leisure activities including a state-of-the-art gym, an infinity swimming pool and a landscaped jogging track, with other features including a residents’ lounge, an open-air cinema for entertainment and a multi-purpose court.

Following the successful launch of the Como Residence on the Palm, the architectural firm of Benjelloun Piper is launching the Fairmont Residences Solara Tower in Downtown Dubai.

Al Aseel Contracting has been appointed by Dubai South Properties for a US$ 41 million contract towards the construction of its latest luxury apartment development, South Living Tower; the project is located at The Residential District in Dubai South. The project, which comprises two hundred and nine units, including studios, one, two, and three-bedroom apartments, is expected to be completed by Q1 2027.

HH Sheikh Mohammed bin Rashid, Ruler of Dubai, has announced the establishment of Dubai National University, with an investment of US$ 1.2 billion, (AED 4.5 billion). The plan is to establish the university as one of the top two hundred global education centres by 2044.

Furthermore, this week, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, issued Executive Council Resolution No. (49) of 2024 regulating healthcare activities and professions in Dubai. It will license healthcare establishments for periods of one renewable year at a time and can close down establishments and suspend professionals violating guidelines.

Emirates is expecting to receive five Airbus A350s in Q4, with the first due for delivery next month, but confirmed that they have yet to receive any Boeing jets so far this year and that ”due to delays in aircraft deliveries, we have had to extend the service of some of our current aircraft.” It earlier announced a US$ 3.0 billion aircraft retrofit programme that has now been extended to cover one hundred and ninety planes, following an increase in the number of aircraft targeted for modernisation. Some of the problems can be put down to the pandemic, when aircraft manufacturing cut back on production, (because nobody was flying), and laying off a percentage of workforce. When some sort of normality returned to the sector, and air travel literally took off again, then the supply chain could not keep up with demand – and that problem still continues and will continue for some time.

Reports indicate that Malaysia could possibly reach a free trade agreement with the UAE by the end of 2024, perhaps leading to a CEPA sometime later; since last year, several rounds of discussions have been held relating to a comprehensive economic partnership agreement. Its Minister of Investment, Trade and Industry, Tengku Zafrul Aziz, commented “we are continuing discussions with the GCC for an FTA, and we are on track to conclude an FTA with the UAE by end of the year on a wider scale.” Last year, bilateral non-oil trade topped US$ 4.7 billion, maintaining the record levels achieved in 2022. The UAE has already signed two CEPAs with Asean countries – Indonesia and Cambodia – and continuing trade discussions with other Asean members, including the Philippines and Vietnam. Earlier in the week, Hong Kong confirmed that it was exploring options, including FTAs with the UAE and the Gulf to boost trade and investment ties .

To meet its growing demand for large-scale offshore projects, Drydocks World has signed a contract with Shanghai Zhenhua Heavy Industries Co Ltd to purchase a new generation 5k-tonne Floating Sheerleg Crane. The design, construction, testing, and commissioning phase is expected to be completed by Q2 2026, and then the crane will boost Drydocks World’s heavy-lifting capabilities, allowing it to meet the growing demands of large-scale projects, such as high-voltage offshore converter platforms and Floating Production Storage and Offloading (FPSO) vessel topsides. The crane features a 160 mt-long A-frame, allowing heavy loads of up to 5k tonnes to be lifted 120 mt above the water, and a six hundred-tonne fly jib that can extend its reach to 180 mt. This capability enables the installation of larger vessel modules constructed in the yard and lifted onto the vessel for assembly, both nearshore and offshore. It can also accommodate up to fifty personnel offshore, thereby reducing the need for support vessels.

Initially starting in North India, Carrefour and Dubai-based Apparel Group have signed a franchise partnership agreement, in the sub-continent, with the first store openings expected in 2025. Although many foreign entrees have failed in the past, both parties have had Indian exposure and will be confident of success in a country, with a population of about 1.4 billion people, and being one of the world’s largest food markets, with the additional attraction of rising consumer spending power. Over a decade ago, Carrefour had attempted to enter the country, with a local retailer, but later withdrew, saying the market was underperforming. Both parties are exuding confidence, with the French conglomerate posting that “the arrival of Carrefour in India marks an important step in our strategy of expanding our franchise in more than ten new countries by 2026,” whilst Nilesh Ved, owner of Apparel Group, adding that “our goal is clear: to offer the best products at very attractive prices to all Indian customers and make Carrefour their favourite brand to shop.” The country is having major problems, with severe food price inflation, which accounts for almost 50% of the overall consumer price basket.

Preliminary figures by the Federal Competitiveness and Statistics Centre indicate robust Q1 growth in the country’s economy. UAE’s real GDP increased by 3.4% to US$ 117.17 billion, (AED 430 billion). Over the period, non-oil GDP came in 4.0% higher on the year.

At the end of trading last Friday, 06 September, helped by a robust economy, the country’s bourses showed a market cap, of all companies listed, reaching US$ 97.82 billion as it moves to its target of US$ 1.63 trillion by 2030. The twenty largest companies listed on the local stock exchanges by market value reached US$ 76.02 billion, accounting for 77.6% of the total market cap. International Holding Company was in first place, with a market cap of US$ 248.58 billion, equivalent to 25.4% of the market cap of the local markets, followed by Abu Dhabi National Energy Company (US$ 80.87 billion – 8.25%), ADNOC Gas, (US$ 65.40 billion – 6.7%), Etisalat by e&, (US$ 44.00 billion – 4.5%), First Abu Dhabi Bank, (US$ 40.22 billion – 4.1%), Emirates NBD (US$ 34.85 billion – 3.6%), and Dubai Electricity and Water Authority – DEWA, (US$ 32.43 billion – 3.3%). Three other Dubai-listed companies made the top twenty – Emaar (US$ 21.14 billion), Dubai Islamic Bank (US$ 12.18 billion) and Mashreq (US$ 11.63 billion).

The DFM opened the week, on Monday 02 September, one hundred and eighty-one points (1.7%) higher the previous four weeks and gained seven points (0.2%), to close the trading week on 4,380 by Friday 13 September 2024. Emaar Properties, US$ 0.15 higher the previous three weeks, shed US$ 0.02, closing on US$ 2.35 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.64, US$ 5.53 US$ 1.67 and US$ 0.35 and closed on US$ 0.65, US$ 5.45, US$ 1.68 and US$ 0.35. On 13 September, trading was at eighty-five million shares, with a value of US$ 54 million, compared to one hundred and nineteen million shares, with a value of US$ 73 million, on 06 September.

By Friday, 13 September 2024, Brent, US$ 8.71 lower (11.0%) the previous three weeks, gained US$ 0.55 (0.7%) to close on US$ 71.61. Gold, US$ 25 (1.7%) higher the previous week, gained US$ 84 (4.1%) to end the week’s trading at US$ 2,611 on 13 September 2024.

On Tuesday, for the first time since December 2021, the oil price dipped below the US$ 70 level, as it lost 3.7% in value, following Opec reducing its forecast for global oil demand growth; this was for the second consecutive month, amid signs of slowing consumption in major economies. The revised 2024 and 2025 forecasts posted expected growth of 2.0 million bpd and 1.74 million bpd – only 40k and 80k bpd lower than an earlier forecast. Opec accounts for 79.5% of the global output – equating to 1,243.5 billion barrels annually – with the six major contributors, (accounting for 91.7% of the total), being Venezuela, Saudi Arabia, Iran, Iraq, UAE and Kuwait with 24.4%, 21.5%, 16.8%, 11.7%, 9.1% and 8.2% of the total. Q4 forecasts indicate global oil production of 102.47 million bpd in Q4, while consumption is expected to be 103.72 million bpd; that being the case, global oil reserves will begin to decline plus the fact that the Opec+ production cuts will also add to reserves declining. Meanwhile, the US Energy Information Administration expects Brent crude to rise above US$ 80 a barrel and average US$ 82 a barrel in Q4. Other factors that could impact the oil prices include any possible flare up in the region, whether or not growth in the Chinese economy expands or contracts, and any further contagion from the Ukraine crisis.

