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PROPERTY PRICES FALL IN ABU DHABI

Prime and mid-prime villa values in Abu Dhabi are anticipated to fall by at least 15 per cent, while apartments are anticipated to trail at seven per cent, the latest market outlook for 2017 from Core Savills has reported.

Mid-market communities, particularly buildings with smaller units are predicted to maintain relative sale and rental price resilience and stay flat. The reinstatement of the five per cent rental cap has been received with mixed reviews as some tenants are apprehensive that landlords may interpret this law as an opportunity to increase rent by five per cent, while the three per cent municipality fee payable by expatriate tenants, is adding stress to overall rising household costs.

Core Savills CEO David Godchaux said: “We have seen landlords in mainland areas, who have been inflexible with renegotiating better rents, losing tenants to outer, more affordable areas. Interestingly, this migration is statistically under-reported and is artificially feeding stock in these outer areas. This may act as a risk for developers who overestimate potential demand for the outer mid-market communities due to the spurious swell in demand stemmed from the lack of elasticity in prices in core areas.”

On Reem Island, almost 2,400 units are expected to come to the market in 2017. Core Savills maintains that this excess supply will be hard to absorb and is expected to cause a noticeable drop in both rental and sales values. However, some of this stock is anticipated to be absorbed by expert tenants currently renting in the mainland who aspire to be on Reem Island due to better build quality and infrastructure, and may consider the move because of the rental rate drops.

Reidin’s UAE Residential Property Price Indices for December 2016, also revealed that Abu Dhabi apartment sales prices registered a decrease in December 2016. Prices decreased 1.05 per cent month-on-month, and also decreased 2.63 per cent year-on-year. Villa sales prices also registered a decrease in December 2016, with prices decreasing 0.74 per cent month-on-month and 4.99 per cent year-on-year.

GULFOOD TO FEATURE SEGMENTED LAYOUT

The five-day trade show is expected to attract up to 90,000 food professionals Dubai World Trade Centre (DWTC) officials are confident a new segmented show format will be the next stage of the annual Gulfood exhibition’s evolution, as the show prepares for the biggest format shake-up in its 30-year history.

Opening on February 26 (Sunday), Gulfood’s five-day run is expected to attract up to 90,000 food professionals, with some 5,000 plus exhibitors from 150 countries vying for a stake in a multi-billion-dollar Mena F&B market. The show will also encompass the world’s biggest annual halal food sourcing trade exhibition, Halal World Food.

For the first time, Gulfood will feature a segmented layout, with eight dedicated zones designed to ensure visitors get the most out of their visit by being able to quickly connect with their priority producers and suppliers. The eight dedicated segments at Gulfood 2017 are: beverages; dairy; fats and oils; health, wellness and free-from; pulses, grains and cereals; meat and poultry; power brands and world food. According to Trixie LohMirmand, senior vice-president, exhibitions and events management, DWTC, the 22nd edition of the show will put ‘business first’ and retain its mantle as the world’s largest annual food and beverage trade.

This year, Gulfood features 120 national pavilions with four countries – Azerbaijan, Finland, Malta and Somalia – represented for the first time. China, India, Italy, Spain, and the US will also mount their largest Gulfood pavilions to date. The international pavilions will be up against a host of regional country promotions, most notably from Egypt, Iran, Jordan, Lebanon and Morocco. Gulfood 2017 is a trade-only event and is open to business and trade visitors. The show is open 11am-7pm from February 26 to March 1 and 11am-5pm on March 2. Visitors can register on-site for entry fee of Dh350.

IRAN EYES TO BECOME NEW INDUSTRIALIZED COUNTRY

EHRAN – Iran has the capacity to become a newly industrialized country (NIC) in the next calendar year, starting March 21, Industry, Mining and Trade Minister Mohammadreza Nematzadeh said .

“Currently, Iran’s per capita income stands at $5,900,î he said, adding that the figure should rise to a minimum of $10,000 as per capita income is $10,000-$20,000 in NICs. To this end, “Iran needs to attract three billion dollars of foreign investments, improve its competitiveness index to 55, increase non-oil exports to $103 billion, and boost exports of industrial and mining products to $61 billion, while the ratio of exports to imports should reach 98 percent,” IRIB quoted Nematzadeh as saying.

