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After continuous fall, Dubai gold prices edge higher

Gold prices edged higher for a second session on Thursday as the dollar extended losses after minutes of the latest Federal Reserve meeting hinted at a dovish approach to interest rate hikes in the United States.

22k gold in Dubai is priced at Dh147.25 and buyers can buy 24k for Dh157.

Spot gold was up 0.2 percent at $1,295.16 per ounce at 0359 GMT, after gaining nearly 0.2 percent in the previous session.

US gold futures for June delivery were up 0.4 percent at $1,294.60 per ounce.

“The minutes had a little bit of an impact but not too much.

Gold is moving relative to the dollar,” said Ronald Leung, chief dealer at Lee Cheong Gold Dealers in Hong Kong.

The dollar lost momentum versus the yen and against major rivals on Thursday after the minutes of the Federal Reserve’s last policy meeting were seen as dovish and US.

President Donald Trump proposed looking into imposing new tariffs on imported cars.

Although the central bank’s minutes on Wednesday showed another interest rate hike in the United States would be warranted “soon”, it also showed that the Fed would tolerate inflation rising above its target for a time.

While higher US rates tend to boost the dollar and weigh on greenback-denominated gold, the metal can be used as a hedge against rising inflation.

Meanwhile, the euro hovered near a six-month low against the dollar, weighed down by concerns over economic slowdown in the single currency bloc and political risks in Italy and Asian shares tread water as investors fretted about new setbacks in US-China trade talks.

Trump also said on Wednesday he would know next week whether his summit with North Korean leader Kim Jong Un would take place as scheduled, casting further doubts on plans for the unprecedented meeting.

The uncertainty surrounding markets had also helped gold prices push up, investors said. Gold is often seen as a safe investment during times of political and financial uncertainty, alongside the Japanese yen.

“With the trade picture looking increasingly cloudy… we could see further yen strengthening and equity weakness which is typically bullish for gold,” INTL FCStone analyst Edward Meir said in a note.

“A recovery back over the $1,300 per ounce mark could prompt further short-covering,” Meir added.

Among other precious metals, silver climbed 0.1 percent to $16.44 an ounce, while platinum gained 0.7 percent to $905.40 an ounce.

Rupee in free fall; your dh1 may soon fetch Rs19

The current free fall cycle of the Indian rupee is expected to continue unabated for a while, and currency experts predict that it might test 69.65 to 70 against the dollar in the coming weeks (19 against the UAE dirham).

The relentless slide of the rupee, which declined 30 paise to hit a fresh 16-month low of 68.34 per dollar or 18.63 against the dirham on Wednesday, caused jitters among businesses and investors in India. However, it is good news for non-resident money remitters across the Gulf as they gain more in exchange rate.

“For instance, with today’s fall of the rupee by 8.1 paise against the dirham, an NRI remitting home Dh1,000 gets Rs81 more. If, as predicted by currency experts, rupee plunges to 70 against the US dollar or 19.12 against the dirham, the windfall will be substantial,” said a money exchange dealer.

Promoth Manghat, executive director of Finablr and CEO of UAE Exchange Group, said the Indian currency has been fluctuating for the past few weeks and plummeted to its lowest since February 2017.

“This depreciation, particularly during the Holy Month of Ramadan, has resulted in a substantial increase in remittances to India. Looking at the pattern, we see anywhere around eight to 10 per cent increase in remittances whenever there is a depreciation of the Indian rupee.”

Adeeb Ahamed, MD, LuLu Financial Group, said since the rupee closed at 18.63 against the dirham on Wednesday, it could move between 18.75 and 18.80 within the next few days.

“The rupee continues to slide on account of rising oil prices and the general bearish movement of the equity markets. All currencies, including the euro and pound, have also weakened in this context,” said Ahamed.