In a bid to avoid a strike that could potentially shut down its assembly lines within days, Boeing had tried to entice its employees with a 25% pay offer over a four-year contract, with the union urging the workers to support the proposal, describing it as the best contract they had ever negotiated; the union’s initial target was a 40% pay rise. Also added into the mix, include improved healthcare/ retirement benefits, increased employee representation on safety and quality issues and a commitment by Boeing to build its next commercial airplane in the Seattle area. If the deal had been endorsed by the union, it would have been the first full labour agreement between the firm and the unions in sixteen years. But that was no to be, with an overwhelming rejection by the 30k workers resulting in a downing of tools, by the workers in Seattle and Portland, as from midnight Pacific Time (07:00 GMT) on Friday. Undoubtedly this is another body blow for a much-troubled company looking down the barrel of massive financial losses and further loss of business confidence.

After lowering its annual revenue and profit forecasts, Accenture announced plans to cut its global payroll by 19k, (2.5%), to 719k, including in the UK; it also confirmed more than 50% of the redundancies will come from its human resources, IT, finance and marketing departments over the next eighteen months. In the UK, it employs 11k. It expects the severance costs will top US$ 1.2 billion but that it will save around US$ 1.5 billion by closing offices globally. The company noted that “we initiated actions to streamline our operations and transform our non-billable corporate functions to reduce costs”. Previously, in 2020, it said that it was cutting up to nine hundred jobs because of the “additional strain” on the business caused by the coronavirus pandemic. It is not the first major tech giant to cut staff numbers – driven by a fall in demand amid high inflation and rising interest rates – and follows the likes of Amazon, Meta and Just Eat who have posted recent job losses.

Two of the biggest retail winners benefitting from the cost-of-living crisis have been the German interlopers – discounters Aldi and Lidl. Last year, Aldi’s revenue surged by US$ 3.14 billion, as its pre-tax profits more than tripled to a record US$ 702 million in the year; three factors behind the improvement in the figures were price rises, new store openings driving much of the rise in earnings, and new customers. This year, growth has slowed, and its market share is being eroded by its rivals, and it is no longer the fastest growing retailer it was in 2023. Two of its biggest rivals, Sainsbury’s and Tesco, have adopted “Aldi price match” campaigns, and all its rivals have their own loyalty card schemes, except Aldi, with its CEO, Giles Hurley noting, “I would view loyalty as keeping your commitments around your promises and we offer simple, straightforward pricing and our customers know that.” The budget chain has a long-term target of 1.5k UK shops with another one hundred stores being refurbished.

Having acquired Caprice Holdings in 2005, in a deal which included many of London’s most prominent restaurants, there are reports that Richard Caring is in the throes of selling the business, including his collection of Ivy restaurants, to Si Advisers, a little-known London-based firm; the deal, that could see the billionaire businessman US$ 1.30 billion richer, will cover almost all of his stake in The Ivy Collection, and its dozens of restaurants across the country (Other shareholders, including a Qatari fund, are also expected to sell – in 2019, he sold a 25% stake in Caprice Holdings to Hamad bin Jassim bin Jaber Al Thani, the former prime minister of Qatar, in a deal reportedly worth US$ 460 million). However, he will still retain his other restaurants, which include London’s Scott’s, Sexy Fish and J Sheekey, or clubs such as Annabel’s and Mark’s Club in Mayfair.

The investment firm, Aurea has managed to save the remaining one hundred and thirteen Body Shop outlets in the UK, along with outposts in Australia and the US. The retailer was bought out of administration by a consortium led by “Cosmetics King”, Mike Jatania, who along with Charles Denton, former chief executive of beauty brand Molton Brown, will head the new leadership team. The millionaire tycoon’s investment firm said the deal would “steer the Body Shop’s revival and reclaim its global leadership in the ethical beauty sector it pioneered”, adding, “with the Body Shop, we have acquired a truly iconic brand, with highly engaged consumers in over seventy markets around the world.

Another blow for a Big Four audit firm sees PwC’s Chinese auditing arm being suspended from the country for six months. In addition, it has been fined more than US$ 62 million over its work on the collapsed Chinese property giant Evergrande, with authorities claiming that it had covered up fraud at the property monolith. It was also penalised by the security watchdog which confiscated the revenue PwC earned auditing Evergrande and has also issued a fine. In apologising for the impact on its clients, the firm admitted that its work had fallen “unacceptably below the standards” expected within the firm and apologised for the impact on its clients. It is reported that PwC has sacked six partners and has launched a process to fine responsible team leaders. The Chinese authorities have accused Evergrande and its founder, Hui Ka Yan, of falsely inflating revenues at the firm to the tune of US$ 78 billion, and imposed fines and bans on him personally as well as on the business.

This has been a bad week for tech giants, starting with Apple being ordered, by the EC, to pay Ireland US$ 14.0 billion in unpaid taxes; in 2016,, the watchdog blamed the Irish government for giving the US conglomerate illegal tax advantages – and for the past eight years, it has consistently argued against the need for the tax to be paid, but now has said it would respect the ruling, whilst Apple said it was disappointed with the decision and accused the EC of “trying to retroactively change the rules”. The court concluded that Ireland granted Apple unlawful aid which Ireland is required to recover. The original decision covered the period from 1991 to 2014 and related to the way in which profits generated by two Apple subsidiaries, based in Ireland, were treated for tax purposes. Those tax arrangements were deemed to be illegal because other companies were unable to obtain the same advantages.

In contrast, Google seem to have got off lightly, with a European Court of Justice (ECJ) ruling that the company has to pay US$ 2.62 billion for market dominance abuse, of its shopping comparison service, ending a long-running case from 2017. At the time, it was the largest penalty the Commission had ever levied – though a year later it issued Google with an even bigger fine of US$ 4.74 billion over claims it used Android software to unfairly promote its own apps. The court ordered Google, and owner Alphabet, to bear their own costs and pay the costs incurred by the EC. On Monday, Google was taken to court by the US government over its ad tech business – it has been accused of illegally operating a monopoly. Last week, UK regulators provisionally concluded Google used anti-competitive practices to dominate the market for online advertising technology. The EU is also currently investigating the firm over whether it preferences its own goods and services over others in search results, as part of its Digital Markets Act. If found guilty, the firm could face a fine of up to 10% of its annual turnover.

The search giant has amassed fines of US$ 9.09 billionn from the Commission, which has repeatedly alleged it abused its dominant market position. These are:

2017 US 2.64 billion fine over shopping results
2018 US$ 4.74 billion fine over claims it used Android software to unfairly promote its own apps
2019 US$ 1.65 billion fine for blocking adverts from rival search engines

Industry insiders have been keeping a close eye on the EU case, with suggestions that its outcome may illuminate the direction of travel of the many other antitrust cases Google is currently facing from the EC.

The Food and Agriculture Organisation of the United Nations trimmed its 2024 forecast for global cereal production to 2,851 million tonnes – nudging 0.2% higher from 2023 – attributable to hot and dry weather conditions in the EU, Mexico and Ukraine. However, it did lift its 2024 forecast for both global wheat output and for rice, with the latter expected to top a record high of five hundred and thirty-seven tonnes. World cereal stocks are forecast to expand by 1.2%, at the end of the 2025 season, as international trade in total cereals is now pegged at 485.6 million tonnes, down 3.3%, on the year, led mostly by lower traded volumes in coarse grains.

