UAE Fuel Prices Among Lowest In The World
Fuel prices in the UAE, which reached its peak this month since the country opted for deregulation in 2015, are still among the lowest in the world because governments in other countries – unlike in the UAE – have imposed taxes on the consumption of fuel.Generally, retail fuel prices vary in different continents but are highest in Nordic region. Compared to the UAE, prices in the Nordic states such as Norway and Sweden are higher by nearly 250 per cent and 220 per cent, respectively. In Saudi Arabia, fuel prices are the cheapest, which are nearly less than half of UAE prices.
Vijay Valecha, chief market analyst at Century Financial Brokers, says even though fuel prices are at the highest level since August 2015, UAE residents are still better off compared to the rest of the globe. “Prices in US are about 25 per cent higher, India is more expensive by 73 per cent, Singapore by 142 per cent and the UK by 156 per cent compared to UAE gasoline prices at the pump. This is primarily due to low taxes on petrol in the UAE when compared to rest of the world and also because the UAE is one of the largest exporters of crude in the world. Nevertheless, what separates the UAE from others is the low impact on inflation as fuel price comprises only three to four per cent of the UAE consumer price index,” he said.
Uberising The UAE Truck Industry
The idea of TruKKer was born on a dinner table when Gaurav Biswas realised how hard it was to find a suitable truck at the right time at a reasonable cost. He was quick to spot a lucrative gap in the market and the region’s first and fastest-growing truck aggregator was born. Biswas connected with childhood buddy Pradeep, also a successful tech entrepreneur, to build TruKKer. The company started in late 2016 in the UAE with a home relocation business and rapidly scaled into all truck-related services. Currently, TruKKer services 150+ B2B businesses and moves cargo all over the Middle East and North Africa.
“If Uber can use technology to connect people with drivers, surely it must be possible with trucks too? There was a lucrative opportunity waiting to be serviced. Just the thought of introducing technology to such a large industry gave me an adrenaline rush,” said Biswas, founder and CEO, Trukker Technologies.
The logistics and transport market is traditional, non-standardised and fragmented. TruKKer was incorporated to transform the antiquated logistics industry by leveraging the power of technology to make the market standardised, transparent and efficient.
Transportation is emerging as one of the key drivers of economic activity and the GCC market is estimated at $35 billion. It is estimated that one million trucks are currently in operation across the region and this number increases by 5 per cent to 9 per cent every year.
“One year down, our modern way of truck hiring service and fleet solutions has started to change the way logistics managers make decisions. We are solving some of the core problems such as price standardisation, route optimisation, in-transit tracking, digitisation of multiple documents and timely delivery assurance. It has impacted the supply chain on both the supply as well as the demand side, with freight owners getting standard rates and ready fleet; and fleet owners getting business at fair and standard terms with minimum hassle for payments and collections,” said Biswas.
Dubai Gold Stays Near 6-Month Low, 22k Priced At Dh142.50
Gold prices inched up on Thursday as the latest developments in the US-China trade row led to a slight retreat in the dollar, but was still near a six-month low hit in the previous session.
24k gold was priced at Dh151.75 in Dubai and 22k can be bought at Dh142.50.
Spot gold was 0.1 per cent higher at $1,252.74 an ounce, as of 0400 GMT. In the previous session, the metal touched $1,250.30, its lowest since mid-December.
US gold futures for August delivery were down 0.2 per cent at $1,254.20 an ounce.
“There’s a little bit of a pullback in the US dollar, so that explains some recovery in gold,” said Helen Lau, analyst at Argonaut Securities.
A weaker greenback makes dollar-denominated gold cheaper for holders of other currencies.
The dollar held steady against its rivals on Thursday, though it failed to build on overnight gains amid conflicting signals from Washington on a proposal to restrict Chinese investment as the bitter US-China trade row kept financial markets on edge.
US President Donald Trump on Wednesday said he will use a strengthened national security review process to thwart Chinese acquisitions of sensitive American technologies, a softer approach than imposing China-specific investment restrictions.
However, gold prices which usually rise in times political and economic uncertainty, have gained little support from these trade tensions, while expectations that the US Federal Reserve will hike interest rates have pressured bullion.
“The dollar may continue to strengthen because of rising US interest rates and yields. That is all the key reason that makes holding gold unattractive,” Lau added.
Boston Federal Reserve President Eric Rosengren on Wednesday said the central bank should continue to gradually raise interest rates to lower the risk of a major policy error.
The US economy is growing at a 4.5 per cent annualized rate in the second quarter following the latest data on home sales and advance trade balance released this week, the Atlanta Fed’s GDPNow forecast model showed.
The Fed is expected to raise interest rates at least four times this year, which will likely dent gold prices.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.36 per cent to 821.69 tonnes on Wednesday.
In other precious metals, spot silver was 0.4 per cent higher at $16.10 an ounce.
Palladium rose 0.3 per cent to $950.45 an ounce, while platinum fell 0.3 per cent to $853.80 per ounce.
Dubai To Have World’s First Multi-Mode Super Port
Dubai Aviation Engineering Projects (DAEP) has introduced new projects aimed at developing the aviation industry under the umbrella of the Dubai 10X initiative.
The ‘Retractable Aircraft Cabin’ project will enable airlines to re-distribute their capacity on demand for each flight in record time while the aircraft is on the airport floor. The project provides travelers a number of options for customised airplane cabins-on-demand for entertainment and business. Another initiative, the ‘Multi-Mode Super Port’ project, the first of its kind in the world, will provide an integrated travel outlet for both air and space travel.