Sudhesh Giriyan, COO, Xpress Money, said there is invariably an increase in remittances to India whenever the rupee weakens. “This trend can be largely attributed to the white-collar segment as they tend to send more money whenever the exchange rates are favourable. For the white-collar segment, the money sent back home is not time-bound, therefore they prefer to keep an eye on the exchange rates and remit larger amounts every two to three months. The remittance behaviour of the blue-collar segment is completely different as they remit money to their families to provide for their day-to-day expenses. Therefore, those remittances are not impacted by currency fluctuations as they have to send money every month for their basic family needs.”

Pradeep Unni, head of strategic business development, Richcomm Global Services, however, believes that the rupee could weaken much faster towards 69.65 to 70 to a dollar, unless the central government and the RBI do not take strong measures to curb the slide.

“Indian rupee is down more than six per cent so far this year. The dollar continues to be adamantly strong and that combined with high oil prices has raised the concerns of wider current account deficit,” said Unni.

Financial analysts said a widening fiscal deficit and untamable inflation are behind the fall in the rupee.

“With India running a large current account deficit, it needs a constant inflow of dollars, which was not there. High oil prices inflated the import bill and resulted in further widening of the current account deficit, which speeded up the current cycle of rupee fall,” said James Mathews, Group CEO of Crowe Horwath, UAE and Oman.

“Surprise political developments in key Indian states and the fear of the ruling coalition possibly losing its majority in the 2019 general elections had panicked the stock markets too. Since the start of April, foreign investors have sold $1.63 billion and $4.22 billion in local equity and debt market, respectively,” said Unni.

Reports suggest that RBI has spent over $8.5 billion of reserves in the four weeks through May 11 to halt the rupee’s drop, but the result has been negative so far. “A weaker rupee and higher oil prices will cause inflation to accelerate, which may prompt the Reserve Bank of India to hike interest rates earlier than expected,” said Unni.

According to currency experts, multiple econometric analysis points out that every $10 rise in oil prices worsens India’s current-account balance by 0.45 per cent of GDP, pushes up inflation by 40-45 basis points, and hurts growth by about 15 -20 basis points.

“During such periods of heightened volatility and uncertainty, investors and traders should use these current trading levels to hedge/trade the Indian rupee futures and options on the Dubai Gold & Commodities Exchange. Investors have the option to hedge up to six to eight months forward,” they advised.


40% of UAE internships are unpaid, survey finds

Almost half of the students eager to gain work experience, by taking up internships in the UAE, are not paid for their work, a new survey has found.

The ‘State of Internships and Graduate Jobs – UAE 2018’ survey conducted by Oliv showed that 40 per cent of UAE graduates are taking unpaid positions in order to secure experience and gain new skills.

Jean-Michel Gauthier, CEO of Oliv, believes that unpaid internships is a trend that needs to go if companies want to pursue and hire the highest quality candidates.

“More than 90 per cent of the companies we work with on our platform have some form of payment for interns, and this is something we strongly encourage for companies to get the most out of the internship programmes. Creating an effective internship programme takes time and investment from the employer but the payoff is attracting serious and skilled talent,” he said.

In light of the findings, Oliv has also produced a guideline to help organisations work out the best pay bracket for the positions they are offering. Each sector and role differ but averages stand at Dh3,000 for SMEs and Dh4,000 for MNCs.

“This is only a guideline and we appreciate it may not always reflect the truest values for rewarding an intern. Of course, salaries for internships vary, based on the level and intensity of a role, whether it is sales-based or tied to a target, and so on,” he said. “Being paid for an internship isn’t the sole purpose of applying for or accepting one but it goes a long way in contributing to a holistic experience of entering the working world and is a fundamental part of the experience.”

Having a steady supply of skilled and educated graduates in internship programmes can reduce costs and ultimately save a company money. Initial costs associated with visas, medical, and insurance don’t apply to interns, and with a developed and engaging programme, companies are ensured a pipeline of loyal employees.