Last year, Greece had the second worst performing economy in the EU which its Prime Minister, Kyriakos Mitsotakis, has vowed to improve, starting with a new set of policies aimed at boosting citizens’ purchasing power and tackling the country’s housing crisis. Among the measures to be introduced include a 14.0% increase in the minimum wage, to US$ 1.05k by 2027, a 2.5% rise in pensions, a new tourist tax, a green transition using cheaper energy and the mitigation of the effects of the runaway growth in tourism, by the introduction of a new fee for passengers disembarking from cruise ships in Greek ports. He also announced new incentives to boost the birth rate and tax benefits to galvanise the rental market, as well as a Golden Visa scheme for foreigners investing at least US$ 276k in start-ups. The US$ 243 million revenue from a windfall tax on energy companies will be distributed to vulnerable citizens. Average annual income in the country was half the European average last year, with the minimum monthly wage of US$ 916 – less than half that of France.

After five consecutive months of deceleration, Egypt’s inflation rate quickened last month, to 26.2%, as the Sisi’s government’s reduction in fuel subsidies took its toll on consumer prices. The 0.5% monthly rise, which surprised market analysts, was mainly down to a 1.9%, month-on-month, increase in consumer prices – the largest since February. The main factor behind the rise was a monthly 10.7% hike in transportation prices – and 29.8% on an annual basis – (following the decision to raise energy prices in July ahead of an IMF review). Other rises were seen in food and beverage prices – 1.8% higher on the month and up 28.1% on the year – clothing/footwear, housing/utilities, furniture/household equipment and health care, all moving higher by 1.1%, 0.7%, 1.7% and 3.4%. In June, there had been a 300% increase in subsidised bread costs, with the government having also implemented a new wave of subsidy cuts, including price hikes of up to 15% for a range of fuel products and increases of between 15% – 40% in electricity tariffs. It is highly likely that the country’s central bank will maintain interest rates at a record 27.25%. Despite all this, it seems that the country has finally made progress in implementing long-awaited economic reforms and has been a recipient of consecutive bailout deals, worth more than US$ 60 billion, from international partners.

August data sees China’s inflation rising at its quickest pace in six months, attributable to increased food costs due to weather disruptions, while deflation in producer prices deepened. The world’s second-largest economy, and top crude importer, posted a 0.6% hike in its consumer price index, 0.1% higher than in July. Q2 GDP growth slowed to 4.7%, on an annual basis, compared to Q1’s 5.3%.

A new report from the Grattan Institute posted that Australia has the highest gambling losses in the world because governments have taken “a lax approach to regulating gambling”, and “let the gambling industry run wild”. It recommends limits on how much people can bet when at the pokies and via online betting platforms, as well as a complete ban on gambling ads – the latter move is in line with the intentions of the Albanese administration. It notes past reform pushes have failed “because of well-funded, coordinated attacks by vested interests” and that has led to big losses – in the 2020-21-year, gambling losses were estimated at US$ 16.01 billion, (AUD 24.0 billion). 50% of the losses were down to pokies along with 25% of the total down to betting, followed by lotteries, casinos and keno. About 8% of Australian adults placed a bet at least once a month in 2022 and overall losses on online betting grew from US$ 2.40 billion in 2008-09 to US$ 3.87 billion in 2020-21. The average annual loss per adult is US$ 1,091, well ahead of Hong Kong’s US$ 858, Singapore US$ 787, Ireland US$ 595, US US$ 540, Italy US$ 452, Bermuda US$ 430, Norway US$ 401, New Zealand US$ 390 and Iceland US$ 371. The report noted that other countries have stronger regulation than Australia to limit gambling harm and added that it is time governments stand up to online betting and gambling operators “rebutting their self-interested claims”.

Australia’s economy is growing at its slowest pace since the 1990s recession, (Q2 – 0.2% and just 1.0% over the past year), as unemployment levels rise; the soaring cost of living, and high inflation/interest rates have led to an estimated 5.8 million Australians having to struggle to make debt repayments. It seems that Michele Bullock, the Reserve Bank Governor, does realise that high mortgage rates are placing the number of owner-occupiers, with variable-rate mortgages, in a “particularly challenging situation”, as well as being aware lower-income borrowers are over-represented in the group of people who are “really struggling” right now. However, she admits her main aims are to bring inflation down, re-balance the economy and return people’s lives to some kind of normality. She does acknowledge that “those with mortgages are feeling the squeeze on their cash flows not just from high inflation, but also from the increase in interest rates that has occurred in response to it, and “as labour market conditions ease, more households will experience a strain on their finances from unemployment or reduced working hours”. Since mid-2022, the RBA has lifted the interest rate thirteen times, whilst inflation is remaining at a sticky 3.8%, (above the bank’s 2.5% target), with the Governor forecasting that inflation will return to 2.5% by the end of 2026.

The European Central Bank has moved to cut borrowing costs again, as the inflation threat continues to abate while the twenty-nation bloc’s economies continue to dither. Whether there would be a further cut by the end of the year will be data dependent, as the rate of inflation was tipped to rise again during Q4 having eased back towards the 2% target. Bank president, Christine Lagarde, noted “we are not pre-committing to a particular rate path,” and “we are looking at a whole battery of indicators.” Just like the conundrum facing most global central banks, some are more concerned about recession risks and will argue for more rate cuts, while others see wage pressures weighing on the timing and frequency, and either maintain current rates or head in the other direction. Markets are leaning to at least one further cut – perhaps two – in Q4.

In Q2, there were 0.2% rises, on the quarter, in the seasonally adjusted GDPs for both the euro area and the EU, compared to 0.3% in Q1. A year earlier, Q2 2023 increases were 0.6%, (for the euro area), and 0.8% in the EU, compared to rises of 0.5% and 0.7% in Q1 2023. Over Q2, the three highest increases were seen in Poland, Greece and the Netherlands – with 1.5%, 1.1% and 1.0%; on the flip side were decreases of 1.0%, 0.9% and 0.4% in Ireland, Latvia and Austria. Employment-wise, the number of employed persons increased by 0.2% in the euro area and by 0.1% in the EU in Q2 compared to 0.3% rises for both blocs in Q1. Ireland, Lithuania and Estonia registered the highest growth in employment with growth levels of 1.1%, 1.1% and 0.8%, whilst the Romania and Finland posted decrease of 0.5% and 0.4%. Eurostat estimates that in Q2, 218.6 million people were employed in the EU, of which 170.1 million were in the euro area.

As US August inflation continued to cool last month, with consumer prices 2.5% higher, compared to 2.9% in July, it may push Fed officials to cut interest rates, by 0.25%, next Thursday; this was the slowest pace of growth since February 2021. Last month, prices for petrol, used cars and trucks, and some other items fell, whilst housing costs moved in the other direction. Grocery prices, which were surging just a few years ago, were up less than 1.0% on the year and unchanged on the month, whilst petrol costs have fallen more than 10% on the year. Excluding food and energy, prices were up 3.2% over the year, as airline tickets, car insurance, rent, and other housing costs grew more expensive.

For what it is worth, Labour’s manifesto promised a kitty of US$ 3.27 billion to revitalise the UK steel industry – and two months after their whitewash of the Tories in the General Election, the government is warning of a “grim” September, with up to 6k jobs set to be cut across the steel and oil refining industries; they include 3.0k, 2.8k and 0.4k job losses at India’s Tata Port Talbot in Wales, at China’s Jingye British Steel in Scunthorpe, (both companies claim they are each losing US$ 1.31 million every day), and at Scotland’s Grangemouth oil refinery. The Starmer administration is taking a similar stance to that of the previous Sunak government – indicating that public money is only available to invest in new greener steel production facilities, rather than to subsidise large ongoing losses at carbon-intensive plants. There are reports that Tata could receive a US$ 654 million government grant towards the cost of building a US$ 1.63 billion electric arc furnace which will eventually replace the last remaining blast furnace at Port Talbot; electric arc furnaces are mostly used to melt down and repurpose scrap steel, and cannot replicate all grades of steel that are produced in blast furnaces. It does appear that the closure of blast furnaces at both Port Talbot and Scunthorpe would leave the UK without the ability to make virgin steel.