The initiatives are part of 26 initiatives submitted by 24 government agencies in Dubai, which were approved by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Board of Trustees of the Dubai Future Foundation (DFF). A panel of experts reviewed more than 160 ideas submitted by 36 parties for implementation in less than 365 days.
Khalifa Suhail Al Zaffin, Executive Chairman of Dubai Aviation Engineering Projects said: “The advent of new travel technologies such as supersonic aircraft and space travel have raised questions about the ability to exist airports to accommodate these modes of travel in an integrated way. As the most ambitious country in the field of exploratory space missions, we believe the time is right to develop a new comprehensive plan for an integrated airport that offers both air and space travel.”
Al Zaffin added, “The Dubai 10X initiative has helped us make great strides. Dubai has always pioneered change and has a strong track record of innovative projects. Our Dubai 10X projects provide real opportunities for us to set new and innovative standards in the aviation industry and add unique value to the passenger experience.”
Dubai Aviation Enterprise Projects has developed a comprehensive project plan to implement its initiatives in partnership with the aviation industry, both local and international. The plan also provides a framework for establishing close partnerships with the UAE Space Agency, the Mohammed Bin Rashid Space Centre (MBRSC) and the Supreme Legislation Committee, in addition to international organisations, agencies and companies.
African Pension Funds Look To Dubai To Invest Capital
In Africa, there has been the emergence of an ecosystem around pension funds.
A recent institutional investor study estimated that the 10 largest funds in Africa held a combined $310 billion in assets. This has transpired for a number of reasons, not the least of it being a shift in many of these countries switching from defined benefits to defined contribution schemes. In Botswana, for example, where the shift took place in 2001, there are more than 100 pension funds jostling for funds in a country that has a population of 2 million. The top 10 funds account for more than 80 per cent of the assets accumulated, a figure that is similar in other countries in the continent as well.
Yet, what is clear is that these countries have been very good at amassing capital rather than deploying it. In Ghana, for example, there are less than 50 companies that are listed and average daily volumes have shrunk in the last couple of years.
In most countries, the default option remains investing in domestic treasury bonds; in Nigeria, for example, more than 80 per cent of the portfolio is invested in government securities. This limits the ability of growth of the industry; more importantly, what it does is limit the return on assets that these managers can achieve, especially if managers end up chasing the same pool of assets.
Weak currency regimes further exacerbate the problem, and in response, what is transpiring is an increasing willingness to look abroad for opportunities. Although the pace of reform in pension funds is uneven across countries in the continent, what is common is the clarion call of achieving higher returns in order to not only capture a higher market share, but also to cater to existing clientele that are getting restless with the uneven pace of returns achieved in the past.
What we are also witnessing is a new generation of investment professionals that are coming to the fore, thereby changing the mindset and deploying sophisticated asset management techniques, by ways of achieving geographic and asset diversification, but also by leveraging financial instruments in order to increase returns.
In many instances, the first step towards diversification has been to look at the West in markets like London. However, in recent years, the focus has been turning towards the Middle East, and Dubai in particular, as managers become increasingly enticed by the prospects of investing in hard currencies in a jurisdiction that offers stable annuity-oriented returns.
In South Africa for example, the passage of a law allowed pension funds to invest up to 25 per cent of their assets abroad; and even though the initial flurry of deals that followed were in the continent of Africa itself, the largest funds have now increasingly moved abroad towards Europe and Middle East. In Botswana, the law is even more liberal, allowing up to 70 per cent of the assets to be invested offshore.
There is a sense of inevitability around the pension fund industry in Africa; a fait accompli in the sense of pension fund assets increasingly investing abroad to deploy burgeoning pools of funds. It is here that Dubai and the UAE stand to benefit, by looking at these investment pools as opportunities to attract stable long-term capital.
Undoubtedly, given the infrastructure deficit that is inherent in many of the African countries, there are cross-fertilisation opportunities, whereby UAE-based developers stand to benefit by using pension funds in Africa as a gateway to capitalise on the plethora of investment opportunities that are rife in the real estate and construction sectors.
JAFZA F&B Sector Posts Trade Worth Of Dh11 Billion
The food and beverage (F&B) sector based in Jebel Ali Free Zone (Jafza) showed significant growth in 2017, with the sector’s volume of trade rising to 3.5 million metric tonnes, valued at Dh11.1 billion.
This accounted for 17.85 per cent and 15.37 per cent of Dubai’s total F&B volume and value respectively. F&B is a major focus of Jafza’s business portfolio with over 570 companies from 75 countries, including regional and global brands such as Unilever, Mars, AGC and Gulf Food Industries.
Of the F&B companies based in Jafza, 37 per cent are from the Middle East; 24 per cent from Asia-Pacific; 19 per cent from Europe; 10 per cent from the Americas; and 10 per cent from Africa.
“The growth of the food and beverage sector highlights Jafza’s success in establishing itself as a destination of choice for companies in the Mena region,” said Sultan Ahmed bin Sulayem, group chairman and chief executive of DP World.
The UAE’s F&B sector has seen steady growth over the past two years. According to a BMI report, food sales are expected to grow at an annual average of 6.6 per cent over the next five years.
“By creating a world-class business environment, we are encouraging manufacturers to establish themselves here and develop new products and commodities that meet consumer demand,” he added.