RATE HIKE AND FUTURE GUIDANCE POINT TO HIGHER COST OF FUNDS IN GCC
The Central Bank of UAE late on Wednesday raised in its key interest rate by 25 basis points, following the US Federal Reserve’s decision to hike rates by the same margin. The apex bank has effected the rate increase by hiking its repo rate or the rate at which it provides short-term liquidity to banks against certificates of deposits. With the latest increase, the repo rate has been increased to 1.50 per cent. Analysts said the latest round of rate hike and the guidance indicating up to 3 to 4 more hikes in the next 12 months, cost of funds across GCC countries are expected to go up. The 25 bps rate hike by the Fed this week is certain to push up GCC market rates, though GCC central banks have tended to respond differently following US rate hikes in the past. Like in the past Saudi Arabia’s central bank has left its repo rate unchanged at 2 per cent while raising its reverse repo rate, the rate at which commercial banks deposit money with the central bank, by 25 basis points to 1.25 per cent. Kuwait refrained from following the US Federal Reserve’s interest rate increase for the first time since 2015, citing modest economic growth in the country hit by lower oil prices. The central bank left the discount rate at 2.75 per cent, according to a statement.
DEMAND FOR IT SECURITY PROFESSIONALS, MOBILE APP DEVELOPERS ON THE RISE IN UAE
Dubai: If you’re already in the tech field and have a knack for fighting cybercrime or developing apps for smartphones, you’re in luck. Many companies in the UAE are increasingly hiring information technology (IT) professionals that can help them protect their data against hackers and build mobile applications for iPhone, Samsung and other Android phone users. Employers aren’t just looking for anyone with an IT degree, with the most in-demand candidates today belonging to the category of network engineers and information security experts, according to a new study released by GulfTalent on Tuesday. Demand for information security professionals alone has surged over a five-year period, from 4 per cent of all talent searches in 2012 to 9 per cent in 2017, while network engineers witnessed a similar trend, from 6 per cent of searches to 13 per cent. At the same time, demand for recruiting Android and iOS developers- an indicated by talent searches online – also rocketed from almost zero in 2012 to 20 per cent in 2017. Those that are likely to land a role are the ones that are not new in the field, with 97 per cent of employers seeking candidates who have the experience and only 3 per cent who are fresh graduates. A diploma from a university is also a pre-requisite, with 98 per cent of candidates holding a degree being sought after.
SOLAR PROJECT IN SAUDI ARABIA FORECAST TO GENERATE 7,000 JOBS
Dubai: A massive renewable energy programme in Saudi Arabia is expected to generate thousands of jobs.
The solar project seeks to harness renewable energy and build a local manufacturing industry that can boost the kingdom’s exports, and ultimately generate 7,000 employment opportunities by 2020. Saudi Arabia was earlier reported to require a $30 billion to $50 billion investment to materialise its renewable energy programme that seeks to cut local crude consumption in one of the world’s largest oil exporters. Bidders have been invited to pitch for the construction of 3.45-gigawatt solar and wind plants by 2020. The Ministry of Energy and Natural Resources, however, is requiring bidders to spend 30 per cent of the capital through home-grown employees and companies. “We want to create value. We don’t just want to bring in companies that open up manufacturing facilities at a very high premium, which the consumer will end up paying,” Turki al-Shehri, head of the renewable project development office in Saudi Arabia said. “We want to ensure that whatever they are opening is competitive, that it can compete globally for exports.” With the kingdom’s population growing annually, domestic demand for electricity has also been on the rise, prompting the government to find ways to diversify its energy mix. Currently, only a small portion (less than 1 per cent) of the country’s power supply is derived from renewable sources.
The renewable energy programme hopes to increase the share of renewables in the power mix to 4 per cent by generating 3.45 gigawatts of renewable energy by 2020, and an additional 9.5 gigawatts by 2023.
ONLY UAE FIRMS IN CONSUMER GOODS POST INCREASE IN JOB VACANCIES IN Q1
Dubai: Hiring in the UAE and the rest of the Middle East region remained scarce during the first three months of the year, with the latest job index registering a double-digit decline in vacancies compared to the same period in 2016. The UAE’s Monster Employment Index, which measures online recruitment activity using real-time vacancy postings on a number of career portals, was down 47 per cent in March from the year-ago level, suggesting a slowdown in hiring by companies across industries. Released on Tuesday, the index indicated that all businesses, with the exception of those in one industry, aren’t hiring more than they did last year. Recruitment activity is quite limited in companies in the banking and financial services industry, which posted the biggest drop in recruitment, at 42 per cent, as well as in the information and technology, and telecommunications sector, down 27 per cent, and in retail, trade and logistics, down 26 per cent. Hiring by companies in the production, manufacturing, automotive and ancillary industry, as well as those in the chemicals, plastic, rubber, paints, fertilizer and pesticides business, has likewise dropped by 4 per cent and 1 per cent, respectively.