At Port Talbot, here have been more than 2k expressions of interest in the redundancy and re-training package being offered which includes workers receiving 2.8 weeks of earnings for every year of service, up to a maximum of twenty-five years, as well as signing up to a one-year skills and re-training scheme during which they will be paid US$ 35.3k.

Economists were surprised to see that UK’s July economy flatlined for the second month of stagnation, when growth of 0.2% had been expected. However, there is a little glimmer of hope in that there’s “longer-term strength” in the services sector, as the quarter ending 31 July posted 0.3% growth and the fact that, in H1, the UK had the best growth rate among the G7 nations. Growth in the services sector – attributable to computer programmers and the end of NHS strikes – was offset by declines for advertising companies, architects and engineers, along with falls in manufacturing output and construction, due to “a particularly poor month for car and machinery firms”. These factors point to no change in interest rates at the BoE meeting next week.

Senior bankers, who for some years now have gorged themselves on record profits, (and probably record bonuses), on the back of higher interest rates, could be in for a wake-up call. There are rumours that the Starmer government may well raise an existing surcharge that banks already pay, and/or will cut the amount of interest UK banks earn on reserves parked at the Bank of England. (The bank levy was introduced in 2011 to curb excessive risk and reckless growth following the GFC). Although both the Prime Minister and Chancellor Rachel Reeves have yet to publicly declare that this would be the case, the former has referred to the “tax” burden falling on those with “broader shoulders” – and this has fuelled concerns. Consequently, UK banks are intensifying their lobbying against possible tax hikes in the new Labour government’s first budget next month. It does note that “banks based in the UK pay a significantly higher rate of tax than those in New York. And our analysis shows that they are expected to pay notably higher rates of tax in future years than in other European capitals.”

Yet another report has indicated the greed, cronyism, opaqueness and fraud prevalent in the previous Conservative government. Transparency International UK has identified significant concerns in contracts worth over US$ 20.0 billion, (GBP 15.3 billion), awarded by the Conservative government during the Covid pandemic, equivalent to a third of all relative expenditure. The anti-corruption charity discovered one hundred and thirty-five “high risk” contracts, with at least three red flags – warning signs of a risk of corruption; they included twenty-eight contracts worth US$ 5.37 billion going to firms with known political connections, while fifty-one, worth US$ 5.24 billion, went through a “VIP lane” for companies recommended by MPs and peers, a practice the High Court ruled was unlawful. (There was no surprise that a Conservative spokesperson commented that “government policy was in no way influenced by the donations the party received – they are entirely separate”). It also noted that over 66% of high-value contracts to supply items such as masks and protective medical equipment, totalling over US$ 40.0 billion, were awarded without any competition. A further eight contracts worth a total of US$ 654 million went to suppliers no more than one hundred days old – another red flag for corruption. Normal safeguards designed to protect the process of bidding for government contracts from corruption were suspended during the pandemic resulting in “the cost to the public purse has already become increasingly clear with huge sums lost to unusable PPE from ill-qualified suppliers,” with Transparency International adding “as far as we can ascertain, no other country used a system like the UK’s VIP lane in their Covid response”. After the dust had settled, it was estimated that the Department of Health & Social Care wrote off US$ 19.50 billion of the US$ 62.94 billion worth of public money spent on private sector contracts, related to the Covid-19 pandemic; a further US$ 1.31 billion was spent on PPE that was deemed unfit for use. What A Shambles!

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Cover Up

Posted on September 7, 2024 by howesdubai

Cover Up! 06 September 2024

Property Finder’s recent data points to a surge, by an increasing number of young families, to buy bigger apartments, (2 B/R apartments), and bigger villas, (4 B/R or larger villas). Demand is mostly driven by foreign investors and businessmen relocating to Dubai, with their families, and by current tenants to beat rising rents. In August, 41% of property buyers were looking for villas/ townhouses, (including 39% for a 3 B/R and 47% for 4 B/R or larger unit). The 59% balance was in the market for apartments – 36% searched for 2 B/R units, 32% for 1 B/R and 14% for studios. Most of the apartment buyers in Dubai wanted to buy in Jumeirah Village Circle, Dubai Marina, Downtown, Business Bay, and Palm Jumeirah, with villa buyers preferring units in Dubai Hills Estate, Al Furjan, Palm Jumeirah, Damac Hills 2 and Dubai South.

In the rental segment, 79% of tenants were seeking an apartment, with a 63:37 split between furnished and unfurnished. The remaining 21% were considering villas and townhouses, with 57% searching for unfurnished units. The top areas searched to rent apartments included Dubai Marina, Jumeirah Village Circle, Downtown Dubai, Business Bay and Jumeirah Lakes Tower. Dubai Hills Estate, Jumeirah, Damac Hills 2, Al Barsha and Umm Suqeim were popular among those looking to rent villas/townhouses.

According to Emirates NBD’s Residential Market Monthly, total Dubai residential units sold YTD have reached 104.3k, only 14k units shy of the total transactions recorded in 2023 and 31.5% higher on the year. The total value of YTD sales reached a record US$ 72.21 billion – 30.0% higher on the year, whilst August values of US$ 10.14 billion were 8.1% down on the month.

About two thirds of units sold in August 10.47k, were off plan properties, as that segment continues to increase its share of sales. To show how this has expanded, in 2017, there were 17.6k off plan sales – YTD 2024, the total is at 89k and could easily top 100k by year-end. JVC was the top performer in August with 1k sales, followed by 0.86k in Dubai South which recorded 1.3k sales in July and August but only 0.72k in H1. The third best performer in the month was Bu Kadra, located adjacent to Sobha Hartland, with 0.78k sales in the month and a total of over 1.9k YTD.

August villa transactions of 3k has followed the same trend it has all year, with stable demand continuing; 75.7% of sales, (2.27k units) were for off plan properties. It seems that transaction activity in this sector has slowed, as existing landlords are either holding on to their properties or are expecting a significant premium resulting in most buyers opting for off-plan projects.

The three favoured off-plan villa markets in August were the Athlon by Aldar project, Emaar’s The Valley and Dubai South – with the first two both posting sales of around 1k with the latter 0.67k. Damac Hills 2, Villanova and Al Furjan were the most active markets for ready villa transactions. YTD, it is estimated that a record 93k new units have been launched with two major differences – in 2024, the new launches had been focussed on existing master-planned communities or as stand-alone developments – and not concentrated across a few master-planned communities. The second point is that there has been an increase in supply from relatively smaller developers (in terms of past development track-record and completed stock).

Bigger asset price rises were seen in the villa market in August – at an average annual 23%, compared to 12% for apartments. It is reported that villa prices for new launches are at a premium of up to 30% when compared to the current average price points. The feeling is that when the new stock is handed over, there could be a knock-on impact on the older stock, with prices heading north in a catch-up exercise. For apartments, most of the price increases were witnessed across locations with limited new supply and negligible development potential.

Azizi Developments has finally announced the height of its Burj Azizi – at 725 mt, it will become the second tallest building in the world; estimated costs are in the region of US$ 1.63 billion. The project’s launch date is set for February 2025, with completion slated for 2028; the one hundred and thirty-one plus storey project will be located on SZR and will feature a one-of-a-kind all-suite seven-star hotel, inspired by seven cultural themes, along with a variety of residences including penthouses, apartments, and holiday homes. It will also offer a range of amenities, such as wellness centres, swimming pools, saunas, cinemas, gyms, mini markets, resident lounges and a children’s play area. The tower will include a vertical retail centre spread over seven floors, several high-end restaurants, a luxury ballroom, and a beach club, along with a one-of-a-kind observation deck and an adrenaline zone. Being Dubai, there has to be some world records broken and Burj Azizi will not disappoint by having the highest:

nightclub (on level 126)
observation deck (on level 130)
restaurant in Dubai (on level 122,
hotel room in Dubai (on level 118)

Dubai-based property brand Binghatti has launched is latest project — the forty-seven floor Binghatti Royale – featuring three hundred and fifty-four apartments, ranging from 1 B/R to 3 B/R units. Located in Jumeirah Village Circle, it will also include sixteen retail spaces, as well as an infinity pool, private suite pools, a kid’s pool, an outdoor gym, multi-purpose lawn, and padel/tennis courts. The project also features social spaces including a juice bar, an outdoor dining area and lush landscape areas. The launch comes in response to the soaring demand for Binghatti projects in the area following the rapid sell-out of back-to-back projects. Handover is expected in Q3 2025.