“Even when you look at the long-run, training skilled workers from the ground up can have a massive pay off when it comes to filling senior positions. The supply chain within the organisation reduces acquisition cost by a considerable amount,” Gauthier stressed.

Revealed: 62 billionaires in UAE hold Dh616 billion wealth

Dubai was home to 40 billionaires — or 65 per cent of the UAE total — at the end of last year, an addition of three new high net worth individuals. Overall, there were 62 billionaires in the UAE last year, holding $168 billion (Dh616.56 billion) wealth.The UAE was also ranked 10th in the list of countries while Dubai was ranked 8th among cities with the highest number of billionaires, revealed Wealth-X Billionaire Census 2018 report.

Andrew Amoils, head of research, New World Wealth, said most of the UAE-based billionaires have made their money from real estate.

“Going forward they should come from professional services (law firms, consultancies), healthcare, technology, real estate and financial services (banks, fund managers, wealth managers),” Amoils said. He, however, refused to disclose the names of the billionaires.

Rupert Hoogewerf, chairman and chief researcher, Hurun Report, says nine more billionaires emerged in the UAE this year compared to last year, taking the total to 36 known self-made or ‘first generation’ billionaires.

“It is worth noting that we estimate that for each one we have found we have missed potentially as many as two, meaning the true number of existing self-made billionaires in the GCC may be as many as over 100. However, based on the current growth, we expect the number of self-made billionaires in the region to grow by at least three over the next 10 years to 110. This reflects the existing ones we missed in previous years and the new ones created,” he said.

“I would expect a continued growth in the number of expats, since the UAE is considered to be a stable country in the region, offers a high quality of life and has an attractive tax regime. With the vision of growth expected for 2030, there will be more UAE nationals who grow into billionaires.”

Hoogewerf expects several billionaires in the UAE to come from the new economies, but also including investments, transportation, healthcare and life sciences, as well as real estate.

Majority of new billionaires to be expats

Vijay Valecha, chief market analyst at Century Financial Brokers, said lower tax rates, world-class luxury, strong rule of law, good educational facilities and reputation as a global business hub that straddles East and West are the primary attractions of UAE for ultra-high net worth individuals.

“The number of new billionaires is expected to rise sharply in the next 10 years as UAE and adjoining geographical areas progress. UAE economy continues to see robust growth and new billionaires are expected from sectors like healthcare, real estate, education, jewellery and e-commerce. Liberalization of UAE capital markets are expected to aid in the growth of further Emirati wealth. Moreover by 2027, number of Indian billionaires are expected to rise by 200 per cent to 357. By historical migration patterns, at least 24 of them are expected to choose UAE as their home due to geographical proximity and affluent lifestyle. The total count of billionaires are expected to rise by 44 in the next 10 years,” he added.

Valecha expects majority of the new billionaires are expected to be expats who are likely to migrate to UAE due its stable political and low tax regime. A robust UAE economy is expected to aid in the creation of new Emirati billionaires in sectors like e-commerce and healthcare.

“Billionaires in UAE are more inclined to invest in real estate as the current prices are attractive for them from a long term perspective. Risk free products like sovereign bonds, sukuks also rank higher in their investment priorities,” he concluded.

Now, buy an iphone 8 for just Dh115 a month

If you always wanted to own an iPhone 8 or iPhone 8 plus and didn’t have the money for it, we have some good news for you.

Etisalat is offering a Smart Pay offer, that allows you to get a hand on the iPhone 8 64GB handset for as little as Dh115. It is a simple EMI scheme for 24 months.

If you want to increase your monthly budget, you can opt for Dh150 for 18 months of Dh220 for 12 months.

If you wish to own the iPhone 8 256GB, you can opt for a smart plan of Dh154 (24 months), Dh 185 (18 months) or Dh268 (12 months).

The prices exclude the 5 per cent VAT that is payable on these purchases.

You can get your iPhone 8 delivered to your home for free of charge by ordering it online.

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