According to the minister, Iran can experience an eight-percent economic growth thanks to its young and educated workforce, huge hydrocarbon reserves and rich mineral deposits, unparalleled geopolitical situation as well as access to high seas and emerging markets in the region. NIC is a socioeconomic classification applied to several countries around the world by political scientists and economists. NICs are countries whose economies have not yet reached a developed country’s status but have, in a macroeconomic sense, outpaced their developing counterparts.

IRANS MAJOR DEVELOPMENT PROJECTS IN SISTAN BALUCHESTAN

TEHRAN – President Hassan Rouhani inaugurated some major development projects in the country’s southeastern province of Sistan-Baluchestan during his one-day visit on Tuesday, IRNA reported.

Addressing the inaugural ceremony of Iranshahr-Zahedan gas pipeline project, Rouhani said that today the gas pipeline has reached the provincial capital of Sistan-Baluchestan, Zahedan, and in future gas will be also supplied to all other cities of the province for example Zabol and Chabahar.

The managing director of Sistan-Baluchestan Gas Company Mohammad-Hassan Tehrani, who also attended the inaugural ceremony, told reporters that Iranshahr-Zahedan gas pipeline with the length of 262 kilometers has been constructed consuming 7.5 trillion rials (about $198.5 million) of finance.

President Rouhani also inaugurated the second runway of Zahedan International Airport. On the sidelines of the inaugural ceremony, Director General of Sistan-Baluchestan Airports Department HassanA’rabi Moqadam told reporters that the second runway of Zahedan International Airport with the length of above 4.26 kilometers and width of 60 meters has been built using 600 billion rials (about $15.8 million) of finance.

Rouhani also inaugurated 81 kilometers of highway, a copper factory and 333 telecommunication projects in the southeastern province via video conferencing. Director General of Sistan-Baluchestan Transport and Urban Development Department Masoud Maleki told reporters that the inaugurated 81 kilometers include three highways constructed at the cost of 1.25 trillion rials (about $33.09 million).

 

IRAN OIL OUTPUT

TEHRAN- Oil Production in Iran will reach over 3.9 million barrels per day (bpd) in February, Mehr news agency quoted Oil Minister Bijan Namdar Zanganeh as saying on Monday.

The country’s crude oil output was 3.9 million bpd in January, Zanganeh had previously announced.

According to a survey by Reuters published on January 31, Iran has increased its oil output by 20,000 bpd in January after the country was exempted from the OPEC cuts.

Oil production in Iran will reach four million bpd by the beginning of the next Iranian calendar year (March 21), National Iranian Oil Company Managing Director Ali Kardor said on February 18.

’OPEC compliance with oil cuts acceptable’

OPEC’s level of compliance with production cuts in January has been acceptable, Zanganeh said on Monday, expressing hope for further cooperation from non-OPEC members in the near future. The Organization of the Petroleum Exporting Countries agreed on Nov. 30 to cut output by 1.2 million bpd to 32.5 million bpd for the first six months of 2017, in addition to 558,000 bpd of cuts agreed to by producers such as Russia, Oman and Mexico.

EXPO 2020

Preparations for Expo 2020 Dubai gained further momentum on Thursday with the awarding of Dh2.2 billion contract for the development of the event’s three spectacular Theme Districts.

Al Futtaim Carillion, a Dubai-based company, will be the main contractor for the key development of the three Theme Districts that will be home to up to 136 pavilions at the Expo site. The contract announced on Thursday is the first of Dh11 billion worth of construction contracts that Expo 2020 Dubai plans to award in 2017.

In January, Expo 2020 Dubai said it would award 47 construction contracts worth Dh11 billion in 2017. This is on top of awarding over 1,200 contracts worth more than Dh2 billion in 2016. A further 98non-construction contracts to talling more than Dh360 million will also be distributed before the end of the year. These will range from legal advisory services to event management and merchandising.

In 2016, Expo 2020 Dubai announced that 20 per cent of the Expo’s total direct and indirect spend, representing more than Dh5 billion in contracts, would be allocated to small and medium enterprises bothlocal and international. The three Theme Districts will be named Opportunity, Mobility and Sustainability after its three sub-themes and the design will reflect traditional Dubai architecture.

When Expo 2020 Dubai opens on October 20, 2020, the Theme Districts will be home to pavilions for many of the participating countries, non-governmental organisations and commercial partners at the Expo, and will host cutting-edge exhibits and experiences for the Expo’s many millions of visitors to enjoy. In total, the Theme Districts and the buildings within them will have a floor area of 222,000sqm.