JP Morgan has been slow in following the footsteps of the likes of UBS, Deutsche Bank, and Lombard Odier who have already entered Dubai on the back of its growing importance as a global investment and innovation hub. These financial institutions have high hopes in the region’s potential as a haven for the world’s affluent population. The JP Morgan team is led by veterans Sebastian Botana de Beauvau and Carol Mushriqui, from Geneva and London, who will serve a diverse clientele, including individuals, family offices, charities, and family foundations in the GCC, with Dubai as its base. In June, UBS said it was strengthening its wealth management team in the ME with ten new hires, with other Western banks and Asian wealth managers following suit. The reasons that Dubai has become such an economic hotspot are manifold and there is no reason to believe that Dubai will not continue this upward trend. The current World Bank’s real GDP growth projections for the UAE for 2024 and 2025 are at 3.9% and 4.1%, respectively, as well as a ‘AA-’ Long-Term Foreign-Currency Issuer Default Rating by Fitch, which reflects the country’s moderate consolidated public debt level, strong net external asset position, and high GDP per capita.

There is every possibility that Primark could make a début in the ME after the Alshaya Group confirmed they were in talks with the retailer, known for its multinational fashion brands. Founded in Dublin, fifty-five years ago, it now operates over four hundred and fifty stores across seventeen markets. John Hadden, Alshaya Group’s CEO, commented that, “we are incredibly proud to partner with Primark to discuss potential opportunities to bring their stores to the region. For many years, shoppers across the region have asked for Primark and we are looking forward to the start of a successful partnership to help bring their exceptional in-store experience to the GCC.”

In H1, there was a 9.0% annual increase to 9.3 million tourists arriving in Dubai. Knight Frank noted that in the first five months of the year, the UAE’s 80% hotel occupancy was the highest recorded in the region. The revenue per available room, (RevPAR) came in at US$ 155 by the end of H1. The country’s hotel stock, at 212k rooms, was also the largest in the region, with Knight Frank expecting this to rise 17% to 248k keys by 2026; on that premise, Dubai’s current stock of 154k rooms will reach 180k over the next three years. Knight Frank estimates that the GCC’s total current stock of 464.5k will rise to over 544k.

The World Travel and Tourism Council has estimated that visitors to the UAE will spend an estimated US$ 52.2 billion this year, which ranks the country as the tenth biggest recipient of inbound tourism spending globally and the second largest in the ME, behind sixth-placed Saudi Arabia, with a US$ 68.3 billion spend.According toJulia Simpson, chief executive of the WTTC, the global travel and tourism sector’s contribution to the world economy is set to reach an all-time high of US$ 11.1 trillion, supporting a record three hundred and forty-eight million jobs. However, she did warn of the possible impact of geopolitical threats, such as the with the Israel-Gaza war and the Russia-Ukraine conflict.

Euromonitor International also noted that Dubai was the third most visited city in the world, with 17.2 million visitors, behind Istanbul and London but ahead of Antalya, Paris, Hong Kong, Bangkok, New York, Cancún, and Mecca. It is estimated that the travel & tourism sector injected US$ 223.4 billion to the GCC’s GDP, underpinned by the 76.2 million tourist arrivals to the region, who together spent $135.5 billion – 43.5% higher on 2022. It also provides regional employment opportunities to 2.6 million people. Latest figures indicate that the travel/tourism sector now accounting for around 11.7% of UAE’s GDP.

A fairly new arrival to the sector is the cruise industry, with the UAE, Oman, Qatar, and Saudi Arabia all inaugurating new cruise ship terminals. Total revenue topped US$ 200 million last year, with expectations that it could grow at an annual 9.9% rate over the next five years to reach over US$ 320 million. From 01 November, the Resorts World One will homeport in Dubai, via DP World’s Mina Port Rashid, to offer three weekly departures. Michael Goh, President, Resorts World Cruises said “our deployment in the Gulf will unlock new opportunities for Dubai and the Gulf as a premiere cruise region,” with Saud Mohammed Saeed Hareb, Cruise Tourism & Yachting Lead, Dubai Department of Economy and Tourism, commenting, that it “continues to play a pivotal role in the growth of Dubai’s tourism industry, aligning with the goals of the Dubai Economic Agenda, D33, to further consolidate Dubai’s position as a leading global city for business and leisure”.

After expanding at its slowest pace in thirty-four months in July, the UAE’s non-oil private sector growth regained momentum in August, nudging 0.5 to 54.2, supported by a pickup in new orders, output and sales growth, according to. the seasonally adjusted S&P Global UAE Purchasing Managers’ Index. Employment levels rose at a milder rate, as hiring growth weakened in August being the softest for seven months, with wage costs also increasing at the fastest pace since May. Furthermore, the output sub-index rose 1.0 on the month to 59.1, attributable to new business and project work; however, the rate of expansion was among the slowest in the past three years. Businesses surveyed remained confident about the outlook over the next twelve months.

Government data showed that last year, UAE non-oil trade reached a record high of US$ 954 million, (AED 3.5 trillion) – 12.6% higher on the year – whilst exports of goods and services also set a new record high of US$ 272 million, (AED 1.0 trillion). The S&P report noted that since there had been another sharp increase in input prices, it cautioned that ongoing price mark-ups have the potential to curb demand. Although the news was positive, and there had been a solid expansion, they were still weaker than the levels recorded earlier in the year, as fewer companies reported uplifts in activity.

Like most Gulf countries, Bahrain is keen to diversify its economy and reduce its dependence on oil by enhancing revenue in its non-oil sector, so as to support fiscal stability; the introduction of an international tax regime is one such means. It also demonstrates Bahrain’s attempt to meet with global standards, aimed at curbing tax avoidance by MNCs and promoting a fairer global tax environment; this could make the kingdom a more attractive investment proposition on the global stage and can only enhance its international reputation. Furthermore, it is aligning more with recent tax decisions and initiatives seen in the other five GCC members.

It would seem that if Bahrain did not introduce the Minimum Top-Up Tax, MNCs would still be liable to pay it in their home jurisdiction which implements the income-inclusion rule. All this tax does is to ensure that an MNC’s profit, attributable from the operation of its Bahraini subsidiary, remains within the Bahraini tax net. The National Bureau for Revenue – a similar set up to the UAE’s FTA – has confirmed that the legislation is “fully aligned with the Organisation for Economic Co-operation and Development guidelines”, and that eligible businesses will need to register with it. The first filing of the global information return to report on the global minimum tax is not due until eighteen months after the first financial year, and will probably be based on the MNC’s consolidated financial statements.

To date, one hundred and forty jurisdictions have signed up for the OECD’s 2021 Pillar Two reform programme set up a global minimum corporate tax to ensure large MNCs pay a minimum 15% tax on profits in each country where they operate. The main raison d’être is to reduce the reason for profit-moving, whilst placing a floor under tax competition. The global minimum tax, which is based on Global Anti-Base Erosion (Globe) Model Rules, aims to reduce the incentive for profit shifting and places a floor under tax competition; the expectation is that this would bring an end to the race to the bottom on corporate tax rates. It remains to be seen what action is taken by the FTA here, and in the neighbouring states, as they try to align themselves with competing international markets and not seen as a tax pariah by the rest of the world. (There may be some reason why the UAE made recent amendments to its Federal Corporate Law to introduce a definition for top-up tax and multinational entities).