VAT TO BOOST GCC GOVERNMENT REVENUE
Dubai: The introduction of value-added tax (VAT) across the GCC in 2018 is expected to boost government revenues but the tax burden in the short run is seen causing a surge in the headline inflation rate, resulting in the moderation of consumer spending, economists have said. The impact of VAT on inflation and government revenue will vary depending on the proportion of consumption in the economy and how much of the consumption base is captured by VAT. GCC countries have not yet published their individual VAT laws — there is scope for some differences in VAT classifications. “We forecast that GCC countries will raise between 1.2 to 1.6 per cent of GDP [gross domestic product] in the first year after the introduction of VAT, with the UAE and Saudi Arabia likely to see the greatest revenue generation of about 1.5 to 1.6 per cent of GDP,” said Monica Malik, chief economist of Abu Dhabi Commercial Bank (ADCB). “In the case of the UAE, we believe that the relatively higher revenue potentially raised from VAT reflects the larger share of private consumption in the UAE economy.” According to the International Monetary Fund (IMF), VAT is highly effective at mobilising and diversifying government revenue. It is vital for the GCC countries to increase their non-oil and tax revenue, with hydrocarbons still dominating income for most governments in the region. GCC states depend on hydrocarbon revenues more than other high commodity-exporting economies, with hydrocarbon revenues still accounting for between 50-85 per cent of total revenues. This share has fallen from the pre-2014 levels, though largely due to the lower energy price and, to a lesser degree, to fiscal reform measures such as cuts to subsidies and introduction of fees. Analysts expect to see revenue from VAT increasing in the second year onwards as the administrative efficiencies of VAT collection improve. In the case of UAE, VAT revenue is expected to increase to 1.8 per cent of GDP in the second year of collection assuming there are no changes to VAT guidelines.
UAE, SAUDI ARABIA, BAHRAIN AND EGYPT CLARIFY ON BAN ON QATARI AIRLINES
ABU DHABI: The United Arab Emirates, the Kingdom of Saudi Arabia, the Kingdom of Bahrain and Arab Republic of Egypt have affirmed that the measures they have taken against the State of Qatar are within their sovereign and legal rights in line with the international laws and the United Nations Security Council Resolutions No 2309 and 1373 on countering all forms of terrorism and that they comply with the Convention on International Civil Aviation “Chicago Convention 1994”, including all its complementary arrangements on regulating international air travel. This has been stated by an official delegation representing the four nations during a visit to the headquarters of the International Civil Aviation Organization, ICAO, in Montreal Canada, on June 15th. The delegation comprised Sulaiman bin Abdullah Al Hamdan, Saudi Minister of Transport, Mohammad Ahmed Kamal, Bahrain Minister of Transport, Saif Mohammad Al Suwaidi, Director General of the General Civil Aviation Authority of UAE, Hani Al Adawi, Chairman of Egypt’s Civil Aviation Authority, and Captain Abdel Hakim Al Badr, Assistant Chairman of the Saudi Civil Aviation Authority. The delegates met with ICAO Council President Dr. Bernard Aliu, and Secretary General Dr Fang Liu, along with a number of top executives at the international organisation and briefed them on the measures taken in implementation of their countries’ decisions against Qatar.
The delegates responded to all the queries fielded by the international organisation, contesting all Qatari allegations that they stressed are aimed to mislead the international organisations and global community with misinformation about the current situation.
DUBAI’S DATE TRADE AMOUNTS TO $221.7M IN 2016
Dubai: Total date trade in Dubai amounted to $221.7 million in 2016, $85.1 million of which were exports, while $72.1 million were imports, and $64.5 million were re-exports. According to the latest figures from, Dubai accounted for 96 per cent of the UAE’s date exports, making the emirate the country’s top exporter of dates. The analysis, by the Dubai Chamber of Commerce and Industry, showed 108,300 tonnes of dates exported from Dubai in 2016, slightly below peak levels seen in 2015. Trade values were also lower than those in 2015, with exports dropping 8.3 per cent from 2015 levels of $92.9 million. Meanwhile, import values fell 3.6 per cent in 2016, and re-export values declined nearly 14 per cent. Globally, the UAE is the world’s fourth largest exporter of dates, accounting for 8.5 per cent of global date exports. India accounted for the largest share of Dubai’s date re-exports in 2016 (63 per cent), followed by Bangladesh (13 per cent), and Pakistan (4 per cent), the Chamber said. Morocco was the largest importer of Dubai dates in 2016, with $11.7 million worth of dates and a 14 per cent market share, followed by Oman (13 per cent), India (12 per cent), Bangladesh (12 per cent), and Indonesia (10 per cent). While the top importers were primarily Muslim countries, European and North American countries were also among the large date importers.
3 UAE EXPATS WIN IN 2 MILLIONAIRE DRAWS
Dubai: Three expatriates in the UAE became instant millionaires recently after hitting the jackpot in two of the UAE’s most popular raffle draws. The biggest winner, Bangladeshi national Jamal Hossain Bahar Habib Ullah Majumder, with ticket number 030408, won Dh7 million in the latest Big Ticket draw in Abu Dhabi on June 5. The winning ticket was picked by the previous grand prize winner, Thangaraj Ngarajan at the arrival hall of Abu Dhabi International airport. A day later, two more non-UAE nationals were declared millionaires in a different draw, this time by Dubai Duty Free. The two Dubai Duty Free millionaires are Arjun Harish Nayaka, an Indian national living in Sharjah and Vijayaram P.K. a 46-year-old engineer at Al Futtaim Carillon. Nayaka works for WSP Engineering Consultancy in Dubai. He said he was thrilled to hear the news of his new-found fortune.