WHY ARAMCO IPO TO REDEFINE THE KINGDOM

The $100 billion Saudi Aramco IPO, four-time bigger than the Alibaba offer) is a historic event in world finance and politics. The choice of its investment banking advisors, underwriters and listing exchange reflects the House of Saud’s historic political and economies relationships with American oil super majors and money centre banks.

The original Aramco consortium – Jersey Standard (now Exxon Mobil), Mobil, Amoco, Socal (Chevron) – were all offspring of John D. Rockefeller’s Standard Oil Trust. For generations, the Rockefeller and Aldrich families, the royal family of oil and gas in the US, were the dominant shareholders in both Citigroup and Chase Manhattan. Chase, where I worked extensively with clients and friends from the kingdom, was a special place for a 20 something deal maker awed by the fascinating culture, princes and economy of Saudi Arabia.

Sheikh Sulaiman Olayan, a legend in the international finance, sat on our board, as did the patriarchs of the Juffali and Jameel clans with Dr Henry Kissinger and Giovanni Agnelli. Our chairmen were routinely granted audiences by successive Saudi kings and crown princes, notjust the governors of the Saudi Arabian Monetary Authority (Sama) or members of the Council of Ministers. Citicorp was the joint venture partner of the Saudi American Bank, the largest corporate bank in the kingdom. Prince Al Walid bin Talal bin Abdel Aziz was Citi’s white knight during the banking crisis of 1991 and emerged as its largest shareholder. JPMorgan, Chase and Citi managed the global reserves of Sama and their Swiss subsidiaries managed the offshore wealth of the Arab world’s most prominent merchant families.

The House of Morgan was to international banking what the House of Saud is to global oil – and working in JPMorgan Chase in New York, London, Geneva and Bahrain’s “Saudi” banker teams was the education of a lifetime for a young kid fresh out of Penn/Wharton! Even now, there is no doubt in my mind that the finest private banker of his generation is the Hon David Gibson Moore, a product of Oxford’sdreaming spires and the Anglo-Irish ascendancy, chairman of Banque Chase Manhattan Suisse, once David Rockefeller’s ambassador to the kingdom, my dearest friend and mentor fordecades. The cognoscenti in Riyadh and Jeddah will unquestionably agree with my call on David.

So it is natural that JPMorgan is the lead underwriter of the Saudi Aramco IPO. The choice of Morgan Stanley is governed by its historic role in the Eurobond market and its armies of private client wealth management advisors, inherited from Jamie Gorman’s Smith Barney deal. HSBC also makes strategic sense since it was the joint venture partner of the Saudi British Bank and has built a dominant franchise intrading GCC securities via its own subsidiaries and HSBC Amanah.

EMIRATES FINDS ALLEGATIONS BY EUROPEAN AIRLINES AS BAFFLING

Emirates has rejected claims by Lufthansa and Air France-KLM in a letter to the EU that competition from Gulf airlines had forced them to terminate services to Asia. The letter from the CEOs of the French and German carriers last week asked the European Union executive to act over what they say are unfair practices by the Gulf airlines that have caused them to scrap flights to destinations in the Middle East, Asia and India.

“It is baffling why two of the largest legacy airlines in Europe are alleging that Gulf carriers have caused them to contract their Asian services when the opposite is true,” an Emirates spokeswoman said. “OAG [Official Airline Guide] data shows that between 2007 to 2017, the six European carriers combined actually grew capacity from Europe to Asia in terms of seats [17 per cent], and flight frequencies [six per cent].”

The letter to EU Transport Commissioner Violeta Bulc said Lufthansa, Air France, KLM, Brussels Airlines, Swiss and Austrian Airlines have together had to halt services to over 30 destinations in the Middle East, Asia and India in recent years. The European Commission is preparing a law enabling the EU to impose duties on non-EU airlines or suspend their flying rights if it finds they have harmed European airlines through unfair subsidies or discriminatory practices.

European legacy carriers have been hit by the rapid growth of the main Gulf airlines – Emirates, Etihad Airways and Qatar Airways – and shifting traffic flows to Asia.”We have repeatedly disproved all allegations of subsidies, and demonstrated that we operate on a fully commercial basis,” the Emirates spokeswoman said.

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