Having earlier been approved by the federal cabinet, and then by the Higher Committee Overseeing the National Strategy on AML and CFT, the new 2024-27 National Strategy for Anti-Money Laundering, Countering the Financing of Terrorism and Proliferation Financing has been released. The strategy, developed by the General Secretariat of the National Committee in collaboration with key stakeholders, has been built around eleven major goals, and introduces legislative and regulatory reforms aimed at mitigating the impact of illegal activities on society. Sheikh Abdullah bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Foreign Affairs, noted that “this initiative follows the Financial Action Task Force’s (FATF) decision to delist the UAE from its Grey List in February 2024, further underscoring the UAE’s unwavering commitment to upholding the highest international standard”. Key areas include risk-based compliance, national/international coordination, strengthening detection/investigation of illicit financial activities, optimising the use of resources, and addressing emerging risks from virtual assets and cybercrime. The strategy also emphasises improving transparency, data collection and analysis, as well as updating legal and regulatory frameworks to align with global standards. The General Secretariat of the National Committee will oversee its implementation and ensure adherence to UAE objectives.

Ducab Metals Business announced the doubling of its annual production capacity for aluminium to 110k tonnes and has increased its bare copper product capacity in response to surging global demand. The double benefit whammy is that it enhances Ducab Group’s subsidiary position, in the international metals market, and advances the UAE’s Operation 300bn industrial strategy. CEO Mohammad Almutawa, commented that “this expansion enhances our ability to meet international demand, elevates the ‘Made in the Emirates’ brand, and boosts our global competitiveness, all while supporting sustainable business growth and strengthening industrial resilience”. The expansion benefitted from the recent enlargement of DMB’s facilities by 51.0k sq mt, as well as the strategic acquisition of GIC Magnet — a leading global supplier of paper-insulated aluminium strips.

This week, DP World completed the purchase of Cargo Services Far East Ltd, a global supply chain provider headquartered in Hong Kong, that globally employs over 2.5k people. Founded in 1989, Cargo Services has established an extensive portfolio of solutions – such as origin purchase order management, ocean freight, air freight and warehousing for a diverse range of sectors. This includes sophisticated supply chain management services for global retail and high-fashion clients; it has also expanded its portfolio to provide specialised cruise logistics services globally. DP World now employs more than 115k, in eight hundred locations, and by the end of this year, it will operate more than two hundred freight forwarding offices, covering up to 95% of global trade flows. DP World’s Group Chairman, Sultan Ahmed bin Sulayem, commented, “Cargo Services’ logistics expertise and global network perfectly complement our own footprint, and will be yet another tool in our offering to customers. Together, we’ll create a powerful force propelling trade globally”.

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. On Sunday, retail prices saw declines, hovering around 5%, after marginal price rises were registered in August. The breakdown of fuel prices for a litre for September is as follows:

Super 98 US$ 0.790 from US$ 0.831 in Sep (down by 4.9%)

Special 95 US$ 0.757 from US$ 0.798 in Sep (down by 5.1%)

Diesel US$ 0.757 from US$ 0.804 in Sep (down by 5.8%)

E-plus 91 US$ 0.738 from US$ 0.779 in Sep (down by 5.3%)

One of China’s Big Four banks, the Agricultural Bank of China (DIFC Branch) has announced its second listing on Nasdaq Dubai – a US$ 400 million Floating Rate Notes, issued under the US$ 15 billion Medium Term Note Programme, due in 2027. Apart from this issue reflecting the bank’s strategic expansion into global markets, it also enhances the bourse’s fixed-income listing portfolio, which now stands at US$ 135.0 billion

Over the past five years, Emirates Central Cooling Systems Corporation PJSC has witnessed a 41% surge in the number of new customers, registered electronically from both public and private sectors. During H1, Empower posted an 11.0% rise in the number of bill payment transactions, via the electronic payment channels, to 427.1k transactions. As part of its efforts to facilitate business operations and enhance efficiency and productivity, Empower witnessed a 21.0% rise, to 19.7k applications, for No Objection Certificates during H1. Ahmad Bin Shafar, CEO of Empower, noted that the growth in Empower’s operations reflects “Dubai’s thriving economy and increasing demand for our services. Our customer base expanded to more than 138k in the first half of the year.”

The DFM opened the week, on Monday 02 September, one hundred and forty-eight points (1.0%) higher the previous three weeks and gained thirty-three points (0.7%), to close the trading week on 4,373 by Friday 06 September2024. Emaar Properties, US$ 0.08 higher the previous fortnight, gained US$ 0.07, closing on US$ 2.37 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.65, US$ 5.37 US$ 1.68 and US$ 0.35 and closed on US$ 0.64, US$ 5.53, US$ 1.67 and US$ 0.35. On 06 September, trading was at one hundred and nineteen hundred shares, with a value of US$ 73 million, compared to one hundred and fifty-one million shares, with a value of US$ 135 million, on 30 August.

By Friday, 06 September 2024, Brent, US$ 0.94 lower (1.2%) the previous fortnight, tanked US$ 7.77 (9.9%) to close on US$ 71.06. Gold, US$ 44 (1.7%) lower the previous week, gained US$ (1.0%) to end the week’s trading at US$ 2,527 on 06 September 2024.

Another body blow for the aviation industry with reports that Cathay Pacific reported that one of its Airbus A350 planes had to turn back due to an “engine component failure”. Subsequently, forty-eight planes were inspected and, very worryingly, fifteen of them were found with faulty parts that needed to be replaced. The planes’ Trent XWB-97 engines were made by Rolls-Royce and all the carrier’s jets have been fitted with these engines, since Cathay received its first plane in 2016. The engineering giant has confirmed “it is committed to working closely with the airline, aircraft manufacturer and the relevant authorities to support their efforts,” and that it “will also keep other airlines that operate Trent XWB-97 engines fully informed of any relevant developments as appropriate.” Other major airlines, with A350s, include the likes of BA, Virgin Atlantic, Qatar Airways, Singapore Airlines and Japan Airlines. Earlier in the year, Rolls-Royce announced plans to invest heavily to improve its range of engines, including the Trent XWB-97.

The World Travel and Tourism Council has estimated that, this year, a record 10% of all money spent globally will be on travel – including on flights, cruises accommodation etc. It has forecast that the industry’s contribution to the global GDP will increase by 12.5%, on the year, equating to 10% of global GDP – a 7.5% rise since the previous record year of pre-Covid 2019. Travel spending in the US, Chinese and German economies is expected to contribute the most to GDP. In 2024, the sector is expected to support nearly three hundred and forty-eight million jobs in 2024, 4.1% or 13.6 million jobs more than in 2019.

Following events in France last week, Telegram has now been hit by South Korean police who have launched an investigation into messaging over deepfake crimes. It is reported that the probe will examine whether it had been abetting distribution of sexually explicit deepfake content, after South Korean authorities have called on Telegram and other social media platforms for cooperation in fighting sexually explicit deepfake content. Telegram has confirmed it was actively moderating harmful content on its platform, including illegal pornography, saying that “moderators use a combination of proactive monitoring of public parts of the platform, sophisticated AI tools and user reports in order to remove millions of pieces of harmful content each day.”

To make matters worse for exponents of free speech, Brazilian authorities have announced that it was suspending access to Elon Musk’s X social network in the country to comply with a judicial order, with the judge insisting that that social media needs hate speech regulations. It is obvious that the tech company has been struggling with dipping advertising revenue and that this decision will only exacerbate the problem. The judge has ordered that Twitter should be suspended in the country until it complied with all related court orders, including the payment of more than US$ 3 million in fines and the designation of a local representative, as required by Brazilian law. The dispute over X has its roots in a presidential order from earlier this year, which required the platform to block accounts implicated in probes into the alleged spreading of distorted news and hate. Although he closed X’s Brazilian offices, Elon Musk has ensured the platform was still available in the country “until this matter is resolved.”

In a further bid to increase the appeal of its best-selling yet aging EV, (first released in2020), Tesla announced that it is planning to launch a six-seat variant of its Model Y car in China from late 2025. There are reports that the company has already requested suppliers to prepare accordingly for a double-digit increase of Model Y output at its Shanghai factory; it has already seen an annual 6.0% increase in H1 domestic and overseas Model 3 deliveries. It is readily apparent that the EV-maker is facing increasing competition from its Chinese rivals which have already unveiled at least four Model Y competitors this year including the Onvo L60 from Nio and 7X from Zeekr, both with roomier interiors and at prices lower than those of flagship models. However, its Model Y crossover is still the best-selling EV in China, with H1 sales of 207.8k, with expectations that Q3 sales will be even higher; by year end, sales could also get a boost from the introduction of its Full Self-Driving feature.

Car company Volvo is not the first EV-maker to abandon a target to produce only fully electric cars by 2030, blaming changing market conditions for its decision to give up a target it had announced only three years ago; it now expects that at least 90% of its output will be made up of both electric cars and plug-in hybrids by 2030. After a flurry in activity in previous years, the industry is facing a slowdown in demand in some major markets and uncertainty due to the imposition of trade tariffs on EVs made in China. Whilst maintaining that “we are resolute in our belief that our future is electric,” but that “transition will not be linear, and customers and markets are moving at different speeds.” One delaying factor is that EVs are expensive and have become more so because of the end of many government subsidies, and the introduction of tariffs. Registrations of EVs across the EU dropped by nearly 11% in July.

A major blooper by Sony sees it pulling online shooter Concord from sale today, (06 September), just a fortnight after its launch, following its 23 August release exclusively for PlayStation 5 and PC that subsequently has reportedly struggled to attract players. Anyone, (and there were not that many) who paid US$ 52.50 (GBP 40) would be entitled to a full refund. It had taken eight years in its development stage, and now two weeks since its release, it has been withdrawn so that the Sony team can “determine the best path ahead” for its return. Very much like popular titles such as Overwatch and Valorant, Concord is a so-called hero shooter in the multiplayer market, where players are part of a team made up of characters with distinct abilities and can compete in straight-up death matches or other game modes that involve capturing an objective or controlling sections of the arena. On release, it was criticised for failing to offer a new take on the genre. The highest number of concurrent users playing Concord was only six hundred and sixty, whereas the most-played game, Counter-Strike 2, has consistently recorded more than one million players over the past two years.

In a tit for tat move following Canada setting a 100% tariff for imported Chinese EVs, (as well as steel and aluminium), Beijing has announced a probe of Canadian canola imports, escalating a trade fight between the two countries. Its minister of agriculture said plans for the canola investigation were “deeply concerning”, whilst the Chinese retorted that canola oil imports had jumped 170% since 2023, while prices had “continuously fallen”. It will also file a complaint with the World Trade Organisation over the EV tariffs, which it criticised as “discriminatory” and “unilateral”, with Canadian Prime Minister Justin Trudeau saying China had “chosen to give themselves an unfair advantage in the global marketplace”. Canola, also known as rapeseed, is a major agricultural product in Canada, accounting for roughly 25% of all farm crop receipts, according to the Canola Council, an industry group. 90% of its canola is exported with the US being its main source market, followed by China; it is used for cooking, animal feed and some forms of energy.

Following the rise of remote work, attributable to the pandemic, business travel declined which dampened the sector’s growth and led it to lag behind leisure travel. This year, total expenditure on global business travel is forecast to top US 1.5 trillion in 2024 – a 6.2% hike compared to pre-pandemic 2019. The leading largest market for business travel, the US, is expected to reach US$ 472 billion – 13.4% higher than the 2019 record – whilst second place China is expected to grow 13.1% above 2019 levels.

On Sunday, the C919 reached a milestone by surpassing the 500k passenger mark since commercial operations began on 28 May; over the past three months, the C919 has logged over 10k flight hours and completed more than 3.7k commercial flights. Nearly two years ago, in December 2022, China Eastern Airlines received its first of seven C919s and has expanded its C919 fleet, now with five regular routes that connect Shanghai with Chengdu, Beijing, Xi’an and Guangzhou, as well as Beijing with Xi’an.

In H1, China State Railway Group Co Ltd posted that its H1 total operating revenue and net profit reached US$ 81.46 billion and US$ 239 million. Over the period, railway passenger trips topped a record 2.1 billion during the period – 18.4% higher on the year – with an average of 10.26k passenger train journeys, (up 9.4% on the year), whilst more than 1.92 billion tonnes of goods were transported by railways. In H1, China-Europe freight trains transported more than 1.04 million 20’ equivalent units of goods – up 11% on the year. Fixed-asset investment in the sector reached a record US$ 47.39 billion, increasing by 10.6% on the year.

There are many observers wary of China’s growing influence in Africa, which will expand even further after the country’s President Xi Jinping released plans to step up China’s support across debt-laden Africa. Xi, noting that China and Africa account for 33% of the global population, has pledged funding of US$ 50.7 billion, (but specified that US$ 21 billion would be disbursed through credit lines and at least US$ 70 billion in fresh investment by Chinese companies), over three years, backing for more infrastructure projects, and the creation of at least one million jobs. The Chinese leader also added that China would increase cooperation with Africa in various sectors including industry, agriculture, infrastructure, trade and investment, and that “without our modernisation, there will be no global modernisation”. The world’s biggest bilateral lender promised to carry out three times as many infrastructure projects across resource-rich Africa.

For its financial year, ending 30 June 2024, there was no surprise to see embattled Qantas posting a 26.5% slump in its post-tax profit to US$ 844 million (AUD 1.25 billion), with its new chief executive Vanessa Hudson, (who replaced the disgraced Alan Joyce), noting that the airline’s focus this year has been getting the “balance right in delivering for customers, employees and shareholders”; revenue rose US$ 14.78 billion, (AUD 21.9 billion), while net debt is at US$ 2.77 billion, (AUD 4.1 billion). Whilst Jetstar, its lower cost airline, saw a 23.0% hike in its earnings of US$ 335 million, the airline’s domestic routes down by US$ 715 million – underlying EBIT), and international, falling by 39.0% to US$ 382 million. The revenue decline was attributable to several factors including fares moderating, increased spending on customer initiatives and reduced freight revenue. Expenses included US$ 134 million in legal provisions over the year, including a US$ 86 million settlement with the Australian Consumer and Competition over its court case. Capex over the year was at US$ 2.09 billion, with the carrier investing in new Airbus A220 jet aircraft to replace its ageing fleet of Boeing 717s. It also registered a US$ 47 million provision for “ground handling outsourcing” after the High Court ruled it had illegally sacked some staff during the pandemic.

As expected, the carrier did not declare a dividend, but it announced an up to US$ 270.05 million, (AUD 400 million) share buyback. Over the year, Qantas has spent money on regaining” “lost” customers, by investing in passenger promotions and in-flight services, after a turbulent year of headlines over its COVID-19 travel credits scheme and several legal battles. It is patently obvious that the airline has still a long way to go to “restore trust and pride in Qantas as the national carrier is our priority”.

There is an ACCC case against Qantas, claiming that it has sold seats on flights that had already been cancelled, with the carrier agreeing to institute a remediation program for affected passengers, but the full compensation bill has not yet been finalised. It is also involved in a separate class action for not refunding tickets for cancelled flights during the pandemic. Last December, the Albanese administration passed their “Same Job Same Pay” legislation, which has impacted Qantas which has confirmed it will support the union’s three Fair Work Commission (FWC) applications for its short-haul cabin crew and a separate in-principle agreement for its long-haul cabin crew workforce. This is expected to cost US$ 40 million, with 2.5k international and 800 Qantas short-haul cabin crew receiving pay increases, equating to an average 30% hike in remuneration.

Although the median price for Australian residences rose last month by an annual 2.8%, (and 0.5% on the month), to US$ 541k, (AUD 802k), the market is slowing. The annual rise comes at a time when homeowners have continued to face the high cost of living and higher interest rates; the current rate of 4.35% is expected to start declining by the end of the month. The CoreLogic’s Home Value Index indicates variances in capital cities’ house prices, with monthly increases seen in Sydney (0.3%), Brisbane (1.1%), Adelaide (1.4%) and Perth (2.0%), whilst declines were noted in Melbourne (-0.2%), Hobart (-0.1%), Darwin (-0.2%) and Canberra (-0.4%) in August. Interestingly, the latest quarterly data sees growth rate in home values being 1.3% down from the same period in 2023, when there was a 2.7% growth rate.

The major casualty seems to be Melbourne which has more sellers than buyers, with the city continuing to drop down the list of median house price values and is now the third-lowest among the capital city markets, slipping below Perth and Adelaide. Furthermore, the last time Perth prices were higher than those of Melbourne was in 2015 whilst the latest data sees Adelaide having higher prices for the first time ever. Meanwhile, the three most expensive cities are Sydney, Brisbane and Canberra, with prices of US$ 796k, US$ 590k and US$ 570k.

On the rental front, it appears that growth is “slowing to a halt”, with the rent index unchanged for a second consecutive month in August, whilst the annual rate of growth is still very high at 7.2%. One of the factors behind this seems to be a drop in net migration to Australia from March to December 2023, whilst the Reserve Bank of Australia point to a slight uptick in household size, suggesting share housing and multi-generational housing may be on the rise.

With ongoing worries that the US is stepping into recession, global financial markets do what they do under these circumstances – they run for cover. Global bourses, including those in Asia and the US, have seen company share values tumble, on Tuesday, including Nvidia, with the chip conglomerate falling by 9.5%, knocking off US$ 297.7 billion from its market cap. Financial markets in Asia and the US have tumbled on concerns that the world’s largest economy could be headed towards a recession, not helped by US manufacturing activity remaining subdued. In New York, the S&P 500 index closed more than 2% lower, while the tech-heavy Nasdaq fell by over 3%. On Wednesday morning, Japan’s Nikkei 225, South Korea’s Kospi and the Hang Seng in Hong Kong all fell by 3.3%, 2.7% and 0.7%. As in New York, tech companies took the brunt of losses.

August US job growth – at 142k – was weaker than expected and could point to high interest rates having their intended impact, with the economy beginning to slip. Data released shows that the unemployment rate fell back 0.1% to 4.2% on the month, whilst the job gains in the previous two months were lower than initially estimated. August figures will have a bearing on whether the Federal Reserve tinker with the current interest rate of 5.3%, later in the month, for the first time in four years; the odds point to a rate cut and whether this will be 0.25% or 0.50% remains to be seen. With inflation dipping lower by the month – now at 2.9% – the Fed can see the economy slowing which should result in rate cuts before the economy slows into a recession. It is now under pressure to cut rates and ward off the possibility of further economic slowing. Construction and health care firms led the hiring last month, while manufacturers and retailers cut payrolls.

The fall-out from the Oasis dynamic ticket pricing continues after the cost of tickets for their reunion tour more than doubled while on sale. It seems that Culture Secretary Lisa Nandy has posted that surge pricing would be included in a government review of the secondary gig sales market, with many thousands sitting in virtual queues for several hours hoping to buy a ticket. Even if successful, the end result was that ticket prices were more than their face value at US$ 466 (GBP 355) –and not at US$ 194 (GBP 148). Ticketmaster introduced this demand-based in 2022 to stop touts and ensure more money goes to the artists. The company claims it is artists, their teams, and promoters who set pricing and choose whether dynamic pricing is used for their shows.

UK’s Competition and Markets Authority has now launched an investigation into Ticketmaster over the sale of Oasis tickets, adding that it would cover how “dynamic pricing” may have been used, and whether the ticket sale “may have breached consumer protection law”. The watchdog said it would be engaging with Ticketmaster and “gathering evidence from various other sources”, including Oasis’s management and event organisers. The CMA investigation will also consider whether:

Ticketmaster has “engaged in unfair commercial practices”
Oasis fans were given “clear and timely information” explaining that tickets could be subject to “dynamic pricing”, how it would operate and how much they would have to pay
people were “put under pressure to buy tickets within a short period of time – at a higher price than they understood they would have to pay, potentially impacting their purchasing decisions”

Halifax posted that August UK house prices were 4.3% higher on the year, and 0.3% on the month, at US$ 384k, (GBP 293.5k), as the recent 0.25% interest rate cut, to 5.0%, has evidently boosted confidence in the market. The UK’s largest mortgage lender expects that, “with market activity picking up and the possibility of further interest rate reductions to come, we expect house prices to continue their modest growth through the remainder of this year.”

More than seven years after a fire engulfed Grenfell Tower, the enquiry has finally released its findings in a 1.7k page damming report. In 2019, the first phase of the inquiry’s report confirmed that combustible cladding was the primary cause of the rapid spread of the fire. The second and last phase concluded that the tragedy was the culmination of those in charge failing for decades to properly consider the risks of combustible materials on high-rise buildings, while ignoring the mounting evidence before them. As far back as 1991, following a fire on Merseyside, the deadly risks of combustible cladding panels and insulation had been identified. It noted that the government was “well aware” of the deadly risks posed by combustible cladding and insulation a year before the Grenfell Tower fire, but “failed to act on what it knew”, and that there had been “systematic dishonesty” from cladding and insulation companies as well as “toxic” relationship between the tower’s residents and the Tenant Management Organisation which was responsible for running services. It also reported that:

government officials were “complacent, defensive and dismissive” on fire safety, while cutting red tape was prioritised and that successive governments missed opportunities to prevent the tragedy
there was an “inappropriate relationship” between approved inspectors and those they were inspecting
Grenfell residents who raised safety concerns were dismissed as “militant troublemakers” and were failed ‘by dishonesty and greed’; there was “a toxic atmosphere” with the TMO “fuelled by mistrust of both sides”
The TMO and the Royal Borough of Kensington and Chelsea were jointly responsible for managing fire safety at Grenfell Tower – but the years between 2009 and 2017 were marked by a “persistent indifference to fire safety”
cladding and insulation firms involved in this work engaged in “deliberate and sustained strategies to manipulate the testing processes, misrepresent test data and mislead the market”
“systematic dishonesty” from the companies resulted in hazardous materials being applied to the block including
- Cladding company Arconic, “deliberately concealed” the danger of the panels used on the tower
- Celotex, which supplied most of the insulation, similarly “embarked on a dishonest scheme to mislead customers”
- Kingspan knew its insulation product failed fire safety tests “disastrously” but continued to sell it to high-rise buildings
- the firms got away with this because the various bodies designed to oversee and certify their products repeatedly failed to monitor and supervise them

All the above-mentioned stakeholders must share responsibility, to some degree, for their involvement in the disaster, with the Counsel noting that there had been a “merry-go-round of buck-passing” – largely blaming each other for the disaster. Unfortunately, the inquiry cannot make findings of civil and criminal liability, so it is up to the Met Police, (which has its own problems) to continue with their investigations and hopefully bring charges on many of the “villains” involved so that justice finally have its day in court; this could take another seven years. On the back of events such as the Hillsborough football disaster and the tainted blood scandal in the 1980s, Iraq – weapons of mass destruction, phone hacking, Windrush, Greensill, the Post Office scandal, Covidgate and now Grenfell, it is patently obvious that successive UK governments, on many occasions, have been lacking in honesty, integrity, transparency and governance but are masters of Cover Up!

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